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Bajaj Healthcare Ltd.

BSE: 539872 Sector: Health care
NSE: N.A. ISIN Code: INE411U01019
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VOLUME 400
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P/E 20.00
Mkt Cap.(Rs cr) 164.91
Buy Price 230.00
Buy Qty 400.00
Sell Price 240.00
Sell Qty 400.00
OPEN 239.00
CLOSE 230.00
VOLUME 400
52-Week high 263.95
52-Week low 170.00
P/E 20.00
Mkt Cap.(Rs cr) 164.91
Buy Price 230.00
Buy Qty 400.00
Sell Price 240.00
Sell Qty 400.00

Bajaj Healthcare Ltd. (BAJAJHEALTHCARE) - Director Report

Company director report

To

The Share holders

Bajaj Healthcare Limited

Your Directors have pleasure in presenting the 23rd Board's Report of your Companytogether with the Audited Statement of Accounts and the Auditors' Report of your companyfor tire financial year ended 31st March 2016.

FIMANCI Ah HIGHLIGHTS OF THE COMPANY

Particulars 2015-16 2014-15
Gross Income 22321.81 21837.63
Profit Before Interest and Depreciation 3030.56 2876.69
Finance Charges 751.71 788.95
Provision for Depreciation 928.97 886.07
Net Profit Before Tax 1349.89 1201.68
Provision for Tax 529.86 450.46
Net Profit After Tax 820.03 751.21
Surplus carried to Balance Sheet 820.03 751.21
Earnings Per Share 12.15 11.13

STATE OF COMPANY'S AFFAIRS

The Company's turnover for the year increased Rs. 22283.96 Lakhs as compared to lastyear Rs. 21830.17 Lakhs which includes tire Domestic turnover of Rs.15862.80 Lakhs ascompared to last year Domestic turnover was Rs. 15232.89 Lakhs and the Export turnover ofRs. 6421.16 Lakhs as compared to last year's export turnover of Rs. 6597.28 Lakhs.

The Earnings before Depreciation & Tax (EBDT) in Financial Year 2015-2016 was Rs.3030.56 Lakhs .The Profit After Tax (PAT) for the financial Year 2015-2016 is Rs. 820.03Lakhs increase over last year of Rs. 751.21 Lakhs.

CHANGE IN NATURE OF BUSINESS IF ANY

There are no changes in Nature of Business of the Company during the year underconsideration.

DIVIDEND

To conserve the resources Your Directors have not recommended any dividend on EquityShares for the year ended 31st March 2016.

TRANSFER TO RESERVES TN TERMS OF SECTION 134 131 fT> OF THE COMPANIES ACT. 2013

For the financial year ended 31st March 2016 the Company has proposed not to carryany amount to the General Reserve Account.

INFORMATION ABOUT SUBSIDIARY/IV/ ASSOCIATE COMPANY

Company does not have any Subsidiary Joint venture or Associate Company.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

Since there was no unpaid/unclaimed Dividend the provisions of Section 125 of tireCompanies Act 2013 do not apply.

FIXED DEPOSITS

During the year the Company has not accepted an}' deposits from the public and assuch there are no outstanding deposits in terms of tire Companies (Acceptance ofDeposits) Rules 2014.

EXTRACT OF ANNUAL RETURN

As per provision of Section 134 of the Companies Act 2013 the details forming part ofthe extract of the Annual Return is attached to this Report as "Annexure-I" inForm MGT-9 is annexed herewith for your kind perusal and information..

MATERIAL CHANGES AND COMMITMENTS

The following are material changes and commitments affecting the financial position ofthe Company & "Events After the Balance sheet Date" of this report.

a) Initial Public Offer:

The Company has made initial Public Offer (IPO)for 1817600 Equity Shares for cash ata price of Rs 170/- per share including a premium of Rs 160/- per share aggregating toRs.3089.92 lakhs consisiting of Fresh Issue of Rs.149600 equity shares aggregating toRs254.32 lakhs and an offer for sales of 1668000 by the selling shareholders aggregatingto Rs.2835.60 lakhs .

b) Listing of Shares on SME Exchange of BSE Limited

Your directors are pleased to inform you that the Company's securities have been listedon SME Exchange of BSE Limited horn 10th May 2016.

SHARE CAPITAL

a) Redemption of Preference Share Capital:

Pursuant to tire terms of the Issue of 7.5% Redeemable Preference shares issued by thecompany on 15th July 2006 redeemable at par at the end of ten years on or about 14thJuly 2016 or earlier at the option of the Company the Board of Directors at theirmeeting held on 01st December 2015 had exercised tire option to redeem the saidPreference shares earlier on or about 14th December 2015 and redeemed 1500000 7.5%Redeemable Preference Shares during the year

b) Re-classification and Increase in Authorized Share Capital:

During tire year tire Company has reclassified its existing unissued 2000000Preference Shares of Rs. 10/- each to 2000000 Equity shares of Rs. 10/- (Rupees Ten)each and also increased its Authorized Share Capital from Rs. 50000000/- (Five CroresOnly) divided into 5000000 (Fifty Lakhs) Equity shares of Rs.10/- each to Rs.100000000 (Ten Crores) divided into 10000000 Equity shares of Rs.10/- each at tireExtraordinary General Meeting held on 08th January 2016.

c) Bonus Shares

The Company made a bonus allotment of 45 00000 equity shares hr ratio of 2:1 (i.e.two equity shares for every one equity share already held) to the Members at tireExtra-ordinary General Meeting held on 08th January 2016.

d) Buy Back of Securities/ Sweat Equity/ Employees Stock Option Plan

Tire Company has not bought back any of its securities nor issued any Sweat EquityShares nor provided any Stock Option Scheme to the employees during tire year underreview.

DIRECTORS

a) Composition and size of the Board

The Board has an optimum combination of Executive and Non-Executive IndependentDirectors. The total strength of tire Board is of 8 Directors in the financial year2015-16 comprising of five Executive Directors out of which one is woman director.Further tire Board also comprises of three Non-Executive Independent Directors pursuantto the Section 149 (4) of the Companies Act 2013 (hereinafter referred as"Act") and rules made thereunder

b) Director retires by rotation

Ms .Namrata Bajaj Director retires by rotation in terms of provisions of the Act atthe ensuing Annual General Meeting of tire Company and offers herself for re-appointment.The Board recommends his re-appointment.

As stipulated under the Regulation 36(3) of SEBI (Listing Obligation and DisclosureRequirements) Regulations 2015 brief resume of the director proposed to be re-appointedis given in the Notice convening the Annual General Meeting.

c) Change in Composition of Board

During tire year under review the Company had noted the resignation of Mr. SandeepShah and Mr. Deepak Tipnis from the office of Director w.e.f. 31st July 2015. lire Boardhereby express their sincere appreciation for their services rendered to the company as aDirector of the Company.

Further tire Company had also re-appointed Mr. Sajankumar Bajaj as a Managing Directorof the company to hold the office for die period of (5) Five consecutive years w.e.f. 1stApril 2015 as well as re-appointed Ms. Namrata Bajaj Mr. Anil Jain and Mr DhananjayHatle as Whole Time Directors to hold the office for the period of (5) Five years w.e.f.1st April 2015 in the Extra Ordinary General Meeting held on 28th May 2015.

In the Annual General Meetinglield on 30 di September 2015 the designation of Mr.Anil Jain was changed from "Whole Time Director" to "ManagingDirector" w.e.f. 30th May 2015 widiout affecting the terms and conditions ofappointment including remuneradon.

d) Independent Directors

Pursuant to the provision of Section 149 of the Act Mr. Vidyut Shah and Mr. HemantKarnik were appointed as Independent Directors at the Extraordinary General Meeting of theCompany held on 08th January 2016 to hold the office for a term of (5) Five yearscommencing from 08th January 2016.

Further Mr. Ram Banarase was appointed as Independent Director at the ExtraordinaryGeneral Meeting of the Company held on 18th January 2016 to hold the office for a term of(5) Five years commencing from 18th January 2016.

The appointment of all the Independent Directors during the year under review isappropriate and is in the best interest of the Company.

The above named Directors have furnished their respective declarations in Form DIR-8pursuant to the provisions of Section 164(2) of the Companies Act 2013 read with Rule 14(1) of tire Companies (Appointment and Qualifications of Directors) Rules 2014.

e) Declaration by Independent Directors

All Independent Directors have given their respective declarations that they meet thecriteria of independence as laid down under section 149(6) of the Companies Act 2013.

f) Key Managerial Personnel

Pursuant to Section 203 of tire Act read with the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Company had appointed Mr. VipulDubey as Company Secretary cum Compliance Officer w.e.f. 10th December 2015

Further Mr. Rupesh Nikam Director was appointed as a Whole-time Director of tireCompany designated as "Director-Finance and Chief Financial Officer" at theExtra Ordinary General Meeting held as on 18th January 2016 to hold the office for a termof (5) Five years w. e. f. 18th January 2016.

g) Number of Meetings of the Board

During the year 17 (Seventeen) Board Meetings and one meeting of Independent Directorswere convened and held. The intervening gap between the meetings was within tire periodprescribed under tire Companies Act 2013.

Dates of Board Meeting held during tire year 2015-16:

21/04/2015 28/04/2015 29/04/2015 30/05/2015 06/07/2015 11/07/2015
31/07/2015 05/09/2015 01/12/2015 06/01/2016 14/01/2016 18/01/2016
19/01/2016 20/01/2016 04/02/2016 08/03/2016 21/03/2016

Details of Board meetings attended by Board of Directors:

Name of Directors No. of Meetings attended
1 Mr. Sajankumar Bajaj 17/17
2 Mr. Anil Jain 17/17
3 Mr. Dhananjay Halte 17/17
4 Mr. Namrata Bajaj 17/17
5 Mr. Rupesh Nikam 17/17
6 Mr. Sandeep Shah* 02/07
7 Mr. Dipak Tipnis* 02/07
8 Mr. Vidyut Shah# 01/07
9 Mr. Hemant Karnik* 01/07
10 Mr. Ram BanaraseA 02/06

* Mr. Sandeep Shah & Mr Dipak Tipnis resigned on 31st July 2015.

# Mr. Hem ant Karnik& Mr Vidyut Shah were appointed on 08 th January 2016 AMr Ram Banarase was appointed on 14th January 2016.

Committees of the Board

During the year your directors have constituted or re-constituted wherever requiredthe following committees of tire Board in accordance with the requirements of theCompanies Act 2013 The composition terms of reference and other details of all Boardlevel committees have been elaborated in the report.

1) Audit Committee

The Committee was constituted on 19th January 2016 and it comprises of threenon-executive Independent Directors as its members .Tire Chairman of tire Committee is anIndependent Director.

The audit committee assists the Board in the dissemination of the financial informationand in overseeing the financial and accounting processes in tire Company. The details ofwhich are available on the Company's website www.bajajhealtli.com.

In order to ensure that activities of the Company and its employees are conducted in afair and transparent manner the Company has adopted a Whistle Blower Policy & VigilMechanism.

Composition of Audit Committee and Number of Meetings during the year

Sr. No Names of Member Designation Category of Directors
1 Mr. Vidyut Shah Chairman Independent Director
2 Mr. Hernant Karnik Member Independent Director
3 Mr Rupesh Nikam Member Executive Director

First Meeting of the Audit Committee was held on 30th May 2016.

Terms of Reference

The Terms of Reference of this committee cover the matters specified for AuditCommittees under Section 177 of the Act and are as follows:

(A) To oversee the Company's financial reporting process and the disclosure of itsfinancial information to ensure that the financial statement is correct sufficient andcredible.

(B) Recommending the appointment and removal of external auditor fixation of audit feeand also approval for payment for any other services.

(C) Reviewing with management the annual financial statements before submission to theBoard focusing primarily on:

(a) Any changes in accounting policies and practices.

(b) Major accounting entries based on exercise of judgment by management.

(c) Qualifications in d ra ft audit report if any.

(d) The going concern assumption.

(e) Compliance with accounting standards.

(f) Compliance with Stock Exchange and legal requirements concerning financialstatements.

(g) Any related party transactions i.e. transactions of the Company of material naturewith promoters or the management their subsidiaries or relatives etc. that may havepotential conflict with the interests of Company at large.

(h) Reviewing with the management External and Internal auditors the adequacy ofInternal Control System.

(i) The Company has in place its own in house internal audit department to review theadequacy of internal audit function including the structure of internal audit departmentstaff and seniority of official's heading the department reporting structure coverageand frequency of internal audit.

(j) Reviewing the findings of any internal investigations in the matters where tire reis suspected fraud or irregularity or failure of internal control systems of a materialnature and reporting the matter to the Board.

(k) Discussion with external auditors before the audit commences nature and scope ofaudit as well as post-audit discussion to ascertain any area of concern.

(l) Reviewing the Company's financial and risk management policies.

(m) To look into the reasons for substantial defaults in the payment to the depositors debentures holders shareholders (in case of no nonpayment of declared dividends) andcreditors.

2) Nomination and Remuneration Committee:

The Committee was constituted on 14th January 2016 as required under Section 178 ofthe Act and it comprises of three non-executive Independent Directors as its members. TheChairman of the Committee is an Independent Director.

Terms of Reference

The Terms of Reference of this committee cover the matters as follows:

(A) To determine tire remuneration package for any Executive Directors as well asremuneration payable to tire non-executive Directors from die year to year.

(B) To help in determining the appropriate size diversity and composition of theBoard;

(C) To recommend to die Board appointment/reappointment and removal of Directors;

(D) To frame criteria for determining qualifications positive attributes andindependence of Directors;

(E) To create an evaluation framework for Independent Directors and the Board; '

(F) Delegation of any of its powers to any Member of the Committee or the ComplianceOfficer.

Composition of Nomination and Remuneration Committee and Number of Meetings during theyear:

Sr. No. Names of Member Designation Category of Directors
1 Mr. Ram Banarase Chairman Independent Director
2 Mr. Hemant Karnik Member Independent Director
3 Mr. Vidyut Shah Member Independent Director

Meeting of Nomination and Remuneration Committee was held on 29th April 2015 withmembers Mr. Sandeep R Shall and Mr. Dipak Tipnis. Mr. Sandeep R. Shah and Mr. DeepakTipnis resigned from the membership of the committee w. e. f. 31st July 2015 whereas Mr.Ram Banarase (Chairman) Mr. HemantKarnik and Mr. Vidyut Shah were appointed as members ofthe Committee w.e.f. 14th January 2016.

The meeting of the Nomination and Remuneration Committee was held twice during the yearon 29th April 2015 and 14th January 2016. Familiarization Program

On appointment the concerned Director is issued a Letter of Appointment setting out indetail the terms of appointment duties responsibilities and expected time commitments.The details of program for familiarization of Independent Directors with the Companytheir roles rights responsibilities in the Company and related matters are put up on thewebsite of the Company.

3) Stakeholders' Relationship Committee:

The Board has formed Stakeholders' Relationship Committee pursuant to provisions ofSection 178 of the Act w.e.f. 19th January 2016. Terms of Reference:

The Terms of Reference of this committee cover the matters as follows:

(A) Redress Shareholders and Investors complaints.

(B) Review all matters connected with the share transfers.

(C) Review status of legal cases involving the investors where the Company has beenmade a party.

Composition of the Stakeholders' Relationship Committee and Number of Meetings duringthe year:

Sr. No. Names of Member Designation Category of Directors
1 Mr. Hemant Karnik Chairman Independent Director
2 Mr. Ram Banarase Member Independent Director
3 Mr Anil Jain Member Executive Director

No meetings of the Committee were held during the year. Details in respect ofCompliance Officer:

Sr. No. Name of Compliance officer Designation of Compliance officer
1 Mr. Vipul Dubey Company Secretary

4) Corporate Social Responsibility Committee:

Pursuant to Section 135 of Act and the rules made thereunder the Board has constitutedthe Corporate Social Responsibility (CSR) Committee w.e.f 19th January with threemembers out of which two are executive and one is non-executive.

Terms of Reference:

(A) To review the existing CSR Policy and to make it more comprehensive so as toindicate die activities to be undertaken by the Company as specified in Schedule - VII ofthe Companies Act 2013;

(B) To provide guidance on various CSR activities to be undertaken by the Company andto monitor process.

Composition of the Corporate Social Responsibility Committee and Number of Meetingsduring the year:

Sr. No. Names of Member Designation Category of Directors
1 Mr Sajankumar R Bajaj Chairman Executive Director
2 Mr. Ram Banarase Member Independent Director
3 Mr. Rupesh Nikam Member Executive Director

One Meeting of the CSR Committee was held on 20th January 2016.

Risk management

The Company implemented an integrated risk management approach though which it reviewsand assesses significant risks on a regular basis to ensure that a robust system on riskcontrols and mitigation is in place. Senior management periodically reviews this riskmanagement framework to keep update and address emerging challenges.

Risk management system followed by the Company is elaborately detailed in the MDA.

Internal Control System and their Adequacy

The Company's internal control framework is designed specifically to help ensureeffectiveness and efficiency of operations reliability of financial reporting andcompliance of law and regulations. The Company has put in place automated internalbusiness control and a centralized global process framework that works and governs the dayto day operation of key functions like research procurement manufacturing and supplychain integrating them with key support like marketing sales finance regulatoryaffairs of HR and to safeguard its assets and prevention of misappropriation and detectionof fraud and or unauthorized use of assets and it has been designed to ensure preparationof reliable financial statement and maintaining all the assets. The Audit Committee of theBoard deals with the significant issues relating to control raised by the StatutoryAuditors.

Performance Evaluation of the Board

Tire formal annual evaluation has been done by the board of its own performance andthat of its committee and individual directors on the basis of evaluation criteriaspecified in tire Nomination and Remuneration policy of tire Company.

The performance evaluation of tire Chairman and non-independent Directors was alsocarried out by the Independent Directors at their separate meeting held as on 30th June2016 inter alia to:

1. Evaluate the performance of non-independent directors and the Board as a whole;

ii. Evaluate performance of the Mon-executive Chairman of the Company; and

iii. Evaluate tire quality quantity and timelines of flow of information between theexecutive management and the Board.

The suggestions made at the meeting of the Independent Directors were communicated tothe Non-executive Chairman and the Executive Director for taking appropriate steps. AllIndependent Directors were present at the meeting except Mr. Hemant Karnik. The Directorsexpressed their satisfaction with the evaluation process.

AUDITORS

Statutory Auditors & their Report:

M/s. Paresh Rakesh & Associates Chartered Accountants who were appointed as theStatutory Auditors of the Company at the 22th AGM held on 30th September 2015 to holdoffice until the conclusion of the 27th AGM are recommended for ratification ofappointment for the Financial Year 2016-2017. As required under the provisions of Section139 of the Companies Act 2013 the Company has obtained written confirmation from M/s.Paresh Rakesh & Associates Chartered Accountants that their appointment if madewould be in conformity with the limits specified in the said Section.

The Auditors' Report to the Shareholders for the year under review does not contain anyreservation qualification or adverse remark. The comments in the Auditors' Report to theShareholder's for tire year under review are self explanatory and does not need furtherexplanation.

Cost Auditor & their Report

Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Amendment Rules 2014 the cost audit records maintained by the Companyin respect of its Drugs & Pharmaceuticals business is required to be audited.

Your Directors had on tire recommendation of the Audit Committee appointed M/s. N.Ritesh and Associates Cost Accountants as tire Cost Auditors to audit tire cost recordsof the Company for the FY 2016-2017.

As required under tire Companies Act 2013 a resolution seeking member's approval forthe remuneration payable to the Cost Auditor forms part of the Notice convening fireAnnual General Meeting in Item No. 4.

The Cost Audit Report for FY 2015-16 was placed before Board Meeting and it does notcontain any reservation qualification or adverse remark.

Secretarial Auditor

Pursuant to fire provisions of Section204 and other applicable provisions of CompaniesAct 2013 and Rules made there under fire Company had appointed M/s. H P Sanglrvi &Co Practicing Company Secretary Mumbai to undertake the Secretarial Audit of fireCompany for fire FY 2016-2017.

REGSITRAR AND TRANSFER AGENT:

Tire Board had appointed M/s. Sharex Dyamic (India) Private Limited as Registrar andTransfer Agent (RTA) at their meeting held on 19th January 2016.

The Company's Registrar & Share Transfer Agents M/s. Sharex Dyamic (India) PrivateLimited are fully equipped to carry out the transfers of shares and redress Investorcomplaints.

GENERAL DISCLOSURES

a) Related Party Transactions

All transactions entered into with related parties as defined under the Companies Act2013 during the financial year were in the ordinary course of business and on an arm'slength pricing basis and do not attract the provisions of Section 188 of the CompaniesAct 2013. There were no materially significant transactions with the related partiesduring fire financial year which were in conflict with the interest of tire Company andhence enclosing of Form AOC-2 is not required. Suitable disclosure as required by tireAccounting Standard (AS 18) has been made in tire notes to the Financial Statements.

b) Particulars of Loans. Guarantee and Investments:

Details of investments made by tire Company have been given in tire FinancialStatements.

The Company has not given any guarantee or advanced any loans pursuant to theprovisions of Section 186 of Companies Act 2013.

c) Cash Flow Analysis:

In conformity with the Regulation 53 (b) of SEBI (LODR) Regulation 2015 the cash flowstatement for the year ended 31st March 2016 is annexed with the financial statements.

d) Environment and Pollution Control:

The Company is well aware of its responsibility towards a better and clean environment.Our efforts in environment management go well beyond mere compliance with statutoryrequirements. Tire Company has always maintained harmony with nature fay adoptingeco-friendly technologies and upgrading the same from time to time incidental to itsgrowth programs.

e) Particulars of Employees:

Disclosures pertaining to remuneration and other details are required under Section197(12) of the Act read with Rule 5(1) and 5(2) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 is forming part of tire Directors'Report for the year ended 31st March 2016 and is attached to this Report and marked as"Annexure II".

f) Disclosure under Sexual Harassment of Women at Workplace :

The Company believes in safety of women at the workplace and hence has formulatedSexual Harassment Policy which is available on Company's intranet portal. During die yearunder review there were no complaints from any of the employee.

The Company believes in safety of women at tire workplace and hence has constituted anInternal Compliant Committee as required under Section 4 of tire Sexual Harassment ofWomen at Workplace (Prevention Prohibition and Redressal) Act 2013 and has alsoformulated Sexual Harassment Policy which is available on Company's intranet portal.During the year under review there were no complaints filed before tire said committee.

g) Significant and Material Orders passed by the Regulators or Courts

There are no significant and material orders passed by the Regulators/Courts that wouldimpact the going concern status of the Company and its future operations.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis for the year under review is provided as separatesection forming part of the Annual Report

STATUTORY COMPLIANCES

Tire Company has complied with all the statutory requirements. A declaration regardingcompliance of the provisions of the various statutes is also made by the Managing Directorat each Board Meeting. The Company ensures compliance of tire ROC SEBI Regulations andvarious statutory authorities.

CORPORATE GOVERNANCE

Since the Company has listed its securities on SME platform during the year underreview the provisions of Corporate Governance as specified in regulations 171819 2021 22 23 24 25 26 27 and clauses (b) to (i) of sub-regulation (2) of regulation 46and para C D and E of Schedule V of SEBI (LODR) Regulation 2015 are not applicable tothe Company for the financial year ending 31st March 2016.

VIGIL MECHANISM / WHISTLEBLOWER POLICY;

In conformity with the provisions of the Companies Act 2013 policy has been laid downto provide a mechanism for any concerned person of the company to approach Chairman of theAudit Committee for the purpose of dealing with instance of fraud and mismanagement ifany and also ensure that whistleblowers are protected from retribution whether within oroutside the organization.

INSIDER TRADING CODE

The Securities and Exchange Board of India (SEBI) has promulgated the SEBI (Prohibitionof Insider Trading) Regulations 2015 ("The PIT Regulations"). The PITRegulations has come into effect from May 152015 and it is applicable to tire Companyw.e.f. 10th May 2016. Tire object of lire PIT Regulations is to curb the practice ofinsider trading in the securities of a listed company.

Tire Company has adopted an 'Internal Code of Conduct for Regulating Monitoring andReporting of Trades by Insiders' ("the Code") in accordance with therequirements of the PIT Regulations. This Code is displayed on the Company'swebsitewww.bajajlrealth.com.

The Code is applicable to Promoters and Promoter's Group all Directors and suchDesignated Employees who are expected to have access to unpublished price sensitiveinformation relating to the Company. The Company Secretary is tire Compliance Officer formonitoring adherence to the said Regulations.

ADEQUACY OF INTERN AT FINANCIAL CONTROLS

Tire company has adopted adequate policies and procedures for ensuring the orderly andefficient conduct of its business including policies for Safeguarding of AssetsPrevention & Detection of Errors & Frauds for accurate and complete presentationof accounting records and tire timely preparation of reliable financial information

DIRECTORS' RESPONSIBIT.1TY STATEMENT:

The Board of Directors acknowledge the responsibility for ensuring compliance with theprovisions of Section 134(3)(c) read with Section 134(5) of tire Companies Act 2013 intire preparation of annual accounts for tire year ended on 31st March 2016 and confirmthat:

a. in tire preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;

b. tire directors had selected such accounting policies and applied them consistentlyand made judgments and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of tire company at the end of the financial year and oflire profit and loss of the company for that period;

c. tire directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of this Act for safeguarding theassets of the company and for preventing and detecting fraud and other irregularities;

f. tire directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.

d. the directors had prepared the annual accounts on a going concern basis;

e. the directors had laid down internal financial controls to be followed by thecompany and that such internal financial controls are adequate and were operatingeffectively; and

CORPORATE SOCTAE RESPONSIBILITY

As a part of its initiative under tire "Corporate Social Responsibility"(CSR) drive the Company has undertaken projects in tire area of rural developmentpromoting health care and education.

These projects are hr accordance with Schedule VII of the Companies Act 2013 and theCompany's CSR policy. The Report on CSR activities as required under the Companies(Corporate Social Responsibility Policy) Rules 2014 is annexed as Annexure - III whichforms an integral part of this Report.

ENERGY CONSERVATION. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

Tire information on conservation of energy techxrology absorption and foreign exchangeearnings and outgo stipulated. Under section 134(3)(m) of tire Companies Act 2013 readwith Rule 8(3) of tire Companies (Accounts) Rules 2014 are as follows:

I. Conservation Of Energy

Many steps towards energy conservation has taken & implemented successfully

a. Power factor improved up to 99 %

b. LED lights are installed in production block

c. New OLTC (On Load Tap Changer) transformer of 2500 KVA capacity is installed inplace of Manual transformer

d. In production area Pusher type centrifuges are installed instead of conventionalcentrifuges

e. Steam condensate recovery is increased to 50 % from 30 % level by installation ofsteam pressure power pumps

f. For Chilling plant VAM (Vapour Absorption Machine) is replaced by 500 TR Screwchiller to reduce steam consumption & to

increase efficiency.

g. MEE (Multiple Effect Evaporator) is installed to distil out waste water &distilled water is recycled in plant to conserve water usage.

II. Technology Absorption. Adaption and Innovation:

a. Technology of product isolation by Peeler centrifuges is incorporated to isolateproduct effectively from reaction mass.

b. For distillation column fray type packing replaced with structured packing toimprove quality of distilled solvents & to improve distillation efficiency.

c. Auto sealing with Nitrogen purging system adopted for packing of finished productsto avoid contamination of product with external atmosphere

III. Resarch and Development

With the growing scale of business our Company intends to increase our focus onR&D facilities. Our Company intends to reap the benefit of R&D not only indeveloping custom and consistent manufacturing process but also to synthesise efficientand technologically advanced products. Our Company believes that its focus on R&D willresult in development of high quality products and processes and will form the basis forvarious patents which in turn will give our Company a significant boost in brand value.

Our increased R&D effort will be aimed at pre formulation studies prototypedevelopment scale-up andprocess optimization.

IV. Foreign Exchange Earning and Outgo:

Earnings:

Foreign Exchange Gain: Rs. 709395369/- Outgo:

Foreign Exchange outgo: Rs. 739593017/-

ACKNOWLEDGEMENTS:

Your Directors would like express their sincere appreciation of the positiveCo-operation received from tire Governments and bankers. The Directors also wish to placeon record their deep sense of appreciation for tire commitment displayed by allexecutives officers workers and staff of the company resulting in the successfulperformance during the year.

The board also takes this opportunity to express its deep gratitude for tire continuedco- operation and support received from its valued shareholders.

Tire Directors express their special thanks to Mr.Sajankumar Bajaj Chairman &Managing Director for his untiring efforts for tire progress of the Company.

For and on behalf of the Board of Directors
Sd/-
Sajankumar Bajaj
Chairman and Managing Director
DIN:00225950
Dated: 20/07/2016
Place: Thane

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