Bajaj Auto Ltd
Directors Reports
The directors present their Sixteenth Annual Report and Audited
Financial Statements for the year ended 31 March 2023.
Financial Results
The financial results of the Company are elaborated in the report on
Management Discussion and Analysis. Given below are the financial highlights:
| Sales in numbers |
FY2023 |
FY2022 |
| Two-wheelers |
3,437,966 |
3,836,856 |
| Commercial vehicles |
485,018 |
471,577 |
| Total |
3,922,984 |
4,308,433 |
| Of which exports |
1,821,240 |
2,506,626 |
|
|
(H In Crore) |
| Particulars |
FY2023 |
FY2022 |
| Total revenue |
37,609.02 |
34,353.95 |
| Total expenses |
30,200.38 |
28,163.90 |
| Profit before exceptional items and tax |
7,408.64 |
6,190.05 |
| Exceptional items |
- |
(315.28) |
| Profit before tax |
7,408.64 |
6,505.33 |
| Tax expense |
1,781.04 |
1,486.46 |
| Profit for the year |
5,627.60 |
5,018.87 |
| Earnings per share (J) |
197.3 |
173.6 |
| Closing balances in reserve/other equity |
|
|
|
|
(H In Crore) |
| Particulars |
FY2023 |
FY2022 |
| General reserve |
6,389.60 |
6,389.60 |
| Retained earnings |
17,821.40 |
19,340.40 |
| Cash flow hedging reserve |
- |
54.33 |
| Costs of hedging reserve |
- |
5.93 |
| FVTOCI reserve |
927.13 |
626.41 |
| Capital redemption reserve |
6.41 |
- |
| Share based payments reserve |
62.09 |
32.27 |
| Treasury shares |
(63.73) |
(69.51) |
| Total |
25,142.90 |
26,379.43 |
Note: Detailed movement of above reserves can be seen in
‘Statement of Changes in Equity'.
Dividend Distribution Policy
Under the Regulation 43A of Securities and Exchange Board of India
(Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘the Listing
Regulations, 2015'), as amended, the Company has formulated a dividend distribution
policy, which sets out the parameters and circumstances that will be taken into account by
the Board in determining the distribution of dividend to its shareholders.
As a green initiative, the amended policy has been uploaded on the
Company's website and can be accessed at
https://www.bajajauto.com/investors/policies-codes
Dividend
The directors recommend for consideration of shareholders at the
ensuing annual general meeting, payment of a dividend of H 140 per equity share of H 10
each (1400%) for the year ended 31 March 2023.
For the year ended 31 March 2022 also, the dividend paid was H 140 per
share of H 10 each (1400%).
The dividend recommended is in accordance with the principles and
criteria as set out in the dividend distribution policy.
The dividend, if declared, will be taxable in the hands of the
shareholders of the Company pursuant to Income Tax Act, 1961. For further details on
taxability, please refer to Notice of annual general meeting.
Share Capital and Buyback
The paid-up equity share capital as on 31 March 2023 was H 282.96
crore, while as on 31 March 2022, it was H 289.37 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. The reduction in share
capital was as a result of buyback of 6,409,662 equity shares made during the year
utilising an aggregate amount of H 2,499.97 crore. As per approval given by the Board, at
its meeting held on 27 June 2022, the buyback of the equity shares of the Company was done
through open market route through stock exchanges at a price not exceeding H 4,600 per
equity share. The buyback of equity shares commenced on 4 July 2022 and was completed on
10 October 2022.
The details of buyback are available on the website of the Company at
https://www.bajajauto.com/ investors/share-buyback
Operations
Detailed information on the Company's operations is in the report
on Management Discussion and Analysis.
Capacity Expansion and New Projects
The Company's current installed capacity is 6.65 million units per
annum.
Detailed information on capacity expansion and new projects is covered
in the report on Management Discussion and Analysis.
Research and Development (R&D) and Technology Absorption
FY2023 was a challenging year with many regulatory changes for
automotive products to be met under very tight timelines.
A) Products
Many new products were launched during the year under review. Pulsar
has been consistently upgraded over the years to keep it in sync with changing times.
Information on the new products is covered in the report on Management Discussion and
Analysis.
B) Processes
R&D has been working on improving its operations in a number of
areas as listed below:
l Manpo R&D has expanded its team size in areas of design,
analysis and validation to facilitatewer: the rapidly expanding aspirations of the
Company.
l F acilities: R&D continued to enhance its design,
computing, prototype manufacturing and validation facilities. A number of new test
facilities and prototyping facilities were added.
l R egulatory requirements: R&D had to calibrate and
homologate many more variants to meet the new BS6 OBD2 norms. The powertrain and vehicle
configurations were adjusted to meet these new norms rapidly.
C) Technology
As in the past, new and improved technology has been introduced during
the year. Such information is covered in the report on Management Discussion and Analysis.
D) Outgo
The expenditure on R&D during FY2023 and in the previous year was:
| Particulars |
FY2023 |
FY2022 |
| i. Capital (including technical know-how) |
35.15 |
42.06 |
| ii. Recurring |
489.91 |
446.73 |
| Total |
525.06 |
488.79 |
| iii. Total research and development expenditure as a
percentage of sales |
1.48% |
1.52% |
Conservation of Energy
| Company continues its efforts to reduce and optimise the energy
consumption at all its manufacturing facilities, including corporate office at Pune. |
| Significant reduction in energy consumption has been achieved as shown
hereunder (key initiatives): |
| A) Electrical Energy |
| l Ener gy efficiency improved by replacing IE1 Motors by IE4/IE5 Motors
for Slat Conveyor for |
| Assembly Lines, Hot Water Spray Pump, Water Screen Pump. |
| l Use of ED bath voltage optimisation based on surface area of individual
SKUs. |
| l Use of VFD and water temperature sensors for optimised running of
cooling tower. |
| l Pr ovision of energy efficient LED luminaries at various designated
areas across all our factories for energy conservation. |
| l Impr ovement in power factor by addition of automatic power factor
control system. |
| l Continued use of motion sensors for offices and washroom lights. |
| B) Water |
| l Rain water storage pond with capacity 90,000 cubic meter at Waluj
plant, 57,000 cubic meter at Pantnagar plant, and 83,500 cubic meter at Chakan plant are
available for its use in process. |
| l Continuous reuse of treated water for processes like painting, cooling
towers, etc. in addition to gardening. |
| l F requent cleaning of water tank ventilation units. |
| l Continued rainwater harvesting across all plants. |
| l Use of one touch taps and sensor-based taps for hand wash at various
areas across all plants. |
| l R everse cascading of water at pre-treatment stages at paint shop. |
| l Change of underground water lines with above ground line for easy
identification of leakage, if any. |
| C) LPG/Propane |
| l Pr ovision of thermo-ceramic coating for oven inner wall in place of GI
sheet for Paint Shops. |
| l Instal lation of IR heaters on pre-treatment line to reduce hot water
generator PNG consumption. |
| l Exhaust modulation based on oven heating load. |
| l A utomated process Startup and Shutdown System for PTED Line. |
| l Continued use of magnetic resonance in oven PNG supply. |
| l Continued use of low temperature chemical for pre-treatment process at
paint shop. |
| l Pr ovision of IR heaters in painting booth flash off zones to reduce
ASU burner PNG consumption. |
| l Use of energy efficient burners in canteen in all plants. |
| D) Utilisation of Renewable Energy-Key Initiatives |
| l Usage of renewable solar power generation: 5MW at Waluj, 1MW at
Pantnagar, 3.2MW at |
| Akurdi and 2MW at Chakan; generating 155 lakh units per year renewable
energy. |
| l Utilisation of solar water heater in canteen of all plants. |
| l Utilisation of hot water rooftop solar system for residential area for
positive resource utilisation. |
| l Use of direct sunlight to illuminate shops by installation of
‘skylights' across all plants. |
| . |
Impact of Measures Taken
As a result of the initiatives taken for conservation of energy and
natural resources, the Company has achieved an overall reduction in consumption as given
in the table below:
|
% Reduction w.r.t. previous
year |
| Description |
FY2023 |
FY2022 |
| Electricity consumption |
# 1.19 |
3.95 |
| Water consumption |
# (4.53) |
3.93 |
| LPG/PNG consumption |
4.22 |
17.84 |
| # Impact of addition of new facilities and lower production
volume of Motorcycles at Waluj. |
|
|
| Investment/Savings |
|
|
|
|
( H In Crore) |
| Description |
FY2023 |
FY2022 |
| Investment for energy conservation activities |
1.55 |
1.76 |
| Recurring savings achieved through above activities |
0.87 |
0.91 |
Awards and Accolades
l Upgr adation of ‘Occupational Health and Safety Management
Systems' from OHSAS 18001 to ISO 45001 by all plants of the Company.
l P antnagar plant received ‘Platinum Award' in ‘Green
Practices Award Competition' organised by CII.
l P antnagar plant received ‘Silver Award' in ‘10th
CII-National Excellence Practice Competition' organised by CII.
l P antnagar plant won ‘Northern Region EHS Competition'
organised by CII.
l P antnagar plant is awarded ‘Best Practices in Energy
Conservation' in ‘Green Practices Award Competition' organised by CII.
l Chak an plant is awarded by CII for excellence in ‘Energy
Management 2022-Energy Efficient Unit'.
l W aluj Rooftop Solar plant won ‘Excellence in Performance
Award-Rooftop Solar' Award in CII Performance Excellence Awards 2022 for Solar and
Wind plants.
l W aluj plant won ‘Energy Efficient Unit' Award in
‘23rd CII-National Award for Energy Excellence-2022', organised by CII.
International Business
FY2023 has been a difficult year for exports. During the year under
review, Bajaj Auto sold 1.82 million units versus 2.5 million vehicles in the previous
year.
More detailed information is given in the report on Management
Discussion and Analysis.
Foreign Exchange Earnings and Outgo
The Company continued to be a net foreign exchange earner during the
year.
Total foreign exchange earned by the Company during the year under
review was H 14,461.47 crore, as compared to H 16,280.38 crore during the previous year.
Total foreign exchange outflow during the year under review was H
1,138.68 crore, as against H 902.08 crore during the previous year.
Industrial Relations
Bajaj Auto's approach to its human resources is premised on the
fundamental belief in fostering meritocracy in the organisation, which promotes diversity
and offers equal opportunities to all employees. We believe in respecting human rights and
actively developing people who will contribute to society by nurturing them and giving
them opportunities to apply their skills.
In the financial year 2022-23, the Company continued to deliver on its
commitment to excellence. Passing successive milestones, business excellence has been
further strengthened by well-defined goals and employee engagement strategies. The overall
employee relations with staff and workmen across all the plants viz. Akurdi, Waluj, Chakan
and Pantnagar continued to be cordial during the year.
A core component of infusing joy at the workplace is to layer-in
non-work activities that get people excited and encourage involvement. The Company has
focused on ‘Yutori' concept means ‘Joy at Workplace'. Below are three
areas under Yutori, for fostering a more positive and fulfilling professional experience.
1. Body-Physical Happiness
Various initiatives were carried out to sustain and improve physical
fitness. Some of them are workplace improvement in terms of ergonomics, work environment
improvement, health improvement with medical check-up followed by consultation and
physical fitness programs.
2. Mind-Mental Happiness
To improve mental happiness, we focused on education and training,
stress-free operations, healthy communication and interpersonal relationships, rewards and
recognition as well as personal and professional growth.
3. Soul-Spiritual Wellbeing
Various initiatives were taken for spiritual well-being like yoga and
meditation sessions, women's day celebration, people involvement and participation
through kaizen competition, trust building through family care and trekking activities and
collaborative culture development.
With the active participation and involvement of all employees, we have
been able to inculcate a TPM culture for excellence and continuous improvements across all
plants. As a result, the plants have received numerous awards during the year from CII,
IIIE, QCFI, Aditya Birla Group etc. Waluj plant has won two gold medals at the national
level in the QCFI competition; both teams are qualified for international competition.
The Company has been developing and retaining a gender-diverse talent
pool of motivated employees. The Company has taken active steps for engaging women's
talent, contributing to improving women's workforce participation in the economy.
With continuous improvement activities through various committees,
relations with workers and unions have improved and all wage settlements are taking place
in time and without any trouble. The Company signed a long-term settlement with the union
for a period of 3.5 years on 1 January 2023 at the Chakan plant.
Prioritising employees' health, various state-of-the-art sports
and health facilities have been provided to the employees. Employees have bagged prizes in
multiple sports events like weightlifting, swimming organised by Industrial Sports
Association (ISA), Pune. Employees of Waluj plant won 8 gold medals, 5 silver medals and 6
bronze medals at 42nd National Athletics Championship.
With a view to serving the community, the employees were also involved
in Company organised charitable events. These include donation drives, stalls for NGOs,
blood donation camps, tree plantations etc.
The Company will continue its efforts for building and sustaining a
high sense of belongingness and high-performance culture at the workplace.
Subsidiaries and Joint Ventures
PT. Bajaj Auto Indonesia (PT BAI)
Routine business operations of PT BAI, a 99.25% subsidiary of Bajaj
Auto Ltd., remain discontinued.
Indonesia is a large two-wheelers market and hence of interest for PT
BAI.
PT BAI would continue to study the evolving market and evaluate
different possible opportunities.
Bajaj Auto International Holdings BV, Netherlands (BAIH BV)
BAIH BV is a 100% Netherlands based subsidiary of Bajaj Auto Ltd. Over
the years from 2007 to 2013, through this subsidiary, Bajaj Auto Ltd. has invested a total
of €198.1 million (H1,219 crore) and holds 49.9% stake in Pierer Bajaj AG (PBAG).
50.1% in PBAG is held by Pierer Group.
Bajaj Auto (Thailand) Ltd.
Bajaj Auto (Thailand) Ltd. was incorporated as a wholly owned
subsidiary in Thailand with an issued and subscribed share capital of Thai Baht (THB) 45
million (H10 crore). An Engineering Design Centre (EDC) is set up under this subsidiary.
Bajaj Auto (Thailand) Ltd. has all necessary approvals from local
authorities. The EDC is operational and international designers are working from this new
facility in Bangkok.
Bajaj Auto Spain S.L.U.
Bajaj Auto Spain S.L.U. was incorporated as a wholly owned subsidiary
in Barcelona, Spain with an issued and subscribed share capital of €600K (H 5 crore),
the intent being to set up an Engineering Design Centre (EDC).
The EDC has just started operations with the facility being set-up and
is expected to be fully operational in the coming year.
Chetak Technology Ltd. (CTL)
Given the stakes and likely impact of EVs on its business, Bajaj Auto
Ltd. wants to be ahead of this curve. For effectively engaging in this domain, CTL was
incorporated as a wholly owned subsidiary of the Company on 4 October 2021 with an issued
and subscribed share capital of H 5 crore to develop new technologies and products, have
dedicated manufacturing, sales, after-sales and offer customer centric experiences.
During the year under review, additional capital of H 465 crore has
been infused in CTL by way of rights issue. Plans have also been drawn to set up a new
state-of-the-art manufacturing facility at Akurdi.
Bajaj Auto Consumer Finance Ltd. (BACFL)
Financing is key to every automobile business. To increase geographic
coverage and expand financing options for the retail customers of Bajaj Auto Ltd. and
Chetak Technology Ltd., a wholly owned captive financing company i.e. BACFL was formed on
6 December 2021 with an issued and subscribed share capital of H 5 crore. During the year
under review, additional capital of H 25 crore has been infused in BACFL by way of rights
issue.
An application for registration of BACFL as NBFC has been made to RBI
and the matter is under process.
Bajaj Do Brasil Comercio De Motocicletas Ltda
Brazil is an important market for motorcycles in Latin America. To
address this, Bajaj Auto Ltd. has set up a wholly owned subsidiary on 31 March 2022 with a
paid up equity share capital of BRL 30 million (H 48 crore). The subsidiary has just
started operations after obtaining all necessary approvals. Full scale operations are
likely to commence in the coming year.
More detailed information is given in the report on Management
Discussion and Analysis.
The financial statements of the subsidiary companies are also available
on the Company's website on
https://www.bajajauto.com/investors/financial-and-operational-performance
The Company does not have any associate company, nor has it entered
into a joint venture with any other company.
The Company's policy for determination of material subsidiary, as
adopted by the Board of Directors, in conformity with regulation 16 of the Listing
Regulations, 2015, can be accessed on the Company's website at
https://www.bajajauto.com/investors/policies-codes
Anti-Corruption Initiatives
The Company has established several policies to prevent corruption
within Bajaj Auto Ltd. These are suitably integrated with the business operations. The
Company also has adequate disclosure practices with regard to anti-corruption activities.
Some of these practices are given below:
Signing of the Anti-Corruption Initiative of World Economic Forum (WEF)
In support of the initiative taken by WEF, the Company is a signatory
to the ‘Commitment to
Anti-Corruption' and is supporting the ‘Partnering Against
Corruption-Principles for Countering Bribery' derived from Transparency
International's Business Principles. This calls for a commitment to two fundamental
actions, viz. a zero-tolerance policy towards bribery and the development of a practical
and effective implementation programme.
Adoption of the Confederation of Indian Industry (CII) Charters
Your Company, being a member of CII, has adopted the following
Codes/Charters:
1. CII Code of Conduct for Affirmative Action.
2. Model Code of Conduct for Ethical Business practices.
3. Charters of Fair and Responsible Workplace Guidelines for
Collaborative Employee Relations.
4. Charters on Fair and Responsible Workplace Guidelines for Contract
Labour.
More details on the subject are given in the Business Responsibility
and Sustainability Report hosted on the Company's website on
https://www.bajajauto.com/investors/financial-and-operational-performance
Annual Return
A copy of the annual return as provided under sub-section (3) of
section 92 of the Companies Act, 2013 (‘the Act'), in the prescribed form, which
will be filed with Registrar of Companies/MCA, is hosted on the Company's website and
can be accessed at
https://www.bajajauto.com/investors/financial-and-operational-performance
Number of Meetings of the Board
There were seven 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
Act, directors, to the best of their knowledge and belief, state that:
l in the pr eparation of the annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to material
departures;
l the y 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 and loss of the Company for the year ended 31 March 2023;
l the y 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;
l the y have overseen that the annual accounts have been prepared on a
going concern basis;
l the y have laid down internal financial controls to be followed by
the Company and that, to the best of their knowledge, examination and analysis, such
internal financial controls have been adequate and were operating effectively; and
l the y have ensured through oversight of the existence of proper
systems to ensure compliance with the provisions of all applicable laws and that, to the
best of their knowledge, such systems were adequate and were operating effectively.
Details regarding Frauds reported by Auditors under section 143(12)
During the year under review, the auditors i.e. statutory auditors and
secretarial auditors have not reported any matter under section 143(12) of the Act, and
therefore, no details are required to be disclosed under section 134(3)(ca) of the Act.
Declaration by independent directors
The independent directors have submitted their 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, read with regulation
16 and 25 of the Listing Regulations, 2015, as amended. The independent directors have
also confirmed compliance with the provisions of section 150 of the Act read with 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 their meeting the prescribed criteria of independence,
after undertaking due assessment of the veracity of the same as required under regulation
25 of the Listing Regulations, 2015.
Directors' remuneration policy and criteria for matters under
section 178
The salient features and changes to the policy on directors'
appointment and remuneration, including the criteria for determining qualifications,
positive attributes, independence of a director and other matters, as required under
sub-section (3) of section 178 of the Act form a part of the Corporate Governance Report.
The policy is on the Company's website https://www.bajajauto.com/investors/
policies-codes
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
All contracts/arrangement/transactions entered into by the Company
during FY2023 with related parties were in compliance with the applicable provisions of
the Act and the Listing Regulations, 2015. Prior omnibus approval of the audit committee
is obtained for all related party transactions, which are foreseen and of repetitive
nature. Pursuant to the said omnibus approval, details of transactions entered into are
also reviewed by the audit committee on a quarterly basis.
All related party transactions entered into during FY2023 were on an
arm's length basis and in the ordinary course of business of the Company under the
Act and not material under the Listing Regulations, 2015. However, during the year, prior
approval of shareholders was obtained for the material transactions with KTM
Sportmotorcycle GmbH (Associate of Bajaj Auto Ltd.'s 100% subsidiary, Bajaj Auto
International Holdings BV, based in Netherlands) vide ordinary resolution through postal
ballot on 21 November 2022 as it was estimated that the transaction value would cross the
applicable materiality thresholds under the amended Listing Regulations, 2015 (i.e. H
1,000 crore, or 10% of the annual consolidated turnover as per the last audited financial
statements of the listed entity, whichever is lower).
Details of transactions with related parties during FY2023 are provided
in the notes to the financial statements. There were no transactions requiring disclosure
under section 134(3)(h) of 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 available on the Company's website at
https://www.bajajauto.com/investors/policies-codes
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 and the date of this Report.
Risk Management Policy
Pursuant to regulation 21 of the Listing Regulations, 2015, as amended,
risk management policy/ framework was adopted by the Board. This framework, inter alia,
includes identification of internal and external risks faced by the Company, including
financial, operational, sectoral, sustainability, information, cyber security, strategic
or any other risk as may be determined by the risk management committee and the measures
for risk mitigation, reporting of critical risks within the Company and business
continuity plan.
Information on the development and implementation of a risk management
policy for the Company is given in the Corporate Governance Report.
Corporate Social Responsibility (CSR)
The CSR policy including the composition of the CSR committee is hosted
on the Company's website
https://www.bajajauto.com/-/media/bajajauto/Investors/code-policy/BAL-Revised-CSR-Policy-29-April-2021.ashx
Taking into account the commitments made by the Company for the ongoing
CSR projects/programs which are in progress and considering the project mode of CSR
activity where the projects can extend beyond the financial year, as also the amount
transferred to ‘Unspent CSR Account', there is no shortfall in the CSR
expenditure mandated to be spent by the Company during the financial year ended 31 March
2023.
As per provisions of section 135(6) of the Act, any amount remaining
unspent under section 135(5) pursuant to any ongoing project shall be transferred by the
company within a period of thirty days from the end of the financial year to a special
account to be opened by the company. Accordingly, such amount has been transferred by the
Company to the specified account within the prescribed period.
Detailed information on CSR policy, its salient features, CSR
initiatives undertaken during the year, details pertaining to spent and unspent amount
forms part of Annual Report on CSR activities, which is annexed to this Report.
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, chairman and individual directors
Information on the manner in which a formal annual evaluation has been
made by the Board of its own performance and that of its committees, chairman and
individual directors is given in the Corporate Governance Report.
Presentation of Financial Statements
The financial statements of the Company for the year ended 31 March
2023 have been disclosed as per Division Il of Schedule III to the Act.
Indian Accounting Standards, 2015
The annexed financial statements comply in all material aspects with
Indian Accounting Standards (Ind AS) notified under section 133 of the Act, Companies
(Indian Accounting Standards) Rules, 2015 and other relevant provisions of the Act.
Consolidated Financial Statements
The audited consolidated financial statements incorporating the duly
audited financial statements of the subsidiaries, as prepared in compliance with the Act,
applicable accounting standards and Listing Regulations, 2015 along with all relevant
documents and the Auditors' Report form a part of this Report.
Internal Audit
At the beginning of each financial year, an audit plan is rolled out
with approval by the Company's audit committee. The 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 and 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
are periodically presented to the audit committee of the Board.
Statutory Disclosures
The summary of the key financials of the Company's subsidiaries
(Form AOC-1) is included in this Annual Report. A copy of the audited financial statements
for each of the subsidiary companies will be made available to members of the Company,
seeking such information at any point of time. The financial statements of the Company and
its subsidiaries are placed on the Company's website at
https://www.bajajauto.com/investors/financial-and-operational-performance
Details as required under the provisions of section 197(12) of the Act,
read with rule 5(1) of 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 of top ten employees in terms of the remuneration and employees
in receipt of remuneration as required under the provisions of section 197(12) of the Act,
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.
The provisions of section 148 of the Act relating to maintenance of
cost records and cost audit are not applicable to the Company.
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. During the year under review, no
complaint has been received from employees. There was no other case reported during the
year under review under the said policy.
There is no change in the nature of business of the Company during
FY2023.
The securities of the Company were not suspended from trading during
the year on account of corporate actions or otherwise.
A cash flow statement for 2022-23 is attached to the Balance Sheet.
The Managing Director, as per the terms of his appointment, does not
draw any commission or remuneration from subsidiary companies. Hence, no disclosure as
required under section 197(14) of the Act has been made.
Details as prescribed under section 134 of the Act and Rules made
thereunder, applicable to the Company, have been specifically given in this Report,
wherever applicable.
Directors' and Key Managerial Personnel-Changes
I. Changes in Directorate
Shekhar Bajaj, Non-executive non-independent director of the Company
tendered his resignation with effect from close of business hours on 30 June 2022. The
Board places on record its deep appreciation of valuable guidance provided by him during
his very long tenure on the Board.
II. Retirement by Rotation
Independent directors hold office for a fixed term not exceeding five
years from the date of their appointment and are not liable to retire by rotation.
The Act mandates that at least two–thirds of the total number of
directors (excluding independent directors) shall be liable to retire by rotation.
Accordingly, Niraj Bajaj (DIN 00028261), Sanjiv Bajaj (DIN 00014615)
and Madhur Bajaj
(DIN 00014593), directors, being the longest in the office among the
directors liable to retire by rotation, retire from the Board this year and, being
eligible, have offered themselves for re–appointment.
Brief details of Niraj Bajaj, Sanjiv Bajaj and Madhur Bajaj are given
in the notice of annual general meeting.
III. Appointment/Re-appointment of Directors
Rak esh Sharma (DIN 08262670) was appointed as a Whole-time director of
the Company for a period of five years from 1 January 2019 up to 31 December 2023. The
Board, on recommendation of nomination and remuneration committee and after evaluating his
performance and the valuable contribution made by him in the progress of the Company, has
approved his re-appointment for another term of five years commencing from 1 January 2024,
subject to approval of shareholders.
Accordingly, resolution seeking his re-appointment for a further term
of five years and brief details of Rakesh Sharma are given in the notice of annual general
meeting.
There was no other change in the directors and key managerial personnel
during the year under review since the last report.
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, both physical and operational.
This includes its design, implementation and maintenance, along with periodic internal
review of operational effectiveness and sustenance and whether these 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.
Internal financial controls with reference to the financial statements
were adequate and operating effectively.
Corporate Governance
Pursuant to the 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 Board members and senior management personnel have affirmed
compliance with the Code of Conduct for FY2023. 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 Chief Financial Officer have certified
to the Board with regard to the financial statements and other matters as required under
regulation 17(8) of the Listing Regulations, 2015.
Certificate from the auditors of the Company regarding compliance of
conditions of corporate governance is annexed to this Report.
Employee Stock Option Scheme
The Company grants share-based benefits to eligible employees with a
view to attracting and retaining talent, to encourage employees to align individual
performance with the Company objectives and to promote their increased participation in
the growth of the Company.
During the year under review, there has been no change in the Bajaj
Auto Employee Stock Option Scheme 2019 (BAL-ESOS 2019) of the Company. BAL-ESOS 2019 is in
compliance with SEBI (Share Based Employee Benefits) Regulations, 2014, and this has been
certified by the secretarial auditor of the Company.
In line with regulation 14 of the SEBI (Share Based Employee Benefits)
Regulations, 2014, a statement giving complete details, as at 31 March 2023, is available
on the website of the Company at
https://www.bajajauto.com/investors/financial-and-operational-performance
Details of options vested, exercised and cancelled are provided in the
notes to the standalone financial statements.
Business Responsibility and Sustainability Report
Pursuant to amendment in the Listing Regulations, 2015, top 1,000
listed entities based on market capitalisation are required to submit a Business
Responsibility and Sustainability Report (‘BRSR') with effect from the FY2023.
Accordingly, a detailed BRSR in the format prescribed by SEBI
describing various initiatives, actions and process of the Company in conducting its
business in line with its environmental, social and governance obligations has been hosted
on Company's website and can be accessed at https://www.bajajauto.com/
investors/financial-and-operational-performance
A physical copy of the BRSR will be made available to any shareholder
on request.
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.
Statutory Auditor
Pursuant to the provisions of section 139 of the Act, the members at
the annual general meeting of the Company held on 26 July 2022 appointed S R B C & CO
LLP (Firm Registration No. 324982E/E300003) as statutory auditors of the Company from the
conclusion of 15th annual general meeting till the conclusion of 20th annual general
meeting, covering second term of five consecutive years. The statutory auditors have
confirmed that they are not disqualified from continuing as auditors of the Company.
The statutory audit report for the financial year 2022-23 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 appointed, Shyamprasad D Limaye, Practising Company Secretary
(Membership No.1587, CP No. 572) to undertake the secretarial audit of the Company.
Secretarial audit report for the financial year 2022-23 issued by him in the prescribed
form MR-3 is annexed to this Report.
In addition to the above, pursuant to regulation 24A(2) of the Listing
Regulations, 2015, a report on secretarial compliance for the financial year ended 31
March 2023 has been issued by Shyamprasad D Limaye and the same will be submitted with the
stock exchanges within the given timeframe. The report will be made available on the
website of the Company.
There are no observations, reservations or qualifications or adverse
remark in any of the aforesaid reports.
On behalf of the Board of Directors,
| Niraj Bajaj |
| Chairman |
| DIN: 00028261 |
| Pune: 25 April 2023 |
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