MANAGEMENT DISCUSSION AND ANALYSIS
Your Directors take pleasure in presenting the 77th Annual Report together with theaudited financial statements for the financial year ended 31 March 2016. The ManagementDiscussion and Analysis has also been incorporated into this report.
Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015
The Securities and Exchange Board of India (SEBI) vide its NotificationNo.SEBI/LAD-NRO/GN/2015-16/013 dated 02 September 2015 notified the Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 ("SEBI LODR Regulations") applicable with effect from 01 December 2015.This Report therefore states compliance as per the requirement of the Companies Act 2013("the Act") SEBI LODR Regulations and other rules & regulations asapplicable to the Company.
The highlights of the Standalone Financial Results are as under:
(Amount: Rs. in crore except for EPS)
|Particulars ||FY 2015-16 ||FY 2014-15 |
|Revenue from Operations & Other Income ||4634.80 ||4286.80 |
|Gross Profit before Finance Cost and Depreciation ||282.23 ||112.64 |
|Less: Finance Cost ||101.40 ||104.43 |
|Less: Depreciation ||27.24 ||29.03 |
|Profit/(Loss) before Taxes ||153.59 ||(20.82) |
|Less: Provision for Taxation ||57.98 ||(6.87) |
|Profit/(Loss) after Tax ||95.60 ||(13.95) |
|Add: Balance in Profit & Loss Account ||1.50 ||8.69 |
|Add : Transferred from General Reserve ||- ||25.00 |
|Balance available for appropriation ||97.10 ||19.74 |
|Appropriations || || |
|(i) Interim Equity Dividend ||28.27 ||- |
|(ii) Final Equity Dividend ||- ||15.11 |
|(iii) Tax on Equity Dividend ||5.75 ||3.08 |
|(iv) Transferred to General Reserve ||30.00 ||- |
|(v) Dividend paid on exercise of Stock Options along with Dividend Distribution Tax ||0.01 ||0.05 |
|Closing Balance ||33.07 ||1.50 |
|Earnings per share (Rs.) Basic ||9.48 ||(1.39) |
|Earnings per share (Rs.) Diluted ||9.46 ||(1.39) |
The highlights of the Consolidated Financial Results are as under:
(Amount: Rs. in crore except for EPS)
|Particulars ||FY 2015-16 ||*FY 2014-15 |
|Revenue from Operations & Other Income ||4634.80 ||- |
|Profit before Taxes ||153.58 ||- |
|Profit/(Loss) from associates after Taxes ||(0.15) ||- |
|Profit for the year ||95.45 ||- |
|Earnings per share (Rs.) Basic ||9.46 ||- |
|Earnings per share (Rs.) Diluted ||9.45 ||- |
* This being the first year Consolidated Financial Statements are drawn up theprevious year's comparative figures have not been presented.
Overview of Company's Standalone Financial Performance
The overall performance of the Company for the year 2015-16 has been satisfactory withturnaround of EPC business.
The gross turnover and other income achieved for the year ended 31 March 2016was Rs. 4634.80 crore a growth of 8.12% over the previous year.
PBDIT increased by 150.55% from Rs. 112.64 crore to Rs. 282.22 crore.
Interest cost at Rs. 101.40 crore was lower by 2.90%.
Net Profit was at Rs. 95.60 crore as against loss of Rs. 13.95 crore in theprevious year.
Basic Earnings Per Share (EPS) for the year was Rs. 9.48
The Board in its meeting held on 10 March 2016 declared an interim dividend for FY2015-16 of Rs. 2.80 per share on 100948976 equity shares of Rs. 2 each as compared tofinal dividend of Rs. 1.50 per share for the previous year. The amount of dividend and thetax thereon aggregate to Rs. 34.02 crore (previous year Rs. 18.20 crore). Your Directorsrecommend that the interim dividend should be treated as the final dividend for FY2015-16.
Transfer to Reserves
The Company proposes to transfer an amount of Rs. 30.00 crore to General Reserves. Anamount of Rs. 33.07 crore is proposed to be retained in the statement of Profit and Loss.
The paid up Equity Share Capital of the Company as on 31 March 2016 was Rs. 20.19crore. There was no public issue rights issue bonus issue preferential issue etc. madeby the Company during the year. The Company has not issued shares with differential votingrights. The increase in number of shares is due to the issue of 186550 equity shares ofRs. 2 each to the employees upon their exercise of stock options. These shares wereincluded on weighted average basis for the computation of EPS.
No disclosure is required under Section 67(3)(c) of the Act in respect of votingrights not exercised directly by the employees of the Company as the provisions of thesaid Section are not applicable.
The Company's cash and cash equivalent as at 31 March 2016 was Rs. 4657.94 lacs. TheCompany continues to focus on judicious management of its working capital. Receivablesinventories and other working capital parameters were kept under strict check throughcontinuous monitoring.
The below table depicts Company's credit ratings profile in a nutshell:
|Instrument ||Rating Agency ||Rating ||Outlook |
|Non-Convertible || ||[ICRA] A ||Positive |
|Debenture (NCD) ||ICRA Limited ||(pronounced ICRA A) || |
|Commercial Paper ||ICRA Limited ||[ICRA] A1 ||- |
|(CP) || ||(pronounced ICRA A one) || |
|Line of Credit (LOC) ||ICRA Limited ||Short Term Rating - [ICRA] A1 (pronounced ICRA A one) ||Positive |
| || ||Long Term Rating - [ICRA] A || |
| || ||(pronounced ICRA A) || |
The Company has not accepted deposits from the public falling within the ambit ofSection 73 of the Act and the Rules framed thereunder.
Particulars of Loans Guarantees and Investments
Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Act are given in the notes to the financial statements annexed to the Report.
One third of 10000000 - 9% Non-Convertible Cumulative Redeemable Preference Sharesof Rs. 10 each of Starlite Lighting Limited are due for redemption in FY 2016-17 andhence they have been shown under the head Current Investments'.
During FY 2013-14 the Company had issued 1000 Secured Rated Listed RedeemableNon-Convertible Debentures (NCDs) of Rs. 1000000/- each aggregating to Rs. 100.00crore on private placement basis in two series Series 1 of 400 NCDs & Series 2 of 600 NCDs which are listed on National Stock Exchange of India Limited (NSE)under ISIN INE193E07014' and INE193E07022' respectively. Out of the saidNCDs Series 1 NCDs were redeemed on 28 April 2016 the due date of theirredemption.
Axis Trustee Services Limited is the Debenture Trustee for the Debentureholders whosedetails are provided in the Corporate Governance section of the Annual Report. Furtherpursuant to Regulation 53 of the SEBI LODR Regulations disclosures in compliance with theAccounting Standard on "Related Party Disclosures" are given in the notes to thefinancial statements annexed to this Report.
Employees Stock Option Scheme
The Company implemented the Employees Stock Option Scheme ("Scheme") inaccordance with the Securities and Exchange Board of India (Share Based Employee Benefits)Regulations 2014 (the SEBI SBEB Regulations') as a measure to reward and motivateemployees as also to attract and retain the talent. Details of the shares issued under theScheme as also the disclosures in compliance with Regulation 14 of the SEBI SBEBRegulations are set out herewith in the Annexure A' to this Report. No employee hasbeen issued stock options during the year equal to or exceeding 1% of the issued capitalof the Company at the time of grant.
During the year under review 617500 Stock Options were granted to the eligibleemployees at the market price prevailing on National Stock Exchange of India Ltd. (NSE) ason the date of their grant. The issuance of equity shares pursuant to exercise of StockOptions granted under Growth Plan does not affect the profit and loss account of theCompany as the exercise is made at the market price prevailing as on the date of thegrant plus taxes as applicable.
The Company has received a certificate from the Auditors of the Company that the Schemehas been implemented in accordance with the SEBI SBEB Regulations and the resolutionspassed by the shareholders. The certificate would be placed at the Annual General Meetingfor the inspection by the Members.
Scheme of Arrangement for demerger of Manufacturing Business of Hind Lamps Limited intothe Company
During the year under review the Board of Directors of the Company("Company"/"Transferee Company") has approved the proposal fordemerger of manufacturing business of Hind Lamps Limited ("HLL"/"TransferorCompany") into the Company pursuant to a Scheme of Arrangement ("Scheme").
The Transferor Company is an unlisted company incorporated on 30 April 1951 having itsregistered office & manufacturing unit located at Shikohabad Dist. Firozabad UttarPradesh and HID Lamps manufacturing unit located at Parwanoo Himachal Pradesh. TheTransferor Company is engaged in the business of manufacturing of glass bulbs HID bulbsand aluminium caps and has been declared as a sick industrial company within the meaningof Section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act 1985("SICA") by the Board for Industrial and Financial Reconstruction("BIFR").
Shri Shekhar Bajaj Chairman & Managing Director and Shri Anant Bajaj JointManaging Director of the Company are also the Directors in HLL.
Rationale and Object of the Scheme:
HLL amongst others has been Company's vendor for last several years and supplyingproducts under Company's brand. The Company being a leading player in the business oflighting & consumer durables business for over 75 years has management expertise andquality system & controls whereas HLL has a manufacturing capabilities and requiredinfrastructure.
The Board of Directors of the Company is of the view that the proposed Scheme wouldinter-alia have the following benefits:
i. The transfer and vesting of the manufacturing business of
HLL into the Company will enable both the companies to achieve and fulfill theirobjectives more efficiently and economically and the same is also in the interest of allthe stakeholders.
ii. The Company's existing management expertise and quality system & controls willfacilitate revival of the manufacturing business of HLL upon its consolidation into theCompany.
Salient features of the Scheme:
a. The entire manufacturing business of HLL together with all its assets andliabilities will be transferred to the Company on a going concern basis.
b. The Scheme shall be deemed to be effective from the Appointed Date i.e. 31 March2014 but shall be operative from the Effective Date.
c. Pursuant to the Scheme the shareholders of HLL will be issued 529740 fullypaid-up equity shares of the Company of the face value of Rs. 2 each except to theCompany itself in consideration for the demerger in compliance with the provisions ofSection 2(19AA) of the Income Tax Act 1961.
d. The equity shares to be so issued to the shareholders of HLL have been determinedbased on the Share Entitlement Ratio of 109 equity shares of the Company of the face valueof Rs. 2 each for 1000 equity shares of HLL of the face value of Rs. 25 each asrecommended by S.R. Batliboi & Co. LLP Chartered Accountants Mumbai and the samewill be issued on the record date.
e. Fairness opinion has been given by SPA Capital Advisors Limited.
f. The Audit Committee and the Board of Directors of the Company have approved theScheme Valuation Report and the Fairness Opinion.
g. Upon the Scheme becoming effective the shareholding of the Promoters in the Companywould increase to 63.80% from the existing shareholding of 63.61%.
h. HLL will retain the remaining business which includes all the undertakingsbusinesses activities (including trading activities and support services to otherundertakings) employees and operations other than that of the manufacturing business.
i. The Scheme would be effective upon receipt of all requisite approvals including fromthe Shareholders Creditors BIFR or such other appropriate authorities and filling thecertified copies of the order of BIFR with the Registrar of Companies.
j. Subject to the regulatory approvals the proposed transaction is expected to becompleted in a period of about 12 months.
Engineering & Projects Business
Transmission Line Towers (TLT)
TLT BU has performed well in FY 2015-16 in terms of margins though the top line hasnot grown as expected in comparison with the previous year. The increase in the servicesrelated revenue by about 70% has resulted in excellent collection of dues against sales.The new orders intake for the year was Rs. 400 crore.
During the year under reporting due to release of fewer transmission line orders bythe central power utility companies and availability of huge idle capacities with themanufacturers many of the manufacturers compromised with the margins while picking up thefresh orders. However your Company was selective in picking up the orders to ensurecoverage of the fixed costs and protection of margins.
Major achievements of TLT BU for FY 2015-16 are:
i. Completed and commissioned 2 sub-stations of 132 kV along with connectedtransmission lines and bays at Mungoli and Gohad for MPPTCL;
ii. Bagged order for 220 kV sub-station along with connected transmission line and bayat Mittemari in Karnataka from KPTCL; iii. Successfully completed and commissioned 187 KMlong 765 kV D/C Kudgi Kolhapur Transmission line for PGCIL;
iv. Successfully completed and commissioned re-conductoring of Neyveli TS-I to TS-IIexpansion 400 kV link with HTLS conductor along with LILO of 2nd circuit of Neyveli-Trichy400 kV D/C line at Nagapatnam Pooling Station;
v. Bagged 2 packages of 765 kV D/C Warora Parli transmission line from PGCIL; and
vi. Completed Pile Foundations at 15 tower locations for 132 kV transmission lines ofBSPTCL with design engineering and construction in record time of 6 months.
In consideration of increase in the share of investment of private utilities intransmission sector new EPC business models are expected to be evolved in future. EPCplayers who will be able to provide one stop solution for the transmission sector withsustained quality and completion of job in the given timelines will have competitive edge.Keeping this in mind your Company is focusing on developing capabilities in other relatedbusiness areas like usage of monopoles for transmission lines construction of EHVsub-stations and laying of underground EHV cables besides conventional transmission linesbusiness. Further to improve margins the Company has decided to set its foot prints inoverseas EPC transmission sector.
Power Distribution (PD) Business Unit
The performance of PD Business Unit for FY 2015-16 was satisfactory as it achieved aturnover of Rs. 917 crore with a growth of 35% over the previous year. Considering theunexecuted order book of Rs. 2474 crore in hand at the beginning of the financial yearthe Business unit was conservative in acquiring fresh orders and acquired orders worth Rs.120 crore including the prestigious orders of Feeder Separation Project by Madhya PradeshPoorva Kshetra Vidyut Vitaran Company Limited (MPPKVVCL) at Rewa District and MadhyaPradesh Madhya Kshetra Vidyut Vitaran Company Limited (MPMKVVCL) at Guna District toclose the year-end order book at Rs. 1677 crore.
During the year the focus of this BU was on to improve project execution capabilitiesand efficient supply chain management and in order to achieve this the BU took strongstrides in implementing TOC as a methodology. This has resulted in increase in the speedof project execution substantially which has been appreciated by the customers. Due tomajor improvement in the project execution capabilities the outlook of the BU for thecoming years is positive.
For FY 2016-17 the focus of this BU will be on keeping the working capital undercontrol while achieving the topline growth.
Illumination BU ended the year with a sales turnover of Rs. 332 crore with ayear-on-year increase of close to 10% despite an almost flat infrastructure growth marketand achieved 8% reduction in the total outstanding resulting in a better utilisation ofworking capital.
The year saw the acquisition and successful commissioning of many notable ordersincluding Rs. 72 crore EESL order for retrofitting over 86000 LED Streetlights in Delhiwith remote management; Rs. 35 crore order for 611 Nos. Highmasts with floodlights for aNigerian refinery and the floodlighting of the iconic Mohun Bagan football stadium inKolkata. The BU is also executing Rs. 50 crore order for LED streetlights and poles withcontrols based on the Internet of Things (IoT) in Uttar Pradesh which is a first of itskind for a National Highway.
During the year the Siddeshwar temple in Solapur Dakshineshwar temple in Kolkata andChatrapati Shivaji Terminus building of Central Railways were illuminated. The Lighting ofthe Chatrapati Shivaji Terminus building has become Mumbai's landmark visual. The tallestFlag Mast in the country with a height of 82 metres is being installed by the BU at Raipurto join the legion of flag masts installed by the Company. The BU is also installing LEDfloodlights on High Masts & Poles on the international border at Jammu under the mostdifficult working conditions.
During the year the Company made significant progress towards stabilizing Leap Aheadinitiatives in all facets of EPC business. These initiatives channelize activities ofbusiness viz. tendering engineering & design sales supply chain manufacturing andlogistics towards faster completion of project execution. This has resulted in closure andhanding over of some of the projects to the customers before time resulting in improvingin working capital turns.
Domestic & Kitchen Appliances
The Company has a wide range of domestic and kitchen appliances comprising of WaterHeaters Room Heaters Coolers Irons Mixers Induction Cookers Toasters Kettles OTGMicrowave Rice Cookers Gas stoves Non electrical kitchen aids & Pressure Cookersand is a dominant player in small appliances segment in India. The Company enjoysleadership positions in the industry for the product categories such as Mixers ToastersWater Heaters Room Heaters Coolers and Irons whereas categories like Gas stoves OTG& Microwaves are growing significantly year-on-year.
During the year under reporting domestic appliances sale was Rs. 524 crore whereaskitchen appliances sales was Rs. 638 crore.
The sale of appliances was impacted due to sluggish market conditions growingcompetition and implementation of Range and Reach Expansion Programme (RREP) across thecountry. However the implementation of RREP across the country will help the BU incontrolling the inventory at all levels and improving margins.
Fans BU has a modern assortment of ceiling table pedestal wall fresh air andindustrial fans manufactured at plants in India and abroad that have ISO 9001/9002 qualitycertifications. The BU is also involved in marketing self-priming centrifugal &submersible pumps.
Due to sluggish market conditions growing competitiveness dominance of newer channelslike e-commerce the market remained price sensitive leading to drop in sales vis-a-visthe previous year. However the BU has been able to maintain profitability and marketshare.
During FY 2015-16 the BU has achieved a sales turnover of Rs. 639 crore. Robustdistribution launch of new models in premium range better product mix and disciplinedmaintenance of market operating price has resulted in improvement of margins. The BU'sfocus for FY 2015-16 continued on implementation of RREP. The CSD channel continued on itsgrowth path by delivering 11% growth over the previous year.
The production at this Unit showed increase during the year under review with theproduction of 600934 numbers of fans as against 457436 numbers of fans in the previousyear. This Unit has been developed to cater to the demand of export market.
Luminaires BU design and market total lighting solution to all key market segmentscovering commercial lighting industrial lighting street lighting and area lighting. TheBU is certified ISO 9000 while most of the products are manufactured in plants conformingto ISO 9000:2000 and select plants are certified for ISO 14001 which sets out the criteriafor environmental management.
With lighting industry moving to LED technology big time the BU has designed anddeveloped high end LED Luminaires to suit to wide variety of applications ranging fromoffice lighting retail lighting power plants manufacturing industry warehouses streetlighting area lighting and city beautification. The BU is working to offer energyefficient value for money and environment friendly lighting solutions to the customersunder one roof.
For FY 2015-16 the BU achieved a turnover of Rs. 460 crore with a growth of 15% in arelatively tough business environment. The BU continues to maintain its dominant positionin the Indian Luminaires market.
The demand for LED Luminaires is gaining momentum with tremendous push from theGovernment and hence the BU has focused on the development of LED luminaires. Other thanthe government and local bodies the BU has serviced private corporates including AsianPaints Accenture Capgemini and Godrej.
Creating Smart Cities is one of the major agenda of the Central Government and the BUhas taken the challenge to provide high end lighting and smart solutions to such cities.The beginning has already been done by the Company by signing an agreement for developing& launching City Infrastructure Management for Intelligent Public Street LightingSolution and commissioning of pilot installations with satisfactory results.
With thrust to harness renewable energy the BU has launched solar solutions underbrand "Sunsoko" for street lighting power packs roof top panels hand pumpsand semi high masts. The Company's solar product has received an award "Outstandingcontribution towards development of roof top solar industry" during IndianRooftop Solar Summit 2016 held in January 2016 at New Delhi.
The BU also offers a range of sophisticated Integrated Building Management Solutions(IBMS) in creating smart and efficient buildings. The Company was awarded the"Best Company in Integrated Building Management Solutions" at the HospitalManagement Conference 2015 by a jury consisting of the NHBA panel UBM Medica CMIS andHospital Associations. The Company has contracts with Securiton from Switzerland DeltaControls from Canada and Vivotek from Taiwan for IBMS systems.
During FY 2015-16 the BU has made a significant progress in stabilizing Leap Aheadinitiative in supply chain of luminaires which has resulted in timely availability ofmaterial against confirmed orders and increase in sales.
The Lighting BU makes a wide range of conventional light sources LED based lightingproducts Domestic Luminaires HID Lamps Torches and Lanterns. The light sources includesGeneral Lighting Service (GLS) Lamps Fluorescent Tube Lights (FTL) Compact FluorescentLamps (CFL) and special purpose lamps. In line with the emerging trend from all segmentsof the distribution set up the BU made concentrated efforts in developing LED basedproducts by launching LED Bulbs Panel Lights Down Lighters portable lanterns andtorches. The competition is very intense on the LED business with various segments vyingfor market share.
A strong distribution network exists for marketing these products both in urban andrural areas and the special focus is on rural penetration.
The manufacturing of GLS and FTL Lamps is undertaken at Company's Kosi Unit and HindLamps Limited's Shikohabad Unit whereas CFL Lamps and LED Lamps are manufacture byStarlite Lighting Limited at its Nashik plants.
During FY 2015-16 the Lighting BU has achieved a turnover of Rs. 615 crore with growthof 20%. The growth is mainly because of steep increase in LED turnover to Rs. 112 crorefrom Rs. 18 crore for last year which includes sales of Rs. 61 crore to EESL.
Considering the shift in demand for LED products the BU has introduced good futureready LED products. With fast growing trade business of LED products and LED Bulb ordersfrom EESL the LED lights business will be the front runner for the Lighting business inthe coming years.
The BU has continued on the path of RREP to spread its reach and range to a much higherlevel the benefits of which will start accruing now onwards. The BU with its improveddistribution network wide product range and efficient sourcing strategies is poised for abetter than the industry growth in the coming years.
The Company has consolidated quality function with an objective to give a thrust onimprovement of product quality and manufacturing processes.
Supply Chain Management
In the year 2013 Supply Chain Management (SCM) was identified as a function to developcore competencies and bring competitive edge to the business. The Company's managementtook a decision to integrate the SCM of all separate verticals of Consumer Products intoone integrated SCM. The objective was to create a group which could standardize processfocus on consistent quality while getting the muscle power of aggregated purchase. Theentire group was galvanized into one body to relentlessly push the agenda of improving"availability of products for sale at lower inventories". The main tenets ofthis strategy was to improve "supplier relation with joint planning" and"rationalisation of product costing". Last two years saw a steady improvement inboth these parameters. In the year 2015-16 SCM was truly established as supply systembased on the replenishment model of the "Theory of Constraints" waiting to gointo the next cycle of improvement.
Encouraged with the results of Consumer Products segment in July 2015 the Luminariesbusiness procurement group was integrated with SCM. In Luminaries business where a largeportion of business is of customised nature and made against specific orders the strategyidentified was to deliver "On Time In Full (OTIF)" and create a decisivecompetitive edge by reducing the "lead time in servicing of the customerorders". Using a combination strategy of replenishment and order queuing the teamworked with the suppliers to implement systems and processes which lead to measurementparameter of OTIF climbing to over 85%. In FY 2016-17 the focus will be on bringing downthe lead time in servicing of customer orders. The other significant impact of this drivewas the transformation of a motley group of buyers into a self-driven and motivated teamof SCM.
The Company has also integrated EPC (including Ranjangaon Units) with the SCM to createstrategic tie-ups with suppliers for consistent quality and supply schedules and startedusing e-sourcing tool for aggregation of demand price discovery and systematizingprocurement of direct and indirect material and services.
Green Energy Wind Energy
The Company's 2.8 MW Wind Farm located at Village- Vankusawade in Satara District ofMaharashtra has generated 2980491 electrical units during the year under review ascompared to 3067570 electrical units in the previous year.
Internal Control Systems and its adequacy
The Company has in place well defined and adequate internal controls commensurate withthe size of the Company and the scale and complexity of its operations and the same wereoperating effectively throughout the year. These controls are routinely tested andcertified by statutory as well as internal auditors and cover all offices factories andkey areas of business.
The Company has an in-house internal audit function. The scope of internal audit isdecided by the Audit Committee. To maintain its objectivity and independence the internalaudit function reports to the Chairman & Managing Director of the Company and theChairman of the Audit Committee of the Board.
The Internal Audit Department monitors and evaluates the efficacy and adequacy ofinternal control system in the Company its compliance with operating systems accountingprocedures and policies at all locations of the Company. Based on the report of internalaudit function process owners undertake corrective action in their respective areas andthereby strengthen the controls. Significant audit observations and corrective actionsthereon are presented to the Audit Committee of the Board.
Internal Controls over Financial Reporting
The Company has in place adequate internal financial controls commensurate with thesize and complexity of its operations. During the year such controls were tested and noreportable material weakness in the design or operations were observed. The Company haspolicies and procedure in place for ensuring proper and efficient conduct of its businessthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of accounting records and the timely preparation of reliablefinancial information.
The Company has adopted accounting policies which are in line with the AccountingStandards and the Act. These are in accordance with generally accepted accountingprinciples in India. Changes in policies if required are made in consultation with theAuditors and are approved by the Audit Committee.
The Company has robust financial closure certification mechanism for certifyingadherence to various accounting policies accounting hygiene and accuracy of provisionsand other estimates.
Indian Accounting Standards (Ind AS) IFRS converged standards
The Ministry of Corporate Affairs vide its notification dated 16 February 2015 hasnotified the Companies (Indian Accounting Standards) Rules 2015.
In pursuance of this notification the Company will adopt Ind AS with effect from 01April 2016 with the comparatives for the period ending 31 March 2016.
The implementation of Ind AS is a major change process for which the Company has set upa dedicated team and is providing desired resources for its completion within the timeframe. The impact of the change on adoption of Ind AS is being assessed.
Information Technology (IT)
The Company continues to invest in Information Technology for automating variousbusiness processes to be productive. One of the primary requirement for running all thebusiness functions in automated manner is to keep ERP CRM BI and Intranet on for theemployees and extranet portal for all other stakeholders. During the year the IT focuswas on developing new modules on Intranet for automating business processes for EPC BUbased on TOC processes and mobile application for Customer Care team. These applicationsare completely integrated with Core ERP & CRM.
As more and more business processes are getting automated and dependency on IT systemsis increasing for all business units there is continuous focus on IT security andreliable disaster recovery management processes to ensure all critical systems are alwaysavailable. These are periodically reviewed upgraded and tested for efficacy security andreliability.
During FY 2015-16 the Company has received following recognitions from various mediaagencies for its IT projects:
i. EMC Transformation Award 2015 for Private Cloud
ii. CIO 100 Award from IDG for Project Leap Ahead for EPC
iii. CIO Hall of fame 2015 from IDG for getting four CIO-100 awards for variousprojects; and
iv. PCQUEST Best IT implementation award for Project Leap
Ahead for EPC (Project with maximum business impact).
The Company has maintained its tradition and reputation of providing efficient aftersales service to its customers through a strong network of 400 service franchisees andservice dealers. Some of the important actions that it took during the year were toprovide toll free call registration facility to customers and dealers mobile applicationto end customers to register calls any time higher than ever before call resolutionproviding home service to all its consumer products across all deep interior areas andmonitoring of performance through feedback mechanism from customers through SMS facility.The Survey Monkey web surveys confirmed more than 98% customer satisfaction.
To help customers with spare parts requirements the Company has started selling keyrequired spare parts through its website giving comfort and convenience to meet theirrequirements.
Brand Development and Protection
FY 2015-16 saw many new communication initiative by the Company. The first major stepwas taken by the Company was to consolidate all its sub-brand to have unified brandapproach under an umbrella brand "Bajaj" and the same was implemented acrossall internal and external touch points.
To support the RREP the Company implemented retail branding across Traditional TradeChannels Canteen Store Department Modern Retail Stores etc. and branded over 10000stores Pan India.
We are Family' the latest advertising campaign was conceived with the idea thatthe Company's Products completes a home and have been a part of the Indian families forover 75 years. The media exposure for this campaign has been phenomenal considering morethan 10 Million video views across all the platforms viz. more than 6.9 Million videoviews on YouTube; 2.5 Million video views on Facebook; 0.85 Million video views onHotstar; 0.25 Million video views on Inmobi; and 0.8 Million video views on Vdopia.
Bajaj LED "The Science of Light" Reinforcing its focus in the lightingsegment the Company launched a massive mass media campaign which was promoted through aTelevision Commercial Print ads Digital and Social Mediums. The campaign wasstrategically planned keeping in mind the futuristic nature of the product and thecommunication clearly articulated the key benefits to the consumer of Bajaj LEDs namelylong life energy efficiency multi coloured light source environmentally friendly andinbuilt voltage surge protector.
The Company also organised Regional Lighting Dealer events "Upgrade"across various region and launched series of new LED products educate the dealers aboutthe benefits of evolving LED technology and also to felicitate top performing dealers fromrespective regions.
The age old Indian game of Kabaddi in its third season the Pro Kabaddi League (PKL)was much bigger and better. Enhanced graphics analytics and the in-vision commentaryelevated the viewer experience. The Company was associate sponsors for PKL in 2nd and 3rdseasons. The Company achieved unmatched mileage with branded kiosks perimeter brandingground mat branding stadium branding digital banners on hotstar app and throughTelevision Airtime. Pro Kabaddi reached out to a huge global audience by reaching over 109countries as it was relayed in five different languages namely Hindi English KannadaTelugu Marathi etc.
In response to market need and potentials of LED Luminaires the Company has taken thenext logical step and organised a first ever customer focused program ".nxtUpgrade". Ten display booths were specially created to showcase the products segmentsand its actual lighting design for Commercial Retail Industrial Urban ArchitecturalArea Street IBMS Solar lighting. Also a day long conclave included media interactiontalks on LED technology Marketing and Product initiatives. Architects and Consultantsfrom various industries Channel partners Government and other Institutional customerswere the recipients of these events. This show went through 4 major cities in southernregion at the first step; Chennai Hyderabad Bangalore and Cochin.
Your Company has taken significant actions against counterfeits fakes and other formsof unfair competition/trade practices.
Corporate Social Responsibility (CSR)
The Company's CSR activity is guided by the 4 pillars Sustainability Diversity(gender inclusion) Employee Volunteering and Community Outreach.
In our endeavour to work for the benefit of the communities where we operate all ourcommunity outreach programs are planned and executed with a focus on the following:
Ensuring Environmental sustainability & promoting its education;
Employment enhancing vocational skills and livelihoods;
Promoting Preventing Health Care; and
Promotion of Arts & Culture.
As a part of environmental & sustainability initiatives the Company partnered withenvironmental organisations to educate masses on environment protection and to undertakerenewable energy projects viz. setting up solar powered libraries solar computerlaboratory solar street lights and solar education centres which will benefit to therural off grid communities.
In celebration of the International Year of Light and Light-based Technologies (IYL2015) the Company conducted Science of Light workshops in schools with an objective tocreate awareness amongst the students about the fundamentals of light based technologiesenergy efficiency and use of alternative renewable energy like solar.
The Company also took initiatives to establish a "Peace Park" in Almoradistrict of Uttarakhand by motivating selected self-help groups of women to createawareness amongst local communities and school children about the fragility of eco-systemsin the Himalayas. The Company also planted about 7660 trees.
The Company continued with Project Disha in partnership with specialised organisationsto impart vocational skills like masonry electrical works etc. to about 1000 rural youthto enable them to upgrade their skills and enhance their employability.
The Company has joined hands with NGOs and created a pool of anti-tobacco crusaders tospread awareness among different stakeholders about healthy and tobacco free living.
The Company also supported two organisations working to preserve Indian heritagepromote art and culture and Indian Classical Music.
The Company and its employees contributed to support those affected from NepalEarthquake & Chennai Flood and undertook several activities viz. tree plantationblood donation cleanliness drives health check-up camps and tobacco awareness sessionsacross India through employee volunteering. Through dedicated efforts of about 1250employees and 200 social organisations over 16600 trees have been planted across thecountry.
The Company and its employees also participated in Mumbai Kolkata & Delhi Marathonin support of Paryavaran Mitra' to propagate the cause of environment protection andsupported the cause of raising awareness for breast cancer and well being of women bysupporting Pinkathon (women's only marathon) in 9 cities.
Total CSR expenditure incurred by your Company during the year was Rs. 13595069/-.
The CSR Policy Statement and Report on CSR initiatives taken during the year pursuantto Sections 134 & 135 of the Act is annexed to the Board's Report as Annexure 'B'.
The Company's human resource function is committed to make the organisation futureready. A diverse pool of lateral talent has been hired to enhance the bench strength. Thisincludes professional experts with excellent academic credentials and professional trackrecord. The Company has also successfully attracted management and engineering graduatesthrough a focused annual campus hiring program. The Company has also identified a pool ofbest human resources who are being groomed for future leadership roles. Talent mobilitywithin the Company is encouraged through job posting process.
To enhance the engagement retention and work life balance of the employees theCompany has introduced progressive policies & programs like flexible working hourscompensatory off policy flexible pay policy diverse reward & recognition program andother employee interaction programs.
The Company has invested in its human capital regularly with an aim to enhanceorganisation & individual capabilities to make them effective and efficient in theshort run and long run. The Company is driving the learning & development agendathrough a mix of in-house and external learning interventions in the functionalbehavioral and cross functional areas. Select employees are encouraged to attendmanagement development programs conducted by renowned institutes across the country andbest practices learnt are being implemented in the Company. A unique knowledge sharingplatform has been developed to share the knowledge amongst the colleague through shortduration learning interventions.
The Company is in the process of developing a robust performance and talent managementsystem which would be pathbreaking progressive and totally aligned to the organisation'sand employee's needs.
The relations with the employees of the Company have continued to remain cordial.
Prevention Prohibition and Redressal of Sexual Harassment of Women at Workplace
Pursuant to the legislation "Prevention Prohibition and Redressal of SexualHarassment of Women at Workplace Act 2013" introduced by the Government of Indiawhich came into effect from 09 December 2013 the Company has framed a Policy onPrevention of Sexual Harassment at Workplace.
Internal Complaints Committee (ICC) has been set up to redress complaints receivedregarding sexual harassment. All employees (permanent contractual temporary trainees)are covered under this policy. There were no cases reported during FY 2015-16 under theCompany's Policy on Prevention of Sexual Harassment at Workplace.
Whistle Blower Policy / Vigil Mechanism
The Company has a Whistle Blower Policy adopted in May 2011 which enables itsdirectors and employees to report their concerns about unethical behavior actual orsuspected fraud or violation of the Company's Code of Conduct or ethics policy andprovides safeguards against victimisation of director(s)/employee(s) who avail of themechanism. The said Policy was amended in February 2015 to extend its applicability toother persons dealing with the Company viz. contractors vendors customers and businessconsultants. The Policy has been appropriately communicated to the employees within theorganisation and posted on the website of the Company.
Business Risk Management
The Company has a proper framework in place to identify evaluate and mitigate businessrisks. The key business risks identified by the Company and their mitigation plans are asunder:
(a) Business environment
The competitive environment in small appliances continues to be tough and to take careof that the Company has embarked on RREP to extend its demographics and offer valueproposition to the customers to develop and grow in consumer facing business further.
(b) Currency fluctuation related risk
The weakening of the Indian Rupee though slightly has impacted our cost of imports.The Company had undertaken some foreign exchange forward contracts to hedge the risksagainst the currency fluctuations for the imports.
(c) Hiring and retention risk
The Company has been continuously working on retaining the best talent in the industryto work with but it is a constant challenge to retain the good talent. There is imminentshort term risk from new entrants and existing domestic players to hire talent from ourCompany. The Company's human resource agenda focuses mainly on building a robust anddiverse talent pipeline by hiring fresh management graduates to cater to variousbusinesses and functions enhancing individual and organisational capabilities for futurereadiness driving greater employee engagement and strengthening employee relations. TheCompany has also taken a number of employee initiatives like benchmarking compensationstructure with the industry stock options innovative management training programmes jobrotations etc. to retain and grow talent.
(d) Occupational health and safety risk
Safety of employees and workers is of utmost importance to the Company. To reinforcethe safety culture in the Company it has identified Occupational Health & Safety asone of its focus areas. Various training programmes have been conducted at the plants andproject sites such as behavior based safety training program safety leadership programlogistics safety program etc.
Economic Scenario Future Outlook and Sector Overview
India's economic growth rate in FY 2015-16 was estimated at 7.6% by RBI an improvementto the previous year (7.2% in FY 2014-15) mainly on the back of recent policyinitiatives pick up in investments and lower oil prices. Going forward growth rate isestimated at 7.5% by IMF (7.6% by RBI) which would mean that India will outpace mostemerging economies including China and Africa. This is achieved mainly because ofrestoring macro-economic stability achieved on account of fiscal consolidation; controlover inflation and support from fall in the global commodity prices.
On the forecast of normal monsoon this year and the steps taken by the government inrecent times have shown positive results. These initiatives are expected to increase thepurchasing power of an average Indian consumer which would further boost demand and leadto spurt in development.
Currently the manufacturing sector in India contributes 15% of GDP. The Government ofIndia under its "Make in India" initiative is trying to boost the contributionof manufacturing sector and aims to take it to 25%. Experts' view is that Indian Economyis expected to grow by 7.75% during FY 2016-17.
Consumer Durable Sector:
India is expected to become the fifth largest consumer durables market in the world by2025. Rural markets are likely to witness growing demand for consumer durables in thecoming years as the government plans to invest significantly in rural electrification.
It is expected that the market size of Indian LED industry may touch Rs. 21600 croreby 2020 on the back of government's decision to switch to LED for all street lamps andpublic space lighting.
The Indian LED industry was pegged at Rs. 1925 crore out of the lighting industry'saggregate turnover of Rs. 13000 crore in 2013.
As projected the turnover of Indian lighting industry by 2020 will be Rs. 35000 croreand LED will account for Rs. 21600 crore which is significantly over 60 per cent of thistotal turnover.
In the wake of continual government's support for the promotion of LED lighting and itsdecision to switch to LED for all street lamps and public space lighting this market isexpected to grow substantially.
The Company's prime focus is on to educate and promote the sustainable energyefficiency and drive the LED.
Indian power sector is undergoing a significant change that has redefined the industryoutlook. Sustained economic growth continues to drive electricity demand in India. TheGovernment of India's focus on attaining Power For All' has accelerated capacityaddition in the country. At the same time the competitive intensity is increasing at boththe market and supply sides (fuel logistics finances and manpower).
The Government of India has identified power sector as a key sector of focus so as topromote sustained industrial growth and has taken many initiatives to boost the powersector such as:
Ujwal DISCOM Assurance Yojna (UDAY) for financial turnaround and revival ofpower distribution companies (DISCOMs) which will ensure accessible affordable andavailable power for all;
Resolution of issues regarding transfer of mining leases and grant of forestclearances to the winning bidders of coal blocks;
Provision of electricity to 18500 villages in three years under the DeendayalUpadhyaya Gram Jyoti Yojana (DUGJY); and
Implementation of two national level programmes namely Grid Connected Rooftop& Small Solar Power Plants Programme and Off-Grid & Decentralised SolarApplications in order to promote installation of solar rooftop systems.
India's wind energy market is expected to attract investments totaling Rs. 100000crore by 2020 and wind power capacity is estimated to almost double by 2020 from over23000 MW in June 2015 with an addition of about 4000 MW per annum in the next fiveyears.
Appointment of Directors:
During the year under review Shri Anant Bajaj was reappointed as the Joint ManagingDirector of the Company for a further period of five years w.e.f. 01 February 2016. Hisappointment was approved by the shareholders by way of a special resolution passed throughpostal ballot.
In order to strengthen the Board on the recommendation of the Nomination &Remuneration Committee the Board of Directors has appointed Shri Anuj Poddar and ShriSiddharth Mehta as Additional Directors of the Company with effect from 30 May 2016 inthe category of Non-Executive & Independent Directors.
In accordance with Section 161 of the Act aforesaid Additional Directors hold officeupto the date of the forthcoming Annual General Meeting of the Company and being eligibleoffer their candidature for re-appointment as Directors. Your approval for theirappointment as Directors in the category of Non-Executive Independent Directors has beensought in the Notice convening the forthcoming Annual General Meeting of the Company.
As on the date of this report Company's Board comprises of 10 (ten) Directors out ofwhich 8 (eight) are Non-Executive Directors (NEDs) including 1 (one) Woman Director. NEDsrepresent 80% of the total strength. Further out of said 8 NEDs 7 are independentdirectors representing 70% of total strength of the Board.
Directors coming up for retirement by rotation:
In accordance with the provisions of the Act and the Articles of Association of theCompany Shri Anant Bajaj retires by rotation and being eligible offers his candidaturefor reappointment as a Director. The information as required to be disclosed underRegulation 36 of the SEBI LODR Regulations in case of re-appointment of the said directoris provided in the notice of the ensuing Annual General Meeting.
The Independent Directors hold office for a fixed term of five years and are not liableto retire by rotation.
In accordance with Section 149(7) of the Act each Independent Director has given awritten declaration to the Company confirming that he/she meets the criteria ofindependence as mentioned under Section 149(6) of the Act and Regulation 16(1)(b) of SEBILODR Regulations.
Familiarisation Programme for the Independent Directors:
In compliance with the requirement of SEBI LODR Regulations the Company has put inplace a familiarisation programme for the Independent Directors to familiarise them withtheir role rights and responsibility as Directors the working of the Company nature ofthe industry in which the Company operates business model etc. The details of thefamiliarisation programme are explained in the Corporate Governance Report. The same isalso available on the website of the Company www.bajajelectricals.com.
Evaluation of the performance of the Board its Committees and the Directors:
Pursuant to the provisions of the Act and the SEBI LODR Regulations the Board hascarried out the annual performance evaluation of its own performance the Directorsindividually as well as the evaluation of the working of its Audit and Nomination &Remuneration Committee. The criteria applied in the evaluation process are explained inthe Corporate Governance Report.
Key Managerial Personnel
The following persons have been designated as Key Managerial Personnel of the Companypursuant to Section 2(51) and Section 203 of the Act read with the Rules framedthereunder:
Shekhar Bajaj Chairman & Managing Director and CEO;
Anant Purandare Executive Vice President & Chief Financial Officer (CFO);and
Mangesh Patil Vice President Legal & Company Secretary andCompliance Officer
None of the Key Managerial Personnel of the Company have resigned during the year underreview.
Criteria for selection of candidates for appointment as Directors Key ManagerialPersonnel and Senior Leadership Positions
Your Company has laid down a well-defined criteria for the selection of candidates forappointment as Directors Key Managerial Personnel and Senior Leadership Positions.
Directors' Remuneration Policy & Criteria for matters under Section 178
Information regarding Directors' Remuneration Policy & Criteria for determiningqualifications positive attributes independence of a director and other matters providedunder sub-section (3) of Section 178 of the Act are provided in the section of CorporateGovernance Report.
Directors' Responsibility Statement
To the best of their knowledge and belief and according to the information andexplanations obtained by them your Directors make the following statement in terms ofSection 134 of the Act:
(a) that in the preparation of the annual accounts for the year ended 31 March 2016the applicable accounting standards have been followed and that no material departureshave been made from the same;
(b) that the Directors have selected such accounting policies and applied themconsistently and made judgements and estimates that are reasonable and prudent so as togive a true and fair view of the state-of-affairs of the Company as at 31 March 2016 andof the profits of the Company for the year ended on that date;
(c) that the Directors have taken proper and sufficient care for the maintenance 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;
(d) that the annual accounts of the Company have been prepared on a goingconcern' basis;
(e) that proper internal financial controls were in place and that the financialcontrols were adequate and were operating effectively; and
(f) that systems to ensure compliance with the provisions of all applicable laws werein place and were adequate and operating effectively.
A calendar of meetings is prepared and circulated in advance to the Directors.
During the year seven (7) Board Meetings were convened and held the details of whichare given in the Corporate Governance Report. The intervening gap between the meetings waswithin the period prescribed under the Act and SEBI LODR Regulations.
The Audit Committee comprises of three Independent Directors as its Members. During theyear five (5) Audit Committee Meetings were convened and held the details of which aregiven in the Corporate Governance Report.
The CSR Committee comprises of three Members of which one is the Independent Director.The Committee met twice during the reporting period. Details of the Committee and meetingsare given in the Corporate Governance Report.
Particulars of Contracts or arrangements with Related Parties
All transactions with Related Parties are placed before the Audit Committee as also theBoard for approval. Prior omnibus approval of the Audit Committee is obtained on an annualbasis for the transactions which are of a foreseen and repetitive nature.
The transactions entered into pursuant to the omnibus approval so granted are auditedand a statement giving details of all related party transactions is placed before theAudit Committee and the Board of Directors for their approval on a quarterly and on annualbasis.
The Policy on Related Party Transactions as approved by the Board is available on theCompany's website: www.bajajelectricals.com.
All related party transactions that were entered into during the financial year were onan arm's length basis and were in the ordinary course of its business. There were nomaterially significant related party transactions i.e. transactions exceeding ten percentof the annual turnover of the Company as per the last audited financial statementsentered into by the Company with Promoters Directors Key Managerial Personnel or otherdesignated persons which may have a potential conflict with the interest of the Company atlarge. Thus the disclosure in Form AOC-2' is not applicable.
None of the Directors or the Key Managerial Personnel has any pecuniary relationshipsor transactions vis--vis the Company.
The details of Related Party Transactions are given in the notes to the financialstatements.
Transfer of amounts to Investor Education and Protection Fund
Pursuant to the provisions of Section 124 of the Act relevant amounts which remainedunpaid or unclaimed for a period of seven (7) years have been transferred by the Companyto the Investor Education and Protection Fund.
The Company has uploaded the details of unpaid and unclaimed amounts lying with theCompany as on 06 August 2015 (date of last Annual General Meeting) on the website of theCompany (www.bajajelectricals.com) as also on the website of the Ministry of CorporateAffairs.
Material Changes & Commitments
There have been no material changes and commitments affecting the financial positionof the Company which have occurred between the end of the financial year of the Companyand the date of this report.
Significant and Material Orders Passed by the Regulators or Courts
There are no significant and material orders passed by the Regulators or Courts orTribunals which may impact the going concern status of the Company and its futureoperations.
Subsidiaries / associates
The Company has no subsidiary as on 31 March 2016.
Details of the company which is an associate company of the Company:
|Name of the company ||% shareholding of the Company ||Status |
|Starlite Lighting Limited (SLL) ||19% ||Associate |
For the purpose of Section 2(6) of the Act "associate company" in relationto another company means a company in which that other company has a significantinfluence but which is not a subsidiary company of the company having such influence andincludes a joint venture company. For the purposes of this clause "significantinfluence" means control of at least twenty per cent of total share capital or ofbusiness decisions under an agreement. Though the holding of the Company in the equityshare capital of SLL is less than 20% the Company is in a position to influence theoperating and financial policies of SLL and hence the financial statements of SLL areconsolidated with the Company's financial statements considering it as an Associate of theCompany.
The summary of the key financials of the Company's associate company (Form AOC-1) isincluded in this Annual Report. A copy of audited financial statements of the said companywill be made available to the members of the Company seeking such information at anypoint of time. The audited financial statements of the said company will be kept forinspection by any member of the Company at its registered office during business hours.The same are placed on the Company's website www.bajajelectricals.com.
Presentation of financial results
The financial results of the Company for the year ended 31 March 2016 have beendisclosed as per Schedule III to the Act.
(Amount: Rs. in Crore)
|Particulars ||2015-16 ||2014-15 |
|Standalone revenue ||4634.80 ||4286.80 |
|Standalone profit for the year ||95.60 ||(13.95) |
|*Consolidated revenue ||4634.80 ||- |
|*Consolidated profit for the year ||95.45 ||- |
*This being the first year Consolidated Financial Statements are drawn up the previousyear's comparative figures have not been presented.
Secretarial Standards of ICSI
The Act has mandated the Secretarial Standards on Board Meetings & General Meetingsspecified by the Institute of Company Secretaries of India (ICSI). The secretarialstandards issued by ICSI from time to time have been complied with by the Company duringthe year under review.
The Company's Auditors M/s. Dalal & Shah LLP Chartered Accountants Mumbai (FirmRegistration No.: 102021W/ W100110) who retire at the ensuing AGM of the Company areeligible for re-appointment. They have confirmed their eligibility under Section 141 ofthe Act and the Rules framed thereunder for re-appointment as Auditors of the Company. Asrequired under Regulation 33 of SEBI LODR Regulations the auditors have also confirmedthat they hold a valid certificate issued by the Peer Review Board of the Institute ofChartered Accountants of India.
The notes on financial statements referred to in the Auditors' Report areself-explanatory and do not call for any further comments. The Auditors' Report does notcontain any qualification reservation or adverse remark or disclaimer.
The cost audit records maintained by the Company in respect of its manufacturingactivities are required to be audited pursuant to Section 148 of the Act and Rules madethereunder. The Board of Directors has on the recommendation of the Audit Committeeappointed M/s. R. Nanabhoy & Co. Cost Accountants (Firm Registration No.000010) toaudit the cost accounts of the Company for FY 2016-17. As required under the Act theremuneration payable to the Cost Auditor is required to be placed before the Members inthe General Meeting for their ratification. Accordingly a Resolution for seeking Membersratification for the remuneration payable to M/s. R. Nanabhoy & Co. Cost Accountantsis included at Item No.7 of the Notice convening the AGM.
The particulars of the Cost Auditor and cost audit conducted by them for FY 2014-15 arefurnished below:
|ICWA Membership No. ||1337 |
|Registration No. of Firm ||000010 |
|Address ||Jer Mansion 70 |
| ||August Kranti Marg |
| ||Mumbai 400 036 |
|Cost Audit Report ||FY 2014-15 |
|Due date of filing of Report ||30 September 2015 |
|Actual date of filing of Report ||24 September 2015 |
Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Company has appointed M/s. AnantB. Khamankar & Co. Practicing Company Secretaries (Membership No. FCS 3198; CPNo.:1860) to undertake the Secretarial Audit of the Company. The Report of the SecretarialAuditor for FY 2015-16 is annexed to the Board's Report as Annexure C'. TheSecretarial Audit Report does not contain any qualification reservation or adverse remarkor disclaimer made by the Secretarial Auditor.
Pursuant to Regulation 34 of the SEBI LODR Regulations a separate report on corporategovernance has been included in this Annual Report together with a certificate from theauditors of the Company regarding compliance of conditions of Corporate Governance.
All Board members and senior management personnel have affirmed compliance with theCode of Conduct for the year 2015-16. A declaration to this effect signed by the Chairman& Managing Director/CEO of the Company is contained in this Annual Report.
The Chairman & Managing Director and CFO have certified to the Board with regard tothe financial statements and other matters as required under Regulation 17(8) of the SEBILODR Regulations and the said certificate is contained in this Annual Report.
Business Responsibility Reporting
Regulation 34 of the SEBI LODR Regulations provides that the Annual Report of the tophundred listed entities based on market capitalisation (calculated as on March 31 ofevery financial year) shall include business responsibility report describing theinitiatives taken by them from an environmental social and governance perspective in theformat as specified by the Board from time to time.
SEBI vide its Notification dated 22 December 2015 issued SEBI (Listing Obligations andDisclosure Requirements) (Amendment) Regulations 2015 providing that for the word"hundred" the words "five hundred" shall be substituted and whichshall come into effect from 01 April 2016.
The Company was ranked 426th in the list of top 500 companies as per NSE list and thusthe requirement of publishing Business Responsibility Report shall now be applicable tothe Company w.e.f. 01 April 2016. First such report shall be printed for the year 2016-17.
Energy Conservation Technology Absorption and Foreign Exchange Earnings and Outgo
The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Act read with Rule 8 of theCompanies (Accounts) Rules 2014 is annexed herewith as Annexure D' to the Board'sReport.
Extract of Annual Return
The extract of Annual Return as provided under sub-section (3) of Section 92 of theAct in the prescribed Form MGT- 9 is enclosed as Annexure E' to the Board's Report.
Particulars of Employees and related disclosures
Disclosure pertaining to the remuneration and other details as required under Section197(12) of the Act read with Rule 5 of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is enclosed as Annexure F' to the Board's Report.
The information on employees who were in receipt of remuneration of not less than Rs.60 lacs during the year or Rs. 5 lacs per month during any part of the year forms part ofthis Report and will be provided to any Member on a written request to the Company. Interms of Section 136 of the Act the Report and Accounts are being sent to the Members andothers entitled thereto excluding the information on employees' particulars which isavailable for inspection by the Members at the Registered Office of the Company duringbusiness hours on working days upto the date of the ensuing Annual General Meeting. If anyMember is interested in inspecting the same such Member may write to the CompanySecretary in advance.
Consolidated financial statements
The directors also present the audited consolidated financial statements incorporatingthe duly audited financial statements of the associate prepared in compliance with theAct applicable Accounting Standards and the Listing Agreement as prescribed by SEBI.
A separate statement containing the salient features of the associate in the prescribedForm AOC-1' is enclosed herewith as Annexure G' to the Board's Report.
Your Directors would like to express their sincere appreciation for the assistance andco-operation received from the financial institutions banks customers investorsbusiness associates vendors regulatory and government authorities stock exchanges andmembers. Your Directors also wish to place on record their deep sense of appreciation toemployees at all levels for their sincere personal efforts as well as their collectivededication and contribution to the Company's performance.
Statements in the Board's Report and the Management Discussion & Analysisdescribing the Company's objectives expectations or forecasts may be forward lookingwithin the meaning of applicable securities laws and regulations. Actual results maydiffer materially from those expressed in the statement. Important factors that couldinfluence the Company's operations include demand and supply conditions affecting sellingprices of finished goods input availability and prices changes in governmentregulations tax laws economic developments within the country and other factors such aslitigation and industrial relations.
| || ||For and on behalf of the Board of Directors |
|Mangesh Patil ||Anant Bajaj ||Shekhar Bajaj |
|V P - Legal & Company Secretary ||Jt. Managing Director ||Chairman & Managing Director |
|FCS No.: 4752 ||DIN: 00089460 ||DIN: 00089358 |
|Mumbai 30 May 2016 || || |