Your Directors have pleasure in presenting their Eighty Fifth annual report and theaudited financial statements for the year ended March 31 2017.
The summarised financial results of the Company for the year ended March 31 2017 arepresented below:
| ||Year ended March 31 2017 ||Year ended March 31 2016 |
|Sales and other income ||4780.91 ||5038.60 |
|Profit/(Loss) before depreciation interest and tax ||1017.77 ||949.15 |
|Depreciation and amortisation ||214.12 ||223.98 |
|Profit/(Loss) after depreciation but before interest and tax ||803.65 ||725.17 |
|Finance costs (Net) ||802.07 ||848.38 |
|Profit/(Loss) before tax ||1.58 ||(123.21) |
|Provision for taxation (Net) ||5.82 ||3.42 |
|Profit/(Loss) after tax ||7.40 ||(119.79) |
|Opening balance b/f ||(617.58) ||(497.48) |
|Disposable surplus after adjustments ||(610.18) ||(617.27) |
|Transfer to reserve for molasses storage tank ||0.23 ||0.31 |
|Carrying value of fixed assets adjusted ||- ||- |
|Balance carried to balance sheet ||(610.41) ||(617.58) |
On a standalone basis the Company achieved a turnover (including other income) of '4780.91 crore for the year ended March 31 2017 as compared to ' 5038.60 crore in theprevious year. The profit after tax is ' 7.40 crore as compared to the loss of ' 119.79crore in the previous year. On a consolidated basis the turnover including other incomeis ' 4729.75 crore as compared to ' 4979.66 crore in the previous year. The loss aftertax and minority interest is ' 91.98 crore as against loss of ' 212.10 crore in theprevious year.
In view of inadequacy of profits during the year under review your Directors do notrecommend any dividend for the current Financial Year. (Previous year - Nil)
Dividend distribution policy
The Board of Directors at its meeting held on February 13 2017 approved the DividendDistribution Policy containing the requirements mentioned in regulations 43A of theSecurities and Exchange Board of India (Listing Obligations and Disclosure Requirements)Regulations 2015. The policy is annexed as "Annexure I" and forms part of thisReport.
The Company continues to be the leading sugar and ethanol manufacturing company inIndia with its fourteen sugar plants having an aggregate sugarcane crushing capacity of136000 TCD six distilleries having aggregate capacity to produce Industrial Alcohol of800 kilolitres per day and fourteen co-generation plants having a total power generationcapacity of 449 MW.
During the year the operations at all the sugar distillery and co-generation plantswere satisfactory.
During the year ended March 312017 the Company crushed 12.509 MMT of sugarcane asagainst 10.922 MMT in the previous year. The average recovery of sugar from sugarcane wasmarginally lower at 10.23% as against 10.32% in the previous year primarily due to lowrecovery in the mills in East U.P During the year the Company produced 1272424 MT sugar(previous year 1136070 MT) and 594958 MT molasses (previous year 533219 MT).
The Company sold 1046122 MT of sugar and 10058 MT of molasses during the year asagainst 1296466 MT of sugar and 117968 MT of molasses during the previous year.
The Industrial Alcohol / Ethanol production was 111934 KL as against 125310 KL inthe previous year. Alcohol / Ethanol sale during the year was at 109820 KL as against142846 KL during the previous year.
The operations of power generation were smooth at all the fourteen plants. While mostof the power generated by us continued to be used for captive consumption to run ourplants the surplus power was sold to the Uttar Pradesh state grid.
During the year Power generation was at 729431 MW as against 686685 MW in theprevious year. The Company exported 267257 MW of power as against 266106 MW during theprevious year.
In accordance with the Master Restructuring Agreement (MRA) signed on December 30 2014among the Company and JLF Lenders Funded Interest Term Loan (FITL) aggregating to ' 36.45crore have been converted to equity shares on April 06 2016. Pursuant to the conversionon April 06 2016 entire 70% of the FITL have been converted into equity shares as perthe terms of the MRA.
Changes in capital structure
An aggregate of 16742168 fully paid-up equity shares of face value ' 1/- each at apremium of ' 20.77 per equity share were allotted during the year upon conversion ofFunded Interest Term Loan (FITL) aggregating to ' 364476997 to JLF Lenders pursuant tothe Restructuring Scheme under JLF route.
Consequent to the allotment of the equity shares as aforesaid the paid-up equity sharecapital of the Company stands increased from ' 1116817774 divided into 1116817774equity shares of face value ' 1/- each to ' 1133559942 divided into 1133559942equity shares of face value ' 1/- each resulting into shareholding of promoters as onMarch 31 2017 at 26.02% as compared to 26.41% as on March 312016.
Listing of securities
The Company's equity shares are listed on the BSE Limited and The National StockExchange of India Limited. The Annual Listing fees to each of these Stock Exchanges havebeen paid by the Company.
Subsidiary and Associate Companies
As on March 31 2017 the Company had the following Subsidiaries and Associates all ofthem are presently unlisted: Subsidiaries:
1. Bajaj Aviation Private Limited (BAPL) - (Holding 100%).
2. Bajaj Power Generation Private Limited (BPGPL) - (Holding 100%).
3. Bajaj Hindusthan (Singapore) Private Limited (BHSPL) - (Holding 100%).
4. PT. Batu Bumi Persada Indonesia - (step down subsidiary being 99.00% subsidiary ofBHSPL).
5. PT. Jangkar Prima Indonesia - (step down subsidiary being 99.88% subsidiary ofBHSPL).
1. Bajaj Ebiz Private Limited - (Holding 49.50%).
Performance and financial positions of subsidiaries and associates
a) Bajaj Aviation Private Limited: BAPL continued to provide Air Transport Servicesthrough Air Craft - Falcon LX 2000. In addition to this the Company also leased out itsHelicopter - Bell 407 to another Company providing Air Transportation Services.
b) Bajaj Power Generation Private Limited: Uttar Pradesh Power Corporation Limited(UPPCL) had granted permission to change the location of the Company's 1980 MW (3 x 660MW) power project from Bargarh District Chitrakoot to Mirchwara District Lalitpursubject to receipt of approval from Uttar Pradesh Electricity Regulatory Commission. TheCompany is in the process of obtaining requisite approvals for shifting its project.
c) Bajaj Hindusthan (Singapore) Private Limited: BHSPL through its two subsidiaries inIndonesia continued to hold coal mines in Indonesia which are in the process of beingdeveloped.
d) PT. Jangkar Prima (PTJP) Indonesia and PT. Batu Bumi Persada (PTBBP) Indonesia:PTJP and PTBBP are engaged in the business of Mining and Mining services includingconsulting planning implementation and testing of equipment in the field of constructionof mining. These subsidiaries are in the process of development of a coal mine andreceived various clearances in this regard except for the forestry clearance and theclearance for the jetty site for which necessary efforts to expedite the matter withconcerned authorities are being made. Operation of coal mine is expected to start in thenext one year.
e) Bajaj Ebiz Private Limited: Bajaj Ebiz did not carry out any business during theyear.
Pursuant to the provisions of Section 129 of the Companies Act 2013 and Rule 5 of theCompanies (Accounts) Rules 2014 statement containing the salient features of thefinancial statements of its subsidiaries/associate companies in the manner prescribedunder the Companies Act 2013 is given as Annexure to the Consolidated FinancialStatements.
Consolidated financial statements
In compliance with Section 129(3) of the Companies Act 2013 and Rules made thereunderIndian Accounting Standard (Ind AS) 110 SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Consolidated Financial Statements form part of thisAnnual Report. Consolidated Financial Statements presented by your Company includefinancial information about its aforesaid subsidiaries and associates. The standalonefinancial statements of BHSL as well as its aforesaid subsidiaries and its associates willbe available on the website of the Company (www.bajajhindusthan.com).
Directors and Key Managerial Personnel
Retirement by rotation
Mr. Ashok Kumar Gupta Director of the Company will retire by rotation and beingeligible offers himself for reappointment. Appointment of Mr. Ashok Kumar Gupta is incompliance with the provisions of Section 164(2) of the Companies Act 2013.
Cessation of Director
Mr. Binod Kumar Nominee director ceased to be a director of the Company with effectfrom May 11 2017 pursuant to change in nomination by Punjab National Bank.
Appointment of Directors
Ms. Shalu Bhandari was appointed as an Additional Director with effect from September17 2016 in accordance with Section 149 of the Companies Act 2013 and Regulation 17 ofthe Securities and Exchange Board of India (SEBI) (Listing Obligations and DisclosureRequirements) Regulations 2015. Ms. Shalu Bhandari has submitted the declaration ofIndependence pursuant to Section 149(7) of the Companies Act 2013 stating that she meetsthe criteria of Independence as provided in sub section (6) of Section 149. The Companyhas received a notice from a member pursuant to Section 160 of the Companies Act 2013proposing the appointment of Ms. Shalu Bhandari as Independent Director of the Company.The Board of Directors recommends the appointment of Ms. Shalu Bhandari as IndependentDirector to hold office up to September 16 2021.
In accordance with the Master Restructuring Agreement with Joint Lenders Mr.Mukeshkumar S. Dave was appointed as Nominee Director of Punjab National Bank with effectfrom May 11 2017. In terms of the provisions of the Companies Act 2013 and Articles ofAssociation of the Company Mr. Mukeshkumar S Dave would hold office as Additional Directoronly up to the date of the 85th Annual General Meeting of the Company. The Company hasreceived notice from a member pursuant to Section 160 of the Companies Act 2013proposing the appointment of Mr. Mukeshkumar S. Dave as Nominee Director of the Company.The Board of Directors recommends the appointment of Mr. Mukeshkumar S. Dave as NomineeDirector of the Company. The profile of the Directors forms part of the CorporateGovernance Report.
During the year under review there is no change in Key Managerial Personnel.
Pursuant to the provisions of the Companies Act 2013 and Regulation 17 of theSecurities and Exchange Board of India (SEBI) (Listing Obligations and DisclosureRequirements) Regulations 2015 the Board has carried out an annual performance evaluationof its own performance the Directors individually as well as the evaluation of theworking of its Audit Nomination and Remuneration and other Committees. The manner inwhich the evaluation has been carried out has been explained in the Corporate GovernanceReport.
Induction and training of Board members
The process followed by the Company for induction and training to Board members hasbeen explained in the Corporate Governance Report.
Directors' responsibility statement
Pursuant to the requirement of clause (c) of sub-section (3) of Section 134 of theCompanies Act 2013 your Directors confirm that:
(i) in the preparation of the annual accounts the applicable accounting standards hadbeen followed along with proper explanation relating to material departures;
(ii) the directors had selected such accounting policies and applied them consistentlyand made judgements and estimates that are reasonable and prudent so as to give a true andfair view of the state of affairs of the Company at the end of the financial year and ofprofit of the Company for that year;
(iii) the directors had taken proper and sufficient care for the maintenance ofadequate accounting records in accordance with the provisions of this Act for safeguardingthe assets of the Company and for preventing and detecting fraud and other irregularities;
(iv) the directors had prepared the annual accounts on a going concern basis;
(v) 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
(vi) the directors had devised proper systems to ensure compliance with the provisionsof all applicable laws and that such systems were adequate and operating effectively.
Auditors and auditors' report
Auditors and their report
M/s. Chaturvedi & Shah Chartered Accountants (Firm Registration No.101720W) wereappointed as Auditors of the Company for five consecutive years at the conclusion of the83rd Annual General Meeting till conclusion of the 88th Annual General Meeting. The saidappointment is required to be ratified by the members at the ensuing 85th Annual GeneralMeeting.
The Statutory Auditors have confirmed their eligibility pursuant to Section 139 of theCompanies Act 2013.
The Statutory Audit Report does not contain any qualification adverse remark ordisclaimer made by the Statutory Auditor.
Cost auditors and their report
Pursuant to Section 148 of the Companies Act 2013 the Board of Directors on therecommendation of the Audit Committee appointed M/s. B.J.D. Nanabhoy & Co. CostAccountants Mumbai (Firm Registration No. 000011) as the Cost Auditors of the Company forFY 2017-18 and has recommended their remuneration to the shareholders for ratification atthe ensuing Annual General Meeting. The Cost Audit Reports for the financial year endedMarch 31 2016 for the products Sugar Industrial Alcohol and Electricity was filed withthe Ministry of Corporate Affairs on September 22 2016.
Secretarial auditors and their report
Pursuant to Section 204 of the Companies Act 2013 and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 M/s. Anant B Khamankar & Co.Company Secretaries were appointed as Secretarial Auditor of the Company. The SecretarialAudit Report is annexed as "Annexure II" and forms part of this report. Thereport does not contain any qualification reservation or adverse remark or disclaimer.
The Company has not accepted deposit from the public falling within the ambit ofSection 73 of the Companies Act 2013 read with the Companies (Acceptance of Deposits)Rules 2014. Deposits unclaimed at the end of the year was nil.
Particulars of loans guarantees or investments
Details of loans guarantees and investments covered under the provisions of Section186 of the Companies Act 2013 are given in "Annexure III" and forms part ofthis report.
The Company constituted Audit Committee as required under Section 177 of the CompaniesAct 2013 and Regulation 18 of Securities and Exchange Board of India (SEBI) (ListingObligations and Disclosure Requirements) Regulations 2015. Composition of Audit Committeeis given in Corporate Governance Report. There is no such instance during the year underreview where the Board had not accepted any recommendation of Audit of the AuditCommittee.
Related party transactions
The details of transactions entered into with the Related Parties are enclosed in Formno. AOC 2 is annexed herewith as "Annexure IV" and forms part of this report.
Internal financial control
The Board has adopted the policies and procedures for ensuring the orderly andefficient conduct of business including adherence to Company's policies the safeguardingof its assets the prevention and detection of fraud and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialdisclosures. The Company has in place adequate internal financial controls with referenceto financial statements. During the year such controls were tested and no reportablematerial weaknesses in the design or operation were observed.
Extract of Annual Return
The details forming part of the extract of the Annual Return in Form MGT 9 is annexedherewith as "Annexure V" and forms part of this report.
Corporate Social Responsibility
As required under Section 135 of the Companies Act 2013 the Company has constituted aCorporate Social Responsibility (CSR) Committee. As per recommendation of the CSRCommittee the Board at its meeting held on September 25 2014 approved the CSR Policy ofthe Company. Report on CSR Activities/Initiatives is enclosed as "Annexure VI"and forms part of this report.
Policy for determining material subsidiary
During the year ended March 31 2017 the Company does not have any materiallisted/unlisted subsidiary companies as defined in Regulation 16 (c) of Securities andExchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements)Regulations 2015. The Company has framed a policy for determining "materialsubsidiary" and the same is available on the Company's website atwww.bajajhindusthan.com/investorcorner-policies.php
Policy on remuneration and other aspects of directors and KMP
The Board has on the recommendation of the Nomination and Remuneration Committee frameda policy on directors' appointment and remuneration including criteria for determiningqualifications positive attributes independence of director and appointment ofDirectors Key Managerial Personnel and Senior Management and their remuneration. Thedetailed remuneration policy is placed on the Company's website atwww.bajajhindusthan.com/investorcorner-policies.php
Vigil mechanism/Whistle blower policy
The Company has formulated a Vigil Mechanism/Whistle Blower Policy in accordance withSection 177(9) of the Companies Act 2013 and Regulation 22 of Securities and ExchangeBoard of India (SEBI) (Listing Obligations and Disclosure Requirements) Regulations 2015.The details of the Vigil Mechanism/Whistle Blower Policy are provided in the CorporateGovernance Report and also posted on the website of the Company atwww.bajajhindusthan.com/ investorcorner-policies.php
Risk management policy
The Company has a Risk Management Policy to identify evaluate business risks andopportunities. This framework seeks to create transparency minimise adverse impact on thebusiness objectives and enhance the Company's competitive advantage. The business riskframework defines the risk management approach across the enterprise at various levelsincluding documentation and reporting. The framework has different risk models which helpin identifying risks trend exposure and potential impact analysis at a Company level asalso separately for business.
Related party transaction policy
Policy on dealing with Related Party Transactions as approved by the Board is uploadedon the Company's website at www.bajajhindusthan.com/investorcorner-policies.php
Corporate Social Responsibility (CSR) policy
Contents of Corporate Social Responsibility Policy in the Board's report are given inthe Report on CSR Activities in "Annexure VI" and on the Company's website atwww.bajajhindusthan.com/investorcorner-policies.php
Anti sexual harassment policy
The Company has in place an Anti Sexual Harassment Policy in line with the requirementsof Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act2013. An Internal committee has been set up to redress the complaints received regardingsexual harassment at workplace. All employees including trainees are covered under thispolicy.
The following is the summary of sexual harassment complaints received and disposed ofduring the current financial year. Number of Complaints received: Nil Number of Complaintsdisposed of: Nil
Significant and material orders passed by the regulators or courts or tribunals
No significant or material order passed by the regulators or courts or tribunalsimpacting the going concern status and Company's operations in future.
Particulars of employees and related disclosures
As required under the provision of Section 197 of the Companies Act 2013 read withRule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014in respect of employees of the Company are set out in "Annexure VII" and formspart of this report.
Transfer of unclaimed dividend and unclaimed shares to investor education andprotection fund
The details of Unclaimed Dividend and Unclaimed Shares forms part of the CorporateGovernance Report.
Conservation of energy technology absorption and foreign exchange earnings and outgo
The relevant particulars regarding the above are given in "Annexure VIII" andforms part of this report.
The Company has vigorously striven to follow the best corporate governance practicesaimed at building trust among the key stakeholders shareholders employees customerssuppliers (including farmers) and other stakeholders on four key elements of corporategovernance - transparency fairness disclosure and accountability. As per Securities andExchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 a separate section on Corporate Governance practices followed by the Companytogether with a certificate from the Company's Auditors conforming compliance forms partof this Report.
Management Discussion and Analysis and Business Responsibility Report
As per Regulation 34 of the Securities and Exchange Board of India (Listing Obligationsand Disclosure Requirements) Regulations 2015 Management Discussion and Analysis Reportand Business Responsibility Report are prescribed in separate Sections forming part ofthis Annual Report.
Industrial relations have been cordial at all the plants of the Company. The Directorsexpress their appreciation for the sincere co-operation and assistance of Central andState Government authorities bankers customers and suppliers and business associates.Your Directors also wish to place on record their deep sense of appreciation for thecommitted services by your Company's employees. Your Directors acknowledge with gratitudethe encouragement and support extended by our valued shareholders.
| ||For and on behalf of the Board of Directors |
| ||Kushagra Bajaj |
| ||Chairman & Managing Director |
| ||(DIN: 00017575) |
|Mumbai May 25 2017 || |