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Bajaj Holdings & Investment Ltd.

BSE: 500490 Sector: Financials
NSE: BAJAJHLDNG ISIN Code: INE118A01012
BSE LIVE 15:40 | 17 Nov 2835.40 -18.85
(-0.66%)
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2880.00

HIGH

2880.00

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2810.15

NSE 15:57 | 17 Nov 2834.45 -17.90
(-0.63%)
OPEN

2850.00

HIGH

2883.50

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2824.00

OPEN 2880.00
PREVIOUS CLOSE 2854.25
VOLUME 787
52-Week high 3020.25
52-Week low 1745.00
P/E 28.76
Mkt Cap.(Rs cr) 31,555
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 2880.00
CLOSE 2854.25
VOLUME 787
52-Week high 3020.25
52-Week low 1745.00
P/E 28.76
Mkt Cap.(Rs cr) 31,555
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Bajaj Holdings & Investment Ltd. (BAJAJHLDNG) - Director Report

Company director report

The directors present their Seventy Second Annual Report and audited financialstatements for the year ended 31 March 2017.

Financial results

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

The highlights of the Standalone Financial Results are as under:

(Rs In Crore)
Particulars FY2017 FY2016
Total revenue 888.43 1401.28
Total expenses 215.94 42.72
Profit before tax 672.49 1358.56
Tax expense 134.31 88.05
Profit for the year 538.18 1270.51
Transfer to Reserve fund u/s 45-IC(1) of Reserve Bank of India Act 1934 107.64 254.10
Transfer to General reserve 53.82 127.05
Balance carried to Balance Sheet 376.72 454.03
Earnings per share (H) 48.4 114.2
Proposed dividend (%) 325% 325%
Dividend and tax thereon 435.33 435.33

The highlights of the Consolidated Financial Results are as under:

(Rs In Crore)
Particulars FY2017 FY2016
Total revenue 850.08 476.69
Profit before tax 630.26 429.90
Share of profit after tax of associates 1977.50 1923.65
Profit for the year 2473.19 2265.24
Earnings per share (H) 222.2 203.5

Dividend

The directors recommend for consideration of the shareholders at the ensuing annualgeneral meeting payment of dividend of RS 32.50 per equity share (325%) for the yearended 31 March 2017. The amount of dividend and the tax thereon to the extent applicableaggregate to RS 435.33 crore.

For the year ended 31 March 2016 the total dividend paid (including interim dividend)was also RS 32.50 per equity share of RS 10 each (325%) and the total dividend and the taxthereon to the extent applicable also aggregated to RS 435.33 crore.

Share Capital

The paid up equity share capital as on 31 March 2017 was RS 111.29 crore. There was nopublic issue rights issue bonus issue or preferential issue etc. during the year. TheCompany has not issued shares with differential voting rights sweat equity shares nor hasit granted any stock options.

Registration as a Systemically Important Non-Deposit taking NBFC

The Company has been registered with the Reserve Bank of India as a Non-BankingFinancial Institution (Non-Deposit taking). In terms of provisions of Non-BankingFinancial (Non-Deposit Accepting or Holding) Companies Prudential Norms (Reserve Bank)Directions 2007 the Company is categorised as a ‘Systemically Important Non-Deposittaking Non-Banking Financial Company'. The Company has not accepted public deposits duringthe year under review. The Company has formed Risk Management Committee and AssetLiability Management Committee in terms of the applicable directions/regulations of theReserve Bank of India in this regard.

Operations

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

Extract of annual return

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

Number of meetings of the Board

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

Directors' responsibility statement

As required under clause (c) of sub-section (3) of section 134 of the Companies Act2013 directors to the best of their knowledge and belief state that -l in the preparation of the annual accounts the applicable Accounting Standards had been followedalong with proper explanation relating to material departures;

l the dir ectors 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 the Company at the end of the financial year and ofthe profit and loss of the Company for that period;

l the directors had taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

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

• the directors had laid down internal financial controls to be followed by theCompany and that such internal financial controls were adequate and were operatingeffectively; and

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

Details in respect of frauds reported by auditors under section 143(12)

During the year under review there were no frauds reported by the auditors to theAudit Committee or the Board under section 143(12) of the Companies Act 2013.

Declaration by independent directors

The independent directors have submitted the declaration of independence as requiredpursuant to section 149(7) of the Companies Act 2013 stating that they meet the criteriaof independence as provided in section 149(6) of the said Act.

Directors' Remuneration Policy and criteria for matters under section 178

Information regarding Directors' Remuneration Policy and criteria for determiningqualifications positive attributes independence of a director and other matters providedunder sub-section (3) of section 178 are provided in the Corporate Governance Report.

Particulars of loans guarantees or investments

Information regarding loans guarantees and investments covered under the provisions ofsection 186 of the Companies Act 2013 are detailed in the financial statements.

Related party transactions

No related party transactions (RPTs) were entered into by the Company during thefinancial year which attracted the provisions of section 188 of the Companies Act 2013.There being no ‘material' related party transactions as defined under regulation 23of the SEBI Listing Regulations 2015 there are no details to be disclosed in Form AOC-2in that regard.

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

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

Material changes and 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.

Conservation of energy technology absorption foreign exchange earnings and outgo

The Company primarily being an investment company and not involved in any industrial ormanufacturing activities has no particulars to report regarding conservation of energyand technology absorption as required under section 134 of the Companies Act 2013 andRules made thereunder. During the year under review the Company did not have any foreignexchange earnings whereas the foreign exchange outgo amounted to RS 1.30 crore.

Risk Management Policy

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

Corporate Social Responsibility (CSR)

Detailed information on the Corporate Social Responsibility Policy developed andimplemented by the Company on CSR initiatives taken during the year pursuant to section135 of the Companies Act 2013 is given in the Annual Report on CSR activities.

Formal annual evaluation of the performance of the Board its Committees and Directors

Information on the manner in which formal annual evaluation has been made by the Boardof its own performance and that of its Committees and individual directors is given in theCorporate Governance Report.

Subsidiary/joint venture/associates

Following are the companies which are subsidiary/joint venture/associate companies ofthe Company:

Name of the company % shareholding of BHIL and its subsidiary Status
Bajaj Auto Ltd. 31.54% Associate
Bajaj Finserv Ltd. 39.29% Associate
Bajaj Auto Holdings Ltd. 100% Subsidiary
Maharashtra Scooters Ltd. 24% Joint Venture

Detailed information on the performance and financial position of subsidiaryassociates and joint venture of the Company is covered in the Management Discussion andAnalysis Report.

As regards Maharashtra Scooters Ltd. (MSL) a company jointly promoted by the Company(erstwhile Bajaj Auto Ltd.) and Western Maharashtra Development Corporation Ltd. (WMDC)WMDC had offered to sell its 27% shareholding in MSL and the Company had confirmed itswillingness to purchase these shares.

As reported in the past in the matter of Appeal No.153 of 2010 concerning the Awardof the Arbitrator between BHIL and WMDC passed on 14 January 2006 the Division Bench ofthe Hon'ble Bombay High Court had pronounced its Order on 8 May 2015 inter aliastipulating the following:

1. The Company's Appeal No.153 of 2010 is allowed and the impugned order of the SingleJudge dated 15 February 2010 is set aside in so far as it set aside the arbitral Award onthe ground that clause 7 of the Protocol Agreement was in the nature of a restriction onfree transferability of the shares and was therefore contrary to section 111A of theCompanies Act 1956.

2. The Cross Objections filed by the Respondent (WMDC) have no merit and thereforestand dismissed.

3. In the peculiar circumstances of the case and in the interest of justice theAppellant (BHIL) for the purchase of the 3085712 equity shares of MSL shall pay to theRespondent (WMDC) a sum of RS 46.79 crore (calculated at Arbitral Award price of RS 151.63per share) together with simple interest @ 18% per annum from 14 January 2006 (date ofArbitral Award) till payment.

WMDC has subsequently filed a Special Leave Petition (SLP) in the Supreme Court on 15September 2015 which is registered as SLP No.- 27194-95 of 2015 against the impugnedDivision Bench judgment of the Hon'ble Bombay High Court dated 8 May 2015 challenging thejudgment amongst other grounds on the basis of validity of the Protocol Agreement in thecontext of section 111A of the Companies Act 1956 prescribing free transferability ofshares.

The above mentioned SLP filed by WMDC is currently pending before the Supreme Court.

Directors and Key Managerial Personnel-changes

Sanjiv Bajaj was appointed as Managing Director of the Company w.e.f. 1 April 2012 fora period of five years up to 31 March 2017. The Board at its meeting held on 16 March2017 approved the re-appointment of Sanjiv Bajaj as Managing Director for a fresh term offive years and fixed his remuneration at its meeting held on 18 May 2017 based on therecommendations of the Nomination and Remuneration Committee subject to necessaryapprovals of the shareholders. The matter is being separately put up for shareholders'approvals through the Notice of the ensuing seventy second annual general meeting of theCompany.

There was no change in the non-executive directors and other Key Managerial Personnelduring the year under review.

In light of the provisions of the Companies Act 2013 Madhur Bajaj retires from theBoard by rotation this year and being eligible offers himself for re-appointment. Theinformation as required to be disclosed under regulation 36(3) of the SEBI ListingRegulations 2015 in case of re-appointment of the director is provided in the Notice ofthe ensuing annual general meeting.

Detailed information on the directors is provided in the Corporate Governance Report.

Significant and material orders passed by the regulators or courts

During the year under review there were no significant and material orders passed bythe regulators or courts or tribunals which may impact the going concern status of theCompany and its operations in future.

Global Depository Receipts (GDRs)

During the year under review the Company terminated its GDR programme w.e.f. 20 March2017 and these GDRs were consequently delisted from the London Stock Exchange w.e.f. 24March 2017. Detailed information about GDRs is given in the chapter on General ShareholderInformation.

Details of internal financial controls with reference to the financial statements

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

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

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

Presentation of financial statements

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

Consolidated financial statements

The directors also present the audited consolidated financial statements incorporatingthe duly audited financial statements of the subsidiaries including the associates andjoint venture and as prepared in compliance with the Companies Act 2013 applicableAccounting Standards and SEBI Listing Regulations 2015.

A statement containing the salient features of the subsidiaries (including associatesand joint venture) in the prescribed form AOC-1 is annexed separately.

Statutory disclosures

The summary of the key financials of the Company's subsidiary associate companies andjoint venture (Form AOC-1) is included in this Annual Report. A copy of the auditedfinancial statements of the said companies will be made available to the members of theCompany seeking such information at any point of time. The audited financial statements ofthe said companies will be kept for inspection by any member of the Company at itsregistered office during business hours. The same are placed on the Company's websitewww.bhil.in

Details as required under the provisions of section 197(12) of the Companies Act 2013read with rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 as amended are annexed to this Report.

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

Disclosures as prescribed under the Non-Banking Financial Company-SystemicallyImportant Non-Deposit taking Company and Deposit taking Company (Reserve Bank) Directions2016 and other applicable NBFC Regulations have been made in this Annual Report.

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

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

Corporate governance

Pursuant to the SEBI Listing Regulations 2015 a separate chapter titled‘Corporate Governance' has been included in this Annual Report along with thereports on Management Discussion and Analysis and General Shareholder Information.

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

The Managing Director (CEO) and CFO have certified to the Board with regard to thefinancial statements and other matters as required under regulation 17(8) of the SEBIListing Regulations 2015.

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

Business Responsibility Report

Regulation 34(2) of the SEBI Listing Regulations 2015 which was amended on 22December 2015 to come into force from 1 April 2016 inter alia provides that the annualreport of the top 500 listed entities based on market capitalisation (calculated as on 31March of every financial year) shall include a Business Responsibility Report (BRR).

Since BHIL is one of the top 500 listed companies by way of market capitalisation as on

31 March 2016 the Company has presented its maiden BRR for the financial year 2016-17which is part of this Annual Report. As a green initiative the BRR has been hosted on theCompany's website www.bhil.in

A physical copy of the BR Report will be made available to any shareholder on request.

Secretarial Standards of ICSI

Pursuant to the approval given on 10 April 2015 by Central Government to theSecretarial

Standards specified by the Institute of Company Secretaries of India the SecretarialStandards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) cameinto effect from 1 July 2015. The Company is in compliance with the same.

Auditors

Statutory auditor

The current auditors viz. Dalal & Shah LLP Chartered Accountants (FirmRegistration No. 102021W/W100110) were last re-appointed by the members at their annualgeneral meeting held on 17 July 2014 to hold the office of auditor from the conclusion ofthe sixty ninth annual general meeting till the conclusion of this seventy second annualgeneral meeting.

As per the provisions of section 139 of the Companies Act 2013 no listed companyshall appoint an audit firm as auditors for more than two terms of five consecutive years.The Act also provided for an additional transition period of three years from thecommencement of the Act i.e. 1 April 2014. The current auditors had completed a period often years at the commencement of the said Act hence on their completing the additionaltransition period of three years provided under the Act the term of the current auditorsexpires at the conclusion of the ensuing annual general meeting.

The Board at its meeting held on 18 May 2017 based on the recommendation of the AuditCommittee has recommended the appointment of S R B C & Co LLP Chartered Accountants(Firm Registration No. 324982E/E300003) as the statutory auditors of the Company forapproval by the members.

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

S R B C & Co LLP Chartered Accountants will be appointed as the statutory auditorsof the Company from the conclusion of seventy second annual general meeting till theconclusion of seventy seventh annual general meeting covering one term of fiveconsecutive years subject to ratification by the members at each intervening annualgeneral meeting on a remuneration out-of-pocket expenses etc. incurred in connectionwith the audit as may be decided by the Board in consultation with the auditors from yearto year.

The members are therefore requested to appoint S R B C & Co LLP CharteredAccountants (Firm Registration No. 324982E/E300003) as auditors of the Company for a termof five years from the conclusion of the ensuing annual general meeting till theconclusion of the seventy seventh annual general meeting to be scheduled in 2022 subjectto ratification at each annual general meeting and to fix their remuneration for the year2017-18.

The statutory audit report for the year 2016-17 does not contain any qualificationreservation or adverse remark or disclaimer made by statutory auditor.

Secretarial auditor

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

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

On behalf of the Board of Directors

Rahul Bajaj

Chairman

Pune: 18 May 2017