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Bajaj Electricals Ltd.

BSE: 500031 Sector: Consumer
BSE 00:00 | 19 Jul 523.75 -1.10






NSE 00:00 | 19 Jul 524.45 -0.70






OPEN 525.50
VOLUME 16361
52-Week high 706.35
52-Week low 294.50
P/E 45.42
Mkt Cap.(Rs cr) 5,350
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 525.50
CLOSE 524.85
VOLUME 16361
52-Week high 706.35
52-Week low 294.50
P/E 45.42
Mkt Cap.(Rs cr) 5,350
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Bajaj Electricals Ltd. (BAJAJELEC) - Director Report

Company director report

Dear Members

Your Directors are pleased to present the 78th Annual Report of the Company togetherwith the audited financial statements for the financial year ended 31 March 2017. ThisReport states compliance as per the requirement of the Companies Act 2013 ("theAct") the Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 ("Listing Regulations") and other rules &regulations as applicable to the Company.


The highlights of the Standalone Financial Results are as under:

(Amount: Rs in crore except for EPS)

Particulars FY 2016-17 FY 2015-16
Revenue from Operations & Other Income 4328.78 4670.54
Gross Profit before Finance Cost and Depreciation 278.35 312.33
Less: Finance Cost 80.44 108.08
Less: Depreciation 29.87 27.38
Profit/(Loss) before Taxes 168.04 176.87
Less: Provision for Tax expenses 60.38 66.52
Profit/(Loss) after Tax 107.66 110.35
Less : Other Comprehensive Income 2.29 2.25
Add: Balance in Profit & Loss Account 35.55 9.68
Balance available for appropriation 140.92 117.78
Amount transferred to General Reserves - 30.00
Earnings per share (?) Basic 10.65 10.94
Earnings per share (?) Diluted 10.63 10.92

The highlights of the Consolidated Financial Results are as under:

(Amount:Rs in cron 3 except for EPS)

Particulars FY 2016-17 FY 2015-16
Revenue from Operations & Other Income 4328.78 4670.54
Profit before Taxes 168.04 176.87
Profit/(Loss) from associates after Taxes (5.49) (2.54)
Profit/(Loss) before Taxes 162.55 174.33
Less: Provision for Taxation 60.38 66.52
Profit/(Loss) after Tax 102.17 107.81
Earnings per share (?) Basic 10.10 10.69
Earnings per share (?) Diluted 10.08 10.67

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


Your Directors are pleased to recommend a dividend of 140% (? 2.80) on 101290176 equityshares of' 2 each for the financial year 2016-17. The amount of dividend and the taxthereon aggregate to ' 34.13 crore (previous year ' 34.02 crore). The dividend on equityshares subject

to the approval of the Members at the Annual General Meeting on 3 August 2017 will bepaid on or after 10 August 2017 to the members whose names appear in the Register ofMembers as of the close of business hours on 28 July 2017; in respect of shares held indematerialised form it will be paid to members whose names are furnished

by National Securities Depository Limited and Central Depository Services (India)Limited as beneficial owners as ofthe close of business hours on that date.

Shares that may be allotted on exercise of stock options granted under the EmployeeStock Option Scheme before the book closure date for payment of dividend will rank pari-passu with the existing shares and be entitled to receive the dividend.

Dividend Distribution Policy

As per Regulation 43A of the Listing Regulations the top 500 listed companies shallformulate a dividend distribution policy. Accordingly the policy was adopted to set outthe parameters and circumstances that will be taken into account by the Board indetermining the distribution of dividend to its shareholders and/or for retaining profitsearned by the Company. The policy is available on the Company's


The paid-up equity share capital of the Company as on 31 March 2017 was ' 20.26 crore.There was no public issue rights issue bonus issue preferential issue etc. made by theCompany during the year. The Company has not issued shares with differential votingrights. The increase in number of shares is due to the issue of 341200 equity shares of '2 each to the employees upon their exercise of stock options. These shares were includedon weighted average basis for the computation of EPS.

No disclosure is required under Section 67(3)(c) of the Act in respect ofvoting rightsnot exercised directly by the employees of the Company as the provisions of the saidSection are not applicable.

The equity shares of the Company continue to remain listed on BSE Limited and NationalStock Exchange of India Limited. The stipulated listing fees for FY 2017-18 have been paidto both the stock exchanges.


The Company's cash and cash equivalent as at 31 March 2017 was ' 25.08 crore. TheCompany continues to focus on judicious management of its working capital. Receivablesinventories and other working capital parameters were kept under strict check throughcontinuous monitoring.


The below table depicts Company's credit ratings profile in a nutshell:

Instrument Rating Agency Rating Outlook
Non-Convertible Debentures (NCDs) ICRA Limited [ICRA]A+ (pronounced ICRA A plus) Stable
Commercial Paper (CP) ICRA Limited [ICRA]A1 + (pronounced ICRA A one plus)
Line of Credit (LOC) ICRA Limited Short Term Rating - [ICRA] A1 (pronounced ICRAAone) Positive
Long Term Rating - [ICRA] A (pronounced ICRA A)


The Company has not accepted deposits from the public falling within the ambit ofSection 73 of the Act and the Rules framed thereunder.


Details of Loans Guarantees and Investments covered under the provisions of Section186 of the Act are given in the notes to the financial statements annexed to the Report.


During FY 2013-14 the Company had issued 1000 Secured Rated Listed RedeemableNon-Convertible Debentures (NCDs) of ' 1000000/- each aggregating to ' 100.00 crore onprivate placement basis in two series Series - 1 of 400 NCDs & Series - 2 of 600NCDs which were listed on National Stock Exchange of India Limited (NSE) under ISIN‘INE193E07014' and ‘INE193E07022' respectively. The said Series - 1 and Series- 2 NCDs were redeemed on their respective due dates for redemption on 28 April 2016 and24 April 2017.

Axis Trustee Services Limited was the Debenture Trustee for the debentureholders whosedetails are provided in the Corporate Governance section of the Annual

Report. Further pursuant to Regulation 53 of the Listing Regulations disclosures incompliance with the Accounting Standard on "Related Party Disclosures" are givenin the notes to the financial statements annexed to the Report.


The Company implemented the Employees Stock Option Scheme ("Scheme") inaccordance with the Securities and Exchange Board of India (Share Based Employee Benefits)Regulations 2014 (‘the SEBI SBEB Regulations') as a measure to reward and motivateemployees as also to attract and retain the talent.

Disclosures pertaining to the Scheme of the Company pursuant to the SEBI SBEBRegulations are placed on the Company's website: . The details of optionsvested exercised and cancelled are provided in the notes to the standalone financialstatements. No employee has been issued stock options during the year equal to orexceeding 1% of the issued capital of the Company at the time of grant.

During the year under review 507500 stock options were granted to the eligibleemployees at the market price prevailing on National Stock Exchange of India Limited (NSE)as on the date of their grant. The issuance of equity shares pursuant to exercise of stockoptions granted under Growth Plan does not affect the profit and loss account of theCompany as the exercise is made at the market price prevailing as on the date of thegrant plus taxes as applicable.

The Company has received a certificate from the Auditors of the Company that the Schemehas been implemented in accordance with the SEBI SBEB Regulations and the resolutionspassed by the shareholders. The certificate would be placed at the Annual General Meetingfor the inspection by the Members.


The operations of the Company's GLS bulbs and Tube lights manufacturing unit located atKosi Uttar Pradesh which originally belonged to a sick company registered with BIFR andpurchased by the Company in an open bid invited by the Operating Agency for BIFR in theyear 2012-13 were closed during the year under review as the efforts put in by theCompany's management to improve its operations were not yielding the desired results andthere was not even a remote chance of improvement therein on account of the followingfactors:

a. Energy saving LED based lighting products having a very long life have gainedpopularity in a very

short time and the reducing prices of LED products has resulted in demand for GLS bulbscoming down continuously;

b. GLS bulbs are being phased out;

c. Under-utilisation of manufacturing capacity across the industry so is with theUnit;

d. Higher cost of production of FTLs in comparison with competitors and the market ofthe same is also falling;

f. Non-availability of and difficulty in retention of skilled manpower because oflosses made by the Unit;

g. Implementation of E-Waste (Management) Rules 2016 requires technology up-gradationand calls for major investment in order to comply with stricter norms.


During FY 2015-16 the Board of Directors of the Company ("Company'VTransfereeCompany") had approved the proposal for demerger of manufacturing business of HindLamps Limited ("HLL'TTransferor Company") into the Company pursuant to a Schemeof Arrangement ("Scheme") as they were of the view that the transfer and vestingof the Manufacturing Business of the Demerged Company with the Company will enable boththe companies to achieve and fulfill their objectives more efficiently and economicallyand the same is also in the interest of all the stakeholders. The Company's managementexpertise and quality systems & controls will enhance the performance of thisbusiness.

Since the Transferor Company was declared as a sick industrial company within themeaning of Section 3(1)(o) of the Sick Industrial Companies (Special Provisions) Act 1985("SICA") by the Board for Industrial and Financial Reconstruction("BIFR") the said Scheme was filed with BIFR for its approval by the TransferorCompany. However subsequently the Central Government of India vide Notification No.S.O. 3568 (E) dated 25 November 2016 brought the provisions of the SICA Repeal Act intoforce with effect from 1 December 2016 and SICA was repealed.

Section 4(b) of the SICA Repeal Act (as amended by Section 252 of the Insolvency andBankruptcy Code 2016) provides that any proceeding of whatever nature pending before theBIFR shall stand abated. Accordingly Case No.09/2002 filed by the Company stood abated ason 1 December 2016. However the proviso to Section 4(b) entitles the Company to make areference to the National

Company Law Tribunal ("NCLT") under the provisions of the Insolvency andBankruptcy Code 2016 provided that such reference is made within the time periodprescribed therein.

Accordingly both the Transferor Company and Transferee Company are in the process offiling petitions before the NCLT Allahabad Bench and Mumbai Bench having jurisdictionsover the respective companies for approval of Scheme under the applicable provisions ofthe Act read with the Companies (Compromises Arrangements and Amalgamations) Rules 2016.

The Scheme is subject to the approval of the shareholders in the Court/NCLT convenedmeeting sanction of the Court/ NCLT and such other approvals as may be applicable.


Detailed information on the operations of the different business segments of theCompany and details on the state-of-affairs of the Company are covered in the ManagementDiscussion and Analysis Report.


The Company has in place well defined and adequate internal controls commensurate withthe size of the Company and the scale and complexity of its operations. The Company hasdocumented its internal financial controls considering the essential components of variouscritical processes physical and operational which includes its design implementationand maintenance along with periodical internal review of operational effectiveness andsustenance. This ensures orderly and efficient conduct of its business includingadherence to the Company's policies safeguarding of its assets prevention of errorsaccuracy and completeness of the accounting records and the timely preparation ofreliablefinancial information.

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



The financial statements up to year ended 31 March

2016 were prepared in accordance with the Accounting Standards notified under Companies(Accounting Standard) Rules 2006 (as amended) and other relevant provisions of the Act.

The annexed financial statements comply in all material aspects with Indian AccountingStandards (Ind AS) notified under Section 133 of the Act [Companies (Indian

Accounting Standards) Rules 2015] and other relevant provisions of the Act.

These financial statements are the first financial statements of the Company under IndAS.

Detailed information on the impact of the transition from previous GAAP to Ind AS isprovided in the annexed financial statements.


In accordance with the provisions of Section 135 read with Schedule VII of the Act theCompany as a part of its Corporate Social Responsibility ("CSR") initiativehas adopted a CSR Policy outlining various CSR activities to be undertaken by the Companyin the area of health water sanitation promoting education skill developmentempowerment of women and genderequality and promotion of art & culture etc. The CSRpolicy of the Company is available on the Company's website www.baiaielectricals. comunder ‘Investors' tab.

During the year under review the Company has spent ' 108.48 lakh on CSR activities.The Board has constituted a CSR Committee inter-alia to recommend on the CSRprojects/programmes the amount on each CSR activity and to monitor such CSR activitiesbeing undertaken by the Company.

The report on CSR activities as required under the Companies (Corporate SocialResponsibility Policy) Rules 2014 is set out as Annexure ‘A' to this Report.


The relations with the employees of the Company have continued to remain cordial.


The Company is an equal opportunity employer and consciously strives to build a workculture that promotes dignity of all employees. As required under the provisions of SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013 andRules framed thereunder the Company has implemented a policy on Prevention of SexualHarassment of Women at Workplace. An Internal Complaints Committee has been set up toreceive complaints investigate the matter and report to the management for redressal ofcomplaints of sexual harassment.

During the year no complaint was received by the committee.


The Company believes to conduct its affairs in a fair and transparent manner byadopting highest standards of professionalism honesty integrity and ethical behaviour.The Company is committed to developing a culture where it is safe for all employees toraise concerns about any wrongful conduct.

The Board of Directors has approved the vigil mechanism/ whistle blower policy of theCompany which provides a framework to promote a responsible and secure whistle blowing. Itprotects employees wishing to raise a concern about serious irregularities within theCompany. It provides for a vigil mechanism to channelise reporting of suchinstances/complaints/grievances to ensure proper governance. The Audit Committee overseesthe vigil mechanism. No employee has been denied access to the Audit Committee. The policyhas been appropriately communicated to the employees within the organisation and posted onthe Company's website: www.baiaielectricals .com.


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 report on ManagementDiscussion and Analysis.


The two largest denomination notes ' 500 and ' 1000 ("Specified BankNotes") together comprising 86 percent of all the cash in circulation weredemonetised with immediate effect ceasing to be legal tender except for a few specifiedpurposes on 8 November 2016.

Demonetisation has had short-term costs in the form of slow growth but holds thepotential for long-term benefits. Long-term benefits include reduced corruption greaterdigitalisation of the economy increased flows of financial savings and greaterformalisation of the economy all of which could eventually lead to higher GDP growthbetter tax compliance and greater tax revenues.

The report on Specified Bank Notes (SBNs) held and transacted by the Company during theperiod from 8 November 2016 to 30 December 2016 in the format specified by the Ministryof Corporate Affairs vide its notification dated 30 March 2017 is provided in the notesto the financial statements:



• Appointment of Directors

In order to strengthen the Board during the year under review the Board of Directorshad appointed Shri Anuj Poddar and Shri Siddharth Mehta as Additional Directors of theCompany with effect from 30 May 2016 and recommended their appointment as IndependentDirectors for the approval ofthe Members. The Members at the Annual General Meeting heldon 4 August 2016 approved their appointment as Independent Directors of the Company for aterm of five (5) years effective 30 May 2016.

As on the date of this report the Company's Board comprises of ten (10) Directors outof which eight (8) are Non-Executive Directors (NEDs) including one (1) Woman Director.NEDs represent 80% ofthe total strength. Further out of the said eight (8) NEDs seven(7) are independent directors representing 70% ofthe total strength ofthe Board.

• Director coming up for retirement by rotation

In accordance with the provisions of the Act and the Articles of Association of theCompany Shri Madhur Bajaj retires by rotation and being eligible offers his candidaturefor re-appointment as a Director. The information as required to be disclosed underRegulation 36 of the Listing Regulations in case of reappointment of the director isprovided in the notice of the ensuing Annual General Meeting.

• Independent Directors

The Independent Directors hold office for a fixed term offive years and are not liableto retire by rotation.

In accordance with Section 149(7) of the Act each Independent Director has given awritten declaration to the Company confirming that he/she meets the criteria ofindependence as mentioned under Section 149(6) of the Act and Regulation 16(1)(b) of theListing Regulations.

• Meetings

A calendar of meetings is prepared and circulated in

advance to the Directors.

Board Meetings:

During the year six (6) Board Meetings were convened and held the details of whichare given in the Corporate Governance Report. The intervening gap between the meetings waswithin the period prescribed under the Act and Listing Regulations.

Audit Committee:

The Audit Committee comprises of three independent directors as its Members. During theyear five (5) Audit Committee Meetings were convened and held the details of which aregiven in the Corporate Governance Report. The intervening gap between the meetings waswithin the period prescribed under the Act and Listing Regulations.

CSR Committee:

The CSR Committee comprises of three Members of which one is the Independent Director.The Committee met twice during the reporting period. Details of the Committee and meetingsare given in the Corporate Governance Report.

• Board Effectiveness

Familiarisation Programme for the Independent Directors:

In compliance with the requirement of Listing Regulations the Company has put in placea familiarisation programme for the independent directors to familiarise them with theirrole rights and responsibility as directors the working of the Company nature of theindustry in which the Company operates business model etc. The details of thefamiliarisation programme are explained in the Corporate Governance Report. The saiddetails are also available on the website of the Company www.

Evaluation of the performance of the Board its Committees and the Directors:

Pursuant to the provisions of the Act and the Listing Regulations the Board hascarried out the annual performance evaluation of its own performance the Directorsindividually as well as the evaluation of the working of its Committees. The criteriaapplied in the evaluation process are explained in the Corporate Governance Report.

Key Managerial Personnel

The following persons have been designated as Key Managerial Personnel of the Companypursuant to Sections 2(51) and 203 of the Act read with the Rules framed thereunder:

a. Shekhar Bajaj Chairman & Managing Director and CEO;

b. Anant Purandare President & Chief Financial Officer; and

c. Mangesh Patil EVP - Legal & Taxation and Company Secretary and ComplianceOfficer.

None of the Key Managerial Personnel of the Company have resigned during the year underreview.

Policy on Remuneration of Directors Key Managerial Personnel and Senior ManagerialPersonnel & Criteria for matters under Section 178 of the Act

Information regarding Policy on Remuneration of Directors Key Managerial Personnel andSenior Managerial Personnel & Criteria for determining qualifications positiveattributes independence of a director and other matters provided under sub-section (3) ofSection 178 of the Act are provided in the section of Corporate Governance Report.

Criteria for selection of candidates for appointment as Directors Key ManagerialPersonnel and Senior Managerial Personnel

Your Company has laid down a well-defined criteria for the selection of candidates forappointment as Directors Key Managerial Personnel and Senior Managerial Personnel.


All transactions with Related Parties are placed before the Audit Committee as also theBoard for approval. Prior omnibus approval of the Audit Committee is obtained on an annualbasis for the transactions which are of a foreseen and repetitive nature.

The transactions entered into pursuant to the omnibus approval so granted are auditedand a statement giving details of all related party transactions is placed before theAudit Committee and the Board of Directors for their approval on a quarterly and on annualbasis.

The Policy on Related Party Transactions as approved by the Board is available on theCompany's website: www.

There were no materially significant related party transactions i.e. transactionsexceeding ten percent of the annual turnover of the Company as per the last auditedfinancial statements entered into by the Company with Promoters Directors KeyManagerial Personnel or other designated persons which may have a potential conflict withthe interest of the Company at large. Thus the disclosure in ‘Form AOC-2' is notapplicable.

None of the Directors or Key Managerial Personnel has any pecuniary relationships ortransactions vis-a-vis the Company.

The details of related party transactions are given in the notes to the financialstatements.


Pursuant to the provisions of Section 124 of the Act relevant amounts which remainedunpaid or unclaimed for a period of seven (7) years have been transferred by the Companyto the Investor Education and Protection Fund (IEPF).

The Company has uploaded the details of unpaid and unclaimed amounts lying with theCompany as on 4 August 2016 (date oflast Annual General Meeting) on the website of theCompany . as alsoon the website of the Ministry of Corporate Affairs.

Further Section 124(6) of the Act requires that all shares in respect of whichdividend has not been paid or claimed for seven consecutive years or more. shall also betransferred to IEPF. Ministry of Corporate Affairs vide its notifications dated 5September 2016 and 28 February 2017 has notified the IEPF Authority (Accounting AuditTransfer and Refund) Rules 2016 and the IEPF Authority (Accounting Audit Transfer andRefund) Amendment Rules 2017 ("Rules") containing inter alia the provisionsfor transfer of such shares to "IEPF Suspense Account".

Accordingly. in due compliance of the provisions of Rule 6(3) of the aforesaid Rulesthe Company sent individual letters through Speed Post to such shareholders in respect ofwhom dividend for a consecutive period of seven (7) years had remained unpaid and publicnotice was released in newspapers on 3 December 2016. Subsequently on amendment of thesaid Rules vide MCA notification dated 28 February 2017 another public notice wasreleased in newspapers on 6 May 2017 giving such shareholders a fresh opportunity to claimthe unpaid dividends. up to such date of transfer. The Company is accordingly in theprocess of taking appropriate steps with regard to transfer of such shares in accordancewith the amended Rules. in line with the necessary guidelines being issued by MCA in thisregard.

As provided under these Rules. the shareholder shall be allowed to claim such unpaiddividends and shares transferred to IEPF by following the required procedure. The saidRules have been made available under the ‘Investor' section of the Company's website:www.baiaielectricals. com


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.


There are no significant and material orders passed by the Regulators or Courts orTribunals which may impact the going concern status of the Company and its futureoperations.


The Company has no subsidiary as on 31 March 2017.

Details of associate companies/joint ventures of the Company:

Name of the Company % of shareholding of the Company as on 31 March 2017 Status
Starlite Lighting Limited (SLL) 19.00 Joint Venture
Hind Lamps Limited (HLL) 19.00 Associate

For the purpose of Section 2(6) of the Act "associate company" in relationtoanothercompany means a company in which that other company has a significant influencebut which is not a subsidiary company of the company having such influence and includes ajoint venture company. For the purposes of this clause "significant influence"means control of at least twenty percent of total share capital. or of business decisionsunder an agreement. Though the holding of the Company in the equity share capital of SLLand HLL is less than 20 percent the Company is in a position to influence the operatingand financial policies of these companies and hence the financial statements of SLL andHLL are consolidated with the Company's financial statements considering them as JointVenture and Associate of the Company respectively.

Starlite Lighting Limited

The gross revenue of SLL for FY 2016-17 stood at ' 126.82 crore (Previous Year: '164.86 crore). Loss for the year was at ' 21.40 crore (Previous Year Loss: ' 5.73 crore).

Hind Lamps Limited

The gross revenue of HLLfor FY 2016-17 stood at' 44.16 crore (Previous Year: ' 53.32crore). Loss for the yearwas at ' 8.05 crore (Previous Year Loss: ' 7.04 crore).


The financial results of the Company for the year ended 31 March 2017 have beendisclosed as per Schedule III to the Act.


The summary of the key financials of the Company's associate and joint venture (FormAOC-1) is included in this Annual Report. The copies of audited financial statements ofthe said companies will be made available to the Members of the Company seeking suchinformation at any point of time. The audited financial statements of the said companieswill be kept for inspection by any Member of the Company at its registered office duringbusiness hours. The same are placed on the Company's website: .


Statutory Auditors

The tenure of appointment of M/s. Dalai & Shah LLP Chartered Accountants Mumbai(Firm Registration No.: 102021W / W100110) the existing Statutory Auditors will expireat the conclusion of the 78th AGM as per the provisions of Section 139(2) of the Act andthe Rules framed thereunder.

The Board of Directors of the Company at its meeting held on 9 February 2017 hassubject to the approval of the Members at the ensuing AGM approved the appointment ofM/s. SRBC & Co. LLP Chartered Accountants (Firm Registration No.324982E / E300003) asthe new Statutory Auditors of the Company in place of M/s. Dalai & Shah LLP for a termof five (5) years commencing from the conclusion of the 78th AGM till the conclusion ofthe 83rd AGM subject to ratification of their appointment by the Members annually. M/s.SRBC & Co. LLP have confirmed their eligibility under Section 141 of the Act and theRules framed thereunder for appointment as Auditors of the Company. As required underRegulation 33 of the Listing Regulations the new auditors have also confirmed that theyhold a valid certificate issued by the Peer Review Board of the Institute of CharteredAccountants of India.

The notes on financial statements referred to in the Auditors' Report areself-explanatory and do not call for any further comments.

The Auditors' Report on standalone financial statements does not contain anyqualification reservation or adverse remark or disclaimer.

Explanations/comments bv the Board on qualification reservation or adverse remark ordisclaimer made bv the Auditors in their Report on consolidated financial statements:

The auditors of Hind Lamps Limited (HLL) the associate of the Company have qualifiedtheir opinion regarding recognition of deferred tax assets aggregating to ' 9.21 crore asat 31 March 2017 in absence of convincing evidence of availability of adequate futuretaxable profits to demonstrate virtual certainty of reversal of such deferred tax assets.The Company holds 19% interest in HLL and as such the proportionate impact of qualifiedopinion on the Company is only ' 1.74 crore which on comparison with the total assets ofthe Company at standalone and consolidated level as at 31 March 2017 is 0.06%. Furtherthe proportionate impact of this qualified opinion on comparison with the profit beforetax for the year ended 31 March 2017 is 1.04% at standalone level and 1.08% atconsolidated level. Hence the Company assesses the impact ofthe qualified opinion asinsignificant.

Cost Auditors

Pursuant to Section 148 of the Act read with the Rules made thereunder the cost auditrecords maintained by the Company in respect of its manufacturing activities are requiredto be audited. The Board of Directors has on the recommendation of theAudit Committeeappointed M/s. R. Nanabhoy & Co. Cost Accountants (Firm Registration No.000010) toaudit the cost accounts of the Company for FY 2017-18. As required under the Act theremuneration payable to the Cost Auditors is required to be placed before the Members inthe general meeting for their ratification. Accordingly a resolution seeking Membersratification for the remuneration payable to M/s. R. Nanabhoy & Co. CostAccountantsis included at item no.5 ofthe Notice convening the AGM.

The particulars of the Cost Auditors and cost audit conducted by them for FY 2015-16are furnished below:

ICWA membership no. 7464
Registration No. of Firm 000010
Address Jer Mansion 70 August Kranti Marg Mumbai 400 036
Cost Audit Report FY 2015-16
Due date of filing of Report 30 September 2016
Actual date of filing of Report 30 August 2016

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 the Company has appointed M/s. AnantB. Khamankar & Co. Practicing Company Secretaries (Membership No.: FCS 3198; CPNo.:1860) to undertake the Secretarial Audit of the Company.

The Company has undertaken Secretarial Audit for the financial year 2016-17 whichinter-alia includes audit of compliance with the Act and the Rules made thereunderListing Regulations and other applicable Regulations prescribed by the Securities andExchange Board of India and Foreign Exchange Management Act 1999 and SecretarialStandards issued by the Institute of Company Secretaries of India. The report of theSecretarial Auditors for FY 2016-17 is annexed to this Report as Annexure ‘B'. TheSecretarial Audit Report does not contain any qualification reservation or adverse remarkor disclaimer made by the Secretarial Auditors.


Your Company is in compliance with the corporate governance requirements mentioned inthe Listing Regulations. Pursuant to Regulation 34 of the Listing Regulations a separatereport on corporate governance has been included in this Annual Report together with acertificate from the auditors of the Company regarding compliance of conditions ofcorporate governance.

All 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 Chairman& Managing Director and CEO of the Company is contained in this Annual Report.

The CEO and CFO have certified to the Board with regard to the financial statements andother matters as required under Regulation 17(8) of the Listing Regulations and the saidcertificate is contained in this Annual Report.


The Management Discussion and Analysis Report on the operations of the Company asrequired under the Listing Regulations is provided in a separate section and forms anintegral part of this Report.


Listing Regulations mandates inclusion of the Business Responsibility Report (BRR) as apart of the Annual Report for top 500 listed entities based on market capitalisation.

Since the Company is one of the top 500 listed entities the Company has presented itsBRR for the financial year 2016-17 which is part ofthis Annual Report.


The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134(3)(m) of the Act read with Rule 8 of theCompanies (Accounts) Rules 2014 is annexed herewith as Annexure ‘C' to this Report.


The extract of Annual Return in Form MGT-9 as required under sub-section (3) of Section92 of the Act read with Companies (Management & Administration) Rules 2014 isannexed herewith as Annexure ‘D' to this Report.


Disclosure pertaining to the remuneration and other details as required under Section197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014 is annexed herewith as Annexure ‘E' to this Report.

The information on employees who were in receipt of remuneration of not less than ' 60lakh during the year or ' 5 lakh per month during any part of the year forms part of thisReport and will be provided to any Member on a written request to the Company. In terms ofSection 136 of the Act the Report and Accounts are being sent to the Members and othersentitled thereto excluding the information on employees' particulars which is availablefor inspection by the Members at the Registered Office of the Company during businesshours on working days upto the date of the ensuing AGM. If any Member is interested ininspecting the same such Member may write to the Company Secretary in advance.


The directors also present the audited consolidated financial statements incorporatingthe duly audited financial statements of the associate and joint venture prepared incompliance with the Act applicable Accounting Standards and the Listing Agreement asprescribed by SEBI.

A separate statement containing the salient features of the associate and joint venturein the prescribed ‘Form AOC-1' is annexed herewith as Annexure ‘F' to thisReport.


Pursuant to Section 134 of the Act your Directors confirm that:

(a) in the preparation of the annual accounts for the year ended 31 March 2017 theapplicable accounting standards have been followed and that no material departures havebeen made from the same;

(b) the Directors have 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 as at 31 March 2017 and of the profits ofthe Company for the year ended on that date;

(c) the Directors have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and other irregularities;

(d) the annual accounts of the Company have been prepared on a ‘going concern'basis;

(e) proper internal financial controls were in place and that the financial controlswere adequate and were operating effectively; and

(f) systems to ensure compliance with the provisions of all applicable laws were inplace and were adequate and operating effectively.


Your Directors take this opportunity to thank the Central and State GovernmentDepartments organisations and agencies for their continued support and co-operation. TheDirectors are also thankful to all valuable stakeholders viz. customers vendorssuppliers banks financial institutions and other business associates for their continuedcooperation and excellent support provided to the Company during the year. The Directorsacknowledge the unstinted commitment and valuable contribution of all employees of theCompany.

Your Directors also appreciate and value the trust reposed in them by Members of theCompany.


The following annexures form part of this report:

a. Annual Report on Corporate Social Responsibility - Annexure ‘A';

b. Secretarial Audit Report in ‘Form MR-3'-Annexure ‘B';

c. Conservation of Energy Technology Absorption and Foreign Exchange Earnings andOutgo - Annexure


d. Extract of Annual Return in Form MGT-9 - Annexure


e. Information under Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014-Annexure ‘E' and

f. Statement containing salient features of the financial statement ofsubsidiaries/associate companies/joint ventures in ‘Form AOC-1' -Annexure ‘F'.

For and on behalf of the Board of Directors

Mangesh Patil Anant Bajaj Shekhar Bajaj
EVP-Legal & Taxation and Joint Managing Director Chairman & Managing Director
Company Secretary DIN:00089460 DIN:00089358
FCS No.: 4752