Your Directors have pleasure in presenting their Eighty Fourth annual report and theaudited financial statements for the year ended March 31 2016.
The summarised financial results of the Company for the year ended March 312016 arepresented below:
| || ||(Rs. Crore) |
| ||Year ended March 31 2016 ||Year ended March 312015 |
|Sales and other income ||4689.20 ||4570.12 |
|Profit/(Loss) before depreciation interest and tax ||800.57 ||(115.73) |
|Depreciation and amortisation ||223.98 ||239.94 |
|Profit/(Loss) after depreciation but before interest and tax ||576.59 ||(355.67) |
|Finance costs (Net) ||690.87 ||741.55 |
|Profit/(Loss) before tax ||(114.28) ||(1097.22) |
|Provision for taxation (Net) ||- ||- |
|Profit/(Loss) after tax ||(114.28) ||(1097.22) |
|Opening balance b/f ||(2645.97) ||(1533.31) |
|Disposable surplus after adjustments ||(2760.25) ||(2630.53) |
|Transfer to reserve for molasses storage tank ||0.31 ||0.28 |
|Carrying value of fixed assets adjusted ||- ||15.16 |
|Balance carried to balance sheet ||(2760.56) ||(2645.97) |
On a standalone basis the Company achieved a turnover (including other income) of Rs.4689.20 crore for the year ended March 31 2016 as compared to Rs. 4570.12 crore in theprevious year. The loss after tax is Rs. 114.28 crore as compared to the loss of Rs.1097.22 crore in the previous year. On a consolidated basis the turnover including otherincome is Rs. 4696.57 crore as compared to Rs. 4574.05 crore in the previous year. Theloss after tax and minority interest is Rs. 206.59 crore as against loss of Rs. 1192.45crore in the previous year.
In view of loss incurred during the year under review your Directors do not recommendany dividend for the current Financial Year. (Previous year - Nil)
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 312016 the Company crushed 10.922 MMT of sugarcane. Theaverage recovery of sugar from sugarcane was at 10.32% as against 9.38% in the previousyear. During the year the Company produced 1136070 MT sugar and 533219 MT molasses.
During the year the Company sold 1296466 MT of sugar and 117968 MT of molasses asagainst 1239186 MT of sugar and 33684 MT of molasses during the previous year.
During the year Industrial Alcohol / Ethanol production was 125310 KL as against125463 KL in the previous year. Alcohol / Ethanol sale during the year was at 142846KL as against 109389 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 686685 MW as against 778057 MW in theprevious year. The Company exported 266106 MW of power during the year as against329277 MW during the previous year.
During the year operations were kept suspended due to inadequate availability of rawmaterial and inadequate demand of finished product in market.
In accordance with the Master Restructuring Agreement (MRA) signed on December 30 2014among the Company and JLF lenders the Company has completed the following majoractivities:
- Completed the security creation formalities in respect of all current assets and allmovable and immovable fixed assets of the Company and personal/corporate guarantee frompromoter/promoter group.
- During the year the promoters have infused balance Rs. 25 crore out of the totalcommitment of Rs. 200 crore as Promoters contribution by way of unsecured loan to theCompany as per the MRA.
- Funded Interest Term Loan (FITL) aggregating to Rs. 667.42 crore have been convertedduring the financial year and Rs. 36.45 crore have been converted on April 06 2016 intothe equity shares of the Company and accordingly entire 70% of the FITL facility has beenconverted into equity shares of the Company as per the MRA.
Changes in capital structure
During the year 306576597 fully paid-up equity shares of face value Rs. 1/- each ata premium of Rs. 20.77 per equity share were allotted upon conversion of Funded InterestTerm Loan (FITL) aggregating to Rs. 6674172517 to JLF Lenders pursuant to theRestructuring 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 Rs. 810241177 divided into 810241177equity shares of face value Rs. 1/- each to Rs. 1116817774 divided into 1116817774equity shares of face value Rs. 1/- each resulting into shareholding of promoters as onMarch 31 2016 at 26.41% as compared to 36.40% as on March 312015.
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.
Management Discussion and Analysis
Management Discussion and Analysis Report is presented in a separate section formingpart of this Annual Report.
Subsidiary and Associate Companies
As on March 31 2016 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 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 process of development of a Coal mine and receivedvarious clearances in this regard except for the forestry clearance and the clearance forthe jetty site for which necessary efforts to expedite the matter with concernedauthorities are being made. Operation of coal mine is expected to start in next 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 thereunderAccounting Standards 21 23 and 27 of Companies (Accounting Standards) Rules 2006 SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the ConsolidatedFinancial Statements form part of this Annual Report. Consolidated Financial Statementspresented by your Company include financial information about its aforesaid subsidiariesand associates. The standalone financial statements of BHSL as well as its aforesaidsubsidiaries and its associates will be available on the website of the Company(www.bajajhindusthan.com).
Directors and Key Managerial Personnel
Retirement by rotation
Mr. Kushagra Bajaj Director of the Company will retire by rotation and being eligibleoffers himself for re-appointment. Appointment of Mr. Kushagra Bajaj is in compliance withthe provisions of Section 164(2) of the Companies Act 2013.
Appointment of Directors
Mr. Ashok Mukand and Mr. Binod Kumar were appointed as Additional Directors with effectfrom September 14 2015 and January 07 2016 respectively in accordance with the terms ofthe Master Restructuring Agreement. Mr. Vipulkumar S. Modi was appointed as an AdditionalDirector with effect from January 07 2016 in accordance with Section 149 of the CompaniesAct 2013 and Regulation 17 of the Securities and Exchange Board of India (SEBI) (ListingObligations and Disclosure Requirements) Regulations 2015. Mr. Vipulkumar S Modi hassubmitted the declaration of Independence pursuant to Section 149(7) of the Companies Act2013 stating that he meets the criteria of Independence as provided in sub section (6) ofSection 149.
In terms of the provisions of the Companies Act 2013 and Articles of Association ofthe Company Mr. Ashok Mukand Mr. Binod Kumar and Mr. Vipulkumar S. Modi would hold officeas Additional Directors only up to the date of the 84th Annual General Meeting of theCompany. The Company has received notices from members pursuant to Section 160 of theCompanies Act 2013 proposing the appointment of Mr. Ashok Mukand Mr. Binod Kumar andMr. Vipulkumar S. Modi as Directors of the Company. The Board of Directors recommends theappointment of Mr. Ashok Mukand Mr. Binod Kumar and Mr. Vipulkumar S. Modi as Directorsof the Company. The profile of the Directors forms part of the Corporate GovernanceReport.
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 ofloss 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 for five consecutive years from the conclusion of the 83rd Annual GeneralMeeting till conclusion of 88th Annual General Meeting. The said appointment is requiredto be ratified by the members at the ensuing 84th Annual General Meeting.
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. The reservations made by the Statutory Auditorsunder para "Emphasis of Matter" along with note no. 41 is self-explanatory anddo not call for any further information and explanation or comments under Section134(3)(f) of the Companies Act 2013.
Cost auditors and their report
Pursuant to Section 148 of the Companies Act 2013 M/s. B.J.D. Nanabhoy & Co.Cost Accountants Mumbai (Firm Registration No. 000011) were appointed as the CostAuditors of the Company. The cost auditors have submitted the Cost Audit Reports to theCentral Government for its products i.e. Sugar Industrial Alcohol and Electricity as perthe following details:
|Sr. No. ||Product ||Report submitted with Central Government ||Financial year ended ||Date of filing |
|1. ||Sugar ||Cost Audit Report ||31.03.2015 ||30.09.2015 |
|2. ||Industrial Alcohol ||Cost Audit Report ||31.03.2015 ||30.09.2015 |
|3. ||Electricity ||Cost Audit Report ||31.03.2015 ||30.09.2015 |
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 I" 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 II" and forms part of thisreport.
The Company constituted Audit Committee as required under Section 177 of the CompaniesAct 2013 and Clause 49 of the Listing Agreement / Regulation 18 of Securities andExchange Board of India (SEBI) (Listing Obligations and Disclosure Requirements)Regulations 2015. Composition of Audit Committee is given in Corporate Governance Report.There is no such instance during the year under review where the Board had not acceptedany recommendation of the Audit Committee.
Related party transactions
The details of transactions entered into with the Related Parties are enclosed in FormNo. AOC 2 is annexed herewith as "Annexure III" 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 IV" 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/lnitiatives is enclosed as "Annexure V"and forms part of this report.
Policy for determining material subsidiary
During the year ended March 31 2016 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 Committeeframed a policy on Directors' appointment and remuneration including criteria fordetermining qualifications positive attributes independence of Director and appointmentof Directors Key Managerial Personnel and Senior Management and their remuneration. Thedetailed remuneration policy is placed on 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 Clause 49 of the ListingAgreement/Regulation 4 (d) (iv) of Securities and Exchange Board of India (SEBI) (ListingObligations and Disclosure Requirements) Regulations 2015. The details of the VigilMechanism/ Whistle Blower Policy are provided in the Corporate Governance Report and alsoposted 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 V" 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 VI" and formspart of this report.
Transfer of amounts to Investor Education and Protection Fund
The amounts of dividend sum of matured fixed deposits sum of interest on matureddeposits etc. which has remained unpaid or unclaimed for 7 years have been transferred tothe Investor Education and Protection Fund within the time stipulated by law on respectivedue dates in accordance with the provisions of Section 124(5) of the Companies Act 2013.
Conservation of energy technology absorption and foreign exchange earnings and outgo
The relevant particulars regarding the above is given in "Annexure VII" 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.
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 30 2016 || |