Directors Report of Bajaj Holdings & Investment Ltd.
Mar 31, 2023
Your directors present the seventy-eighth Annual Report along with the audited standalone and consolidated financial statements for FY2023.
Bajaj Holdings & Investment Ltd. (''BHIL'' or ''the Company'') is registered with the Reserve Bank of India as a Non-Banking Financial Company - Investment and Credit Company (NBFC-ICC) vide RBI registration number N-13.01952 dated 29 October 2009. BHIL is essentially a holding and investment company and does not have any other operations of its own. BHIL earns revenue primarily by way of dividend income from investments held in group companies. More details about the Company and its investments are available in the Management Discussion and Analysis.
The financial results of the Company are elaborated in the Management Discussion and Analysis.
The highlights of the standalone financial results are as under:
|
(C In Crore) |
||
|
FY2023 |
FY2022 |
|
|
Total income |
1,937.01 |
1,833.16 |
|
Total expenses |
158.16 |
132.04 |
|
Profit before tax |
1,778.85 |
1,701.12 |
|
Tax expense |
67.27 |
70.60 |
|
Profit for the year |
1,711.58 |
1,630.52 |
|
Earnings per share (in H) |
153.8 |
146.5 |
|
Closing balances in reserve/other equity: |
FY2023 |
(C In Crore) FY2022 |
|
Reserve fund in terms of section 45-IC(1) of Reserve Bank of India Act, 1934 |
2,815.48 |
2,473.16 |
|
Securities premium |
444.42 |
444.42 |
|
General reserve |
3,706.96 |
3,706.96 |
|
Retained earnings |
3,723.84 |
3,637.00 |
|
Other reserves - Equity instruments through other comprehensive income |
4,899.63 |
4,999.15 |
|
Other reserves - Debt instruments through other comprehensive income |
(36.35) |
15.90 |
|
Other reserves - Hedge instruments through other comprehensive income |
- |
(0.02) |
|
Total |
15,553.98 |
15,276.57 |
|
Note: Detailed movement of above reserves can be seen in ''Statement of Changes in Equity'' The highlights of the consolidated financial results are as under: |
FY2023 |
(C In Crore) FY2022 |
|
Total Income |
527.35 |
486.51 |
|
Share of profit of associates |
4,667.01 |
3,893.67 |
|
Profit before tax |
5,011.51 |
4,225.90 |
|
Profit for the year |
4,850.52 |
4,055.68 |
|
Earnings per share (H) |
435.8 |
364.4 |
Under section 45-IC of Reserve Bank of India Act, 1934, non-banking financial companies (NBFCs) are required to transfer a sum of not less than 20% of its net profit every year to the reserve fund before declaration of any dividend. Accordingly, the Company has till date transferred a sum of H 2,815.48 crore to its reserve fund.
Detailed information on the operations of the Company and details on the state of affairs of the Company are covered in Management Discussion and Analysis.
Pursuant to the provisions of SEBI Listing Regulations, the Company had formulated a Dividend Distribution Policy, which sets out the parameters and circumstances to be considered by the Board in determining the distribution of dividend to its shareholders and/ or retaining the profit earned. The Dividend Distribution Policy of the Company endeavour to maintain a minimum dividend pay-out of 50% of distributable profit on standalone basis each year. The said Policy is available on the website of the Company at https://www.bhil.in/ pdf/Dividend%20Distribution%20Policy.pdf
The Reserve Bank of India (RBI) vide its circular dated 24 June 2021, has laid down framework for declaration of dividend by NBFCs. Accordingly, the Board of Directors after taking into account various aspects and in compliance with the said circular, to the extent applicable, recommend for consideration of the members at the ensuing Annual General Meeting (''AGM''), payment of final dividend of H 13 per equity share (130%) of face value of H 10 for the financial year ended 31 March 2023.
The Board of Directors, at its meeting held on 13 September 2022, declared an interim dividend of H 110 per equity share (1100%) of face value of H 10 for the financial year ended 31 March 2023. The record date fixed for the purpose of declaration of divided was 23 September 2022. The total dividend pay-out on account of interim dividend was H 1,224.23 crore.
The total dividend pay-out (including interim dividend) for FY2023 would be H 1,368.91 crore.
The dividend declared/ recommended is in accordance with the principles and criteria set out in the Dividend Distribution Policy.
The final dividend, if declared, at the ensuing AGM will be taxable in the hands of the members of the Company pursuant to Income Tax Act, 1961. For further details on taxability, please refer to Notice of AGM.
Following are the subsidiaries/associates of the Company:
|
Name of the company |
% shareholding of BHIL and its subsidiaries |
Status |
|
Bajaj Auto Ltd. |
36.64% |
Associate |
|
Bajaj Finserv Ltd. |
41.63% |
Associate |
|
Bajaj Auto Holdings Ltd. |
100% |
Subsidiary |
|
Maharashtra Scooters Ltd. |
51% |
Subsidiary |
The financial highlights of performance of the subsidiaries and associates of the Company and their contribution to the overall performance of the Company during FY2023, is covered in the Management Discussion and Analysis.
During FY2023, no new subsidiary was incorporated/acquired. Neither the Company has entered into a joint venture with any company.
The Company does not have any material subsidiary as defined under the SEBI Listing Regulations.
The financial statements of the subsidiary companies are also available in a downloadable format under ''Investors'' section of the Company''s website and can be accessed at https://www.bhil.in/investors.html#url-annual-reports
A separate statement containing the salient features of the subsidiaries in the prescribed form AOC-1 is attached to the consolidated financial statements.
Directors and Key Managerial Personnel (KMP)A. Change in directorate during FY2023i. AppointmentDr. Vidya Yeravdekar (DIN: 02183179)
Based on the recommendation of the Nomination and Remuneration Committee (NRC), the Board at its meeting held on 28 July 2022, has appointed Dr. Vidya Yeravdekar, as an Independent Director, for a period of five years effective from 1 August 2022. Further, the shareholders have approved her appointment through a postal ballot on 21 September 2022, by an overwhelming majority.
The Board is of the opinion that Dr. Yeravdekar is a person of integrity, expertise and has relevant experience to serve the Company as an Independent Director that can strengthen the overall composition of the Board.
Dr. Yeravdekar is exempted from requirements of clearing the online proficiency test pursuant to rule 6(4) of Companies (Appointment and Qualifications of Directors) Rules, 2014, as amended.
ii. ResignationDr. Gita Piramal (DIN: 01080602)
Due to health reasons, Dr. Gita Piramal had decided to reduce her professional commitments in FY2023. Accordingly, she had tendered her resignation as an Independent Director of the Company effective from close of business hours on 30 June 2022. The Board noted the resignation of Dr. Piramal effective from the aforementioned date and recorded its appreciation for the valuable services and guidance provided by her during her long tenure as a Director of the Company.
B. Directors liable to retire by rotation
Rajiv Bajaj (DIN: 00018262) and Shekhar Bajaj (DIN: 00089358) retires by rotation at the ensuing AGM and being eligible, have offered themselves for re-appointment.
Brief details of Rajiv Bajaj and Shekhar Bajaj, who are seeking re-appointment, are given in the Notice of AGM.
There was no change in KMPs of the Company during FY2023.
Declaration by Independent Directors
The independent directors have submitted declaration of independence, as required under section 149(7) of the Act, stating that they meet the criteria of independence as provided in section 149(6) of the Act and Regulation 16 of the SEBI Listing Regulations, as amended.
The independent directors have also confirmed compliance with the provisions of rule 6 of Companies (Appointment and Qualifications of Directors) Rules, 2014, relating to inclusion of their name in the databank of independent directors. Pursuant to the aforementioned Rules, the independent directors have passed the online proficiency self-assessment test, to the extent applicable.
The Board took on record the declaration and confirmation submitted by the independent directors, regarding them meeting the prescribed criteria of independence, after undertaking due assessment of the veracity of the same, as required under Regulation 25 of the SEBI Listing Regulations.
Policy on directors'' appointment and remuneration
The Board, on the recommendation of the NRC, has framed a Remuneration Policy. The policy, inter alia, provides:
a) the criteria for determining qualifications, positive attributes and independence of directors; and
b) a policy on remuneration of directors, key managerial personnel and other employees.
The policy is directed towards a compensation philosophy and structure that will reward and retain talent and provides for a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.
The Remuneration Policy is placed on the Company''s website and can be accessed at https://www.hhil.in/prif/Rfimuneration%70Policy%70.prif
As per the requirements of RBI Master Directions and SEBI Listing Regulations, details of all pecuniary relationship or transactions of the non-executive directors vis-a-vis the Company are disclosed in the Corporate Governance Report.
Compliance with Code of Conduct
All Board members and Senior Management Personnel have affirmed their compliance with the Company''s Code of Conduct for FY2023.
A declaration to this effect signed by the Managing Director & CEO is included in this Report.
A copy of the annual return as required under section 92(3) of the Act, in the prescribed form which will be filed with the Registrar of Companies / Ministry of Corporate Affairs within the regulatory timelines and will also be placed on the Company''s website and can be accessed at https://www.bhil.in/investors.html#url-annual-reports
Number of meetings of the Board
Six (6) meetings of the Board were held during FY2023. Details of the meetings and attendance thereat form a part of the Corporate Governance Report.
Directors'' responsibility statement
In accordance with the provision of section 134(3)(c) of the Act and based on the information provided by the Management, the directors state that:
⢠in the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures;
⢠they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of FY2023 and of the profit of the Company for the said period;
⢠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;
⢠they have prepared the annual accounts on a going concern basis;
⢠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
⢠they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Manish Kejriwal, stepped down as member of the Audit Committee, with effect from close of business hours on 31 March 2023 and Dr. Vidya Yeravdekar was inducted effective 1 April 2023.
The present composition of the Committee as approved by the Board at its meeting held on 15 March 2023 is, Pradip Shah (DIN: 00066242) as Chairman, Dr. Naushad Forbes (DIN: 00630825), Dr. Arindam Bhattacharya (DIN: 01570746) and Dr. Vidya Yeravdekar (DIN: 02183179) as members.
The composition of Audit Committee is over and above the minimum requirement prescribed under the Act,
SEBI Listing Regulations and RBI Regulations, of having a minimum of two-thirds of independent directors, including the Chairman. All members of the Committee are independent directors possessing financial literacy and expertise in accounting or financial management related matters.
During FY2023, all recommendations of the Audit Committee were accepted by the Board.
Brief terms of reference and attendance record of members are given in the Corporate Governance Report.
Particulars of loans, guarantees or investments
The Company, being an NBFC registered with the RBI and engaged in the business of investments as its ordinary course of business, is exempt from complying with the provisions of section 186 of the Act with respect to investments. Accordingly, the disclosures of the investments as required under the aforesaid section have not been made in this Report. During the year under review, the Company did not give loans or guarantee to any person including its Directors.
As on 31 March 2023, the paid-up share capital of the Company stood at H 111.29 crore consisting of 111,293,510 equity shares of H 10 each. There was no public issue, rights issue, bonus issue or preferential issue, etc., during FY2023. The Company has not issued shares with differential voting rights or sweat equity shares, nor has any scheme for grant of stock option.
Scale based regulations - revised regulatory framework for NBFC''s
The Reserve Bank of India (RBI) vide its circular dated 22 October 2021 has introduced Scaled Based Regulation (SBR) - a revised Regulatory Framework for NBFC. As per the revised regulatory framework, regulatory structure for NBFCs shall comprise of four layers based on their size, activity, and perceived riskiness. NBFCs in the lowest layer shall be known as NBFC - Base Layer (NBFC-BL). NBFCs in middle layer and upper layer shall be known as NBFC - Middle Layer (NBFC-ML) and NBFC - Upper Layer (NBFC-UL), respectively. RBI may, based on the size of an NBFC, classify some of them as NBFC- Top Layer.
In accordance with the circular, NBFCs without public funds and customer interface are classified as a Base Layer of the regulatory structure. Considering, the nature of business, the Company is classified under the Base Layer.
All contracts/arrangements/transactions entered by the Company during FY2023 with the related parties were in compliance with the applicable provisions of the Act and SEBI Listing Regulations. Prior omnibus approval of the Audit Committee was obtained for all related party transactions which were foreseen and repetitive in nature as well as for transactions which were not foreseen and details of which were not available, up to the limits as specified in the SEBI Listing Regulations. Pursuant to the said omnibus approval, details of related party transactions entered into were also reviewed by the Audit Committee on a quarterly basis.
All related party transactions entered during FY2023 were on arm''s length basis and in the ordinary course of business of the Company as per the Act and not material under the SEBI Listing Regulations or extant RBI guidelines. None of the transactions required members'' prior approval under the Act or SEBI Listing Regulations.
Details of transactions with related parties during FY2023 are provided in the notes to the financial statements. There were no material related party transactions requiring disclosure as per the Act. Hence, the prescribed Form AOC-2 does not form a part of this report.
The Policy on Materiality of and Dealing with Related Party Transactions is placed on the Company''s website at https://www.bhil.in/pdf/Policy%?0on%?0Materiality%?0of%?Q&%?0Dealing%?0with%?0Related%?0Party%?0 Transactions.pdf and also forms a part to the Corporate Governance Report.
Material changes and 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.
Conservation of energy, technology absorption, foreign exchange earnings and outgoConservation of energy
The operations of the Company are not energy intensive. However, the Company has taken, inter alia, following measures to reduce energy consumption:
⢠Switched from conventional lighting systems to LED lights at Mumbai location; and
⢠Designed the office in a manner which facilitate maximum natural light utilisation.
The Company, primarily being an investment company and not involved in any industrial or manufacturing activities, has no particulars to report regarding technology absorption as required under section 134 of the Act and Rules made thereunder.
Foreign exchange earnings and outgo
No foreign exchange was earned by the Company during the year under review as well as during the previous year.
The total foreign exchange outflow during the year under review was H 45.61 crore (as against H 39.62 crore during the previous year).
Corporate Social Responsibility (CSR)
The CSR committee comprises of three directors viz., Dr. Naushad Forbes (DIN: 00630825) as Chairman,
Anami N Roy (DIN: 01361110) and Sanjiv Bajaj (DIN: 00014615) as members.
Detailed information on CSR Policy, its salient features and details pertaining to spent and unspent amount forms part of ''Annual Report on CSR activities''.
The CSR policy has been hosted on the website of the Company and can be accessed at https://www.bhil.in/pdf/CSR-Policy.pdf
The Chief Financial Officer has certified that the funds disbursed have been utilised for the purpose and in the manner approved by the Board for FY2023.
Formal annual evaluation of the performance of the Board, its Committees and Directors
Pursuant to section 178 of the Act, the NRC and the Board has decided that the evaluation shall be carried out by the Board only and the NRC will only review its implementation and compliance.
Further as per Schedule IV of the Act and provisions of SEBI Listing Regulations, the performance evaluation of Independent Directors shall be done by the entire Board of Directors excluding the Director being evaluated, on the basis of performance and fulfillment of criteria of independence and their independence from management.
Accordingly, the Board has carried out an annual performance evaluation of its own performance, that of its Committees, Chairperson and individual Directors.
The manner in which formal annual evaluation of performance was carried out by the Board for the period from 1 January 2022 to 31 December 2022 is given below:
⢠A questionnaire-cum-rating sheet was deployed using an IT platform for seeking feedback of the directors with regards to the performance of the Board, its Committees, the Chairperson and individual directors, which is on the basis of the Board approved criteria for evaluation of the Board, its Committees, Chairperson and individual directors.
⢠From the individual ratings received from the directors, a report on summary of ratings in respect of performance evaluation of the Board, its Committees, Chairperson and individual directors for the period from 1 January 2022 to 31 December 2022 and a consolidated report thereof, were arrived at.
⢠The report of performance evaluation so arrived at was then discussed and noted by the Board at its meeting held on 15 March 2023.
⢠The NRC reviewed the implementation and compliance of the performance evaluation at its meeting held on 15 March 2023.
⢠For FY2023, the criteria and process followed by the Company was reviewed by the NRC and the Board, which opined to be compliant with the applicable provisions and found satisfactory. The criteria for evaluation of the Board, its Committees, Chairperson and individual directors is placed on the website of the Company and can be accessed at https://www.bhil.in/pdf/Board%20Fvaluation%20Criteria.pdf
Other than the Chairperson of the Board and NRC, no director had access to the individual ratings given by the directors.
The NRC and Board after reviewing the criteria, advised enhancement to the feedback mechanism by introducing few qualitative aspects to the criteria.
Significant and material orders passed by the regulators or courts
During FY2023, there were 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 operations in future.
The internal audit function provides an independent view to the Board of Directors, the Audit Committee and the Senior Management on the quality and effectiveness of the internal controls, risk management and governance related systems and processes. In line with the RBI''s guidelines on Risk Based Internal Audit, the Company has adopted a Risk Based Internal Audit Policy.
At the beginning of each financial year, an audit plan is rolled out after approval of the Audit Committee.
The Audit Committee quarterly reviews the internal audit reports and the adequacy and effectiveness of internal controls. Significant audit observations, corrective and preventive actions thereon are presented to the Audit Committee on a quarterly basis.
The Committee also has an independent meeting with the internal auditor without the presence of Management.
The Company has in place adequate financial controls commensurate with its size, scale and complexity of operations with reference to its financial statements. These have been designed to provide reasonable assurance about recording and providing reliable financial information, ensuring integrity in conducting business, accuracy and completeness in maintaining accounting records and prevention and detection of frauds and errors.
The Board is of the opinion that internal financial controls with reference to the financial statements were tested and reported adequate and operating effectively.
Managing risk is fundamental to any business in general and in particular to financial services industry. Considering the nature of business of BHIL, i.e., investments in securities for a long-term horizon, the risk perceived is low as far as the standalone business of BHIL is concerned. However, risks arising out of businesses of the group companies are the key risks of the Company. BHIL has a risk governance framework in place which provides an integrated approach for identifying, monitoring and mitigating risks associated with its business and that of its group companies.
Key risks exposure of BHIL includes market risk, credit risk, governance risk, reputation risk and compliance risk. The Risk Management Committee of the Board, assists the Board in monitoring various risks, review and analysis of risk exposures and mitigation plans related to the Company and its group companies.
A Risk Management Policy has been adopted by the Board of Directors which, inter alia, sets out risk strategy, approach and mitigation plans, liquidity risk management and asset liability management.
The group companies have their own risk management frameworks in line with their strategic business operations as appropriate to the industry in which they operate. Business operations of each of the group companies, the risks faced by them and the risk mitigation tools followed by them are reviewed periodically by the Risk Management Committees and the Boards of the respective group companies.
The details of meetings of Risk Management Committee of the Company and the members who attended the same are mentioned in the Corporate Governance Report.
Whistle Blower Policy / Vigil Mechanism
The Company has a Whistle Blower Policy encompassing vigil mechanism pursuant to section 177(9) of the Act and Regulation 22 of the SEBI Listing Regulations. The whistle blower framework has been introduced with an aim to provide employees and directors with a safe and confidential channel to share their inputs about such aspects which are adversely impacting their work environment. The Policy/Vigil Mechanism enables directors, employees and other persons to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company''s Code of Conduct or ethics policy and leak or suspected leak of unpublished price sensitive information.
During the year under review, there were no complaints received under the above mechanism nor was any employee denied access to the Audit Committee. The Audit Committee reviews the functioning of the Vigil Mechanism/Whistle Blower Policy once a year.
The Whistle Blower Policy is uploaded on the website of the Company and can be accessed at https://www.bhil.in/pdf/Whistle%20Blower%20Policy.pdf
The Company continues to fulfill all the norms and standards laid down by RBI pertaining to non-performing assets, capital adequacy, statutory liquidity assets, etc. As against the RBI norm of 15%, the capital adequacy ratio of the Company was 111% as on 31 March 2023. In line with the RBI guidelines for Asset Liability Management (ALM) system for NBFCs, the Company has an Asset Liability Management Committee, which review its ALM risks and opportunities.
The Company is in compliance with the NBFC - Corporate Governance (Reserve Bank) Directions, 2015.
⢠The financial results of the Company are placed on the website of the Company at https://www.bhil.in/ investors.html#url-financial-results-press-release and the audited financial statements of its subsidiaries are placed on the website of the Company at https://www.bhil.in/investors.html#url-annual-reports
⢠Details as required under the provisions of section 197(12) of the Companies Act, 2013, read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, containing, inter alia, ratio of remuneration of Directors and KMP to median remuneration of employees and percentage increase in the median remuneration are annexed to this Report.
⢠Details as required under the provisions of section 197(12) of the Act read with rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, will be made available to any member by way of email upon request, as per provisions of section 136(1) of the said Act.
⢠The Managing Director & CEO will be entitled to remuneration by way of a sitting fee, in his capacity as a Non-executive director of Maharashtra Scooters Ltd., a subsidiary of the Company during FY2024.
⢠Pursuant to RBI Master Direction-Information Technology Framework for the NBFC sector, the Company has constituted an IT Strategy Committee to review the IT strategies in line with the corporate strategies, board policy reviews, cyber security arrangements and any other matter related to IT governance.
⢠The provisions of section 148 of the Act, are not applicable to the Company. Accordingly, there is no requirement of maintenance of cost records as specified under sub-section (1) of section 148 of the Act.
⢠The Company has a gender neutral policy on prevention of sexual harassment at the workplace. The Company has also complied with the provisions relating to the constitution of Internal Complaints Committee under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. There was no case reported during the year under review.
⢠There has been no change in the nature of business of the Company during FY2023.
⢠Neither any application was made, nor any proceeding is pending under the Insolvency and Bankruptcy Code, 2016 against the Company. Further, the Company had not made any one-time settlement with banks or financial institutions during FY2023.
⢠The Company has not accepted any fixed deposits under Chapter V of the Companies Act, 2013 and as such no amount of principal and interest were outstanding as on 31 March 2023.
⢠During FY2023, the Company had not borrowed any funds from any banks or Financial Institutions.
Pursuant to the SEBI Listing Regulations, a separate chapter titled ''Corporate Governance'' has been included in this Annual Report, along with the reports on Management Discussion and Analysis and General Shareholder Information.
The Managing Director & CEO and the Chief Financial Officer, have certified to the Board with regard to the financial statements and other matters as specified under the SEBI Listing Regulations.
A certificate from the statutory auditors of the Company regarding compliance of conditions of corporate governance is annexed to this Report.
Business Responsibility & Sustainability Report
Pursuant to amendment in SEBI Listing Regulations, top 1000 listed entities based on market capitalisation are required to submit a Business Responsibility & Sustainability Report (''BRSR'') with effect from the FY2023. Accordingly, the Company, being one of the top 1000 listed entity, has adopted a Policy on BRSR.
A detailed BRSR in the format prescribed by SEBI describing various initiatives, actions and process of the Company towards the ESG endeavor, forms a part of this Annual Report and has also been hosted on the Company''s website at https://www.bhil.in/investors.html#url-annual-reports
The Company has complied with the requirements prescribed under the Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) read with the MCA circulars.
Auditors and Auditors'' ReportStatutory Auditors
RBI, vide its Guidelines for Appointment of Statutory Central Auditors (SCAs) / Statutory Auditors (SAs) of Commercial Banks (excluding RRBs), UCBs and NBFCs (including HFCs) dated 27 April 2021 (the "Guidelines/ circular"), mandated NBFCs (including HFCs) with an asset size of H 1,000 crore and above to appoint a minimum of an audit firm for conducting statutory audit, where each term should be for a maximum period of 3 consecutive years. Further, as per the Guidelines, for NBFC entities with asset size of H 15,000 crore and above as at the end of previous year, the statutory audit was required to be conducted under joint audit of a minimum of two audit firms.
By virtue of the aforesaid Guidelines and related FAQs, the members of the Company, on the basis of recommendation of the Audit Committee and Board, by way of Postal Ballot, have approved appointment of Kalyaniwalla & Mistry LLP (Firm Registration No. 104607W / W100166) as Statutory Auditors effective from 17 November 2021, i.e., the last date of Postal Ballot till conclusion of 77th AGM. Further, the members at 77th AGM held on 28 July 2022, had approved their continuation/re-appointment as Statutory Auditor for remaining term of two years, from the conclusion of the 77th AGM till the conclusion of the 79th AGM, i.e., for the financial year ending 31 March 2023 and 31 March 2024, respectively.
The members at their 77th AGM held on 28 July 2022, based on the recommendation of Audit Committee and Board, had also approved the appointment of NBS & Co. (Firm Registration No. 110100W) as Joint Statutory Auditors for a period of 3 years i.e., from the conclusion of the 77th AGM till the conclusion of the 80th AGM to conduct audit of the financial statements of the Company for the year ending 31 March 2023, 31 March 2024 and 31 March 2025.
The audit report given by Kalyaniwalla & Mistry LLP and NBS & Co., Joint Statutory Auditors for FY2023 is unmodified, i.e., it does not contain any qualification, reservation or adverse remark or disclaimer.
Pursuant to the provisions of section 204 of the Act and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed Shyamprasad D Limaye, Practising Company Secretary (FCS No. 1587, CP No. 572) to undertake the secretarial audit of the Company.
A report from the secretarial auditor in the prescribed Form MR-3 is annexed to this Report. It does not contain any qualification, reservation or adverse remark or disclaimer made by secretarial auditor.
Pursuant to Regulation 24A(2) of the SEBI Listing Regulations, a report on secretarial compliance has been issued by Shyamprasad D Limaye for the financial year ended 31 March 2023 and the same will be submitted with the stock exchanges within the given timeframe. There are no observations, reservations or qualifications in the said report. The report will be available on the website of the Company at https://www.bhil.in/investors.html#url-stock-exchange-intimations.
Since, the auditors i.e. joint statutory auditors and secretarial auditor have not reported any matter under section 143(12) of the Act, no detail is required to be disclosed under section 134(3)ca of the Act.
The Board of Directors place its gratitude and appreciation for the support and cooperation from its members, the RBI, other regulators and banks.
The Board of Directors also places on record its sincere appreciation for the commitment and hard work put in by the Management and the employees of the Company, its subsidiaries and associates and thank them for yet another excellent year of performance.
On behalf of the Board of Directors
Shekhar Bajaj Chairman DIN: 00089358
Pune: 27 April 2023
Mar 31, 2022
Your directors present the seventy seventh Annual Report along with the audited standalone and consolidated financial statements for FY2022.
Sad Demise of Shri Rahul Bajaj, Chairman Emeritus of the Company
At the outset, your directors express their profound grief on the sad demise of Shri Rahul Bajaj, the iconic leader of Bajaj Group, who passed away on 12 February 2022.
He lived an extraordinary life. He was the architect of one of the most respected business groups in the country, a vocal proponent of entrepreneurship, and a voice of the industry at large.
He stood for what he believed, a man driven by values, and bold in both expression and action. He was the torchbearer of the family legacy that dates back to the founding days of our country and championed the creation of a new India.
While his passing away has left a void amongst us, he leaves behind an unparalleled foundation for all of us to build upon.
The Board places on record its whole-hearted appreciation of the invaluable contribution made by him to the spectacular success of the Company and the Group over several decades.
The financial results of the Company are elaborated in the Management Discussion and Analysis Report.
The highlights of the Standalone Financial Results are given below:
|
Particulars |
FY2022 |
(? In Crore) FY2021 |
|
Total income |
1,833.16 |
431.14 |
|
Total expenses |
132.04 |
121.23 |
|
Profit before tax |
1,701.12 |
309.91 |
|
Tax expense |
70.60 |
111.32 |
|
Profit for the year |
1,630.52 |
198.59 |
|
Earnings per share (in ?) |
146.5 |
17.8 |
Closing balances in reserve/other equity
|
Particulars |
FY2022 |
(? In Crore) FY2021 |
|
Reserve fund in terms of section 45-IC(1) of Reserve Bank of India Act, 1934 |
2,473.16 |
2,147.06 |
|
Securities premium |
444.42 |
444.42 |
|
General reserve |
3,706.96 |
3,706.96 |
|
Retained earnings |
3,637.00 |
3,647.69 |
|
Other reserves - Equity instruments through other comprehensive income |
4,999.15 |
3,906.78 |
|
Other reserves- Debt instruments through other comprehensive income |
15.90 |
52.56 |
|
Other reserves- Hedge instruments through other comprehensive income |
(0.02) |
0.01 |
|
Total |
15,276.57 |
13,905.48 |
|
Note: Detailed movement of above reserves can be seen in ''Statement of Changes in Equity''. |
||
|
The highlights of the Consolidated Financial Results are as under: |
||
|
Particulars |
FY2022 |
(? In Crore) FY2021 |
|
Total income |
486.51 |
463.07 |
|
Share of profits of associates |
3,893.67 |
3,445.59 |
|
Profit before tax |
4,225.90 |
3,765.74 |
|
Profit for the year |
4,055.68 |
3,649.83 |
|
Earnings per share (?) |
364.4 |
327.9 |
Under section 45-IC of Reserve Bank of India Act, 1934, non-banking financial companies (NBFCs) are required to transfer a sum of not less than 20% of its net profit every year to the reserve fund before declaration of any dividend. Accordingly, Bajaj Holdings & Investment Ltd. (''the Company'' or ''BHIL'') has till date transferred a sum of ? 2,473.16 crore to its reserve fund.
Detailed information on the operations of the Company and details on the state of affairs of the Company are covered in Management Discussion and Analysis Report.
Presentation of Standalone and Consolidated Financial Statements
The financial statements of the Company for FY2022, on a standalone and consolidated basis, have been prepared in compliance with the Companies Act, 2013 (''the Act''), applicable Accounting Standards and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (''SEBI Listing Regulations'') and are disclosed in accordance with Schedule III of the Act. The consolidated financial statements incorporate the audited financial statements of the subsidiaries and associates of the Company.
Pursuant to the provisions of SEBI Listing Regulations, the Company had formulated a Dividend Distribution Policy, which sets out the parameters and circumstances to be considered by the Board in determining the distribution of dividend to its shareholders and/ or retaining profits earned. The Board at its meeting held on 17 September 2021 had revised the Dividend Distribution Policy thereby enabling the Company to maintain a minimum dividend pay-out of 50% of distributable profits on standalone basis each year. The revised Policy is available on the website of the Company at https://www.bhil.in/investors.html#url-codes-policies
Final Dividend
The Reserve Bank of India (RBI) vide its circular dated 24 June 2021, has laid down framework for declaration of dividend by NBFCs. Accordingly, the Board of Directors after taking into account various aspects and in compliance with the said circular, to the extent applicable, recommend for consideration of the members at the ensuing AGM, payment of final dividend of ? 25 per equity share (250%) of face value of ? 10 for the year ended 31 March 2022.
Interim Dividend
The Board of Directors, at its meeting held on 17 September 2021, after taking into account its financial position as on that date, declared an interim dividend of ? 90 per equity share (900%) of face value of ? 10 for the year ended 31 March 2022. The record date fixed for the purpose of declaration of divided was 29 September 2021. The total dividend pay-out on account of interim dividend was ? 1,001.64 crore.
The total dividend pay-out (including interim dividend) for FY2022 would be ? 1,279.87 crore.
The dividend recommended is in accordance with the principles and criteria set out in the Dividend Distribution Policy.
The final dividend, if declared, at the ensuing AGM will be taxable in the hands of the members of the Company pursuant to Income Tax Act, 1961. For further details on taxability, please refer to Notice of AGM.
FY2022 was once again dominated by the Covid-19 pandemic as new waves of infection swept across countries. In India, the second wave (called ''Delta'') proved far more deadly than the first that struck in 2020.
The advent of the highly transmissible variant ''Omicron'' in early January 2022 (the third wave) spread much dread across the world. During this wave, India''s daily number of reported cases peaked to nearly 3.50 lakh on 20 January 2022 and the active case load was over 22 million as on 23 January 2022. Fortunately, while highly transmissible, Omicron was not as clinically deadly as the Delta variant. So, while many got infected, almost all got well again within a week or so, without hospitalisation and mortality.
Considering the nature of business of the Company, the operations of the Company went uninterrupted and the impact of Covid-19 on the business was minimal.
Subsidiaries/Associates and Joint Ventures
Following are the subsidiaries/associates of the Company:
|
Name of the Company |
% shareholding of BHIL and its subsidiaries |
Status |
|
Bajaj Auto Ltd. |
35.83% |
Associate |
|
Bajaj Finserv Ltd. |
41.63% |
Associate |
|
Bajaj Auto Holdings Ltd. |
100% |
Subsidiary |
|
Maharashtra Scooters Ltd. |
51% |
Subsidiary |
The financial highlights of performance of the subsidiaries and associates of the Company and their contribution to the overall performance of the Company during FY2022 is covered in the Management Discussion and Analysis Report.
During FY2022, no new subsidiary was incorporated/acquired. Neither the Company has entered into a joint venture with any company.
The Company does not have a material subsidiary as defined under the SEBI Listing Regulations.
The financial statements of the subsidiary companies are also available in a downloadable format under Investors section of the Company''s website at https://www.bhil.in/investors.html#url-annual-reports.
A separate statement containing the salient features of the subsidiaries in the prescribed form AOC-1 is attached to the consolidated financial statements.
Directors and Key Managerial Personnel (KMP)
A) Change in Directorate
i) Resignation
The Board at its meeting held on 29 April 2021, appointed Dr. Omkar Goswami as an Independent director, with effect from 1 May 2021 for a period of five years. Dr. Goswami tendered his resignation, as an Independent Director of the Company, due to personal commitments and additional professional work with effect from 9 July 2021.
ii) Appointment
On recommendation of the Nomination and Remuneration Committee (NRC), the Board at its meeting held on 17 September 2021, has appointed Dr. Arindam Kumar Bhattacharya as an Independent Director, for a period of five years effective from 17 September 2021. Further, shareholders have approved his appointment through a postal ballot on 17 November 2021.
The Board is of the opinion that Dr. Arindam Kumar Bhattacharya is a person of integrity, expertise and has competent experience to serve the Company as an Independent Director.
B) Directors liable to retire by rotation
Niraj Bajaj and Manish Kejriwal retire by rotation at the ensuing AGM and being eligible, have offered themselves for re-appointment.
Brief details of Niraj Bajaj and Manish Kejriwal, who are seeking re-appointment, are given in the Notice of AGM.
C) Change in KMP
There was no change in KMPs of the Company during FY2022.
Sanjivnayan Rahulkumar Bajaj was re-appointed as the Managing Director & CEO of the Company w.e.f.
1 April 2017 for a period of five years, up to 31 March 2022. The Board at its meeting held on 16 March 2022, approved the re-appointment of Sanjiv Bajaj as Managing Director & CEO for a fresh term of five years and fixed his remuneration at its meeting held on 28 April 2022, based on the recommendation of NRC, subject to necessary approvals of the members.
Declaration given by Independent Directors
The Independent Directors have submitted declaration of independence, as required under section 149(7) of the Act, stating that they meet the criteria of independence as provided in section 149(6) of the Act, as amended and Regulation 16 of the SEBI Listing Regulations, as amended.
The independent directors have also confirmed compliance with the provisions of Rule 6 of Companies (Appointment and Qualifications of Directors) Rules, 2014, relating to inclusion of their name in the databank of Independent directors. Pursuant to the aforementioned Rules, the Independent Directors have passed the online proficiency self-assessment test, to the extent applicable.
The Board took on record the declaration and confirmation submitted by the Independent Directors, regarding them meeting the prescribed criteria of independence, after undertaking due assessment of the veracity of the same as required under Regulation 25 of the SEBI Listing Regulations.
Policy on Directors'' Appointment and Remuneration
The Board on the recommendation of the Nomination and Remuneration Committee has framed a Remuneration Policy. The policy, inter-alia, provides:
a) the criteria for determining qualifications, positive attributes and independence of directors; and
b) remuneration for directors, key managerial personnel and other employees.
The Policy is directed towards a compensation philosophy and structure that will reward and retain talent and provides for a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.
The Remuneration Policy is available on the Company''s website at https://www.bhil.in/investors.html#url-codes-policies
As per the requirements of RBI Master Directions and SEBI Listing Regulations, details of all pecuniary relationship or transactions of the non-executive directors vis-a-vis the Company are disclosed in the Corporate Governance Report.
Compliance with Code of Conduct
All Board members and Senior Management Personnel have affirmed their compliance with the Company''s Code of Conduct for FY2022.
A declaration to this effect signed by the Managing Director & CEO is included in this Annual Report.
A copy of the annual return as required under section 92(3) of the Act in the prescribed form which will be filed with the Registrar of Companies / Ministry of Corporate Affairs within the regulatory timelines is hosted on the Company''s website at https://www.bhil.in/investors.html#url-annual-reports.
Number of meetings of the Board
Six meetings of the Board were held during FY2022. Details of the meetings and attendance thereat form a part of the Corporate Governance Report.
Directors'' Responsibility Statement
In accordance with section 134(3) (c) of the Act and based on the information provided by the Management, the directors state that:
⢠in the preparation of the annual accounts, the applicable Accounting Standards have been followed along with proper explanation relating to material departures, if any;
⢠they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of FY2022 and of the profit of the Company for that period;
⢠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;
⢠they have prepared the annual accounts on a going concern basis;
⢠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
⢠they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
The Audit Committee comprises of Pradip Shah as Chairman, Dr. Naushad Forbes, Dr. Gita Piramal,
Dr. Arindam Kumar Bhattacharya and Manish Kejriwal as other members. The Board at its meeting held on 16 March 2022 re-constituted the Audit Committee by inducting Dr. Arindam Kumar Bhattacharya as a member of the Committee with effect from 1 April 2022.
The brief terms of reference and attendance record of members are given in the Corporate Governance Report.
Particulars of Loans, Guarantees or Investments
The Company, being an NBFC registered with the RBI and engaged in the business of investments in ordinary course of its business, is exempt from complying with the provisions of section 186 of the Act with respect to investments. Accordingly, the disclosures of the investments made as required under the aforesaid section have not been made in this Report. During the year under review, the Company did not give loans to any person.
The paid-up equity share capital as on 31 March 2022 was ? 111.29 crore. There was no public issue, rights issue, bonus issue or preferential issue, etc. during the year. The Company has neither issued shares with differential voting rights or sweat equity shares, nor has it granted any stock options.
Classification as SystemicaNy Important Non-Deposit taking NBFC
The Company has been registered with the Reserve Bank of India (''RBI'') as a Non-Banking Financial Institution (Non-Deposit taking). As per the RBI circular dated 22 February 2019 namely ''harmonisation of different categorisation of NBFC''s'', the Company being a Systemically Important Non-Deposit taking Company has been categorised as an NBFC- Investment and Credit Company. The Company has not accepted public deposits during the year under review.
All contracts/arrangements/transactions entered by the Company during FY2022 with related parties were in compliance with the applicable provisions of the Act and SEBI Listing Regulations. Prior omnibus approval of the Audit Committee is obtained for all related party transactions which are foreseen and repetitive in nature as well as for transactions which are not foreseen and details of which are not available, upto the limits as specified in the SEBI Listing Regulations. Pursuant to the said omnibus approval, details of related party transactions entered into are also reviewed by the Audit Committee on a quarterly basis.
All related party transactions entered during FY2022 were on arm''s length basis and in the ordinary course of business of the Company as per the Act and not material under the SEBI Listing Regulations or extant RBI guidelines. None of the transactions required members'' prior approval under the Act or SEBI Listing Regulations.
Details of transactions with related parties during FY2022 are provided in the notes to the financial statements. There were no material related party transactions requiring disclosure as per the Act. Hence, the prescribed Form AOC-2 does not form a part of this report.
The Policy on Materiality of and Dealing with Related Party Transactions was amended pursuant to the amendment to SEBI Listing Regulations. The said Policy is placed on the Company''s website at https://www.bhil.in/investors.html#url-codes-policies and also forms a part to the Corporate Governance Report.
Material Changes and 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.
Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo Conservation of energy
The Company has taken, inter alia, following measures to reduce energy consumption:
⢠Switched from conventional lighting systems to LED lights at Mumbai location; and
⢠Selecting and designing offices to facilitate maximum natural light utilisation.
Technology absorption
The Company primarily being an investment company and not involved in any industrial or manufacturing activities, has no particulars to report regarding technology absorption as required under section 134 of the Act and Rules made thereunder.
Foreign exchange earnings and outgo
During the year under review, no foreign exchange was earned by the Company. No foreign exchange was earned by the Company during FY2021 as well.
The total foreign exchange outflow during the year under review was ? 39.62 crore (as against ? 37.04 crore during the previous year).
Corporate Social Responsibility (CSR)
The CSR Committee comprises of three directors viz., Dr. Naushad Forbes as Chairman, Anami Roy and Sanjiv Bajaj as other members. The Board at its meeting held on 28 October 2021 has appointed Dr. Naushad Forbes as Chairman of the Committee w.e.f. 29 October 2021.
As per section 135 of the Act, read with Companies (Corporate Social Responsibility) Rules, 2014, the Company is required to transfer any unspent amount, pursuant to any ongoing project undertaken by the Company in pursuance of its Corporate Social Responsibility Policy, within a period of thirty days from the end of the financial year, in that behalf for that financial year in any scheduled bank called Unspent Corporate Social Responsibility Account.
For FY2022, the CSR obligation of the Company is ? 8.70 crore. As on 31 March 2022, total amount spent on CSR activities by Company is ? 6.32 crore.
Due to Covid-19 pandemic, some part of the mandatory CSR obligations pursuant to ongoing projects has remained unspent as on 31 March 2022, thereby requiring it to be transferred to an Unspent Corporate Social Responsibility Account. Accordingly, the Company has opened an account with Axis Bank Ltd. to transfer unspent amount of ? 2.40 crore.
Detailed information on CSR Policy, its salient features and CSR initiatives undertaken during the year forms part of ''Annual Report on CSR activities''.
In terms of the provisions of the Companies (Corporate Social Responsibility Policy) Rules, 2014, the CSR Policy, composition of the CSR Committee and the list of Board approved CSR projects is uploaded on the website of the Company.
The Chief Financial Officer has certified that the funds disbursed have been utilised for the purpose and in the manner approved by the Board for FY2022.
Formal Annual Evaluation of the Performance of the Board, its Committees and Directors
Pursuant to section 178 of the Act, the Nomination and Remuneration Committee (NRC) and the Board has decided that the evaluation shall be carried out by the Board only and the NRC will only review its implementation and compliance.
Further as per Schedule IV of the Act and provisions of SEBI Listing Regulations, the performance evaluation of Independent Directors shall be done by the entire Board of Directors excluding the Director being evaluated, on the basis of performance and fulfillment of criteria of independence and their independence from management. On the basis of the report of the performance evaluation, it shall be determined whether to extend or continue the term of appointment of Independent Director.
Accordingly, the Board has carried out an annual performance evaluation of its own performance, that of its Committees, Chairperson and individual Directors.
The manner in which formal annual evaluation of performance was carried out by the Board for the period from 1 January 2021 to 31 December 2021 is given below:
⢠The Nomination and Remuneration Committee at its meeting held on 21 May 2020, reviewed the criteria for evaluation of the Board, its Committees, Chairman and individual directors, which is available on the website of the Company at https://www.bhil.in/investors.html#url-codes-policies.
⢠Based on the said criteria, a questionnaire-cum-rating sheet was deployed using an IT platform for seeking feedback of the directors with regards to the performance of the Board, its Committees, the Chairperson and individual directors.
⢠From the individual ratings received from the directors, a report on summary of ratings in respect of performance evaluation of the Board, its Committees, Chairperson and individual directors for the period from 1 January 2021 to 31 December 2021 and a consolidated report thereof were arrived at.
⢠The report of performance evaluation so arrived at was then discussed and noted by the Board at its meeting held on 16 March 2022.
⢠The NRC reviewed the implementation and compliance of the performance evaluation at its meeting held on 16 March 2022.
⢠Based on the report and evaluation, the Board and NRC at their respective meetings held on 16 March 2022, determined that the appointment of all Independent Directors may continue.
⢠During FY2022, the criteria and process followed by the Company was reviewed by the NRC and the Board, which opined these to be satisfactory.
Other than the Chairperson of the Board and NRC, no other director had access to the individual ratings given by the directors.
Significant and Material Orders passed by the Regulators or Courts
During FY2022, there were 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 operations in future.
At the beginning of each financial year, an audit plan is rolled out after the same has been approved by Audit Committee. Pursuant to Risk Based Internal Audit Framework, Internal Audit is aligned in such a manner that assurance is provided to the Audit Committee and Board of Directors on the overall risk management system including the quality and effectiveness of the internal controls, and governance related systems and processes.
Significant audit observations and corrective actions thereon are presented to the Audit Committee of Board.
The Company has in place adequate financial controls commensurate with its size, scale and complexity of operations with reference to its financial statements. These have been designed to provide reasonable assurance about recording and providing reliable financial information, ensuring integrity in conducting business, accuracy and completeness in maintaining accounting records and prevention and detection of frauds and errors.
The Board is of the opinion that internal financial controls with reference to the financial statements were tested and reported adequate and operating effectively.
Whistle Blower Policy / Vigil Mechanism
The Company has a Whistle Blower Policy encompassing vigil mechanism pursuant to the requirements of section 177(9) of the Act and Regulation 22 of the SEBI Listing Regulations. The whistle blower framework has been introduced with an aim to provide employees and directors with a safe and confidential channel to share their inputs about such aspects which are adversely impacting their work environment. The Policy/
Vigil Mechanism has been revised recently and enables directors, employees and other persons to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company''s Code of Conduct or ethics policy and leak or suspected leak of unpublished price sensitive information.
During the year under review, there were no complaints received under the above mechanism nor was any employee denied access to the Audit Committee. The Audit Committee reviews the functioning of the Vigil Mechanism/Whistle Blower Policy once a year.
The Whistle Blower Policy is uploaded on the website of the Company and can be accessed at https://www.bhil.in/investors.html#url-codes-policies
The Company continues to fulfill all the norms and standards laid down by RBI pertaining to non-performing assets, capital adequacy, statutory liquidity assets, etc. As against the RBI norm of 15%, the capital adequacy ratio of the Company was 111% as on 31 March 2022. In line with the RBI guidelines for Asset Liability Management (ALM) system for NBFCs, the Company has an Asset Liability Management Committee, which meets yearly once to review its ALM risks and opportunities.
The Company is in compliance with the NBFC - Corporate Governance (Reserve Bank) Directions, 2015.
Pursuant to the SEBI Listing Regulations, a separate chapter titled ''Corporate Governance'' has been included in this Annual Report, along with the reports on Management Discussion and Analysis and General Shareholder Information.
The Managing Director & CEO and the CFO have certified to the Board with regard to the financial statements and other matters as required under regulation 17(8) of the SEBI Listing Regulations.
Certificate from the statutory auditors of the Company regarding compliance of conditions of corporate governance is annexed to this Report.
Business Responsibility Report
Pursuant to the provisions of the SEBI Listing Regulations, the Company is required to give Business Responsibility Report (''BRR'') in the Annual Report.
The BRR for FY2022 has been placed on the Company''s website at https://www.bhiLin/investors.html#url-annual-reports
Auditors and Auditors'' Report
Statutory auditor
Pursuant to the provisions of section 139 of the Act, S R B C & Co LLP, Chartered Accountants (Firm Registration No. 324982E/E300003) were appointed as statutory auditors of the Company for a period of five years i.e. from the conclusion of the 72nd annual general meeting till the conclusion of the 77th annual general meeting.
RBI, vide its Guidelines for Appointment of Statutory Central Auditors (SCAs) / Statutory Auditors (SAs) of Commercial Banks (excluding RRBs), UCBs and NBFCs (including HFCs) dated 27 April 2021 (the "Guidelines"/"Circular"), mandated NBFCs (including HFCs) with an asset size of ? 1,000 crore and above to appoint a minimum of an audit firm for conducting statutory audit, where each term should be for a maximum period of 3 consecutive years. Further, the Guidelines also specified that an auditor who has completed a period of 3 years (counted as one tenure as per Guidelines) as on the date of the Circular shall not be eligible for re-appointment in the same Entity for six years (two tenures) after completion of one tenure of 3 years. Subsequently, the RBI had also released Frequently Asked Questions (FAQs) dated 11 June 2021, inter alia, clarifying that the existing statutory auditors who have completed 3 years with an entity would not be able to continue as auditors with effect from second half of the financial year 2021-22, even though they may not have completed their present tenure as approved by the members of the said entity.
By virtue of the aforesaid RBI Guidelines and related FAQs, S R B C & Co. LLP, being ineligible to continue as Statutory Auditors for the remaining part of their tenure, tendered their resignation as Statutory Auditors of the Company effective from 13 November 2021.
Consequent to the above, members of the Company, on the basis of recommendation of the Audit Committee and Board, by way of Postal Ballot, have approved appointment of Kalyaniwalla & Mistry LLP (Firm Registration No. 104607W / LLP W100166) as Statutory Auditors effective 17 November 2021 till conclusion of 77th AGM.
In the ensuing AGM, approval of the members is being sought again for their continuation/ re-appointment as Statutory Auditor for remaining term of two years, i.e., from the conclusion of the 77th AGM till the conclusion of the 79th AGM, i.e., for the financial year ending 31 March 2023 and 31 March 2024, respectively.
As per the Guidelines, for NBFC entities with asset size of ? 15,000 crore and above as at the end of previous year, the statutory audit should be conducted under joint audit of a minimum of two audit firms. Considering that the Company, as on 31 March 2022, having an asset size exceeding ? 15,000 crore, the Company is required to appoint Joint Statutory Auditors.
In accordance with the RBI Guidelines, the Board of Directors, based on the recommendation of Audit Committee, at their meeting held on 28 April 2022, have recommended the appointment of NBS & Co., Chartered Accountants (Firm Registration no. 110100W) as the other Joint Statutory Auditor for a period of 3 years i.e. from the conclusion of the 77th AGM till the conclusion of the 80th AGM to conduct audit of the financial statements of the Company for the year ended 31 March 2023, 31 March 2024 and 31 March 2025, respectively, subject to members'' approval at the ensuing AGM.
The statutory audit report for FY2022 does not contain any qualification, reservation or adverse remark or disclaimer made by statutory auditor.
Secretarial Auditor
Pursuant to the provisions of section 204 of the Act and Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed Shyamprasad D Limaye, Practising Company Secretary (FCS No. 1587, CP No. 572) to undertake the secretarial audit of the Company.
A report from the secretarial auditor in the prescribed Form MR-3 is annexed to this Report. It does not contain any qualification, reservation or adverse remark or disclaimer made by secretarial auditor.
Pursuant to Regulation 24A(2) of the SEBI Listing Regulations, a report on secretarial compliance has been issued by Shyamprasad D Limaye for the financial year ended 31 March 2022 and the same has been submitted to stock exchanges. There are no observations, reservations or qualifications in the said report.
Since, the auditors, i.e., statutory auditors and secretarial auditors have not reported any matter under section 143(12) of the Act, no detail is required to be disclosed under section 134(3) (ca) of the Act.
Secretarial Standards of ICSI
The Company has complied with the requirements prescribed under the Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) read with the MCA Circulars granting exemptions in view of the Covid-19 pandemic.
⢠The financial results of the Company and its subsidiaries are placed on the website of the Company at https://www.bhil.in/investors.html#url-annual-reports
⢠Details as required under 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, as amended, containing, inter alia, ratio of remuneration of Directors and KMP to median remuneration of employees and percentage increase in the median remuneration are annexed to this Report.
⢠Details as required under the provisions of section 197(12) of the Act read with rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, which form part of the Directors'' Report, will be made available to any member by way of email upon request, as per provisions of section 136(1) of the said Act.
⢠Pursuant to RBI Master Direction-Information Technology Framework for the NBFC sector, the Company has constituted an IT Strategy Committee to review the IT strategies in line with the corporate strategies, board policy reviews, cyber security arrangements and any other matter related to IT governance.
⢠The provisions of section 148 of the Act, are not applicable to the Company. Accordingly, there is no requirement of maintenance of cost records as specified under sub-section (1) of section 148 of the Act.
⢠The Company has a policy on prevention of sexual harassment at the workplace. The Company has also complied with the provisions relating to the constitution of Internal Complaints Committee under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. There was no case reported during the year under review.
⢠There is no change in the nature of business of the Company during FY2022.
⢠Neither any application was made, nor any proceeding is pending under the Insolvency and Bankruptcy Code, 2016 against the Company.
On behalf of the Board of Directors
Shekhar Bajaj Chairman
Pune: 28 April 2022
Mar 31, 2021
At the outset, your Company''s Board of directors commiserates with the families of all employees, members and others who succumbed to this dreadful COvID-19 pandemic.
Your directors'' present the Seventy Sixth Annual Report along with the audited standalone and consolidated financial statements for FY2021.
Circulation of Annual Reports in electronic form
Pursuant to circulars from the Ministry of Corporate Affairs (''MCA'') dated 8 April 2020, 13 April 2020, 5 May 2020 and 13 January 2021, read with SEBI Circulars dated 12 May 2020 and 15 January 2021, the ensuing 76th Annual General Meeting (AGM) is being conducted through ''Video Conferencing or Other Audio Visual Means'' (VC/OAVM).
Accordingly, the financial statements (including Directors'' Report, Corporate Governance Report, Management Discussion and Analysis Report, Auditors'' Report and other documents to be attached therewith) are being sent through electronic mode to those members whose email addresses are registered with the Company''s Registrar and Share Transfer Agent viz., KFin Technologies Pvt. Ltd. (KFin) /Depository Participants, and whose names appear in the Register of Members as on Friday, 18 June 2021. The Company has also made arrangements for those members who have not yet registered their email address to get these registered by following the procedure prescribed in the notice of AGM.
The financial results of the Company are elaborated in the Management Discussion and Analysis Report.
The highlights of the Standalone Financial Results are as under:
|
Particulars |
FY2021 |
('' In Crore) FY2020 |
|
Total income |
431.14 |
2,205.86 |
|
Total expenses |
121.23 |
157.77 |
|
Profit before tax |
309.91 |
2,048.09 |
|
Tax expense |
111.32 |
221.22 |
|
Profit for the year |
198.59 |
1,826.87 |
|
Earnings per share (?) |
17.80 |
164.10 |
|
Particulars |
FY2021 |
('' In Crore) FY2020 |
|
Reserve fund in terms of section 45-IC(1) of Reserve Bank of India Act, 1934 |
2,147.06 |
2,107.34 |
|
Securities premium |
444.42 |
444.42 |
|
General reserve |
3,706.96 |
3,706.96 |
|
Retained earnings |
3,647.69 |
3,198.67 |
|
Other reserves - Equity instruments through other comprehensive income |
3,906.78 |
1,089.11 |
|
Other reserves- Debt instruments through other comprehensive income |
52.56 |
34.63 |
|
Other reserves- Hedge instruments through other comprehensive income |
0.01 |
0.07 |
|
Total |
13,905.48 |
10,581.20 |
Note: Detailed movement of above reserves can be seen in ''Statement of Changes in Equity'' The highlights of the Consolidated Financial Results are as under:
('' In Crore)
Particulars FY2021 FY2020
Total income 463.07 435.69
Share of profits of associates 3,445.59 3,057.81
Profit before tax 3,765.74 3,313.67
Profit for the year 3,649.83 2,992.00
Earnings per share (?) 327.90 268.80
Under section 45-IC of Reserve Bank of India Act, 1934, non-banking financial companies (NBFCs) are required to transfer a sum not less than 20% of its net profit every year to reserve fund before declaration of any dividend. Accordingly, the Company has till date transferred a sum of '' 2,147.06 crore to its reserve fund.
Detailed information on the operations of the Company and details on the state of affairs of the Company are covered in the Management Discussion and Analysis Report.
Presentation of Standalone and Consolidated Financial Statements
The financial statements of the Company for FY2021, on a standalone and consolidated basis, have been prepared in compliance with the Act, applicable Accounting Standards and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (''SEBI Listing Regulations'') and are disclosed in accordance with Schedule III of the Act. The consolidated financial statements incorporate the audited financial statements of the subsidiaries and associates of the Company.
Pursuant to the provisions of SEBI Listing Regulations as amended, the Company has formulated a Dividend Distribution Policy. The Policy sets out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its members.
The policy has been uploaded on the website of the Company and can be accessed at
http://www.bhil.in/inv/codes_policies.html. A copy of the policy will be made available to any shareholder on request, by email.
The directors recommend, for consideration of the members at the ensuing Annual General Meeting, dividend of '' 40 per equity share (400%) of face value of '' 10 for the year ended 31 March 2021. The total dividend pay-out for FY2021 is '' 445.17 crore.
During FY2020, Dividend income received by the Company was substantially higher as compared to FY2021 as group companies had declared an Interim Dividend in FY2020. Consequently, there was no dividend declared in FY2021 by some of these companies. In order to keep the dividend declared stable and steady, the Board has, for FY2021, recommended dividend out of the Retained Earnings outstanding at the close of the year. Such payment of dividend from retained profits was not envisaged in the Dividend Distribution policy, which will be suitably revised.
Dividend paid for FY2020 was '' 40 per equity share (400%) of face value of '' 10 each. The amount of dividend pay-out and tax thereon aggregated to '' 531.00 crore.
In view of the amendment to the Income Tax Act, 1961 through the Finance Act, 2020, imposition of Dividend Distribution Tax has been abolished. The dividend, if declared at the ensuing AGM will be taxable in the hands of the members of the Company. For further details on taxability, please refer to the ''Notice of 76th AGM''.
Subsidiary/associates and joint ventures
Following are the subsidiary/associate companies of the Company:
|
Name of the company |
% shareholding of BHIL and its subsidiaries |
Status |
|
Bajaj Auto Ltd. |
35.77% |
Associate |
|
Bajaj Finserv Ltd. |
41.63% |
Associate |
|
Bajaj Auto Holdings Ltd. |
100% |
Subsidiary |
|
Maharashtra Scooters Ltd. |
51% |
Subsidiary |
The financial highlights of performance of subsidiary and associates of the Company and their contribution to the overall performance of the Company during the period under Report is covered in the Management Discussion and Analysis Report.
During FY2021, no new subsidiary was incorporated/acquired. Neither the Company has entered into a joint venture with any company.
The financial statements of the subsidiary companies are also available in a downloadable format under Investors section of the Company''s website at http://www.bhil.in/inv/annual_reports.html
A separate statement containing the salient features of the subsidiaries in the prescribed form AOC-1 is attached to the consolidated financial statements.
Directors and Key Managerial Personnel
A) Change in Directorate/Chairman:
i) Relinquishment of position of Chairman
Considering the increasing roles and responsibilities in various Bajaj group entities, Niraj Bajaj has relinquished his position as Chairman of the Company with effect from close of business hours of 30 April 2021. Considering his valuable performance as Chairman of the Company over the past two years and to leverage his experience, the Board at its meeting held on 29 April 2021, designated Niraj Bajaj as the vice-chairman of the Company with effect from 1 May 2021.
ii) Appointment of Independent Director
The Board of Directors at its meeting held on 29 April 2021, has appointed Dr. Omkar Goswami as Independent Director for a period of five years with effect from 1 May 2021.
The Board is of the opinion that Dr. Omkar Goswami has the necessary experience and expertise concerning the business of the Company. Based on the declarations submitted by Dr. Goswami, the Board is also of the opinion that he possesses the integrity to be appointed as an Independent Director of the Company.
iii) Appointment of Non-executive Director and Chairman of the Company
Considering the relinquishment of position of Chairman by Niraj Bajaj, the Board at its meeting held on 29 April 2021, appointed Shekhar Bajaj as an Additional Director and Non-executive Chairman with effect from 1 May 2021.
Necessary details regarding their appointments as required under the Act and SEBI Listing Regulations including their brief profile, are given in the notice of AGM. The appointment of Dr. Omkar Goswami and Shekhar Bajaj is subject to approval of members at the ensuing AGM.
B) Director liable to retire by rotation:
The Company as on 31 March 2021, has 10 directors - 5 independent directors, 4 non-executive, non-independent and 1 executive director. As per the provisions of Companies Act, 2013 (''the Act'') at least two-third of the total number of directors (excluding independent directors) shall be liable to retire by rotation. Amongst the said 5 directors, Sanjiv Bajaj, Managing Director is a director not liable to retire by rotation. Out of the remaining 4 directors liable to retire by rotation, Madhur Bajaj, director, being the longest in office, retires from the Board by rotation this year, and, being eligible, has offered his candidature for re-appointment.
Necessary details of Madhur Bajaj, Director, who is seeking re-appointment, are given in the notice of AGM.
C) Change in KMP:
There was no change in Key Managerial Personnel of the Company during the year under review.
Declaration by independent directors
The independent directors have submitted a declaration of independence, stating that they meet the criteria of independence as required pursuant to the provisions of the Act, as amended, and SEBI Listing Regulations. The independent directors have also confirmed compliance with the provisions of rule 6 of Companies (Appointment and Qualifications of Directors) Rules, 2014, as amended, relating to inclusion of their name in the databank of independent directors.
The Board took on record the declaration and confirmation submitted by the independent directors, regarding, them meeting the prescribed criteria of independence, after undertaking due assessment of the veracity of the same in terms of the SEBI Listing Regulations.
Policy on directors'' appointment and remuneration
The salient features of the Policy on directors'' appointment and remuneration form a part of the ''Corporate Governance Report''. The said policy is placed on the Company''s website at http://www.bhil.in/inv/codes_policies.html.
A copy of the annual return as required under the Act in the prescribed form which will be filed with the Registrar of Companies/Ministry of Corporate Affairs within the regulatory timelines is hosted on the Company''s website at http://www.bhil.in/inv/annual_reports.html
Number of meetings of the Board
Five meetings of the Board were held during FY2021. Details of the meetings and attendance thereat form a part of the Corporate Governance Report.
Directors'' responsibility statement
In accordance with the provisions of the Act and based on the information provided by the Management, the directors state that:
in the preparation of the annual accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;
they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;
they 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;
they have prepared the annual accounts on a going concern basis;
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
they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Particulars of loans, guarantees or investments
During the year under review, the Company did not give loans to any person. Information regarding investments covered under the provisions of the Act are detailed in the financial statements.
The paid-up equity share capital as on 31 March 2021 was '' 111.29 crore. There was no public issue, rights issue, bonus issue or preferential issue, etc. during the year. The Company has not issued shares with differential voting rights or sweat equity shares, nor has it granted any stock options.
Continued classification as Systemically Important Non-Deposit taking NBFC
The Company has been registered with the Reserve Bank of India as a Non-Banking Financial Institution (Non-Deposit taking). In terms of provisions of Non-Banking Financial Company - Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016, the Company is categorised as a ''Systemically Important Non-Deposit taking Non-Banking Financial Company''. The Company has not accepted public deposits during the year under review.
Details in respect of frauds reported by auditors under section 143(12) of the Act
During the year under review, no frauds were reported by the auditors to the Audit Committee or the Board pursuant to the Act.
All contracts/arrangements/transactions entered by the Company during FY2021 with related parties were in compliance with the applicable provisions of the Act and SEBI Listing Regulations. Prior omnibus approval of the Audit Committee is obtained for all related party transactions which are of foreseen and repetitive nature. Pursuant to the said omnibus approval, details of related party transactions entered into are also reviewed by the Audit Committee on a quarterly basis.
All related party transactions entered during FY2021 were on arm''s length basis and in the ordinary course of business of the Company under the Act and not material under the SEBI Listing Regulations or extant RBI guidelines. None of the transactions required members'' prior approval under the Act or SEBI Listing Regulations.
Details of transactions with related parties during FY2021 are provided in the notes to the financial statements. There were no material related party transactions requiring disclosure as per the Act. Hence, the prescribed Form AOC-2 does not form a part of this report.
The Company has formulated a policy on materiality of related party transactions for dealing with related party transactions including clear threshold limits, duly approved by the Board. The Board has reviewed the policy and has not recommended any change to either the policy or prescribed threshold.
The said policy is placed on the Company''s website at http://www.bhil.in/inv/codes_policies.html.
Material changes and 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.
Conservation of energy, technology absorption, foreign exchange earnings and outgo
Conservation of energy
The Company has taken, inter alia, following measures to reduce energy consumption:
(a) Switched from conventional lighting systems to LED lights at Mumbai location; and
(b) Selecting and designing offices to facilitate maximum natural light utilisation.
Technology absorption
The Company primarily being an investment company and not involved in any industrial or manufacturing activities, has no particulars to report regarding technology absorption as required under the Act and Rules made thereunder.
Foreign exchange earnings and outgo
During the year under review, no foreign exchange was earned by the Company. No foreign exchange was earned by the Company during FY2020 as well.
The total foreign exchange outflow during the year under review was '' 37.04 crore (as against '' 36.68 crore during the previous year).
Information on the development and implementation of a Risk Management Policy for the Company, inter alia, including identification of the elements of risks, which in the opinion of the Board could significantly impact the Company, is given in the Corporate Governance Report.
Corporate Social Responsibility (CSR)
The CSR committee comprises of three directors viz., Sanjiv Bajaj as Chairman, Anami N Roy and Dr. Naushad Forbes as other members. During FY2021, the Committee met once, the attendance record of members are given in the ''Annual Report on CSR activities''.
Section 135 of the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014 have been amended substantially with effect from 22 January 2021.
In terms of the provisions of the Act read with amended Companies (Corporate Social Responsibility Policy) Rules, 2014, the Annual Report on CSR activities under the format prescribed under Annexure II of the said Rules is annexed to this Report.
In line with the said amendments, the Board, at its meeting held on 29 April 2021, amended the existing Policy. The Policy is uploaded on the website of the Company at http://www.bhil.in/inv/corporate-social-responsibility.html
The Chief Financial Officer has certified that the funds disbursed have been utilised for the purpose and in the manner approved by the Board for FY2021.
Formal annual evaluation of the performance of the Board, its Committees and Directors
Information on the manner in which formal annual evaluation has been made by the Board, of its own performance and that of its Committees and individual directors is given in the Corporate Governance Report.
Significant and material orders passed by the regulators or courts
During the year under review, there were 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 operations in future.
The Audit Committee comprises of Pradip P Shah as Chairman, Dr. Naushad Forbes, Dr. Gita Piramal and Manish Kejriwal as other members.
The brief terms of reference and attendance record of members are given in the ''Corporate Governance Report''.
At the beginning of each financial year, an audit plan is rolled out after the same has been approved by Audit Committee. The audit plan is aimed at evaluation of the efficacy and adequacy of internal control systems and compliance thereof, robustness of internal processes, policies and accounting procedures, compliance with laws and regulations. Based on the reports of internal audit, process owners undertake corrective action in their respective areas.
Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.
The Reserve Bank of India, vide its circular dated 3 February 2021, has introduced Risk based Internal Audit (RBIA) for NBFCs. In terms of the said circular, applicable NBFCs shall put forth a Risk Based Internal Audit Framework by 31 March 2022.
The Board, on the recommendation of the Audit Committee has approved a policy, process and plan for internal audit as per the said RBI circular which is being implemented from 1 April 2021.
The Company has in place adequate financial controls commensurate with its size, scale and complexity of operations with reference to its financial statements. These have been designed to provide reasonable assurance about recording and providing reliable financial information, ensuring integrity in conducting business, accuracy and completeness in maintaining accounting records and prevention and detection of frauds and errors.
Whistle blower policy/vigil mechanism
The Company has a whistle blower policy encompassing vigil mechanism pursuant to the provisions of the Act and SEBI Listing Regulations. The Audit Committee reviews the functioning of the whistle blower policy. The policy/vigil mechanism enables directors and employees to report to the management their concerns about unethical behaviour, actual or suspected fraud or violation of the Company''s code of conduct or ethics policy and leak or suspected leak of unpublished price sensitive information. More details are given in ''Corporate Governance Report''.
The whistle blower policy is uploaded on the website of the Company and can be accessed at http://bhil.in/inv/codes_policies.html
The Company continues to fulfill all the norms and standards laid down by the RBI pertaining to non-performing assets, capital adequacy, statutory liquidity assets, etc. As against the RBI norm of 15%, the capital adequacy ratio of the Company was 112% as on 31 March 2021. In line with the RBI guidelines for asset liability management (ALM) system for NBFCs, the Company has an Asset Liability Management Committee, which meet yearly once to review its ALM risks and opportunities.
Your Company is in compliance with the NBFC - Corporate Governance (Reserve Bank) Directions, 2015.
The financial results of the Company and its subsidiaries are placed on the Company''s website at www.bhil.in
Details as required under the provisions of the Act read with rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, containing, inter alia, ratio of remuneration of Directors to median remuneration of employees and percentage increase in the median remuneration are annexed to this Report.
Details as required under the provisions of the Act read with rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, which form part of the Directors'' Report, will be made available to any member on request as per provisions of section 136(1) of the said Act.
Pursuant to RBI Master Direction-Information Technology Framework for the NBFC sector, the Company has constituted an IT Strategy Committee to review the IT strategies in line with the corporate strategies, board policy, cyber security arrangements and any other matter related to IT governance.
The provision of section 148 of the Act relating to maintenance of cost records and cost audit are not applicable to the Company.
The Company has a policy on prevention of sexual harassment at the workplace.
The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The number of complaints received, disposed-off and pending during FY2021 is given in the annexed ''Corporate Governance Report''.
There is no change in the nature of business of the Company during FY2021.
Pursuant to the SEBI Listing Regulations, a separate chapter titled ''Corporate Governance'' has been included in this Annual Report, along with the reports on Management Discussion and Analysis and General Shareholder Information.
All the Board members and Senior Management personnel have affirmed compliance with the Code of Conduct for FY2021. A declaration to this effect signed by the Managing Director & CEO of the Company is contained in this Annual Report.
The Managing Director & CEO and the CFO have certified to the Board with regard to the financial statements and other matters as required under SEBI Listing Regulations.
Certificate from the statutory auditors of the Company regarding compliance of conditions of corporate governance is annexed to this Report.
Business Responsibility Report
According to the provisions of the SEBI Listing Regulations, a Business Responsibility Report (BRR) has been hosted on the website and can be accessed at http://bhil.in/inv/annual_reports.html The BRR highlights the initiatives, actions, process and the way the Company conducts its business in line with its environmental, social and governance obligations.
Towards the end of March 2020, the Prime Minister announced a Nationwide Lockdown in view of the heightened concern over the spread of Corona Virus (''COVID-19''), which had adversely affected all the industrial operations.
In line with the lockdowns announced by the Central Government, all offices of the Company were closed from 23 March 2020 providing ''Work from Home'' facility to employees to ensure continuity of operations of the Company. Considering the nature of business of BHIL, i.e., being an investment company with no customer interface, the operations of the Company went uninterrupted and the impact of COVID-19 on the business was minimal.
The only cause for concern at present is the huge surge in infections that started with the second wave beginning in early March 2021. Hopefully, the outreach of vaccination drive across the country coupled with proper wearing of masks and social distancing will bring this surge down and we expect the situation to normalize soon.
The Company has complied with the requirements prescribed under the Secretarial Standards on meetings of the Board of directors (SS-1) and general meetings (SS-2) read with the MCA Circulars granting exemptions in view of the COVI D-19 pandemic.
Statutory auditor
Pursuant to the provisions of the Act, the members at the Annual General Meeting of the Company held on 20 July 2017 appointed S R B C & CO LLP, Chartered Accountants (Firm Registration No. 324982E/E300003) as statutory auditors of the Company from the conclusion of the seventy second annual general meeting till the conclusion of the seventy seventh annual general meeting.
The statutory auditors have confirmed they are not disqualified from continuing as auditors of the Company.
The audit report by S R B C & CO LLP, for FY2021 is unmodified, i.e., it does not contain any qualification, reservation or adverse remark or disclaimer.
In terms of the RBI Master Directions - Non-Banking Financial Companies Auditor''s Report (Reserve Bank) Directions, 2016, the auditors have also submitted an additional report dated 21 July 2020, for the financial year 2020 which has been filed with RBI. There were no comments or adverse remarks in the said report.
Secretarial auditor
Pursuant to the provisions of the Act, the Board has appointed Shyamprasad D Limaye, practising company secretary (FCS No. 1587, CP No. 572), to undertake secretarial audit of the Company.
A report from the secretarial auditor in the prescribed Form MR-3 is annexed to this Report. It does not contain any qualification, reservation or adverse remark or disclaimer.
In addition to the above and pursuant to SEBI circular dated 8 February 2019, a report on secretarial compliance by Shyamprasad D Limaye for FY2021 has been submitted with the stock exchanges. There are no observations, reservations or qualifications in that report.
Since, the auditors i.e. statutory auditors and secretarial auditors have not reported any matter under section 143(12) of the Act, no detail is required to be disclosed under section 134(3)(ca) of the Act.
The Board places its gratitude and appreciation for the support and cooperation from its members, the RBI and other regulators and banks. The Board also places on record its sincere appreciation for the commitment and hard work put in by the management and the employees in these trying times.
On behalf of the Board of Directors
Mar 31, 2019
The directors have pleasure in presenting the Seventy Fourth Annual Report and the audited financial statements for the year ended 31 March 2019.
Financial results
The financial results of the Company are elaborated in the Management Discussion and Analysis Report.
The highlights of the Standalone Financial Results are as under:
(Rs. In Crore)
|
Particulars |
FY2019 |
FY2018 |
|
Total income |
998.27 |
953.83 |
|
Total expenses |
88.63 |
69.72 |
|
Profit before tax |
909.64 |
884.11 |
|
Tax expense |
121.45 |
84.18 |
|
Profit for the year |
788.19 |
799.93 |
|
Earnings per share (in Rs.) |
70.8 |
71.9 |
Closing balances in reserve/other equity
(Rs. In Crore)
|
Particulars |
FY2019 |
FY2018 |
|
Reserve fund in terms of section 45-IC(1) of Reserve Bank of India Act, 1934 |
1,741.97 |
1,584.33 |
|
Securities premium |
444.42 |
444.42 |
|
General reserve |
3,706.96 |
3,706.96 |
|
Retained earnings |
2,543.02 |
2,356.76 |
|
Other reserves - Equity instruments through other comprehensive income |
2,441.76 |
2,017.98 |
|
Total |
10,878.13 |
10,110.45 |
Note: Detailed movement of above reserves can be seen in âStatement of Changes in Equityâ
The highlights of the Consolidated Financial Results are as under:
(Rs. In Crore)
|
Particulars |
FY2019 |
FY2018 |
|
Total income |
431.35 |
424.41 |
|
Share of profits of associates and joint venture |
2,827.33 |
2,384.88 |
|
Profit before tax |
3,170.02 |
2,739.45 |
|
Profit for the year |
3,048.38 |
2,654.75 |
|
Earnings per share (Rs.) |
273.9 |
238.5 |
Dividend
The directors recommend for consideration of the shareholders at the ensuing Annual General Meeting, payment of dividend of RS. 32.50 per equity share (325%) for the year ended 31 March 2019. The amount of dividend and the tax thereon to the extent applicable aggregate to RS. 436 crore.
For the year ended 31 March 2018, the dividend paid was RS. 40.00 per equity share of RS. 10 each (400%) and the total dividend and the tax thereon to the extent applicable aggregated to RS. 536.50 crore.
Share Capital
The paid-up equity share capital as on 31 March 2019 was RS. 111.29 crore. There was no public issue, rights issue, bonus issue or preferential issue, etc. during the year. The Company has not issued shares with differential voting rights or sweat equity shares nor has it granted any stock options.
Registration as a Systemically Important Non-Deposit taking NBFC
The Company has been registered with the Reserve Bank of India as a Non-Banking Financial Institution (Non-Deposit taking). In terms of provisions of Non-Banking Financial Company -Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016, the Company is categorised as a âSystemically Important Non-Deposit taking Non-Banking Financial Companyâ. The Company has not accepted public deposits during the year under review.
Operations
Detailed information on the operations of the Company and details on the state of affairs of the Company are covered in the Management Discussion and Analysis Report.
Annual Return
The extract of annual return as provided under section 92(3) of the Companies Act, 2013 (âthe Actâ), in the prescribed form MGT-9 is annexed to this Report and also on the Companyâs website at http://www.bhil.in/inv/annual_reports.html
Number of meetings of the Board
Six meetings of the Board were held during FY2019. Details of the meetings and attendance thereat form a part of the âCorporate Governance Reportâ.
Directorsâ responsibility statement
In compliance of section 134(5) of the Act the directors state that:
- in the preparation of the annual accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;
- the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;
- the directors had 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;
- the directors had prepared the annual accounts on a going concern basis;
- the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
- the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Details in respect of frauds reported by auditors under section 143(12)
During the year under review, no frauds were reported by the auditors to the Audit Committee or the Board under section 143(12) of the Act.
Declaration by independent directors
The Independent Directors have submitted declaration of independence, as required under section 149(7) of the Act stating that they meet the criteria of independence as provided in section 149(6) of the Act as amended and Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âthe SEBI Listing Regulationsâ), as amended.
The Board took on record the declaration and confirmation submitted by the Independent Directors regarding them meeting the prescribed criteria of independence, after undertaking due assessment of the veracity of the same as required under Regulation 25 of the SEBI Listing Regulations.
Policy on directorsâ appointment and remuneration
The Board, at its meeting held on 14 March 2019, has revised the sitting fees from RS. 50,000 to RS. 100,000 and commission from RS. 100,000 to RS. 200,000 payable per meeting to all non-executive directors (including independent directors) for meetings of the Board and/or Committeeâs attended by them from and after 1 April 2019.
The salient features and changes to the Policy on directorsâ appointment and remuneration form a part of the âCorporate Governance Reportâ. The said policy is placed on the Companyâs website at www.bhil.in
Particulars of loans, guarantees or investments
Information regarding loans, guarantees and investments covered under the provisions of section 186 of the Act are detailed in the financial statements.
Related party transactions
During FY2019, transactions with related parties were entered with the approval of the Audit Committee in line with provisions of the Act and the SEBI Listing Regulations.
All related party transactions entered into during FY2019 were on an armâs length basis and in the ordinary course of business under the Act and not material under the SEBI Listing Regulations. None of the transactions required membersâ prior approval under the Act or the SEBI Listing Regulations. During FY2019, there were no related party transactions requiring disclosure under section 134 of the Act. There being no âmaterialâ related party transactions as defined under Regulation 23 of the SEBI Listing Regulations, there are no details to be disclosed in Form AOC-2 in that regard
Pursuant to Regulation 23 of SEBI Listing Regulations, the Board, at its meeting held on 14 March 2019, has revised the policy on materiality of related party transactions and on dealing with related party transactions including providing clear threshold limits for various transactions with related parties.
The said revised policy is placed on the Companyâs website at www.bhil.in and is also included in this Annual Report.
Material changes and 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.
Conservation of energy, technology absorption, foreign exchange earnings and outgo
Conservation of energy
- The Company has taken, inter alia, following measures to reduce energy consumption;
- Switched from conventional lighting systems to LED lights at its offices;
- Selecting and designing offices to facilitate maximum natural light utilisation.
Technology absorption
The Company primarily being an investment company and not involved in any industrial or manufacturing activities, has no particulars to report regarding technology absorption as required under section 134 of the Act and Rules made thereunder.
Foreign exchange earnings and outgo
During the year under review, the total foreign exchange earned by the Company was RS. 180.70 crore (as against Nil during the previous year).
The total foreign exchange outflow during the year under review was RS. 207.23 crore (as against RS. 1.21 crore during the previous year).
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 Corporate Governance Report.
Corporate Social Responsibility (CSR)
Detailed report on the Corporate Social Responsibility Policy developed and implemented by the Company on CSR initiatives taken during the year pursuant to section 135 of the Act is given in the Annual Report on CSR activities.
Formal annual evaluation of the performance of the Board, its Committees and Directors
Information on the manner in which formal annual evaluation has been made by the Board of its own performance and that of its Committees and individual directors is given in the Corporate Governance Report.
Subsidiary/joint venture/associates
Following are the subsidiary/joint venture/associate companies of the Company:
|
Name of the company |
% shareholding of BHIL and its subsidiary |
Status |
|
Bajaj Auto Ltd. |
33.43% |
Associate |
|
Bajaj Finserv Ltd. |
39.29% |
Associate |
|
Bajaj Auto Holdings Ltd. |
100% |
Subsidiary |
|
Maharashtra Scooters Ltd. |
24% |
Joint Venture |
The financial highlights of performance of subsidiary, associates and joint venture of the Company and their contribution to the overall performance of the Company during the period under Report is covered in the Management Discussion and Analysis Report.
With respect to the litigation between the Company and Western Maharashtra Development Corporation Ltd. (WMDC) in connection with the sale of 27% shareholding in Maharashtra Scooters Ltd. (MSL) i.e. 30,85,712 equity shares by WMDC to the Company, pending since 2003, the updates/developments during the year under review are as follows:
1) The Honâble Supreme Court of India passed an Order dated 9 January 2019, directing WMDC to transfer 30,85,712 shares of MSL to the Company upon payment to WMDC an amount of RS. 232 per share (in place of RS. 151.63 per share awarded by the Arbitrator) along with interest @ 18% p.a. from the date of the Arbitral Award.
2) Pursuant to and in compliance of the said Order, the Company sent a communication dated 14 January 2019 to WMDC, along with cheques towards the following:
a. Cost of shares @ RS. 232 per share, i.e. RS. 715,885,184
b. Interest calculated @18% p.a. from the date of award i.e. 14 January 2006 till the date of payment, i.e. 14 January 2019 of RS. 1,676,583,488 less 10% TDS i.e. RS. 167,658,349, net RS. 1,508,925,139.
3) WMDC has neither encashed the cheques nor has it effected the transfer of shares so far and WMDCâs compliance of the Honâble Supreme Court Order is awaited.
Directors and Key Managerial Personnel
A)Change in Directorate:
I. Appointment/Re-appointment of Independent Directors
(a) The Board of Directors at its meeting held on 14 March 2019 has appointed Anami N Roy as Independent Director for a period of five years with effect from 1 April 2019. Further, the Board also appointed Niraj Bajaj as Additional Director and Non-executive Chairman with effect from the conclusion of the Board meeting on 17 May 2019.
(b) At the aforesaid Meeting, the Board, taking into account the report of performance evaluation and the recommendation of Nomination and Remuneration Committee re-appointed the following independent directors for a second consecutive term:
|
Sr. No. |
Name of Independent Director |
Tenure of Second term |
|
1. |
Nanoo Pamnani (DIN 00053673)* |
Five years w.e.f. 1 April 2019 |
|
2. |
D J Balaji Rao (DIN 00025254)** |
Five years w.e.f. 1 April 2019 |
|
3. |
Dr. Gita Piramal (DIN 01080602) |
Five years w.e.f. 17 July 2019 |
*Pursuant to Regulation 17(1A) of SEBI Listing Regulations, consent of the Members by way of Special Resolution is being sought by the Company for continuance of Nanoo Pamnani beyond 26 February 2020 on account of his attaining the age of 75 years on that date.
** Pursuant to Regulation 17(1A) of SEBI Listing Regulations, consent of the Members by way of Special Resolution is being sought by the Company for continuance of D J Balaji Rao beyond 1 April 2019 on account of his having already attained the age of 75 years as on 1 April 2019.
Necessary details regarding their appointment and re-appointment as required under the Act and SEBI Listing Regulations, are given in the notice of Annual General Meeting (AGM). The aforesaid appointments are subject to approval of shareholders at the ensuing AGM.
II. Retirement of Independent Director
P Murari, vide his letter dated 28 February 2019 has stated that due to his commitments, priorities and health reasons, he will be unable to continue as an Independent Director of the Company for another term after 31 March 2019. The Board at its meeting held on 14 March 2019 noted the same and recorded its appreciation of the valuable services rendered by P Murari during his long tenure as director of the Company.
iii. Resignation of Non-executive Chairman
As part of succession planning, Rahul Bajaj, the Chairman, vide letter dated 15 February 2019 expressed his intention to step down as Non-executive director and Chairman of the Company with effect from the conclusion of the Board meeting scheduled on 17 May 2019. The Board at its meeting held on 14 March 2019 noted the same and recorded its appreciation of the valuable services rendered by Rahul Bajaj during his long tenure as Chairman of the Company. Since, Rahul Bajaj has already attained the age of seventy five years, as required under Regulation 17(1A) of the SEBI Listing Regulations, a special resolution will be taken from the shareholders for the tenure of Rahul Bajaj from 1 April 2019 to 17 May 2019.
iv. Directors liable to retire by to rotation
The Company in total has 10 directors- 5 independent directors, 4 non-executive non independent and 1 executive director. As per section 152 of the Act, at least two-thirds of the total number of directors (excluding independent directors) shall be liable to retire by rotation. Amongst the said 5 directors, Sanjiv Bajaj, Managing Director is a director not liable to retire by rotation. Out of the remaining 4 directors liable to retire by rotation, Rajiv Bajaj (DIN 00018262), director, being the longest in the office, retires from the Board by rotation this year and, being eligible, has offered his candidature for re-appointment.
Brief details of Rajiv Bajaj, Director, who is seeking re-appointment are given in the notice of Annual General Meeting.
B) Change in KMP
During the year under review, Sriram Subbramaniam was appointed as Company Secretary w.e.f. 1 October 2018 in place of Vallari Gupte who resigned from the services of the Company w.e.f. 17 August 2018.
Significant and material orders passed by the regulators or courts
During the year under review, there were 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 operations in future.
Adequacy of internal financial controls with reference to the financial statements
The Company has documented its internal financial controls considering the essential components of various critical processes, physical and operational. This includes its design, implementation and maintenance, along with periodical internal review of operational effectiveness and sustenance, which are commensurate with the nature of its business and the size and complexity of its operations.
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.
Presentation of financial statements
As per notification no. G.S.R. 365 (E) dated 30 March 2016, issued by Ministry of Corporate Affairs (MCA) in exercise of power conferred to it under section 133 read with section 469 of the Act, NBFCs having net worth of rupees five hundred crore or more are required to comply with the Indian Accounting Standards (Ind AS) in preparation of their financial statements and quarterly financial results for the accounting periods beginning on or after 1 April 2018 with effective transition date of 1 April 2017.
Further, MCA, in exercise of its power under sub-section (1) of section 467 of the Act, amended Schedule III to the Act. Vide the amendment, a new division, viz. âDivision IIIâ financial statement format was introduced for Non-Banking Financial Companies effective from 11 October 2018.
Accordingly, the financial statements of the Company for the year ended 31 March 2019 and corresponding figures for the year ended 31 March 2018 have been re-casted and prepared as per the revised Schedule III to the Act.
Consolidated financial statements
The directors also present the audited consolidated financial statements incorporating the duly audited financial statements of the subsidiaries and joint ventures, and as prepared in compliance with the Act, applicable IND Accounting Standards and SEBI Listing Regulations.
A separate statement containing the salient features of our subsidiaries and joint ventures in the prescribed form AOC-1 is annexed.
RBI guidelines
The Company continues to fulfill all the norms and standards laid down by the RBI pertaining to non-performing assets, capital adequacy, statutory liquidity assets, etc. As against the RBI norms of 15%, the capital adequacy ratio of the Company was 98% as on 31 March 2019. In line with the RBI guidelines for asset liability management (ALM) system for NBFCs, the Company has an Asset Liability Management Committee, which meets periodically to review its ALM risks and opportunities.
The Company is in compliance with the NBFC - Corporate Governance (Reserve Bank) Directions, 2015.
Harmonisation of different categories of NBFCs
The Reserve Bank of India vide its circular no. DNBR (PD)CC.No.097/03.10.001/2018-19 dated 22 February 2019, harmonized different categories of NBFCs into fewer ones on the basis of the principle of regulation by activity rather than regulation by entity in order to provide greater operational flexibility.
Accordingly, the three categories of NBFCs viz., Asset Finance Companies (AFCs), Loan Companies (LCs) and Investment Companies (ICs) have been merged into a new category called NBFC -Investment and Credit Company (NBFC-ICC).
The Company now is categorized as NBFC- Investment and Credit Company (NBFC-ICC).
Policy on dividend distribution
Information about the policy on dividend distribution is given in the annexed âCorporate Governance Reportâ.
Statutory disclosures
- A summary of the key financials of the Companyâs subsidiary, associates and joint ventures in Form AOC-1 is included in this Annual Report. A copy of audited financial statements for each of the Companyâs subsidiary, associates and joint venture 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 10.00 a.m. to 12.30 p.m. upto the date of AGM.
- The financial results are placed on the Companyâs website at www.bhil.in
- Details as required under 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, as amended, are annexed to this Report.
- Details as required under the provisions of section 197(12) of the Act read with rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, which form part of the Directorsâ Report, will be made available to any member on request, as per provisions of section 136(1) of the said Act.
- The Directorsâ Responsibility Statement as required by section 134(5) of the Act appears in a preceding paragraph.
- Pursuant to RBI Master Direction-Information Technology Framework for the NBFC sector, the Company has constituted an IT Strategy Committee to review the IT strategies in line with the corporate strategies, Board policy reviews, cyber security arrangements and any other matter related to IT governance.
- Cash Flow Statement for FY2019 is attached to the Balance Sheet.
- The provision of section 148 of the Act are not applicable to the Company. Accordingly, there is no requirement of maintenance of cost records as specified under sub-section (1) of section 148 of the Act.
- The Company has a policy on prevention of sexual harassment at the workplace. The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. There was no case reported during the year under review under the said Policy.
Corporate governance
Pursuant to the SEBI Listing Regulations, a separate chapter titled âCorporate Governanceâ has been included in this Annual Report, along with the reports on Management Discussion and Analysis and General Shareholder Information.
All the Board members and Senior Management personnel have affirmed compliance with the Code of Conduct for the year 2018-19. A declaration to this effect signed by the Managing Director and CEO of the Company is contained in this Annual Report.
The Managing Director and CEO and the CFO have certified to the Board with regard to the financial statements and other matters as required under Regulation 17(8) of the SEBI Listing Regulations.
Certificate from the statutory auditors of the Company regarding compliance of conditions of corporate governance is annexed to this Report.
Business Responsibility Report
Pursuant to the provisions of the SEBI Listing Regulations, the Company is required to give Business Responsibility Report (âBRRâ) in the Annual Report.
As a part of green initiative, the BRR for FY2019 has been placed on the Companyâs website at www.bhil.in A physical copy of the BRR will be made available to any members on request.
Secretarial Standards of ICSI
Pursuant to the approval given on 10 April 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 1 July 2015. These Secretarial Standards were then revised and were made effective from 1 October 2017. The Company is in compliance with the same.
Auditors
Statutory auditor
Pursuant to the provisions of section 139 of the Act, the members at the Annual General Meeting of the Company held on 20 July 2017 appointed S R B C and CO LLP, Chartered Accountants (Firm Registration No. 324982E/E300003) as statutory auditors of the Company from the conclusion of the seventy second Annual General Meeting till the conclusion of the seventy seventh Annual General Meeting.
The statutory audit report for the year 2018-19 does not contain any qualification, reservation or adverse remark or disclaimer made by statutory auditor.
Secretarial auditor
Pursuant to the provisions of section 204 of the Act and Rules made thereunder, the Company has re-appointed, Shyamprasad D Limaye, Practising Company Secretary (Membership No. 1587) to undertake the secretarial audit of the Company. Secretarial audit report for the year 2018-19 as issued by him in the prescribed form MR-3 is annexed to this Report.
The said secretarial audit report does not contain any qualification, reservation or adverse remark or disclaimer made by the secretarial auditor.
In addition to the above and pursuant to SEBI circular dated 8 February 2019, a report on secretarial compliance by Shyamprasad D Limaye for the financial year ended 31 March 2019 is being submitted to stock exchanges. There are no observations, reservations or qualifications in the said report.
Acknowledgement
The Board of Directors would like to express its gratitude and its appreciation for the support and co-operation from its members, RBI and other regulators and banks.
The Board of Directors also places on record its sincere appreciation of the commitment and hard work put in by the Management and the employees of the Company and thank them for yet another excellent year.
On behalf of the Board of Directors
Rahul Bajaj
Chairman
Pune: 17 May 2019
Mar 31, 2018
Directors'' Report
The directors present their Seventy Third Annual Report and audited financial statements for the year ended 31 March 2018.
Financial results
The financial results of the Company are elaborated in the Management Discussion and Analysis Report.
The highlights of the Standalone Financial Results are as under:
(RS, In Crore)
Particulars FY2018 FY2017
|
Total revenue |
1,474.42 |
888.43 |
|
Total expenses |
70.12 |
215.94 |
|
Profit before tax |
1,404.30 |
672.49 |
|
Tax expense |
90.75 |
134.31 |
|
Profit for the year |
1,313.55 |
538.18 |
|
Transfer to Reserve fund u/s 45-IC(1) of Reserve Bank of India Act, 1934 |
262.71 |
107.64 |
|
Transfer to General reserve |
- |
53.82 |
|
Balance carried to Balance Sheet |
1,050.84 |
376.72 |
|
Earnings per share (RS,) |
118.0 |
48.4 |
|
Proposed dividend (%) |
400% |
325% |
|
Dividend and tax thereon |
536.68 |
435.33 |
The highlights of the Consolidated Financial Results are as under:
(RS, In Crore)
|
Particulars |
FY2018 |
FY2017 |
|
Total revenue |
964.83 |
850.08 |
|
Profit before tax |
889.60 |
630.26 |
|
Share of profit after tax of associates |
2,387.48 |
1,977.50 |
|
Profit for the year |
3,185.68 |
2,473.19 |
|
Earnings per share (H) |
286.2 |
222.2 |
Dividend
The directors recommend for consideration of the shareholders at the ensuing annual general meeting, payment of dividend of RS, 40 per equity share (400%) for the year ended 31 March 2018. The amount of dividend and the tax thereon to the extent applicable aggregate to RS, 536.68 crore.
For the year ended 31 March 2017, the dividend paid was RS, 32.50 per equity share of RS, 10 each (325%) and the total dividend and the tax thereon to the extent applicable aggregated to RS, 435.33 crore.
Share Capital
The paid up equity share capital as on 31 March 2018 was RS, 111.29 crore. There was no public issue, rights issue, bonus issue or preferential issue, etc. during the year. The Company has not issued shares with differential voting rights or sweat equity shares nor has it granted any stock options.
Registration as a Systemically Important Non-Deposit taking NBFC
The Company has been registered with the Reserve Bank of India as a Non-Banking Financial Institution (Non-Deposit taking). In terms of provisions of Non-Banking Financial Company -Systemically Important Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016, the Company is categorized as a ''Systemically Important Non-Deposit taking Non-Banking Financial Company''. The Company has not accepted public deposits during the year under review. The Company has formed a Risk Management Committee and Asset Liability Management Committee in terms of the applicable directions/regulations of the Reserve Bank of India in this regard. An Information Technology (IT) Strategy Committee has also been formed under the RBI IT framework.
Operations
Detailed information on the operations of the Company and details on the state of affairs of the Company are covered in the Management Discussion and Analysis Report.
Extract of annual return
The extract of annual return as provided under sub-section (3) of section 92 of the Companies Act, 2013, in the prescribed form MGT-9 is annexed to this Report.
Number of meetings of the Board
Six meetings of the Board were held during the year. Detailed information is given in the Corporate Governance Report.
Directors'' responsibility statement
As required under clause (c) of sub-section (3) of section 134 of the Companies Act, 2013, the directors, to the best of their knowledge and belief, state that -
- in the preparation of the annual accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;
- the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;
- the directors had 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;
- the directors had prepared the annual accounts on a going concern basis;
- the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and
- the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
Details in respect of frauds reported by auditors under section 143(12)
During the year under review, no frauds were reported by the auditors to the Audit Committee or the Board under section 143(12) of the Companies Act, 2013.
Declaration by independent directors
The independent directors have submitted the declaration of independence, as required pursuant to section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in section 149(6) of the said Act.
Directors'' Remuneration Policy and criteria for matters under section 178
Information regarding Directors'' Remuneration Policy and criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section (3) of section 178 are provided in the Corporate Governance Report.
Particulars of loans, guarantees or investments
Information regarding loans, guarantees and investments covered under the provisions of section 186 of the Companies Act, 2013 are detailed in the financial statements.
Related party transactions
No related party transactions (RPTs) were entered into by the Company during the financial year, which attracted the provisions of section 188 of the Companies Act, 2013. There being no ''material'' related party transactions as defined under regulation 23 of the SEBI Listing Regulations, 2015, there are no details to be disclosed in Form AOC-2 in that regard.
During the year 2017-18, pursuant to section 177 of the Companies Act, 2013 and regulation 23 of the SEBI Listing Regulations, 2015, all RPTs were placed before the Audit Committee for its approval.
The Policy on RPTs as approved by the Board is uploaded on the Company''s website www.bhil.in
Material changes and 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.
Conservation of energy, technology absorption, foreign exchange earnings and outgo
The Company primarily being an investment company and not involved in any industrial or manufacturing activities, has no particulars to report regarding conservation of energy and technology absorption as required under section 134 of the Companies Act, 2013 and Rules made there under. During the year under review, the Company did not have any foreign exchange earnings, whereas the foreign exchange outgo amounted to RS, 1.21 crore.
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 Corporate Governance Report.
Corporate Social Responsibility (CSR)
Detailed information on the Corporate Social Responsibility Policy developed and implemented by the Company on CSR initiatives taken during the year pursuant to section 135 of the Companies Act, 2013 is given in the Annual Report on CSR activities.
Formal annual evaluation of the performance of the Board, its Committees and Directors
Information on the manner in which formal annual evaluation has been made by the Board of its own performance and that of its Committees and individual directors is given in the Corporate Governance Report.
Subsidiary/joint venture/associates
Following are the subsidiary/joint venture/associate companies of the Company:
|
Name of the company |
% shareholding of BHIL and its subsidiary |
Status |
|
Bajaj Auto Ltd. |
31.54% |
Associate |
|
Bajaj Finserv Ltd. |
39.29% |
Associate |
|
Bajaj Auto Holdings Ltd. |
100% |
Subsidiary |
|
Maharashtra Scooters Ltd. |
24% |
Joint Venture |
Detailed information on the performance and financial position of subsidiary, associates and joint venture of the Company is covered in the Management Discussion and Analysis Report.
As regards Maharashtra Scooters Ltd. (MSL), a company jointly promoted by the Company (erstwhile Bajaj Auto Ltd.) and Western Maharashtra Development Corporation Ltd. (WMDC), WMDC had offered to sell its 27% shareholding in MSL and the Company had confirmed its willingness to purchase these shares.
As reported in the past, in the matter of Appeal No. 153 of 2010, concerning the Award of the Arbitrator between BHIL and WMDC, passed on 14 January 2006, the Division Bench of the Hon''ble Bombay High Court had pronounced its Order on 8 May 2015, inter alia, stipulating the following:
1. The Company''s Appeal No. 153 of 2010 is allowed and the impugned order of the Single Judge dated 15 February 2010 is set aside in so far as it set aside the arbitral Award on the ground that clause 7 of the Protocol Agreement was in the nature of a restriction on free transferability of the shares and was therefore contrary to section 111A of the Companies Act, 1956.
2. The Cross Objections filed by the Respondent (WMDC) have no merit and therefore stand dismissed.
3. In the peculiar circumstances of the case and in the interest of justice, the Appellant (BHIL), for the purchase of the 3,085,712 equity shares of MSL, shall pay to the Respondent (WMDC) a sum of H 46.79 crore (calculated at Arbitral Award price of H 151.63 per share) together with simple interest @ 18% per annum from 14 January 2006 (date of Arbitral Award) till payment.
WMDC has subsequently filed a Special Leave Petition (SLP) in the Supreme Court on 15 September 2015 which is registered as SLP No.- 27194-95 of 2015, against the impugned Division Bench judgment of the Hon''ble Bombay High Court dated 8 May 2015, challenging the judgment amongst other grounds, on the basis of validity of the Protocol Agreement in the context of section 111A of the Companies Act, 1956, prescribing free transferability of shares.
The above mentioned SLP filed by WMDC is currently pending before the Supreme Court.
Directors and Key Managerial Personnel-changes
The Directors regret to report the sad demise of Naresh Chandra, an independent director of the Company, on 9 July 2017. The Directors record their very sincere appreciation of the valuable contribution made by him during his long tenure as director of the Company.
Pursuant to section 149 and regulation 17(1)(b) read with regulation 25(6) of the SEBI Listing Regulations, 2015, the Board at its meeting held on 15 September 2017 appointed Dr. Naushad Forbes as an Additional Director in the category of non-executive, independent director, in place of Late Naresh Chandra, to hold office up to the date of the ensuing annual general meeting of the Company.
As required under the said Act and the Rules made there under, the same is now put up for approval of shareholders 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 Companies Act, 2013 and regulation 36(3) of the SEBI Listing Regulations, 2015. Dr. Forbes has submitted the declaration of independence, as required pursuant to section 149(7) of the Companies Act, 2013 stating that he meets the criteria of independence as provided in section 149(6) and regulation 16(1)(b) of the SEBI Listing Regulations, 2015.
As per the provisions of the Companies Act, 2013, Rahul Bajaj retires from the Board by rotation this year and being eligible, offers himself for re-appointment. The information as required to be disclosed under regulation 36(3) of the SEBI Listing Regulations, 2015, in case of re-appointment of the director, is provided in the Notice of the ensuing annual general meeting.
Apart from the above, there was no change in the directors and Key Managerial Personnel during the year under review.
Detailed information on the directors is provided in the Corporate Governance Report.
Significant and material orders passed by the regulators or courts
During the year under review, there were 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 operations in future.
Details of internal financial controls with reference to the financial statements
The Company has documented its internal financial controls considering the essential components of various critical processes, physical and operational. This includes its design, implementation and maintenance, along with periodical internal review of operational effectiveness and sustenance, which are commensurate with the nature of its business and the size and complexity of its operations.
This ensures orderly and efficient conduct of its business, including adherence to the Company''s 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.
Presentation of financial statements
The financial statements of the Company for the year ended 31 March 2018 have been disclosed as per Division I of Schedule III to the Companies Act, 2013.
Consolidated financial statements
The directors also present the audited consolidated financial statements incorporating the duly audited financial statements of the subsidiaries, including the associates and joint venture and as prepared in compliance with the Companies Act, 2013, applicable Accounting Standards and the SEBI Listing Regulations, 2015.
A statement containing the salient features of the subsidiaries (including associates and joint venture) in the prescribed form AOC-1 is annexed separately.
Statutory disclosures
The summary of the key financials of the Company''s subsidiary, associate companies and joint venture (Form AOC-1) is included in this Annual Report. A copy of the 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 Company''s website www.bhil.in
Details as required under the provisions of section 197(12) of the Companies Act, 2013, read with rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended are annexed to this Report.
Details as required under the provisions of section 197(12) of the Companies Act, 2013, read with rule 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, which form part of the Directors'' Report, will be made available to any shareholder on request, as per the provisions of section 136(1) of the said Act.
Disclosures as prescribed under the Non-Banking Financial Company-Systemically Important Non Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016 and other applicable NBFC Regulations have been made in this Annual Report.
A Cash Flow Statement for the year 2017-18 is attached to the Balance Sheet.
Pursuant to the legislation ''The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013'', the Company has a Policy on Prevention of Sexual Harassment at Workplace. There was no case reported during the year under review under the said Policy.
Corporate governance
Pursuant to the SEBI Listing Regulations, 2015, a separate chapter titled ''Corporate Governance'' has been included in this Annual Report, along with the reports on Management Discussion and Analysis and General Shareholder Information.
All the Board members and Senior Management personnel have affirmed compliance with the Code of Conduct for the year 2017-18. A declaration to this effect signed by the Managing Director & CEO of the Company is contained in this Annual Report.
The Managing Director & 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 SEBI Listing Regulations, 2015.
Certificate from the statutory auditors of the Company regarding compliance of conditions of corporate governance is annexed to this Report.
Business Responsibility Report
Regulation 34(2) of the SEBI Listing Regulations, 2015, as amended, inter alia, provides that the annual report of the top 500 listed entities based on market capitalization (calculated as on 31 March of every financial year) shall include a Business Responsibility Report (BRR).
Since BHIL is one of the top 500 listed companies, the Company, as in the previous years, has presented its BRR for the financial year 2017-18, which is part of this Annual Report. As a green initiative, the BRR has been hosted on the Company''s website www.bhil.in
A physical copy of the BRR will be made available to any shareholder on request.
Secretarial Standards of ICSI
Pursuant to the approval given on 10 April 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 1 July 2015. These Secretarial Standards were then revised and made effective from 1 October 2017. The Company is in compliance with the same.
Auditors
Statutory auditor
Pursuant to the provisions of section 139 of the Companies Act, 2013, the members at the Annual General Meeting of the Company held on 20 July 2017 appointed S R B C & CO LLP, Chartered Accountants (Firm Registration No. 324982E/E300003) as statutory auditors of the Company from the conclusion of the seventy second annual general meeting till the conclusion of the seventy seventh annual general meeting, covering one term of five consecutive years, subject to ratification by the members at each intervening annual general meeting.
In view of the amendment to the said section 139 through the Companies (Amendment) Act, 2017 notified on 7 May 2018, ratification of auditors'' appointment is no longer required.
However, as required under section 142 of the Companies Act, 2013, a proposal is put up for approval of members for authorizing the Board of Directors of the Company to fix Auditors'' remuneration for the year 2018-19 and thereafter. The members are requested to approve the same.
The statutory audit report for the year 2017-18 does not contain any qualification, reservation or adverse remark or disclaimer made by statutory auditor.
Secretarial auditor
Pursuant to the provisions of section 204 of the Companies Act, 2013 and Rules made there under, the Company has re-appointed, Shyamprasad D Limaye, Practising Company Secretary (Membership No. 1587) to undertake the secretarial audit of the Company. Secretarial audit report for the year 2017-18 as issued by him in the prescribed form MR-3 is annexed to this Report.
The said secretarial audit report does not contain any qualification, reservation or adverse remark or disclaimer made by the secretarial auditor.
On behalf of the Board of Directors
Rahul Bajaj ''
Chairman
Pune: 18 May 2018
Mar 31, 2017
Directors'' Report
The directors present their Seventy Second Annual Report and audited financial statements for the year ended 31 March 2017.
Financial results
The financial results of the Company are elaborated in the Management Discussion and Analysis Report.
The highlights of the Standalone Financial Results are as under:
(RS, In Crore)
|
Particulars |
FY2017 |
FY2016 |
|
Total revenue |
888.43 |
1,401.28 |
|
Total expenses |
215.94 |
42.72 |
|
Profit before tax |
672.49 |
1,358.56 |
|
Tax expense |
134.31 |
88.05 |
|
Profit for the year |
538.18 |
1,270.51 |
|
Transfer to Reserve fund u/s 45-IC(1) of Reserve Bank of India Act, 1934 |
107.64 |
254.10 |
|
Transfer to General reserve |
53.82 |
127.05 |
|
Balance carried to Balance Sheet |
376.72 |
454.03 |
|
Earnings per share (H) |
48.4 |
114.2 |
|
Proposed dividend (%) |
325% |
325% |
|
Dividend and tax thereon |
435.33 |
435.33 |
The highlights of the Consolidated Financial Results are as under:
(RS, In Crore)
|
Particulars |
FY2017 |
FY2016 |
|
Total revenue |
850.08 |
476.69 |
|
Profit before tax |
630.26 |
429.90 |
|
Share of profit after tax of associates |
1,977.50 |
1,923.65 |
|
Profit for the year |
2,473.19 |
2,265.24 |
|
Earnings per share (H) |
222.2 |
203.5 |
Dividend
The directors recommend for consideration of the shareholders at the ensuing annual general meeting, payment of dividend of RS, 32.50 per equity share (325%) for the year ended 31 March 2017. The amount of dividend and the tax thereon to the extent applicable aggregate to RS, 435.33 crore.
For the year ended 31 March 2016, the total dividend paid (including interim dividend), was also RS, 32.50 per equity share of RS, 10 each (325%) and the total dividend and the tax thereon to the extent applicable also aggregated to RS, 435.33 crore.
Share Capital
The paid up equity share capital as on 31 March 2017 was RS, 111.29 crore. There was no public issue, rights issue, bonus issue or preferential issue etc. during the year. The Company has not issued shares with differential voting rights, sweat equity shares nor has it granted any stock options.
Registration as a Systemically Important Non-Deposit taking NBFC
The Company has been registered with the Reserve Bank of India as a Non-Banking Financial Institution (Non-Deposit taking). In terms of provisions of Non-Banking Financial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007, the Company is categorized as a ''Systemically Important Non-Deposit taking Non-Banking Financial Company''. The Company has not accepted public deposits during the year under review. The Company has formed Risk Management Committee and Asset Liability Management Committee in terms of the applicable directions/regulations of the Reserve Bank of India in this regard.
Operations
Detailed information on the operations of the Company and details on the state of affairs of the Company are covered in the Management Discussion and Analysis Report.
Extract of annual return
The extract of annual return as provided under sub-section (3) of section 92 of the Companies Act, 2013, in the prescribed form MGT-9 is annexed to this Report.
Number of meetings of the Board
There were six meetings of the Board held during the year. Detailed information is given in the Corporate Governance Report.
Directors'' responsibility statement
As required under clause (c) of sub-section (3) of section 134 of the Companies Act, 2013, directors, to the best of their knowledge and belief, state that -
- in the preparation of the annual accounts, the applicable Accounting Standards had been followed along with proper explanation relating to material departures;
- the directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent, so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;
- the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
- the directors had prepared the annual accounts on a going concern basis;
- the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls were adequate and were operating effectively; and
- the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and were operating effectively.
Details in respect of frauds reported by auditors under section 143(12)
During the year under review, there were no frauds reported by the auditors to the Audit Committee or the Board under section 143(12) of the Companies Act, 2013.
Declaration by independent directors
The independent directors have submitted the declaration of independence, as required pursuant to section 149(7) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in section 149(6) of the said Act.
Directors'' Remuneration Policy and criteria for matters under section 178
Information regarding Directors'' Remuneration Policy and criteria for determining qualifications, positive attributes, independence of a director and other matters provided under sub-section (3) of section 178 are provided in the Corporate Governance Report.
Particulars of loans, guarantees or investments
Information regarding loans, guarantees and investments covered under the provisions of section 186 of the Companies Act, 2013 are detailed in the financial statements.
Related party transactions
No related party transactions (RPTs) were entered into by the Company during the financial year, which attracted the provisions of section 188 of the Companies Act, 2013.
There being no ''material'' related party transactions as defined under regulation 23 of the SEBI Listing Regulations, 2015, there are no details to be disclosed in Form AOC-2 in that regard.
During the year 2016-17, pursuant to section 177 of the Companies Act, 2013 and regulation 23 of the SEBI Listing Regulations, 2015, all RPTs were placed before the Audit Committee for its approval.
The Policy on RPTs as approved by the Board is uploaded on the Company''s website www.bhil.in
Material changes and 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.
Conservation of energy, technology absorption, foreign exchange earnings and outgo
The Company primarily being an investment company and not involved in any industrial or manufacturing activities, has no particulars to report regarding conservation of energy and technology absorption as required under section 134 of the Companies Act, 2013 and Rules made there under. During the year under review, the Company did not have any foreign exchange earnings, whereas the foreign exchange outgo amounted to RS, 1.30 crore.
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 Corporate Governance Report.
Corporate Social Responsibility (CSR)
Detailed information on the Corporate Social Responsibility Policy developed and implemented by the Company on CSR initiatives taken during the year pursuant to section 135 of the Companies Act, 2013 is given in the Annual Report on CSR activities.
Formal annual evaluation of the performance of the Board, its Committees and Directors
Information on the manner in which formal annual evaluation has been made by the Board of its own performance and that of its Committees and individual directors is given in the Corporate Governance Report.
Subsidiary/joint venture/associates
Following are the companies, which are subsidiary/joint venture/associate companies of the Company:
|
Name of the company |
% shareholding of BHIL and its subsidiary |
Status |
|
Bajaj Auto Ltd. |
31.54% |
Associate |
|
Bajaj Finserv Ltd. |
39.29% |
Associate |
|
Bajaj Auto Holdings Ltd. |
100% |
Subsidiary |
|
Maharashtra Scooters Ltd. |
24% |
Joint Venture |
Detailed information on the performance and financial position of subsidiary, associates and joint venture of the Company is covered in the Management Discussion and Analysis Report.
As regards Maharashtra Scooters Ltd. (MSL), a company jointly promoted by the Company (erstwhile Bajaj Auto Ltd.) and Western Maharashtra Development Corporation Ltd. (WMDC), WMDC had offered to sell its 27% shareholding in MSL and the Company had confirmed its willingness to purchase these shares.
As reported in the past, in the matter of Appeal No.153 of 2010, concerning the Award of the Arbitrator between BHIL and WMDC, passed on 14 January 2006, the Division Bench of the Hon''ble Bombay High Court had pronounced its Order on 8 May 2015, inter alia, stipulating the following:
1. The Company''s Appeal No.153 of 2010 is allowed and the impugned order of the Single Judge dated 15 February 2010 is set aside in so far as it set aside the arbitral Award on the ground that clause 7 of the Protocol Agreement was in the nature of a restriction on free transferability of the shares and was therefore contrary to section 111A of the Companies Act, 1956.
2. The Cross Objections filed by the Respondent (WMDC) have no merit and therefore stand dismissed.
3. In the peculiar circumstances of the case and in the interest of justice, the Appellant (BHIL), for the purchase of the 3,085,712 equity shares of MSL, shall pay to the Respondent (WMDC) a sum of RS, 46.79 crore (calculated at Arbitral Award price of RS, 151.63 per share) together with simple interest @ 18% per annum from 14 January 2006 (date of Arbitral Award) till payment.
WMDC has subsequently filed a Special Leave Petition (SLP) in the Supreme Court on
15 September 2015 which is registered as SLP No.- 27194-95 of 2015, against the impugned Division Bench judgment of the Hon''ble Bombay High Court dated 8 May 2015, challenging the judgment amongst other grounds, on the basis of validity of the Protocol Agreement in the context of section 111A of the Companies Act, 1956, prescribing free transferability of shares.
The above mentioned SLP filed by WMDC is currently pending before the Supreme Court.
Directors and Key Managerial Personnel-changes
Sanjiv Bajaj was appointed as Managing Director of the Company w.e.f. 1 April 2012 for a period of five years, up to 31 March 2017. The Board at its meeting held on 16 March 2017, approved the re-appointment of Sanjiv Bajaj as Managing Director for a fresh term of five years and fixed his remuneration at its meeting held on 18 May 2017, based on the recommendations of the Nomination and Remuneration Committee, subject to necessary approvals of the shareholders. The matter is being separately put up for shareholders'' approvals through the Notice of the ensuing seventy second annual general meeting of the Company.
There was no change in the non-executive directors and other Key Managerial Personnel during the year under review.
In light of the provisions of the Companies Act, 2013, Madhur Bajaj retires from the Board by rotation this year and being eligible, offers himself for re-appointment. The information as required to be disclosed under regulation 36(3) of the SEBI Listing Regulations, 2015 in case of re-appointment of the director is provided in the Notice of the ensuing annual general meeting.
Detailed information on the directors is provided in the Corporate Governance Report.
Significant and material orders passed by the regulators or courts
During the year under review, there were 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 operations in future.
Global Depository Receipts (GDRs)
During the year under review, the Company terminated its GDR programme w.e.f. 20 March 2017 and these GDRs were consequently delisted from the London Stock Exchange w.e.f. 24 March 2017. Detailed information about GDRs is given in the chapter on General Shareholder Information.
Details of internal financial controls with reference to the financial statements
The Company has documented its internal financial controls considering the essential components of various critical processes, physical and operational. This includes its design, implementation and maintenance, along with periodical internal review of operational effectiveness and sustenance, which are commensurate with the nature of its business and the size and complexity of its operations.
This ensures orderly and efficient conduct of its business, including adherence to the Company''s 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.
Presentation of financial statements
The financial statements of the Company for the year ended 31 March 2017 have been disclosed as per Division I of Schedule III to the Companies Act, 2013.
Consolidated financial statements
The directors also present the audited consolidated financial statements incorporating the duly audited financial statements of the subsidiaries, including the associates and joint venture and as prepared in compliance with the Companies Act, 2013, applicable Accounting Standards and SEBI Listing Regulations, 2015.
A statement containing the salient features of the subsidiaries (including associates and joint venture) in the prescribed form AOC-1 is annexed separately.
Statutory disclosures
The summary of the key financials of the Company''s subsidiary, associate companies and joint venture (Form AOC-1) is included in this Annual Report. A copy of the 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 Company''s website www.bhil.in
Details as required under the provisions of section 197(12) of the Companies Act, 2013, read with rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended are annexed to this Report.
Details as required under the provisions of section 197(12) of the Companies Act, 2013, read with rule 5(2) and 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, which form part of the Directors'' Report, will be made available to any shareholder on request, as per provisions of section 136(1) of the said Act.
Disclosures as prescribed under the Non-Banking Financial Company-Systemically Important Non Deposit taking Company and Deposit taking Company (Reserve Bank) Directions, 2016 and other applicable NBFC Regulations have been made in this Annual Report.
A Cash Flow Statement for the year 2016-17 is attached to the Balance Sheet.
Pursuant to the legislation ''The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013'', the Company has a Policy on Prevention of Sexual Harassment at Workplace. There was no case reported during the year under review under the said Policy.
Corporate governance
Pursuant to the SEBI Listing Regulations, 2015, a separate chapter titled ''Corporate Governance'' has been included in this Annual Report, along with the reports on Management Discussion and Analysis and General Shareholder Information.
All the 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 Managing Director (CEO) of the Company is contained in this Annual Report.
The Managing Director (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 SEBI Listing Regulations, 2015.
Certificate from the auditors of the Company regarding compliance of conditions of corporate governance is annexed to this Report.
Business Responsibility Report
Regulation 34(2) of the SEBI Listing Regulations, 2015, which was amended on 22 December 2015 to come into force from 1 April 2016, inter alia, provides that the annual report of the top 500 listed entities based on market capitalization (calculated as on 31 March of every financial year), shall include a Business Responsibility Report (BRR).
Since BHIL is one of the top 500 listed companies by way of market capitalization as on 31 March 2016, the Company has presented its maiden BRR for the financial year 2016-17, which is part of this Annual Report. As a green initiative, the BRR has been hosted on the Company''s website www.bhil.in
A physical copy of the BR Report will be made available to any shareholder on request.
Secretarial Standards of ICSI
Pursuant to the approval given on 10 April 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 1 July 2015. The Company is in compliance with the same.
Auditors
Statutory auditor
The current auditors, viz. Dalal & Shah LLP, Chartered Accountants (Firm Registration No. 102021W/W100110) were last re-appointed by the members at their annual general meeting held on 17 July 2014 to hold the office of auditor from the conclusion of the sixty ninth annual general meeting till the conclusion of this seventy second annual general meeting.
As per the provisions of section 139 of the Companies Act, 2013, no listed company shall appoint an audit firm as auditors for more than two terms of five consecutive years. The Act also provided for an additional transition period of three years from the commencement of the Act i.e. 1 April 2014. The current auditors had completed a period of ten years at the commencement of the said Act, hence on their completing the additional transition period of three years provided under the Act, the term of the current auditors expires at the conclusion of the ensuing annual general meeting.
The Board at its meeting held on 18 May 2017, based on the recommendation of the Audit Committee has recommended the appointment of S R B C & Co LLP, Chartered Accountants (Firm Registration No. 324982E/E300003), as the statutory auditors of the Company for approval by the members.
S R B C & Co LLP, Chartered Accountants have consented to the said appointment and confirmed that their appointment, if made, would be within the limits specified under section 141(3)(g) of the Act and that they are not disqualified to be appointed as statutory auditors in terms of section 143 of the Act.
S R B C & Co LLP, Chartered Accountants will be appointed as the statutory auditors of the Company from the conclusion of seventy second annual general meeting till the conclusion of seventy seventh annual general meeting, covering one term of five consecutive years, subject to ratification by the members at each intervening annual general meeting, on a remuneration, out-of-pocket expenses, etc. incurred in connection with the audit as may be decided by the Board in consultation with the auditors from year to year.
The members are therefore requested to appoint S R B C & Co LLP, Chartered Accountants (Firm Registration No. 324982E/E300003), as auditors of the Company for a term of five years from the conclusion of the ensuing annual general meeting till the conclusion of the seventy seventh annual general meeting, to be scheduled in 2022, subject to ratification at each annual general meeting and to fix their remuneration for the year 2017-18.
The statutory audit report for the year 2016-17 does not contain any qualification, reservation or adverse remark or disclaimer made by statutory auditor.
Secretarial auditor
Pursuant to the provisions of section 204 of the Companies Act, 2013 and Rules made there under, the Company has re-appointed, Shyamprasad D Limaye, Practising Company Secretary (Membership No. 1587) to undertake the secretarial audit of the Company.
Secretarial audit report for the year 2016-17 as issued by him in the prescribed form MR-3 is annexed to this Report.
The said secretarial audit report does not contain any qualification, reservation or adverse remark or disclaimer made by the secretarial auditor.
On behalf of the Board of Directors
Rahul Bajaj Chairman
Pune: 18 May 2017
Mar 31, 2015
Dear Members,
The directors present their Seventieth Annual Report and audited
financial statements for the year ended 31 March 2015.
Financial results
The financial results of the Company are elaborated in the Management
Discussion and Analysis Report.
The highlights of the Standalone Financial Results are as under:
(Rs. In Crore)
Particulars FY 2015 FY 2014
Total revenue 1,006.46 839.47
Total expenses 41.96 25.70
Profit before tax 964.50 813.77
Tax expense 79.58 85.14
Profit after tax 884.92 728.63
Profit for the year 867.73 733.35
Transfer to Reserve fund u/s 45-IC
(1) of Reserve Bank of India Act,
1934 173.55 146.67
Transfer to General reserve 86.77 73.34
Proposed dividend (inclusive of
dividend tax) 434.49 390.47
Balance carried to Balance Sheet 172.92 122.87
Earnings per share (B ) 78.0 65.9
The highlights of the Consolidated Financial Results are as under:
(H In Crore)
Particulars FY 2015 FY 2014
Total revenue 558.83 427.72
Profit before tax 513.19 399.57
Income from associates after tax 1,615.41 1,669.11
Profit for the year 2,029.24 1,987.56
Earnings per share (B ) 182.3 178.6
Dividend
The directors recommend for consideration of the shareholders at the
ensuing annual general meeting, payment of a dividend of Rs. 32.50 per
share (325%) for the year ended 31 March 2015. The amount of dividend
and the tax thereon to the extent applicable aggregate to Rs. 434.49
crore.
Dividend paid for the year ended 31 March 2014 was Rs. 30 per share
(300%). The amount of dividend and the tax thereon to the extent
applicable aggregated to Rs. 390.47 crore.
Share Capital
The paid up equity share capital as on 31 March 2015 was Rs. 111.29
crore. There was no public issue, rights issue, bonus issue or
preferential issue etc. during the year. The Company has not issued
shares with differential voting rights, sweat equity shares nor has it
granted any stock options.
Registration as a Systemically Important Non-Deposit taking NBFC
The Company has been registered with the Reserve Bank of India as a
Non-Banking Financial Institution (Non-Deposit taking). In terms of
provisions of Non-Banking Financial (Non-Deposit Accepting or Holding)
Companies Prudential Norms (Reserve Bank) Directions, 2007, the Company
is categorised as a ''Systemically Important Non-Deposit taking
Non-Banking Financial Company''. The Company has not accepted public
deposits during the year under review. The Company has formed Risk
Management Committee and Asset Liability Management Committee in terms
of the applicable directions/regulations of the Reserve Bank of India
in this regard.
Operations
Detailed information on the operations of the Company and details on
the state of affairs of the Company are covered in the Management
Discussion and Analysis Report.
De-notification of Special Economic Zone (SEZ) Project
As reported previously, the Company had proposed to set up a sector
specific SEZ, at Waluj, Aurangabad, which was notified by the Central
Government on 17 April 2007. In response to the application of the
Company, the Central Government has de-notified the SEZ Project vide
its notification no. F/2/94/2006-SEZ dated 30 July 2014.
Extract of annual return
The extract of annual return as provided under sub-section (3) of
section 92 of the Companies Act, 2013, in the prescribed Form MGT-9 is
annexed to this Report.
Number of meetings of the Board
There were 6 meetings of the Board held during the year. Detailed
information is given in the Corporate Governance Report.
Directors'' responsibility statement
As required under clause (c) of sub-section (3) of section 134 of
Companies Act, 2013, directors, to the best of their knowledge and
belief, state that -
- in the preparation of the annual accounts, the applicable
Accounting Standards had been followed alongwith proper explanation
relating to material departures;
- the directors had selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent, so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the profit and
loss of the Company for that period;
- the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of Companies Act, 2013 for safeguarding the assets of the
Company and for preventing and detecting fraud and other
irregularities;
- the directors had prepared the annual accounts on a going concern
basis;
- the directors had laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and were operating effectively; and
- the directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
Declaration by independent directors
The independent directors have submitted the declaration of
independence, as required pursuant to section 149(7) of the Companies
Act, 2013 stating that they meet the criteria of independence as
provided in sub-section (6).
Directors'' Remuneration Policy and criteria for matters under section
178
Information regarding directors'' Remuneration Policy and criteria for
determining qualifications, positive attributes, independence of a
director and other matters provided under sub-section (3) of section
178 are provided in the Corporate Governance Report.
Particulars of loans, guarantees or investments
Information regarding loans, guarantees and investments covered under
the provisions of section 186 of the Companies Act, 2013 are detailed
in the financial statements.
Related party transactions
There were no related party transactions (RPTs) entered into by the
Company during the financial year, which attracted the provisions of
section 188 of the Companies Act, 2013. There being no ''material''
related party transactions as defined under clause 49 of the Listing
Agreement, there are no details to be disclosed in Form AOC-2 in that
regard.
During the year 2014-15, pursuant to section 177 of the Companies Act,
2013 and clause 49 of the Listing Agreement, all RPTs were placed
before the Audit Committee for its prior/omnibus approval.
The policy on RPTs as approved by Board is uploaded on the Company''s
website www.bhil.in
Material changes and 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.
Conservation of energy, technology absorption, foreign exchange
earnings and outgo
The Company primarily being an investment company and not involved in
any industrial or manufacturing activities, the Company has no
particulars to report regarding conservation of energy and technology
absorption as required under section 134 of the Companies Act, 2013 and
Rules made thereunder. During the year under review, the Company did
not have any foreign exchange earnings, whereas the foreign exchange
outgo amounted to B 138,981.
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 Corporate Governance Report.
Corporate Social Responsibility
Detailed information on Corporate Social Responsibility Policy
developed and implemented by the Company on CSR initiatives taken
during the year pursuant to section 135 of the Companies Act, 2013 is
given in the annexed Annual Report on CSR activities.
Formal annual evaluation of the performance of Board, its Committees
and Directors
Information on the manner in which formal annual evaluation has been
made by the Board of its own performance and that of its Committees and
individual directors is given in the Corporate Governance Report.
Detailed information on the performance and financial position of
subsidiary, associates and joint venture of the Company is covered in
the Management Discussion and Analysis Report.
As regards Maharashtra Scooters Ltd. (MSL), a company jointly promoted
by the Company (erstwhile Bajaj Auto Ltd.) and Western Maharashtra
Development Corporation Ltd. (WMDC), WMDC had offered to sell its 27%
shareholding in MSL and the Company had confirmed its willingness to
purchase these shares. The price at which the shares were to be sold,
had been jointly referred to a sole Arbitrator, Justice Arvind V Savant
(Retd), with an understanding in writing that the arbitral award would
be binding on both.
As reported in the past, the Award of the Arbitrator dated 14 January
2006 valuing the share price of MSL at Rs. 151.63 per share as the rate
at which 3,085,712 equity shares of MSL held by WMDC to be sold to the
Company, was challenged by WMDC in the Bombay High Court.
After hearing both the parties, the Single Judge Bench of Hon''ble
Bombay High Court, vide its order dated 15 February 2010, while
confirming the ruling of the Arbitrator on his jurisdiction, the
relevant date for valuation, the methodology adopted by the Arbitrator
on valuation and the price, set aside the Award of the Learned
Arbitrator on the ground that the Arbitral Award goes contrary to the
provisions of section 111A of the Companies Act, 1956, which relates to
free transferability of shares in a public limited company.
The Company challenged the decision of the Hon''ble Bombay High Court by
way of filing an Appeal before the Division Bench of the High Court on
various grounds. WMDC filed Cross Objections on the issues regarding
jurisdiction, date of valuation, methodology and price.
The matter came up for hearing before the Division Bench of the Hon''ble
Bombay High Court in February/March 2015. The Bench has pronounced its
Order on 8 May 2015, inter alia, stipulating the following:
1. The Company''s Appeal No. 153 of 2010 is allowed and the impugned
order of the Single Judge dated 15 February 2010 is set aside in so far
as it set aside the Arbitral Award on the ground that clause 7 of the
Protocol Agreement was in the nature of a restriction on free
transferability of the shares and was therefore contrary to section
111A of the Companies Act, 1956.
2. The Cross Objections filed by the Respondent (WMDC) have no merit
and therefore stand dismissed.
3. In the peculiar circumstances of the case and in the interest of
justice, the Appellant (BHIL), for the purchase of the 3,085,712 equity
shares of MSL, shall pay to the Respondent (WMDC) a sum of Rs. 46.79
crore (calculated at Arbitral Award price of Rs. 151.63 per share)
together with simple interest @ 18% per annum from 14 January 2006
(date of Arbitral Award) till payment.
Directors and Key Managerial Personnel
As reported previously, Dr. Gita Piramal was appointed as an additional
director in the category of non-executive, independent director of the
Company, in the meeting of the Board held on 28 March 2014. Thereafter,
at the sixty ninth annual general meeting of the Company held on 17
July 2014, the members of the Company appointed Dr. Gita Piramal as an
independent director under the Companies Act, 2013 for a period of 5
years effective from 17 July 2014.
Pursuant to section 149(4) of the Companies Act, 2013, every listed
company is required to appoint at least one third of its directors as
independent directors. The Board already has one half of its directors
in the category of independent directors in terms of clause 49 of the
Listing Agreement. The Board therefore, in its meeting held on 28 March
2014 appointed the existing independent directors under clause 49 as
''independent directors'' pursuant to Companies Act, 2013 as well, for a
term of 5 years, effective from 1 April 2014 . The members at the
annual general meeting held on 17 July 2014, approved the appointment.
Pursuant to section 203 of the Companies Act, 2013, the Company has
appointed Anant Marathe as Chief Financial Officer (CFO) of the Company
with effect from 1 October 2014 in place of Kevin D''sa. This change
became necessary since as required under the said section 203,
Kevin D''sa, who was the CFO of Bajaj Auto Ltd., Bajaj Finserv Ltd.
(BFS) and BHIL chose to continue as CFO in Bajaj Auto Ltd. and
relinquished his position as CFO of BFS and BHIL with effect from 1
October 2014.
The Company already has Sanjiv Bajaj, Managing Director and Vallari
Gupte, Company Secretary as the other Key Managerial Personnel of the
Company.
In light of the provisions of the Companies Act, 2013, Rajiv Bajaj
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
the director is provided in the Notice of the ensuing annual general
meeting.
Detailed information on the directors is provided in the Corporate
Governance Report.
Significant and material orders passed by the regulators or courts
During the year under review, there were 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 operations in
future.
Adequacy of internal financial controls
Internal financial controls with reference to the financial statements
were adequate and operating effectively.
Presentation of financial statements
The financial statements of the Company for the year ended 31 March
2015 have been disclosed as per Schedule III to the Companies Act,
2013.
Consolidated financial statements
The directors also present the audited consolidated financial
statements incorporating the duly audited financial statements of the
subsidiaries, including the associates and joint venture and as
prepared in compliance with the Companies Act, 2013, applicable
Accounting Standards and the Listing Agreement as prescribed by SEBI.
A separate statement containing the salient features of the
subsidiaries (including associates and joint venture) in the prescribed
form (AOC-1) is annexed separately.
Statutory disclosures
The summary of the key financials of the Company''s subsidiary,
associate company and joint venture(Form AOC-1), is included in this
Annual Report. A copy 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 Company''s website www.bhil.in
As required under the provisions of section 197(12) of the Companies
Act, 2013 read with rule 5 of Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014, the prescribed particulars are
set out in an annexure to the Directors'' Report. As per provisions of
section 136(1) of the said Act, these particulars will be made
available to any shareholder on request.
Disclosures as prescribed by Non-Banking Financial (Non-Deposit
Accepting or Holding)
Companies Prudential Norms (Reserve Bank) Directions, 2007 and other
NBFC regulations have been made in this Annual Report.
A Cash Flow Statement for the year 2014-15 is attached to the Balance
Sheet.
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 9 December 2013, the
Company has a Policy on Prevention of Sexual Harassment at Workplace.
There was no case reported during the year under review under the said
Policy.
Corporate governance
Pursuant to clause 49 of the Listing Agreement with stock exchanges, a
separate section titled ''Corporate Governance'' has been included in
this Annual Report, alongwith the reports on Management Discussion and
Analysis and General Shareholder Information.
All Board members and Senior Management personnel have affirmed
compliance with the Code of Conduct for the year 2014-15. A declaration
to this effect signed by the Managing Director of the Company is
contained in this Annual Report.
The Managing Director 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 this
Annual Report.
Certificate from auditors of the Company regarding compliance of
conditions of corporate governance is annexed to this Report.
Auditors
Statutory auditor
Pursuant to the provisions of section 139 of the Companies Act, 2013
and the Rules made thereunder, the current auditors of the Company,
Dalal & Shah, Chartered Accountants (registration number: 102021W) were
appointed by the members at the 69th annual general meeting to hold
office until the conclusion of the 72nd annual general meeting, subject
to ratification by members at each annual general meeting.
The members are requested to ratify the appointment of Dalal & Shah,
Chartered Accountants, (registration number: 102021W) as statutory
auditors of the Company and to fix their remuneration for the year
2015-16.
The statutory audit report does not contain any qualification,
reservation or adverse remark or disclaimer made by statutory auditor.
Secretarial auditor
Pursuant to the provisions of section 204 of the Companies Act, 2013
and Rules made thereunder the Company has appointed, Shyamprasad D
Limaye, (Membership No. 1587) Company Secretaries in Practice to
undertake the secretarial audit of the Company. Secretarial Audit
Report for the year 2014-15 as issued by him in the prescribed form
MR-3 is annexed to this Report.
The said Secretarial Audit Report does not contain any qualification,
reservation or adverse remark or disclaimer made by the secretarial
auditor.
On behalf of the Board of Directors,
Rahul Bajaj Chairman
Pune: 21 May 2015
Mar 31, 2014
The directors present their Sixty Ninth Annual Report and the audited
statements of accounts for the year ended 31 March 2014. 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.
Operations
The operations and financials of the Company are elaborated in the
annexed Management Discussion and Analysis Report. The highlights are
as under:
Financial results (Standalone)
(Rs. In Crore)
Particulars FY2014 FY2013
Total revenue 839.47 745.15
Total expenses 25.70 14.70
Profit before tax 813.77 730.45
Tax expense 85.14 67.12
Profit after tax 728.63 663.33
Profit for the year 733.35 663.33
Add: Balance brought forward from
previous year 625.40 486.09
Profit available for appropriation 1,358.75 1,149.42
Transfer to Reserve fund u/s 45-IC(1)
of Reserve Bank of India Act, 1934 146.67 132.67
Transfer to General reserve 73.34 66.33
Proposed dividend (inclusive of
dividend tax) 390.47 325.02
Balance carried to Balance Sheet 748.27 625.40
Earnings per share (Rs.) 65.9 59.6
Financial results (Consolidated)
(Rs. In Crore)
Particulars FY2014 FY2013
Total revenue 427.72 339.46
Profit before tax 399.57 322.02
Income from associates after tax 1,669.11 1,602.69
Profit for the year 1,987.56 1,856.38
Earnings per share (Rs.) 178.6 166.8
Dividend
The directors recommend for consideration of the shareholders at the
ensuing annual general meeting, payment of dividend of Rs. 30 per share
(300 per cent) for the year ended 31 March 2014. The amount of
dividend and the tax thereon aggregates to Rs. 390.47 crore.
Dividend paid for the year ended 31 March 2013 was Rs. 25 per share (250
per cent) and the amount of dividend and the tax thereon aggregated to
Rs. 325.02 crore.
Registration as a Systemically Important Non-Deposit taking NBFC
The Company has been registered with the Reserve Bank of India as a
Non-Banking Financial Institution (Non-Deposit taking). In terms of
provisions of Non-Banking Financial (Non-Deposit Accepting or Holding)
Companies Prudential Norms (Reserve Bank) Directions, 2007, the Company
is categorised as a ''Systemically Important Non-Deposit taking
Non-Banking Financial Company''. The Company has not accepted public
deposits during the year under review. The Company has formed Risk
Management Committee and Asset Liability Management Committee in terms
of the applicable directions/regulations of the Reserve Bank of India
in this regard.
De-notification of Special Economic Zone (SEZ)
As reported in the previous year, the Company had applied on 25 January
2012 to the SEZ section of the Department of Commerce, Ministry of
Commerce and Industry of Government of India for de-notification of its
SEZ Project located at Waluj, Aurangabad. The said authority vide its
letter dated 27 March 2012 conveyed its approval for de-notification of
the Company''s SEZ subject to the Development Commissioner, SEEPZ SEZ,
Mumbai, furnishing its certificate that the Company has refunded all
the tax/duty benefits availed, under the SEZ Act/Rules.
As directed, necessary procedural formalities in this regard are in
process.
Subsidiary/joint venture/associates
Following are the companies, which are the subsidiary/joint
venture/associate companies of the Company:
% Shareholding of Bajaj Holdings &
Name of the company Investment Ltd. as on 31 March 2014 Status
Bajaj Auto Ltd. 31.49% Associate
Bajaj Finserv Ltd. 39.16% Associate
Bajaj Auto Holdings
Ltd. 100% Subsidiary
Maharashtra Scooters
Ltd. 24% Joint
venture
A summary of financial results of the aforesaid
subsidiary/associates/joint venture has been covered under the
Management Discussion and Analysis Report.
As regards Maharashtra Scooters Ltd. (MSL), a company jointly promoted
by the Company (erstwhile Bajaj Auto Ltd.) and Western Maharashtra
Development Corporation Ltd. (WMDC), WMDC had offered to sell its 27
per cent shareholding in MSL and the Company had confirmed its
willingness to purchase these shares. The price at which the shares
were to be sold, had been jointly referred to a sole Arbitrator,
Justice Arvind V Savant (Retd), with an understanding in writing that
the arbitral award would be binding on both.
As reported in the past, the award of the Arbitrator dated 14 January
2006 valuing the share price of MSL at Rs. 151.63 per share as the rate
at which 3,085,712 equity shares of MSL held by WMDC to be sold to the
Company, was challenged by WMDC in the Bombay High Court.
After hearing both the parties, the Hon''ble Bombay High Court, vide its
order dated 15 February 2010, while confirming the ruling of the
Arbitrator on the relevant date for valuation and on the methodology
adopted by the Arbitrator on valuation, set aside the Award of the
Learned Arbitrator on the ground that the Arbitral Award goes contrary
to the provisions of section 111A of the Companies Act, 1956, which
relates to free transferability of shares in a public limited company.
The Company has challenged the decision of the Hon''ble Bombay High
Court by way of filing an Appeal before the Division Bench of the High
Court on various grounds and the same has been admitted. The Appeal is
currently under progress.
Corporate Social Responsibility
The Companies Act, 2013 notified section 135 of the Act concerning
Corporate Social Responsibility (CSR) along with the Rules there under
and revised Schedule VII to the Act on 27 February 2014 to come into
effect from 1 April 2014.
The Company being covered under the provisions of the said section, has
taken necessary initial steps in this regard. A Committee of the
directors, titled ''Corporate Social Responsibility Committee'', has been
formed by the Board in its meeting held on 28 March 2014, consisting of
the following Directors Â
1. Rahul Bajaj, Chairman
2. Sanjiv Bajaj
3. Nanoo Pamnani
The Committee has formulated its CSR policy for the Company and is in
the process of its implementation.
The said section being enacted with effect from 1 April 2014, necessary
details as prescribed there under 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, the Bajaj group continued its CSR initiatives in
various fields, during the year 2013-14. Activities in this area are
set out in detail in the annexed CSR Report.
Directors
During the year under review, Dr. Gita Piramal was appointed as an
Additional Director in the category of non-executive, independent
director of the Company, in the meeting of the Board held on 28 March
2014, to hold office upto the date of the ensuing Annual General
Meeting (AGM) of the Company. Resolution for appointment of Dr. Gita
Piramal is put up for the approval of shareholders in the Notice of
AGM.
Pursuant to the provisions of the Companies Act, 2013 which have been
enacted with effect from 1 April 2014, Dr. Gita Piramal, if appointed
at the forthcoming AGM shall be an ''independent director'' under the
said Act for a period of 5 years with effect from the date of the AGM.
On appointment of Dr. Gita Piramal, the provisions of section 149(1) of
the Companies Act, 2013 of having at least one woman director on the
Board of the Company, stand complied.
In light of the provisions of the Companies Act, 2013, Rahul Bajaj has
now become a retiring director, thus Rahul Bajaj 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
director is provided in the Notice of the ensuing AGM.
Pursuant to section 149(4) of the Companies Act, 2013, every listed
company is required to appoint at least one third of its directors as
independent directors. The Board already has one 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 28 March 2014 appointed the existing independent directors
under clause 49 as ''independent directors'' pursuant to Companies Act,
2013, subject to approval of shareholders.
As required under the said Act and the Rules made there under, the same
is now put up for approval of shareholders 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 Companies Act, 2013.
The independent directors have submitted the declaration of
independence, as required pursuant to section 149(7) of the Companies
Act, 2013 stating that they meet the criteria of independence as
provided in sub-section(6).
With the appointment of independent directors, the conditions specified
in the Act and the Rules made there under as also under new clause 49 of
the listing agreement stand complied.
Directors'' responsibility statement
As required by sub-section (2AA) of section 217 of the Companies Act,
1956, directors state:
- that in the preparation of annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures.
- that the directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent, so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the profit of
the Company for that period.
- 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, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities.
- that the annual accounts 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 to the Companies Act, 1956, pursuant to notification dated 28
February 2011 and General Circular No. 8/2014 dated 4 April 2014 issued
by the Ministry of Corporate Affairs.
Consolidated financial statements
The directors also present the audited consolidated financial
statements incorporating the duly audited financial statements of the
subsidiary, associates and joint venture and as prepared in compliance
with the applicable accounting standards and the provisions of listing
agreement as prescribed by SEBI.
Information in aggregate for the subsidiary company is disclosed
separately in the consolidated Balance Sheet.
Statutory disclosures
Ministry of Corporate Affairs (MCA) vide Circular No. 51/12/2007-CL-III
dated 8 February 2011 has given general exemption with regard to
attaching of the Balance Sheet, Profit and Loss Account and other
documents of its subsidiary companies subject to fulfilment of
conditions mentioned therein. The Company has fulfilled all the
necessary conditions in this regard and hence is not attaching the
Balance Sheet, Statement of Profit and Loss and other documents of the
subsidiary company.
The summary of key financials of the Company''s subsidiary company is
included in this Annual Report.
The annual accounts of the subsidiary company and the related detailed
information will be made available to the members of the Company and
its subsidiary company, seeking such information at any point of time.
The annual accounts of the subsidiary company will be placed on the
website of the company and also kept for inspection by any member of
the Company at its registered office and also at the registered office
of the concerned subsidiary company.
As required under the provisions of sub-section (2A) of section 217 of
the Companies Act, 1956 read with the Companies (Particulars of
Employees) Rules, 1975 as amended, particulars of the employees are set
out in an annexure to the Directors'' Report. As per provisions of
section 219(1) (b)(iv) of the said Act, these particulars will be made
available to any shareholder on request.
The Company has no particulars to report regarding technology
absorption, conservation of energy as required under section 217(1)(e)
of the Companies Act, 1956 and Companies (Disclosure of Particulars in
the Report of Board of Directors) Rules, 1988. During the year under
review, the Company did not have any foreign exchange earnings, whereas
the foreign exchange outgo amounted to H 54,712.
Directors'' responsibility statement as required by section 217(2AA) of
the Companies Act, 1956 appears in a preceding paragraph.
Certificate from auditors of the Company regarding compliance of
conditions of corporate governance is annexed to this Report.
Disclosures as prescribed by Non-Banking Financial (Non-Deposit
Accepting or Holding) Companies Prudential Norms (Reserve Bank)
Directions, 2007 and other NBFC regulations have been made in this
Annual Report.
A Cash Flow Statement for the year 2013-14 is attached to the Balance
Sheet.
Corporate governance
Pursuant to clause 49 of the listing agreement with stock exchanges, a
separate section titled ''Corporate Governance'' has been included in
this Annual Report, along with the Reports on Management Discussion and
Analysis and General Shareholder Information.
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 1 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 Managing Director of the Company is
contained in this Annual Report.
The Managing Director and Chief Financial Officer (CFO) have certified
to the Board with regard to the financial statements and other matters
as specified in clause 49 of the listing agreement and the said
certificate is contained in this Annual Report.
Secretarial Standards of ICSI
Companies Act, 2013 has now mandated certain Secretarial Standards
specified by the Institute of Company Secretaries of India (ICSI) from
time to time. The Company is, however, complying with the Secretarial
Standards for many years now.
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
Pursuant to the provisions of section 139 of the Companies Act, 2013
and the Rules made there under, the current auditors of the Company,
Dalal & Shah, Chartered Accountants are eligible to hold the office for
a period of three years, upto 2017.
The members are therefore requested to appoint Dalal & Shah, Chartered
Accountants as auditors for three years from the conclusion of the
ensuing annual general meeting till the conclusion of the 72nd annual
general meeting, to be scheduled in 2017 and to fix their remuneration
for the year 2014-15.
On behalf of the Board of Directors,
Rahul Bajaj
Chairman
15 May 2014
Mar 31, 2013
The directors present their sixty eighth annual report and the audited
statements of accounts for the year ended 31 March 2013.
Operations
The operations and financial figures of the Company are elaborated in
the annexed Management Discussion and Analysis Report. The highlights
are as under:-
Financial results (Standalone)
(Rs. In Crore)
2013 2012
Total revenue 745.15 650.37
Total expenses 14.70 7.56
Profit before tax 730.45 642.81
Tax expense 67.12 75.35
Profit after tax 663.33 567.46
Add: Balance brought forward from previous year 486.09 411.05
Profit available for appropriation 1,149.42 978.51
Transfer to Reserve fund u/s 45-IC(1) of
Reserve Bank of India Act, 1934 132.67 113.49
Transfer to General reserve 66.33 56.75
Proposed dividend (inclusive of dividend tax) 325.02 322.18
Balance carried to Balance Sheet 625.40 486.09
Earnings per share (Rs.) 59.6 51.0
Financial results (Consolidated)
The highlights of the Consolidated Financial Results are as under:
(Rs. In Crore)
2013 2012
Total revenue 339.46 301.03
Profit before exceptional item and tax 322.02 288.94
Profit before tax 322.02 274.93
Income from associate after tax 1,602.69 1,480.70
Profit for the year 1,856.38 1,679.17
Earnings per share (Rs.) 166.8 150.9
Dividend
The directors recommend for consideration of the shareholders at the
ensuing annual general meeting, payment of dividend of Rs. 25 per share
(250 per cent) for the year ended 31 March 2013. The amount of dividend
and the tax thereon aggregates to Rs. 325.02 crore.
Dividend paid for the year ended 31 March 2012 was also Rs. 25 per
share (250 per cent) and the amount of dividend and the tax thereon
aggregated to Rs. 322.18 crore.
Registration as a Systemically Important Non-Deposit taking NBFC
The Company has been registered with the Reserve Bank of India as a
Non-Banking Financial Institution (Non-Deposit taking). In terms of
provisions of Non-Banking Financial (Non-Deposit Accepting or Holding)
Companies Prudential Norms (Reserve Bank) Directions, 2007, the Company
is categorised as a ''Systemically Important Non-Deposit taking
Non-Banking Financial Company''. The Company has not accepted public
deposits during the year under review. The Company has formed Risk
Management Committee and Asset Liability Management Committee in terms
of the applicable directions/regulations of the Reserve Bank of India
in this regard.
De-notification of Special Economic Zone (SEZ)
As reported in the previous year, the Company had applied on 25 January
2012 to the SEZ section of the Department of Commerce, Ministry of
Commerce and Industry of Government of India for de-notification of its
SEZ Project located at Waluj, Aurangabad. The said authority vide its
letter dated 27 March 2012 conveyed its approval for de-notification of
the Company''s SEZ subject to the Development Commissioner, SEEPZ SEZ,
Mumbai, furnishing its certificate that the Company has refunded all
the tax/duty benefits availed, under the SEZ Act/Rules.
As directed, necessary procedural formalities in this regard are in
process.
Subsidiary/joint venture/associates
Following are the companies, which are the subsidiary/joint
venture/associate companies of the Company:
% Shareholding
of Bajaj
Holdings &
Investment
Ltd. as on
Name of the Company 31 March 2013 Status
Bajaj Auto Ltd. 31.49% Associate
Bajaj Finserv Ltd. 39.16% Associate
Bajaj Auto Holdings Ltd. 100% Subsidiary
Maharashtra Scooters Ltd. (MSL) 24% Joint
venture
A Summary of financial results of the aforesaid
subsidiary/associates/joint venture has been covered under the
Management Discussion and Analysis report.
As regards Maharashtra Scooters Ltd. (MSL), a company jointly promoted
by the Company (erstwhile Bajaj Auto Ltd.) and Western Maharashtra
Development Corporation Ltd. (WMDC), WMDC had offered to sell its 27
per cent shareholding in MSL and the Company had confirmed its
willingness to purchase these shares. The price at which the shares
were to be sold, had been jointly referred to a sole Arbitrator,
Justice Arvind V Savant (Retd), with an understanding in writing that
the arbitral award would be binding on both.
As reported in the past, the award of the Arbitrator dated 14 January
2006 valuing the share price of MSL at Rs. 151.63 per share as the rate
at which 3,085,712 equity shares of MSL held by WMDC to be sold to the
Company, was challenged by WMDC in the Bombay High Court. After
hearing both the parties, the Hon''ble Bombay High Court, vide its order
dated 15 February 2010, while confirming the ruling of the Arbitrator
on the relevant date for valuation and on the methodology adopted by
the Arbitrator on valuation, set aside the Award of the Learned
Arbitrator on the ground that the Arbitral Award goes contrary to the
provisions of section 111A of the Companies Act, 1956, which relates to
free transferability of shares in a public limited company. The Company
has challenged the decision of the Hon''ble Bombay High Court by way of
filing an Appeal before the Division Bench of the High Court on various
grounds and the same has been admitted. The Appeal is currently under
progress.
Corporate Social Responsibility
During the year 2012-13, Bajaj group continued its Corporate Social
Responsibility (CSR) initiatives in various fields. Activities in this
area are set out in detail in the annexed CSR Report.
Directors
During the year under review, Sanjiv Bajaj was appointed as the
Managing Director of the Company for a period of 5 years with effect
from 1 April 2012 to 31 March 2017.
Nanoo Pamnani and P Murari retire from the Board by rotation this year
and being eligible, offer themselves 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.
Directors'' responsibility statement
As required by sub-section (2AA) of section 217 of the Companies Act,
1956, directors state:
- that in the preparation of annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures.
- that the directors have selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent, so as to give a true and fair view of the state
of affairs of the Company at the end of the financial year and of the
profit of the Company for that period.
- 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, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities.
- that the annual accounts have been prepared on a going concern
basis.
Presentation of financial results
The financial results of the Company for the year ended 31 March 2013
as in the previous year have been disclosed as per the revised Schedule
VI to the Companies Act, 1956, pursuant to notification dated 28
February 2011 issued by the Ministry of Corporate Affairs.
Consolidated financial statements
The directors also present the audited consolidated financial
statements incorporating the duly audited financial statements of the
subsidiary, associates and joint venture and as prepared in compliance
with the applicable accounting standards and the provisions of listing
agreement as prescribed by SEBI.
Information in aggregate for the subsidiary company is disclosed
separately in the consolidated Balance Sheet.
Statutory disclosures
Ministry of Corporate Affairs (MCA) vide circular No. 51/12/2007-CL-III
dated 8 February 2011 has given general exemption with regard to
attaching of the Balance Sheet, Profit and Loss Account and other
documents of its subsidiary companies subject to fulfillment of
conditions mentioned therein. The Company has fulfilled all the
necessary conditions in this regard and hence is not attaching the
Balance Sheet, Profit and Loss Account and other documents of the
subsidiary company. The summary of key financials of the Company''s
subsidiary company is included in this annual report.
The annual accounts of the subsidiary company and the related detailed
information will be made available to the members of the Company and
its subsidiary company, seeking such information at any point of time.
The annual accounts of the subsidiary company will be kept for
inspection by any member of the Company at its registered office and
also at the registered office of the concerned subsidiary company.
As required under the provisions of sub-section (2A) of section 217 of
the Companies Act, 1956 read with the Companies (Particulars of
Employees) Rules, 1975 as amended, particulars of the employees are set
out in an annexure to the Directors'' Report.
As per provisions of section 219(1)(b)(iv) of the said Act, these
particulars will be made available to any shareholder on request.
The Company has no particulars to report regarding technology
absorption, conservation of energy as required under section 217(1)(e)
of the Companies Act, 1956 and Companies (Disclosure of Particulars in
the report of Board of Directors) Rules, 1988. During the year under
review, the Company did not have any foreign exchange earnings, whereas
the foreign exchange outgo amounted to Rs. 38,500.
Directors'' responsibility statement as required by section 217(2AA) of
the Companies Act, 1956 appears in a preceding paragraph.
Certificate from auditors of the Company regarding compliance of
conditions of corporate governance is annexed to this report.
Disclosures as prescribed by Non-Banking Financial (Non-Deposit
Accepting or Holding) Companies Prudential Norms (Reserve Bank)
Directions, 2007 and other NBFC regulations have been made in this
annual report.
A Cash Flow Statement for the year 2012-13 is attached to the Balance
Sheet.
Corporate governance
Pursuant to clause 49 of the listing agreement with stock exchanges, a
separate section titled ''Corporate Governance'' has been included in
this annual report, along with the reports on Management Discussion and
Analysis and General Shareholder Information.
All Board members and senior management personnel have affirmed
compliance with the code of conduct for the year 2012-13. A declaration
to this effect signed by the Managing Director of the Company is
contained in this annual report.
The Managing Director and Chief Financial Officer (CFO) have certified
to the Board with regard to the financial statements and other matters
as specified in clause 49 of the listing agreement and the said
certificate is contained in this annual report.
Secretarial standards of ICSI
Secretarial standards issued by the Institute of Company Secretaries of
India (ICSI) from time to time are currently recommendatory in nature.
Your Company is, however, complying with the same.
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 M/s Dalal & Shah, Chartered
Accountants as auditors for the period from the conclusion of the
ensuing annual general meeting till the conclusion of the next annual
general meeting and to fix their remuneration.
On behalf of the Board of Directors,
Rahul Bajaj
Chairman
16 May 2013
Mar 31, 2012
Dear Members,
Introduction
The directors present their sixty-seventh annual report and the audited
statements of accounts for the year ended 31 March 2012.
Operations
The operations and financial figures of the Company are elaborated in
the annexed Management Discussion and Analysis Report. The highlights
are as under:-
Financial results (Standalone)
(Rs. In Crore)
2012 2011
Total Revenue 650.37 1,076.45
Finance Costs 0.01 -
Depreciation 0.24 0.24
Profit before tax 642.81 1,069.12
Tax expense 75.35 71.41
Profit after tax 567.46 997.71
Add: Tax credits pertaining to
earlier years - 2.38
Profit for the year 567.46 1,000.09
Add: Balance brought forward from
previous year 411.05 163.71
Profit available for appropriation 978.51 1,163.80
Transfer to Reserve Fund u/s
45-IC(l) of the
Reserve Bank of India Act, 1934 113.49 200.02
Transfer to General Reserve 56.75 100.01
Proposed dividend (inclusive of
dividend tax) 322.18 452.72
Balance carried to Balance Sheet 486.09 411.05
Basic Earnings per share (Rs.) 51.0 93.4
Diluted Earnings per share (Rs.) 51.0 91.9
Financial results (Consolidated)
The highlights of the Consolidated Financial Results are as under:
(Rs. In Crore)
2012 2011
Total Revenue 301.03 900.41
Profit before tax and exceptional
item 288.94 888.27
Profit before tax 274.93 888.27
Income from associates after tax 1,480.70 1,504.23
Profit for the year 1,679.17 2,322.76
Basic Earnings per share (Rs.) 150.9 217.0
Diluted Earnings per share (Rs.) 150.9 213.5
Dividend
The directors recommend for consideration of the shareholders at the
ensuing annual general meeting, payment of dividend of Rs. 25 per share
(250 per cent) for the year ended 31 March 2012. The amount of dividend
and the tax thereon aggregates to Rs. 322.18 crore.
Dividend paid for the year ended 31 March 2011 wasRs. 35 per share (350
per cent). The amount of dividend and the tax thereon aggregated to Rs.
452.72 crore.
De-notification of Special Economic Zone (SEZ)
The Board of Approval (BoA), Ministry of Commerce and Industry, had
granted its formal approval to Bajaj Holdings & Investment Limited i.e.
erstwhile Bajaj Auto Limited on 7 April 2006 for development, operation
and maintenance of Engineering SEZ at Waluj, Aurangabad.
Your Company had taken numerous steps from time to time over the last
few years for development of SEZ. Given the market conditions and
withdrawal of some tax incentives, your Company feels that its SEZ
Project is not viable in the changed market scenario.
The Company has, therefore, applied on 25 January 2012 to the
appropriate authority of Government of India for de-notification of its
SEZ Project. The BoA vide its letter dated 27 March 2012 has conveyed
its in-principle approval for de-notification of the Company's SEZ.
Registration as a Systemically Important Non-deposit Taking NBFC
The Company has been registered with the Reserve Bank of India as a
Non-Banking Financial Institution (non-deposit taking). In terms of
provisions of Non-Banking Financial (Non-Deposit Accepting or Holding)
Companies Prudential Norms (Reserve Bank) Directions, 2007, your
Company is categorised as a 'systemically important non-deposit taking
non-banking financial company' having total assets ofRs. 100 crore and
above. The Company has not accepted public deposits during the year
under review.
Subsidiary/Joint venture/Associates
Following are the companies, which are the subsidiary/joint
venture/associate companies of the Company:
% Shareholding of Bajaj Holdings & Name of the Company Investment
Limited as on 31 March 2012 Status
Bajaj Auto Limited 31.49% Associate
Bajaj Finserv Limited 39.15% Associate
Bajaj Auto Holdings Limited 100% Subsidiary
Maharashtra Scooters Limited (MSL) 24% Joint Venture
A Summary of financial results of the aforesaid
subsidiary/associates/joint-venture has been covered under the
Management Discussion and Analysis report.
As regards Maharashtra Scooters Ltd. (MSL), a company jointly promoted
by the Company (erstwhile BAL) and Western Maharashtra Development
Corporation Ltd. (WMDC), WMDC had offered to sell its 27 per cent
shareholding in MSL and the Company had confirmed its willingness to
purchase these shares. The price at which the shares were to be sold,
had been jointly referred to a sole arbitrator, Justice Arvind V Savant
(Retd.), with an understanding in writing that arbitral award would be
binding on both.
As reported in the past, the award of the arbitrator dated 14 January
2006 valuing the share price of MSL at Rs. 151.63 per share as the rate
at which 3,085,712 equity shares of MSL held by WMDC are to be sold to
the Company, was challenged by WMDC in the Bombay High Court.
After hearing both the parties, the Hon'ble Bombay High Court, vide its
order dated 15 February 2010, while confirming the ruling of the
Arbitrator on the relevant date for valuation and on the methodology
adopted by the Arbitrator on valuation, set aside the Award of the
Learned Arbitrator on the ground that the Arbitral Award goes contrary
to the provisions of Section 111A of the Companies Act, 1956, which
relates to free transferability of shares in a public limited company.
The Company has challenged the decision of the Hon'ble Bombay High
Court by way of filing an Appeal before the Division Bench of the High
Court on various grounds and the same has been admitted. The Appeal is
currently under progress.
Sad demise of Shri V S Raghavan, CEO
Shri V S Raghavan, CEO of the Company, who was suffering from a major
ailment, passed away on 12 December 2011 at Pune.
Shri Raghavan was also the 'manager' of the Company in terms of
provisions of the Companies Act, 1956 since 20 February 2008. He was
associated with the Bajaj Group since 1984.
The Board hereby notes and takes on record the contribution made by
Shri V S Raghavan during his association with the Group in various
capacities.
Directors
During the year under review, the Board, at its meeting held on 27
March 2012, has, subject to approval by the shareholders, appointed
Sanjiv Bajaj as Managing Director of the Company for a period of 5
years with effect from 1 April 2012 to 31 March 2017 and also fixed his
remuneration, based on the recommendation made by the Remuneration and
Nomination Committee.
D J Balaji Rao and Naresh Chandra retire from the Board by rotation
this year and being eligible, offer themselves for re-appointment.
Corporate Social Responsibility
During the year 2011-12, Bajaj Group continued its Corporate Social
Responsibility (CSR) initiatives in various fields. Activities in this
area are set out in detail in the annexed CSR Report.
Directors' responsibility statement
As required by sub-section (2AA) of Section 217 of the Companies Act,
1956, directors state:
- that in the preparation of annual accounts, the applicable accounting
standards have been followed alongwith proper explanation relating to
material departures.
- that the directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent, so as to give a true and fair view of the state of affairs
of the Company at the end of the financial year and of the profit of
the Company for that period.
- 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, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities.
- that the annual accounts have been prepared on a going concern basis.
Presentation of financial results
Pursuant to Notification dated 28 February 2011 issued by the Ministry
of Corporate Affairs, the format for disclosure of financial statement
prescribed under Schedule VI to the Companies Act, 1956 has been
substantially revised. The financial results of the Company for the
year ended 31 March 2012 have, therefore, been disclosed as per the
revised Schedule VI. Previous year's figures have also been restated to
conform with the current year's presentation.
Consolidated financial statements
The directors also present the audited consolidated financial
statements incorporating the duly audited financial statements of the
subsidiary, associates and joint venture and as prepared in compliance
with the accounting standards and listing agreement as prescribed by
SEBI.
Information in aggregate for the subsidiary company is disclosed
separately in the consolidated balance sheet.
Statutory disclosures
Ministry of Corporate Affairs (MCA) vide Circular No. 51/
12/2007-CL-111 dated 8 February 2011 has given general exemption with
regard to attaching of the balance sheet, statement of profit and loss
and other documents of its subsidiary companies subject to fulfillment
of conditions mentioned therein. The Company has fulfilled all the
necessary conditions in this regard hence is not attaching the balance
sheet, statement of profit and loss and other documents of the
subsidiary company. The summary of key financials of the Company's
subsidiary company is included in this annual report.
The annual accounts of the subsidiary company and the related detailed
information will be made available to the members of the Company and
its subsidiary company, seeking such information at any point of time.
The annual accounts of the subsidiary company will be kept for
inspection by any member of the Company at its registered office and
also at the registered office of the concerned subsidiary company.
As required under the provisions of sub-section (2A) of Section 217 of
the Companies Act, 1956 read with the Companies (Particulars of
Employees) Rules 1975 as amended, particulars of the employees are set
out in an Annexure to the Directors Report. As per provisions of
Section 219(l)(b)(iv) of the said Act, these particulars will be made
available to any shareholder on request.
The Company has no particulars to report regarding technology
absorption, conservation of energy and foreign exchange earnings and
outgo as required under Section 217(l)(e) of the Companies Act, 1956
and Companies (Disclosure of Particulars in the report of Board of
Directors) Rules, 1988.
Directors' Responsibility Statement as required by Section 217(2AA) of
the Companies Act, 1956 appears in a preceding paragraph.
Certificate from auditors of the Company regarding compliance of
conditions of corporate governance is annexed to this report.
Disclosures as prescribed by Non-Banking Financial (Non-Deposit
Accepting or Holding) Companies Prudential Norms (Reserve Bank)
Directions, 2007 and other NBFC regulations have been made in this
annual report.
A Cash Flow Statement for the year 2011-12 is attached to the balance
sheet.
Corporate Governance
Pursuant to clause 49 of the listing agreement with stock exchanges, a
separate section titled 'Corporate Governance' has been included in
this annual report, alongwith the reports on Management Discussion and
Analysis and General Shareholder Information.
All Board members and senior management personnel have affirmed
compliance with the code of conduct for the year 2011-12. 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 this annual report.
Secretarial standards of ICSI
Secretarial standards issued by the Institute of Company Secretaries of
India (ICSI) from time to time are currently recommendatory in nature.
Your Company is, however, complying with the same.
Group
Pursuant to an intimation from the promoters, the names of the
promoters and entities comprising "Group" as defined under the
erstwhile Monopolies and Restrictive Trade Practices ("MRTP") Act, 1969
are disclosed in the annual report in terms of Regulation 3(l)(e) of
the erstwhile SEBI (Substantial Acquisition of Shares and Takeovers)
Regulations, 1997.
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 M/s Dalai and Shah, Chartered
Accountants as auditors for the period from the conclusion of the
ensuing annual general meeting till the conclusion of the next annual
general meeting and to fix their remuneration.
On behalf of the Board of Directors
Rahul Bajaj
Chairman
17 May 2012
Mar 31, 2011
The directors present their sixty-sixth annual report and the audited
statements of accounts for the year ended 31 March 2011
Operations
The operations and financial figures of the company are elaborated in
the annexed Management Discussion and Analysis Report. The highlights
are as under:-
Financial results (standalone)
Rs In Lakh
2011 2010
Net sales & other income 107,645 81,348
Gross profit before interest &
depreciation 106,936 80,721
Interest - -
Depreciation 24 22
Profit before tax 106,912 80,699
Provision for tax 7,141 3,566
Profit after tax 99,771 77,133
Add: Tax credits pertaining to
earlier years 238 -
Profit for the year 100,009 77,133
Add: Balance brought forward from
previous year 16,371 -
Less: Adjustments on revaluation of
deferred tax assets - 526
Profit available for appropriation 116,380 76,607
Transfer to Reserve Fund u/s 45IC(1)
of the Reserve Bank of India Act, 1934 20,002 15,427
Transfer to General Reserve 10,001 7,713
Proposed dividend (inclusive of
dividend tax) 45,272 37,096
Balance carried to Balance Sheet 41,105 16,371
Financial results (consolidated)
Rs In Lakh
2011 2010
Total income 90,046 71,942
Income from associates 150,423 69,023
Profit before tax 239,250 139,881
Profit for the year 232,276 136,260
Basic Earnings per share (Rs) 217.0 134.6
Diluted Earnings per share (Rs) 213.5 133.1
Dividend
The directors recommend for consideration of the shareholders at the
ensuing annual general meeting, payment of dividend of Rs 35 per share
(350 per cent) for the year ended 31 March 2011. The amount of
dividend and the tax thereon aggregates to Rs 45,272 lakh.
Dividend paid for the year ended 31 March 2010 was Rs 30 per share (300
per cent). The amount of dividend and the tax thereon aggregated to Rs
37,096 lakh.
Registration as a Systemically Important Non-deposit Taking NBFC
The company has been registered with the Reserve Bank of India as a
Non-Banking Financial Institution (non-deposit taking).In terms of
provisions of Non-Banking Financial (Non-Deposit Accepting or Holding)
Companies Prudential Norms (Reserve Bank) Directions, 2007, your
company is categorised as a systemically important non-deposit taking
non-banking financial companys having total assets of Rs 100 crore and
above. The company has not accepted public deposits during the year
under review.
Subsidiary/Joint venture/Associates
Following are the companies, which are the subsidiary/joint
venture/associate companies of the company:
% Shareholding of
Name of the Company Bajaj Holdings & Investment Limited Status
as on 31 March 2011
Bajaj Auto Limited 31.49% Associate
Bajaj Finserv Limited 38.69% Associate
Bajaj Auto Holdings
Limited 100% Subsidiary
Maharashtra Scooters
Limited (MSL) 24% Joint Venture
As regards MSL, a company jointly promoted by the company (erstwhile
BAL) and Western Maharashtra Development Corporation Ltd. (WMDC), WMDC
had offered to sell its 27 per cent shareholding in MSL and the company
had confirmed its willingness to purchase these shares. The price at
which the shares were to be sold, had been jointly referred to a sole
arbitrator, Justice Arvind V Savant (Retd.), with an understanding in
writing that arbitral award would be binding on both.
As reported in the past, the award of the arbitrator dated 14 January
2006 valuing the share price of MSL at Rs 151.63 per share as the rate
at which 3,085,712 equity shares of MSL held by WMDC are to be sold to
the company, was challenged by WMDC in the Bombay High Court.
After hearing both the parties, the Honble Bombay High Court, vide its
order dated 15 February 2010, while confirming the ruling of the
arbitrator on the relevant date for valuation and on the methodology
adopted by the arbitrator on valuation, set aside the award of the
learned arbitrator on the ground that the Arbitral Award goes contrary
to the provisions of Section 111A of the Companies Act, 1956, which
relates to free transferability of shares in a public limited company.
The company has challenged the decision of the Honble Bombay High
Court by way of filing an appeal before the division bench of the High
Court on various grounds and the same has been admitted. The appeal is
currently pending.
Preferential Issue
During the year under review, promoters converted balance 5,251,000
warrants by paying balance 75%, i.e. Rs 337.185 per equity share,
aggregating to Rs 17,706 lakh in January 2011.
In terms of powers conferred by the board of directors, share allotment
committee allotted 5,251,000 equity shares of Rs 10/- each to the
promoters, at its meeting held on 21 January 2011.
Paid-up capital of the company has accordingly increased from Rs 10,604
lakh (106,042,510 equity shares of Rs 10/- each) to Rs 11,129 lakh
(111,293,510 equity shares of Rs 10/- each). The Share Premium balance
has gone up from Rs 21,359 lakh to Rs 44,442 lakh, since shares were
issued at Rs 449.58 per share, inclusive of Rs 439.58 per share as share
premium.
Approval of shareholders for payment of commission
Directors seek your approval by way of special resolution for payment
of commission to non-executive directors of a sum not exceeding 1% of
the net profits of the company for a further five years term from 1
April 2011 to 31 March 2016, subject to applicable provisions of the
Companies Act, 1956. Earlier such approval expired on 31 March 2011.
Corporate Social Responsibility
During the year 2010-11, Bajaj Group continued its Corporate Social
Responsibility (CSR) initiatives in various fields. Activities in this
area are set out in detail in the annexed CSR Report.
Directors
During the year under review, Madhur Bajaj was appointed as
non-executive director to fill up the casual vacancy caused by his
resignation in the year 2009-10.
Madhur Bajaj, Rajiv Bajaj and S H Khan retire from the board by
rotation this year and being eligible, offer themselves for
re-appointment.
Directors responsibility statement
As required by sub-section (2AA) of section 217 of the Companies Act,
1956, directors state:
that in the preparation of annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures.
that the directors have selected such accounting policies and applied
them consistently and made judgments and estimates that are reasonable
and prudent, so as to give a true and fair view of the state of affairs
of the company at the end of the financial year and of the profit of
the company for that period.
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, 1956 for safeguarding the assets of
the company and for preventing and detecting fraud and other
irregularities.
that the annual accounts have been prepared on a going concern basis.
Consolidated financial statements
The directors also present the audited consolidated financial
statements incorporating the duly audited financial statements of the
subsidiary, associates and joint venture and as prepared in compliance
with the accounting standards and listing agreement as prescribed by
SEBI.
Information in aggregate for the subsidiary company is disclosed
separately in the consolidated balance sheet.
Statutory disclosures
The company has received an exemption with regard to attaching of the
balance sheet, profit and loss account and other documents of its
subsidiary company, Bajaj Auto Holdings Limited. The summary of the
key financials of the companys subsidiary is included in this annual
report.
The annual accounts of the subsidiary company and the related detailed
information will be made available to the members of the company and
its subsidiary company, seeking such information at any point of time.
The annual accounts of the subsidiary company will be kept for
inspection by any member of the company at its registered office and
also at the registered office of the concerned subsidiary company.
The company has received an exemption with regard to disclosure of
investments in the investment schedule in the accounts under section
211(4) of the Companies Act, 1956. Any shareholder interested in
obtaining the details thereof may write to the company.
As required under the provisions of sub-section (2A) of section 217 of
the Companies Act, 1956 read with the Companies (Particulars of
Employees) Rules 1975 as amended, particulars of the employees are set
out in an Annexure to the Directors Report. As per provisions of
section 219(1)(b)(iv) of the said Act, these particulars will be made
available to any shareholder on request.
The company has no particulars to report regarding technology
absorption, conservation of energy and foreign exchange earning and
outgo as required under section 217(1)(e) of the Companies Act, 1956
and Companies (Disclosure of Particulars in the report of board of
directors) Rules, 1988.
Directors Responsibility Statement as required by section 217(2AA) of
the Companies Act, 1956 appears in a preceding paragraph.
Certificate from auditors of the company regarding compliance of
conditions of corporate governance is annexed to this report.
Disclosures as prescribed by Non-Banking Financial (Non-Deposit
Accepting or Holding) Companies Prudential Norms (Reserve Bank)
Directions, 2007 and other NBFC regulations have been made in this
annual report.
A Cash Flow Statement for the year 2010-11 is attached to the balance
sheet.
Corporate governance
Pursuant to clause 49 of the listing agreement with stock exchanges, a
separate section titled Corporate Governance has been included in
this annual report, along with the reports on Management Discussion and
Analysis and General Shareholder Information.
All board members and senior management personnel have affirmed
compliance with the code of conduct for the 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 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 this annual report.
Secretarial standards of ICSI
Secretarial standards issued by the Institute of Company Secretaries of
India (ICSI) from time to time are currently recommendatory in nature.
Your company is, however, complying with the same.
Group
Pursuant to an intimation from the promoters, the names of the
promoters and entities comprising ÃGroupà as defined under the
Monopolies and Restrictive Trade Practices (ÃMRTPÃ) Act, 1969 are
disclosed in the annual report for the purpose of Regulation 3(1)(e) of
the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations,
1997.
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 M/s Dalal and Shah, Chartered
Accountants as auditors for the period from the conclusion of the
ensuing annual general meeting till the conclusion of the next annual
general meeting and to fix their remuneration.
On behalf of the board of directors
Rahul Bajaj
Chairman 18 May 2011
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