Bajaj Auto Ltd
Directors Reports
The directors present their Fifteenth Annual Report and Audited
Financial Statements for the year ended 31 March 2022.
Sad demise of Rahul Bajaj,
Chairman Emeritus of the Company
At the outset, your directors express their profound grief on the sad
demise of Rahul Bajaj, the iconic leader of the Company, who passed away on 12 February
2022.
He lived an extraordinary life. He was the architect of one of the most
respected industrial 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, bold in both
expression and action. While he remained the torchbearer of a family legacy that dates
back to the founding days of our country, he championed the creation of a new India.
While his passing away has left a huge void among 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.
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 |
FY2022 |
FY2021 |
| Two-wheelers |
3,836,856 |
3,605,893 |
| Commercial vehicles |
471,577 |
367,021 |
| Total |
4,308,433 |
3,972,914 |
| Of which exports |
2,506,626 |
2,054,247 |
|
|
(Rs In Crore) |
| Particulars |
FY2022 |
FY2021 |
| Total revenue |
34,353.95 |
29,017.54 |
| Total expenses |
28,163.90 |
23,078.54 |
| Profit before exceptional items and tax |
6,190.05 |
5,939.00 |
| Exceptional items |
(315.28) |
- |
| Profit before tax |
6,505.33 |
5,939.00 |
| Tax expense |
1,486.46 |
1,384.41 |
| Profit for the year |
5,018.87 |
4,554.59 |
| Earnings per share (Rs) |
173.6 |
157.5 |
Closing balances in reserve/other equity
(Rs In Crore)
| Particulars |
FY2022 |
FY2021 |
| General reserve |
6,389.60 |
5,887.60 |
| Retained earnings |
19,340.40 |
18,861.25 |
| Cash flow hedging reserve |
54.33 |
148.90 |
| Costs of hedging reserve |
5.93 |
(58.06) |
| FVTOCI reserve |
626.41 |
88.43 |
| Share based payments reserve |
32.27 |
16.91 |
| Treasury shares |
(69.51) |
(32.14) |
| Total |
26,379.43 |
24,912.89 |
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 formulated a dividend distribution policy on
28 October 2016, which the Board at its meeting held on 17 March 2021 amended in a major
way.
The amended policy 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 policy has been uploaded on the Company's
website and can be accessed at https://www.bajajauto.com/investors/policies-codes. A copy
of the policy will be made available to any shareholder on request by email.
Dividend
The directors recommend for consideration of shareholders at the
ensuing annual general meeting, payment of a dividend of RS 140 per equity share of RS 10
each (1400%) for the year ended 31 March 2022.
For the year ended 31 March 2021 also, the dividend paid was RS 140 per
share of RS 10 each (1400%).
In terms of the provisions of the Income Tax Act, 1961, the dividend,
if declared, will be taxable in the hands of the shareholders subject to tax deduction at
source at the applicable rates. For further details on taxability, please refer to Notice
of annual general meeting.
The dividend recommended is in accordance with the principles and
criteria as set out in the dividend distribution policy.
Share Capital
The paid-up equity share capital as on 31 March 2022 was RS 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.
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.
In FY2022 despite the waves of COVID that hit Pune, R&D ensured
high attendance at office while taking care of social distancing and kept driving its
programs. But this was not the only challenge that had to be dealt with. R&D had to
work rapidly on counteracting the rapidly increasing costs of precious metal used in the
catalysts, react to the sudden decision by Government to prepone the complete BS6 OBD 2
package to 1 April 2023 and deal with the semiconductor shortage caused by COVID and
related outcomes.
A) Products
Bajaj Auto's most successful brand Pulsar has been a leader not just in
India but in all its export markets. 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:
• Manpower: R&D has expanded its team size in areas of design,
analysis and validation to facilitate the rapidly expanding aspirations of the Company.
• Facilities: R&D continued to enhance its design, computing,
prototype manufacturing and validation facilities. A number of new test facilities and
prototyping facilities were added.
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 2021-22 and in the previous year was:
(Rs In Crore)
| Particulars |
FY2022 |
FY2021 |
| i. Capital (including technical know-how) |
42.06 |
21.14 |
| ii. Recurring |
446.73 |
403.33 |
| Total |
488.79 |
424.47 |
| iii. Total research and development expenditure as a
percentage of sales |
1.52% |
1.56% |
Conservation of Energy
Company continues its efforts to reduce and optimise the energy
consumption at all its manufacturing facilities, and its corporate office at Pune.
Significant reduction in energy consumption has been achieved by
various ENCON initiatives as shown hereunder:
A) Electrical Energy
• Efficient utilisation of rooftop solar plants: 5MW at Waluj, 1MW
at Pantnagar, 3.22MW at Akurdi and 2MW at Chakan.
• Provision of energy efficient motors.
• Use of VFD and water temperature sensors for optimised running
of cooling tower.
• Provision of Localised booster for robotic painting.
• Upgradation of CED paint LB1000 to LB700 having higher throwing
power. (Lower voltage required)
• Installation of RTPFC (Real Time Power Factor Controller), ASVG
(Advanced Static Voltage Generator) and APFC (Automatic Power Factor Controller) to
control and improve power factor greater than 0.99.
• Continued use of motion sensors for offices and washroom lights.
• Installation of energy efficient LED luminaries at various
designated areas across all our factories.
• Use of HVLS (High Volume Low Speed) fans for air circulation in
shop floors.
• Installation of centralised ARP system at Motorcycle paint shop
at Waluj.
Overall improvement in electrical energy consumption is achieved to the
extent of 3.95% (w.r.t. previous year FY2021) despite addition of new facilities viz. ABS
line at Chakan, Club house at Akurdi etc.
B) Water
• Continuous reuse of treated water for processes like painting,
cooling towers etc. in addition to gardening.
• Continued rainwater harvesting across all plants.
• Use of one touch taps and sensor-based taps for hand wash at
various areas across all plants.
• Reverse cascading of water at pre-treatment stages at paint
shop.
• Change of underground water lines with above ground line for
easy identification of leakage, if any.
• Rainwater storage pond with capacity 90,000 cubic meters at
Waluj plant, 47,000 cubic meters at Pantnagar plant, 83,500 cubic meters at Chakan plant
are available for its use in process. Overall water consumption is reduced to the tune of
3.93%, despite addition of new facilities viz. ABS line at Chakan, new garden at Akurdi
etc.
C) LPG/Propane
• Continued use of magnetic resonance in oven fuel supply at paint
shop.
• Improved thermal efficiency of oven by thermo coating
application on the oven's internal surface.
• Continued use of low temperature chemicals for pre-treatment
process at paint shops.
• Lacquer oven auto ON/OFF during lunch and dinner time in paint
shops across all plants.
• Development and monitoring of automated process startup and
shutdown system.
• Reduction in heat load through painting fixture weight
reduction.
• Optimisation of CED oven exhaust through hot air balancing.
• Use of energy efficient burners in the canteens in all plants.
D) Utilisation of Renewable Energy-Key Initiatives
• 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 of
renewable energy.
• Utilisation of solar water heaters in the canteen of all plants.
• 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 brought about an overall reduction in consumption as
given in the table below:
|
% Reduction w.r.t. previous
year |
| Description |
FY2022 |
FY2021 |
| Electricity consumption |
3.95 |
10.20 |
| Water consumption |
3.93 |
9.60 |
| LPG/PNG consumption |
17.84 |
(4.50)# |
# Effect of lower volume of commercial vehicles.
Investment/Savings
(Rs In Crore)
| Description |
FY2022 |
FY2021 |
| Investment for energy conservation activities |
1.76 |
1.69 |
| Recurring savings achieved through above activities |
0.91 |
0.53 |
Detailed information on the above is given in the report on Business
Responsibility.
Awards and Accolades
• Upgradation of "Occupational Health and Safety Management
Systems" from OHSAS 18001 to ISO 45001 by all plants of the Company.
• Pantnagar plant received 3rd prize for "Best Energy
Efficient Organisation" in Kaizen Competition organised by CII.
• Chakan plant awarded 1st prize in green manufacturing
machining-Times of India Group.
International Business
All regions have shown strong growth in FY2022.
During the year under review, Bajaj Auto crossed 2.5 million vehicle
milestone. First time ever!!! Motorcycle exports touched new highs - at 2.2mn units,
growth of 22% over FY2021. In 10 of the 12 months, Bajaj Auto exported more than 200k
units every month. The Company continues to remain, by far, India's No.1 exporter of
motorcycles and three wheelers.
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 RS 16,280.38 crore, as compared to RS 12,181.88 crore during the previous year.
Total foreign exchange outflow during the year under review was H
902.08 crore, as against H 753.34 crore during the previous year.
Pierer Bajaj AG (formerly PTW Holding AG) holds 73.3% stake in Pierer
Mobility AG. Pierer Mobility AG (PMAG) is Europe's leading "Powered Two-wheeler"
manufacturer with focus on highly innovative sports motorcycles and electric mobility-E
bicycles, E motorcycles, etc. With KTM, Husqvarna and GASGAS motorcycle brands, it is a
leading premium motorcycle manufacturer in Europe. With conventional and E bicycles under
Ramon, Husqvarna, GASGAS and Felt brands, it is a strong player in this fast-growing
segment.
With this re-structuring in September, Bajaj Auto and Pierer Group now
partner in all Mobility businesses that Pierer Group engages in. The resultant gain in
fair value of RS 501.23 crore is shown as an exceptional item in consolidated results.
Subsequently, KTM AG announced a buyback program on 5 November 2021.
BAIH BV tendered the balance 161,939 shares (1.49% stake in KTM AG left after the swap
explained above) in this buy back. The resultant gain of Rs74.90 crore is shown as other
income in consolidated results.
In the year 2021, PMAG recorded a strong performance in motorcycles,
with sale of 332,881 units and in bicycles, with sale of 102,753 units (of which 76,916
were e-bicycles) and registered a record top-line of over €2 billion.
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), the intent being to set up an International Business Centre (IBC) to
oversee sales in the ASEAN region and an Engineering Design Centre (EDC) under this
subsidiary. This marks a new beginning for Bajaj Auto's R&D expanding its design
center to trend-defining markets around the globe.
Bajaj Auto (Thailand) has obtained all necessary approvals from local
authorities. The EDC is operational and international designers are working from this new
facility in Bangkok. Full scale operations including IBC will commence in the coming year.
During the year under review, following companies were incorporated as
our subsidiaries.
Bajaj Auto Spain, S.L.
Bajaj Auto Spain, S.L. was incorporated as a wholly owned subsidiary in
Barcelona, Spain with an issued and subscribed share capital of €600K (H5 crore), the
intent being to set up an Engineering Design Centre (EDC).
The EDC has started operations 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
wants to be ahead of this curve.
For effectively engaging in this domain, CTL was incorporated as a
wholly owned subsidiary, with an issued and subscribed share capital of RS 5 crore.
To give prime focus to the EV space and to develop new technologies and
products, the Company now intends to house all its EV related activities - R&D of new
technologies, R&D for product development, manufacturing, sales, after-sales and
customer centric experience — to this newly formed 100% subsidiary.
Additional capital of RS 45 crore has been infused in CTL by way of
Rights issue in April 2022. 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. In India, nearly 65% of
two-wheelers and 85% of three-wheelers retailed are financed. 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
with an issued and subscribed share capital of RS 5 crore.
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
To address the motorcycle market in Brazil, Bajaj Auto has set up a
wholly owned subsidiary on 31 March 2022. The process to obtain necessary approvals for
introduction of equity share capital and setting up operations in Brazil is currently
underway. Full scale operations are likely to commence in the coming year.
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. 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
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, 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 five 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:
• 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 judgements and estimates that are reasonable and prudent, so as
to give a true and fair view of the state of affairs of the Company at the end of the
financial year and of the profit 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 Act
for safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities;
• the directors have overseen that the annual accounts have been
prepared on a going concern basis;
• the directors 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
• the directors had 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, there were no frauds 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 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, as amended and
Regulation 16 and 25 of the Listing Regulations, 2015, as amended.
The independent directors have also confirmed compliance with the
provisions of the 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 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
The contracts/arrangement/transactions entered into by the Company
during FY2022 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 FY2022 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. None of the transactions required
members' prior approval under the Act or the Listing Regulations, 2015.
Details of transactions with related parties during FY2022 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 was amended by the Board, at its meeting held on 15 March 2022 in line with
SEBI (Listing Obligations and Disclosure Requirements) (Sixth Amendment) Regulations,
2021.
The policy 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
During the year under review, a revised 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 Board, at its meeting held on 29 April 2021, amended the existing
policy. The policy including the composition of the CSR committee is uploaded on the
Company's website https://www.bajajauto.com/investors/policies-codes
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 2022.
Further, in light of the circular dated 25 August 2021 issued by
Ministry of Corporate Affairs (MCA) on the Frequently Asked Questions on CSR, mere
disbursal of funds for implementation of a project does not amount to spending unless the
implementing agency utilises the whole amount.
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.
As per the said circular of MCA, this amounts to meeting of the
obligation and due compliance under section 135 of the said Act.
In terms of the provisions of section 135 of the Act, read with amended
Companies (Corporate Social Responsibility Policy) Rules, 2014, the Annual Report on CSR
activities in the format prescribed under Annexure II of the said Rules 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 FY2022.
Formal Annual Evaluation of the Performance of the Board, its
Committees, Chairperson 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, Chairperson 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
2022 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 directors also present 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.
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 by email to members of the
Company, seeking such information.
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 directors' responsibility statement as required by section 134(5)
of the Act, appears in a preceding paragraph.
A cash flow statement for 2021-22 is attached to the Balance Sheet.
There is no change in the nature of business of the Company during
FY2022.
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 case reported during the year under review
under the said policy.
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
(a) Dr. Omkar Goswami, Non-executive independent director of the
Company tendered his resignation on 9 July 2021. The Board places on record its sincere
appreciation for the valuable contribution made by him during his tenure on the Board.
(b) Dr. Gita Piramal, Non-executive independent director of the Company
tendered her resignation with effect from close of business hours on 30 April 2022. The
Board places on record its sincere appreciation for the valuable services rendered by her
during her 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, Rakesh Sharma (DIN 08262670) 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 Rakesh Sharma and Madhur Bajaj are given in the notice
of annual general meeting.
III. Appointment/Re-appointment of Directors
The Board at its meeting held on 27 April 2022, taking into account the
Report of performance evaluation and pursuant to the recommendation of nomination and
remuneration committee and subject to approval by the members by way of special
resolution, re-appointed following independent directors for a second consecutive term:
| Sr. No. Name of independent director |
Tenure of second term |
| 1 Dr. Naushad Forbes (DIN 00630825) |
Five years w.e.f. 18 May 2022 |
| 2 Anami N. Roy* (DIN 01361110) |
Five years w.e.f. 14 September 2022 |
IV. Change in Key Managerial Personnel
(a) Soumen Ray, resigned from the position of Chief Financial Officer
of the Company w.e.f. closing hours of 20 December 2021 to explore other opportunities.
(b) Consequent upon the resignation of Soumen Ray, the Board at its
meeting held on 15 March 2022, pursuant to the recommendation of nomination and
remuneration committee appointed Dinesh Thapar as Chief Financial Officer and Key
Managerial Personnel of the Company w.e.f. 15 March 2022.
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.
Covid-19 Impact
The impact of the second and third wave of the pandemic on the
performance of the Company and measures adopted to steer through this continuing crisis
have been discussed in detail in Management Discussion and Analysis.
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 2021-22. 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 statutory auditors 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 2022, is available
on the website of the Company 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 Report
Pursuant to the provisions of the Listing Regulations, 2015, a Business
Responsibility Report ('BRR') has been hosted on the website and can be accessed at
https://www.bajajauto.com/investors/financial-and-operational-performance.
The BRR highlights the initiatives, actions and processes of the
Company in conducting its business in line with its environmental, social and governance
obligations.
A copy of the BRR will be made available by email to any shareholder on
request.
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 with effect from the FY2023.
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 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 & CO LLP
(Firm Registration No. 324982E/E300003) as statutory auditors of the Company from the
conclusion of 10th annual general meeting till the conclusion of 15th annual general
meeting, covering one term of five consecutive years. The term of appointment of the
statutory auditors expires at the conclusion of ensuing annual general meeting.
The Board of Directors, based on the recommendation of the audit
committee, at its meeting held on 27 April 2022, has proposed the re-appointment of S R B
C & CO LLP (Firm Registration No. 324982E/ E300003) as statutory auditors of the
Company for a further term of five years to hold office from the conclusion of 15th annual
general meeting till the conclusion of 20th annual general meeting, subject to approval of
the members and to fix their remuneration.
The statutory auditors have confirmed that they are not disqualified
from continuing as auditors of the Company.
The statutory audit report for the year 2021-22 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. 1 587,
CP No. 572) to undertake the secretarial audit of the Company.
Secretarial audit report for the year 2021-22 issued by him in the prescribed form MR-3 is
annexed to this Report.
The 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 2022 has been submitted with the stock exchanges. There are no
observations, reservations or qualifications in that report.
| On behalf of the Board of Directors, |
| Niraj Bajaj |
| Chairman |
| Pune: 27 April 2022 |
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