You are here » Home » Companies » Company Overview » Bajaj Auto Ltd

Bajaj Auto Ltd.

BSE: 532977 Sector: Auto
NSE: BAJAJ-AUTO ISIN Code: INE917I01010
BSE LIVE 13:18 | 21 Sep 3075.00 -13.10
(-0.42%)
OPEN

3088.10

HIGH

3135.00

LOW

3071.40

NSE 13:03 | 21 Sep 3091.60 1.05
(0.03%)
OPEN

3090.55

HIGH

3135.00

LOW

3080.00

OPEN 3088.10
PREVIOUS CLOSE 3088.10
VOLUME 12300
52-Week high 3152.75
52-Week low 2510.00
P/E 23.44
Mkt Cap.(Rs cr) 88,981
Buy Price 3072.80
Buy Qty 66.00
Sell Price 3075.85
Sell Qty 22.00
OPEN 3088.10
CLOSE 3088.10
VOLUME 12300
52-Week high 3152.75
52-Week low 2510.00
P/E 23.44
Mkt Cap.(Rs cr) 88,981
Buy Price 3072.80
Buy Qty 66.00
Sell Price 3075.85
Sell Qty 22.00

Bajaj Auto Ltd. (BAJAJ-AUTO) - Director Report

Company director report

The Directors present their Tenth Annual report and Audited Financial Statements forthe year ended 31 March 2017.

Financial results

The financial results of the Company are elaborated in the Management Discussion andAnalysis Report.

The highlights of the Financial Results are as under:

Sales in Numbers FY2017 FY2016
Two-wheelers 3219932 3358252
Three-wheelers + Quadricycle 446018 535329
Total 3665950 3893581
Of which Exports 1411333 1739629

 

(Rs. In Crore)
Particulars FY2017 FY2016
Total income 24310.00 24956.79
Total expenses 18974.37 19409.47
Profit before tax 5335.63 5547.32
Tax expense 1508.07 1617.65
Profit for the year 3827.56 3929.67
Earnings per share (H) 132.3 135.8

Closing balances in reserve/other equity

(Rs. In Crore)
Particulars FY2017 FY2016
General reserve 4046.60 3663.60
Retained earnings 12562.56 9305.17
Cash flow hedging reserve 200.27 23.86
Costs of hedging reserve (64.67) (15.45)
Total 16744.76 12977.18

Note: Detailed movement of above reserves can be seen in 'Statement of Changes inEquity'

Dividend

The directors recommend for consideration of the shareholders at the ensuing annualgeneral meeting payment of a dividend of Rs. 55 per equity share (550%) for the yearended 31 March 2017. The amount of dividend and the tax thereon aggregate to Rs. 1915.51crore.

For the year ended 31 March 2016 the total dividend paid (including interim dividend)was also Rs. 55 per share of Rs. 10 each (550%) and the total dividend and the tax thereonto the extent applicable also aggregated to Rs. 1915.51 crore.

Share capital

The paid up equity share capital as on 31 March 2017 was Rs. 289.37 crore. There was nopublic issue rights issue bonus issue or preferential issue etc. during the year. TheCompany has not issued shares with differential voting rights sweat equity shares norhas it granted any stock options.

Operations

Detailed information on the operations of the Company and details on the state ofaffairs of the Company are covered in the Management Discussion and Analysis Report.

Capacity expansion and new projects

The Company's current installed capacity is 6.06 million units per annum.

As regards our Quadricycle – QUTE the product is ready for launch and the Companyawaits requisite approvals for sale in the domestic market.

The Qute was sold in various international markets during the year 2016-17.

Research and Development and technology absorption

A) Products

Many new products have been launched during the year under review. Detailed informationon the new products is covered in the Management Discussion and Analysis Report.

B) Process

R&D has been working on improving its operations in a number of areas as listedbelow:

Manpower: R&D has been expanding its team size in areas of designanalysis and validation in order to keep up with the rapidly expanding aspirations of theCompany.

Facilities: R&D continued to enhance its design computing prototypemanufacturing and validation facilities. A number of new test facilities and prototypingfacilities were added.

C) Technology

As in the past new and improved technology has been introduced during the year underreview and the detailed information on the same is covered in the Management Discussionand Analysis Report.

D) Outgo

The expenditure on research and development during 2016-17 and in the previous yearwas:

(Rs. In Crore)
Particulars FY2017 FY2016
i. Capital (including technical know-how) 35.26 52.82
ii. Recurring 332.38 282.34
Total 367.64 335.16
iii. Total research and development expenditure as a percentage of sales 1.62% 1.43%

Conservation of energy

The company continues its efforts to reduce and optimize the energy consumption at allits manufacturing facilities including the corporate office at Pune.

Significant reduction in energy consumption has been achieved by:

A) Electrical energy

Elimination of compressors for pneumatically operated 132 kv circuitbreakers; by modifying circuit breakers to spring mechanism.

• Optimisation of centralised coolant system by relocation of production cells.

• Reduction in energy consumption by providing inverter drives with pressuretransmitter for hydraulic motors.

• Replacing conventional blower with higher capacity induction motor to achieveoptimal design in paint shop-tank cell air supply unit.

• Optimising compressed air pressure by use of portable small compressors onholidays.

• Reduction in hidden loss by providing on-line loss measurement system fortransformer.

• Use of HVLS (High volume and Low Speed) fans for fixed load reduction of aircirculators.

B) Water

Rain water harvesting.

• Re-use of treated water for processes like cooling towers central coolantsystems de-sludge pool and incinerator compressor cooling tower and AHU etc.

• Replacing rusty underground hydrant and raw water pipeline with above groundlevel pipeline to arrest water leakages.

• Installation of second stage reverse osmosis at paint shop.

C) LPG/propane

Thermal imaging/audit for ovens in paint shop and countermeasure.

• Weight reduction of job fixtures in heat treatment.

• Burner efficiency improvement through efficient burners.

• Upgrade of furnace insulation to reduce heat losses.

• Providing magnetic resonator in gas train pipeline to increase combustionefficiency.

• Usage of low temperature chemicals for pre-treatment process.

D) Utilisation of renewable energy-key initiatives

Two PV Solar Power Plants with capacity of 110 KWp and 1100 KWp areinstalled at the Company's Akurdi Plant. Recurring saving of 1.57

• KWH and 15.5

• KWH respectively is being realised yearly. Benefit of Rs. 70 lakh per year.

• Additionally 1228 KWp (roof top) solar power plant installation is in progressat the Company's Chakan Plant. Electricity saving to the extent of 17

• KWH per year is expected.

Benefit of Rs. 19 lakh per year.

• Installation of natural light transparent roof sheets.

Impact of measures taken

As a result of the initiatives taken for conservation of energy and natural resourcesthe Company has effected an overall reduction in consumption as given in the followingtable :

% Reduction w.r.t. previous year
Description FY2017 FY2016
Electricity consumption 1.98 5.96
Water consumption 18.73 16.99
LPG/PNG consumption 8.80 15.65

Investment/savings

(Rs. In Crore)
Description FY2017 FY2016
Investment for energy conservation activities 3.34 3.76
Recurring savings achieved through above activities 2.18 2.52

Awards and Accolades

Sr. No. Details
1 National Energy Management Award 2016 for 'Excellent Energy Efficient Unit' by CII to Waluj Plant.
2 National Award for Excellence in Water Management 2016 by CII to Waluj Plant.
3 BAL Chakan received 'Certificate of Merit' Award in National Energy Conservation Award by Bureau of Energy Efficiency.
4 BAL Chakan received ISO 14001 Certification for upgraded standard (2015).

International Business

Bajaj Auto continues to be India's No. 1 exporter of motorcycles and three-wheelers. Itexports to 78 countries in Latin America Africa South Asia Middle East and Asia Pacificregions. During the year under review exports accounted for 36.9% of the Company's netsales. Detailed information on the International Business is given in the ManagementDiscussion and Analysis Report.

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.7336.49 crore compared to Rs. 9404.68 crore during the previous year.

Total foreign exchange outflow during the year under review was Rs. 697.92 crore asagainst Rs. 774.90 crore during the previous year.

Industrial relations

Industrial relations with staff and workmen across all the plants viz. Akurdi WalujChakan and Pantnagar continued to be cordial.

During the year a wage settlement has been signed at Pantnagar on 1 August 2016 for aperiod of three and half years from 1 June 2016 to 30 November 2019 on expiry of theearlier settlement on 31 May 2016.

For the Akurdi and Chakan plants periodic wage reviews are due with effect from 1April 2016 as per the terms of the respective wage settlements signed for a period of 9years in the year 2010.

In view of the financial difficulties faced by the workmen an interim wage raise hasbeen given to all Chakan workmen in October 2016 with effect from 1 April 2016.

The existing settlement at Akurdi Plant has been terminated in November 2016. The wagereview process will commence on receipt of a fresh charter of demands from the Union.

With active participation and involvement of employees the Company has been able toinculcate TPM culture for excellence and continuous improvement across all plants. Theplants have received many Awards during the year from Confederation of Indian Industry(CII) Quality Circle Forum of India (QCFI) Indian Institution of Industrial Engineering(IIIE) and National Convention Quality Circle (NCQC).

Waluj Motorcycle Division (MCD) received Gold Awards in QC Circle competitionsorganised by QCFI at Nagpur and Aurangabad apart from Excellence Awards in thecompetitions held by QCFI at Raipur and Mumbai. It also received an Award in Champion ofChampions competition organised by CII at Bangalore and in the 3M Kaizen competitionorganised by TPM Club and Institute of Quality at New Delhi.

Likewise Waluj Commercial Vehicle Division (CVD) received Gold Medal/GoldPerformance/Excellent/ Best of Best Poka Yoke/Best of Manufacturing Support Awards in theMini/Annual Convention competitions organised by QCFI at Aurangabad and Nagpur. The CVDalso received Excellence Awards in the competition organised by NCQC at RaipurChhattisgarh.

Chakan Plant received Gold Awards in the National Productivity Competition organised byIIIE at Nagpur. The plant was declared as First Prize Winner in the TPM CircleCompetitions organised by CII at Aurangabad and Chennai.

Pantnagar Plant received Gold Award in the TPM Circle Competition organised by QCFI atRudrapur. The plant was also declared as a Winner in the TPM Circle competition organisedby CII at Chennai.

Ramkrishna Shekhaji Hivale a workman from Central Heat Treatment (MCD) Waluj hasreceived the National ‘Vishwakarma Rashtriya Puraskar' Award from the Labour andEmployment Ministry Government of India for the year 2014.

Two workmen from Waluj plant viz. Ratankumar S Kamble from Final Assly-3Wh. andVishwanath Savta Jadhav from Final Assly-MCD have received the Prime Minister's‘Shram Bhushan' and ‘Shram Shree' Awards respectively for the year 2015.

Subsidiaries and joint ventures

PT. Bajaj Auto Indonesia

Routine business operations of PT. Bajaj Auto Indonesia a 99.25% subsidiary of BajajAuto have currently stopped.

The Company has an agreement with KTM to establish and distribute the KTM branded bikesin Indonesia the largest motorcycle market in South-East Asia.

KTM and Bajaj Auto have decided for BAL to manage KTM in the Indonesian market with thejointly developed range of products. Towards this the joint product range has beenintroduced in Jakarta through a local distributor. Further plans to build brand networkand supply chain are being developed.

During the year under review a total of 1598 units of KTM were sold in Indonesia.

It is intended that PT. Bajaj Auto Indonesia will hold the necessary regulatoryapprovals for the Assembly operations and Product homologation in Indonesia.

Bajaj Auto International Holdings BV Netherlands (BAIH BV)

Bajaj Auto International Holdings BV is a 100% Netherlands based subsidiary of BajajAuto Ltd. Over the years through this subsidiary Bajaj Auto has invested a total of€ 198.1 million (H 1219 crore) and holds approximately 48% stake in KTM AG ofAustria (KTM). Calendar year 2016 has again been a good year for KTM with highest salesin units and highest turnover in the history of the Company. Detailed information on thedevelopments at the subsidiary and KTM AG is provided in the Management Discussion andAnalysis Report.

Signing of anti-corruption initiative of World Economic Forum (WEF)

In support of the initiative taken by WEF with a view to strengthening the efforts tocounter bribery and corruption your Company is a signatory to the 'Commitment toanti-corruption' and is supporting the 'Partnering Against Corruption-Principles forCountering Bribery' derived from Transparency International's Business Principles. Thiscalls for a commitment to two fundamental actions viz.a zero-tolerance policy towardsbribery and development of a practical and effective implementation programme.

Adoption of Confederation of Indian Industry (CII) Charters

The Company has adopted the CII Code of Conduct for Affirmative Action in the year2006 effective from 1 December 2006.

In addition during the year under review CII had come out with a Model Code ofConduct for its member companies with basic principles of doing business ethically. YourCompany being a member of CII has adopted the said Model Code of Conduct.

Further with a view to showcasing industry's commitment to fair and ethical practicesCII had also presented two charters on Fair and Responsible Workplace Guidelines viz.Charters on Fair and Responsible Workplace Guidelines for Collaborative Employee Relationsand Responsible Workplace Guidelines for Contract Labour to the members of CII. In supportof the initiative taken by CII and with a view to striving towards reducing the disparityin treatment between regular and contractual work force your Company has adopted theabove two charters during the year under review.

Extract of annual return

The extract of Annual Return as provided under sub-section (3) of section 92 of theCompanies Act 2013 in the prescribed form MGT-9 is annexed to this Report.

Number of meetings of the Board

There were seven meetings of the Board held during the year. Detailed information isgiven in the Corporate Governance Report.

Directors' responsibility statement

As required under clause (c) of sub-section (3) of section 134 of the Companies Act2013 directors to the best of their knowledge and belief state that-

• in the pr eparation of the annual accounts the applicable Accounting Standardshad been followed along with proper explanation relating to material departures;

• the directors had selected such accounting policies and applied themconsistently and made judgments and estimates that are reasonable and prudent so as togive a true and fair view of the state of affairs of the Company at the end of thefinancial year and of the profit and loss of the company for that period;

• the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of the Companies Act 2013for safeguarding the assets of the Company and for preventing and detecting fraud andother 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 theCompany and that such internal financial controls were adequate and were operatingeffectively; and

• the directors had devised proper systems to ensure compliance with theprovisions of all applicable laws and that such systems were adequate and were operatingeffectively.

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 theAudit 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 requiredpursuant to section 149(7) of the Companies Act 2013 stating that they meet the criteriaof 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 determiningqualifications positive attributes independence of a director and other matters providedunder 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 ofsection 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 thefinancial year which attracted the provisions of section 188 of the Companies Act 2013.There being no ‘material' related party transactions as defined under regulation 23of SEBI Listing Regulations 2015 there are no details to be disclosed in Form AOC-2 inthat regard.

During the year 2016-17 pursuant to section 177 of the Companies Act 2013 andregulation 23 of SEBI Listing Regulations 2015 all RPTs were placed before the AuditCommittee for its approval.

The Policy on RPTs as approved by the Board is uploaded on the Company's websitewww.bajajauto.com

Material changes and commitments

There have been no material changes and commitments affecting the financial position ofthe Company which have occurred between the end of the financial year and the date ofthis Report.

Risk Management Policy

Information on the development and implementation of a Risk Management Policy for theCompany including identification therein of elements of risk which in the opinion of theBoard may threaten the existence of the Company is given in the Corporate GovernanceReport.

Corporate Social Responsibility (CSR)

Detailed information on the Corporate Social Responsibility Policy developed andimplemented by the Company on CSR initiatives taken during the year pursuant to section135 of the Companies Act 2013 is given in the annexed 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 Boardof its own performance and that of its Committees and individual directors is given in theCorporate Governance Report.

Presentation of financial statements

The financial statements of the Company for the year ended 31 March 2017 have beendisclosed as per Division ll of Schedule III to the Companies Act 2013.

Indian Accounting Standards 2015

The financial statements up to year ended 31 March 2016 were prepared in accordancewith the Accounting Standards notified under Companies (Accounting Standard) Rules 2006(as amended) and other relevant provisions of the Act.

The annexed financial statements comply in all material aspects with Indian AccountingStandards (Ind AS) notified under section 133 of the Companies Act 2013 (the Act)[Companies (Indian Accounting Standards) Rules 2015] and other relevant provisions of theAct.

These financial statements are the first financial statements of the Company under IndAS.

Detailed information on the impact of the transition from previous GAAP to Ind AS isprovided in the annexed financial statements.

Consolidated financial statements

The directors also present the audited consolidated financial statements incorporatingthe duly audited financial statements of the subsidiaries and as prepared in compliancewith the Companies Act 2013 applicable Accounting Standards and SEBI ListingRegulations 2015 as prescribed by SEBI.

A separate statement containing the salient features of its subsidiaries in theprescribed form AOC-1 is annexed separately.

Statutory disclosures

The summary of the key financials of the Company's subsidiaries (Form AOC-1) isincluded in this Annual Report. A copy of the audited financial statements for each of thesubsidiary companies will be made available to the members of the Company seeking suchinformation at any point of time. The audited financial statements for each of thesubsidiary companies will be kept for inspection by any member of the Company at itsregistered office during business hours. The same are placed on the Company's websitewww.bajajauto.com

Details as required under the provisions of section 197(12) of the Companies Act 2013read 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 2013read with rule 5(2) and 5(3) of Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 as amended which form part of the Directors' Report will be madeavailable to any shareholder on request as per provisions of section 136(1) of the saidAct.

A Cash Flow Statement for the year 2016-17 is attached to the Balance Sheet.

Pursuant to the legislation ‘The Sexual Harassment of Woman at Workplace(Prevention Prohibition and Redressal) Act 2013' the Company has a Policy on Preventionof Sexual Harassment at Workplace. There was no case reported during the year under reviewunder the said Policy.

Directors and Key Managerial Personnel-changes

The Board at its meeting held on 16 March 2016 appointed Pradeep Shrivastava as anadditional director and whole-time director with the designation of Executive Director fora period of five years commencing from 1 April 2016. The members at the Ninth annualgeneral meeting have approved the appointment of Pradeep Shrivastava as a whole-timedirector with the designation of Executive Director.

During the year under review Madhur Bajaj whole-time director and Vice Chairman ofthe Company informed the Board that due to certain commitments and other pre-occupationshe would be unable to continue as a whole-time director of the Company and that he berelieved of the responsibilities as a whole-time director of the Company with effect from1 April 2017. He however informed that he would be willing to continue as anon-executive director and Vice Chairman of the Company and that his services willcontinue to be available to the Company on various matters as and when required. TheBoard at its meeting held on 15 March 2017 at the recommendation of the Nomination andRemuneration Committee approved the change in status of Madhur Bajaj from that ofExecutive Vice Chairman to Non-Executive Vice Chairman with effect from 1 April 2017. TheBoard placed on record its appreciation of the long and conscientious service rendered byMadhur Bajaj as an Executive Vice Chairman of the Company.

Kantikumar R Podar an independent director of the Company after his longdistinguished tenure on the Board of the Company (including erstwhile BAL) since 19 August1983 due to his health condition tendered his letter of resignation to take effect from15 March 2017. The Board placed on record its sincere appreciation of the valuableservices rendered by him during his long tenure. In his place pursuant to section 149 andregulation 17 (1) (b) read with regulation 25 (6) of SEBI Listing Regulations 2015 Dr.Naushad Forbes was appointed as an additional director in the category of non-executiveindependent director of the Company with effect from 18 May 2017 at the meeting of theBoard held on 18 May 2017.

J N Godrej an independent director of the Company after his distinguished tenure ofnearly two decades on the Board of the Company (including erstwhile Bajaj Auto) tenderedhis letter of resignation to take effect from 10 April 2017. The Board placed on recordits sincere appreciation of the valuable services rendered by him during his long tenure.In his place pursuant to section 149 and regulation 17 (1) (b) read with regulation 25(6) of the SEBI Listing Regulations 2015 Dr. Omkar Goswami was appointed as anadditional director in the category of non-executive independent director of the Companywith effect from 18 May 2017 at the meeting of the Board held on 18 May 2017.

In light of the provisions of the Companies Act 2013 Madhur Bajaj and Shekhar Bajajretire from the Board by rotation this year and being eligible offer themselves forre-appointment. The information as required to be disclosed under regulation 36(3) of theSEBI Listing Regulations 2015 in case of re-appointment of the directors is provided inthe Notice of the ensuing annual general meeting.

There was no other change in the directors and KMP 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 bythe regulators or courts or tribunals which may impact the going concern status of theCompany and its operations in future.

Global Depository Receipts (GDRs)

During the year under review the Company terminated its GDR programme w.e.f 1 February2017. Detailed information about the same is given in the annexed General ShareholderInformation.

Details of internal financial controls with reference to the financial statements

The Company has documented its internal financial controls considering the essentialcomponents of various critical processes physical and operational. This includes itsdesign implementation and maintenance along with periodical internal review ofoperational effectiveness and sustenance which are commensurate with the nature of itsbusiness and the size and complexity of its operations.

This ensures orderly and efficient conduct of its business including adherence to theCompany's policies safeguarding of its assets prevention of errors accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation.

The internal financial controls with reference to the financial statements wereadequate and operating effectively.

Corporate governance

Pursuant to SEBI Listing Regulations 2015 a separate chapter titled ‘CorporateGovernance' has been included in this Annual Report along with the reports on ManagementDiscussion and Analysis and General Shareholder Information.

All Board members and Senior Management personnel have affirmed compliance with theCode of Conduct for the year 2016-17. A declaration to this effect signed by the ManagingDirector (CEO) of the Company is contained in this Annual Report.

The Managing Director and CFO have certified to the Board with regard to the financialstatements and other matters as required under regulation 17 (8) of the SEBI ListingRegulations 2015.

Certificate from the Auditors of the Company regarding compliance of conditions ofcorporate governance is annexed to this Report.

Business Responsibility Report

Regulation 34(2) of the SEBI Listing Regulations 2015 as amended inter aliaprovides that the annual report of the top 500 listed entities based on marketcapitalisation (calculated as on 31 March of every financial year) shall include aBusiness Responsibility Report.

Since Bajaj Auto Ltd. is one of the top 500 listed entities the Company as in theprevious years has presented its BR Report for the financial year 2016-17 which is partof this Annual Report. As a green initiative the BR Report has been hosted on theCompany's website www.bajajauto.com

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 the Central Government to theSecretarial Standards specified by the Institute of Company Secretaries of India theSecretarial 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 (FirmRegistration No. 102021W/W100110) were last re-appointed by the members at their annualgeneral meeting held on 17 July 2014 to hold the office of auditor from the conclusion ofthe Seventh annual general meeting till the conclusion of this Tenth annual generalmeeting.

As per the provisions of section 139 of the Companies Act 2013 no listed companyshall 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 thecommencement of the Act i.e. 1 April 2014. The current auditors had completed a period ofseven years at the commencement of the said Act and hence on their completing theadditional transition period of three years provided under the Act the term of thecurrent auditors expires at the conclusion of the ensuing annual general meeting.

The Board of Directors at its meeting held on 18 May 2017 based on the recommendationof the Audit Committee has recommended the appointment of S R B C & Co LLP CharteredAccountants (Firm Registration No. 324982E/E300003) as the statutory auditors of theCompany for approval by the members.

S R B C & Co LLP Chartered Accountants have consented to the said appointment andconfirmed that their appointment if made would be within the limits specified undersection 141(3) (g) of the Act and that they are not disqualified to be appointed asstatutory auditors in terms of section 143 of the Act.

S R B C & Co LLP Chartered Accountants will be appointed as the statutory auditorsof the Company from the conclusion of the ensuing annual general meeting till theconclusion of the Fifteenth annual general meeting subject to ratification of theirappointment by the members at every intervening annual general meeting on a remunerationout-of-pocket expenses etc. incurred in connection with the audit as may be decided bythe Board in consultation with the auditors from year to year.

The members are therefore requested to appoint S R B C & Co LLP CharteredAccountants as statutory auditors of the Company for a term of five years from theconclusion of the ensuing annual general meeting till the conclusion of the Fifteenthannual general meeting to be scheduled in 2022 subject to ratification at each annualgeneral meeting and to fix their remuneration for the year 2017-18.

The statutory audit report does not contain any qualification reservation or adverseremark or disclaimer made by statutory auditor.

Secretarial Auditor

Pursuant to the provisions of section 204 of the Companies Act 2013 and Rules madethereunder the Company has re-appointed Shyamprasad D Limaye Practising CompanySecretary (Membership No.1587) to undertake the secretarial audit of the Company.Secretarial audit report for the year 2016-17 issued by him in the prescribed form MR-3 isannexed to this Report.

The said secretarial audit report does not contain any qualification reservation oradverse remark or disclaimer made by the Secretarial Auditor.

On behalf of the Board of Directors

Rahul Bajaj

Chairman

Pune: 18 May 2017