DIRECTORS' REPORT Your Directors have pleasure in presenting their Tenth Annual Report and the audited statement of accounts for the Financial Year ended March 31, 2016. Registered Office The details of the present address of the Registered Office are given below: Bajaj Corp Limited Old Station Road Sevashram Chouraha Udaipur 313 001 Rajasthan Dividend The Board of Directors of the Company had declared an Interim Dividend of 1150% (i.e. Rs.11.50 per share on Equity Shares of the face value of Rs. 1/- each) for the Financial Year ended March 31, 2016. Total outgo on the Interim Dividend was Rs. 20,415.64 Lacs (including Dividend Tax of Rs. 3,453.14 Lacs as against Rs. 20,354.00 Lacs (including Dividend Tax of Rs. 3,391.50 Lacs) in the previous year. The above outgo constitutes a payout ratio of 103.16% of annual profits as against 117.44% in the previous year. The Board has not proposed any Final Dividend and accordingly, the Interim Dividend paid during the year shall be treated as Final Dividend for the Financial Year ended March 31, 2016. Share Capital The paid up Equity Share Capital of the Company as on March 31, 2016 was Rs. 1,475.00 Lacs. There was no change in the Company's Share Capital during the year under review. Particulars of Loans, Guarantees and Investments Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the standalone financial statement (Please refer to Note 7, 31 and 32 to the standalone financial statement). Management Discussion and Analysis The Management Discussion and Analysis Report presented in a separate section forms part of the Board's Report. Corporate Social Responsibility (CSR) Initiatives Pursuant to the provisions of Section 135 of the Companies Act, 2013, the Companies (Corporate Social Responsibility) Rules, 2014 and the various notifications/ circulars issued by the Ministry of Corporate Affairs, the Company has contributed an amount of approximately Rs. 4.12 Crore towards the corpus of Kamalnayan Jamnalal Bajaj Foundation (KJBF) (the implementing agency engaged in activities specified in Schedule VII of the Companies Act, 2013). Additional disclosures along with the Report on CSR Activities are given in Annexure-1 to this Report. The CSR policy adopted by the Company is available on the Company's website www.bajajcorp.com Business Risk Management The Company, like any other enterprise, is exposed to business risk which can be internal risks as well as external risks. One of the key risks faced by the Company in today's scenario is the wide and frequent fluctuations in the prices of its raw material. Any further increase in prices of raw materials could create a strain on the operating margins of the Company. Inflationary tendencies in the economy and deterioration of macroeconomic indicators can impact the spending power of the consumer because of which down trading from branded products to non-branded can occur which can affect the operating performance of the Company. The Company operates in the highly competitive FMCG market with competitors who may have better ability to spend more aggressively on advertising and marketing and more flexibility to respond to changing business and economic conditions. An increase in the amount of competition that we face could have a material adverse effect on our market share and sales. Any unexpected changes in regulatory framework pertaining to fiscal benefits and other related issues can affect our operations and profitability However, the Company is well aware of the above risks and as part of business strategy has put in a mechanism to ensure that they are mitigated with timely action. The Company has a robust Business Risk Management (BRM) framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company's competitive advantage. The details of the Risk Management Policy are available on the Company's website www.bajajcorp.com In the opinion of the Board of Directors, none of the aforementioned risks affect and/or threaten the existence of the Company. Policies Material Subsidiary During the year ended March 31, 2016, the Company does not have any material listed/unlisted subsidiary companies as defined in the erstwhile Clause 49 of the Listing Agreement and Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations). The details of the policy on determining material unlisted subsidiary of the Company is available on <http://www.bajajcorp.com/> images/policy/policy_material_subsidiary.pdf. Vigil Mechanism The Board of Directors of Bajaj Corp Limited are committed to maintain the highest standard of honesty, openness and accountability and recognize that employees have important role to play in achieving the goal. As a public company, the integrity of the financial matters of the Company and the accuracy of financial information is paramount. The stakeholders of the Company and the financial markets rely on this information to make decisions. For these reasons, the Company must maintain workplace where it can retain and treat all complaints concerning questionable accounting practices, internal accounting controls or auditing matters or concerning the reporting of fraudulent financial information to our shareholders, the Government or the financial markets. The employees should be able to raise these free of any discrimination, retaliation or harassment. Pursuant to the Policy, employees are encouraged to report questionable accounting practices to Chairman of the Audit Committee through email or by correspondence through post. Further details are available on the company's website www.bajajcorp.com Related Party Transactions Policy on dealing with Related Party Transactions as approved by the Board is available on <http://www>. bajajcorp.com/images/policy/policy_related_party_ transaction.pdf. Subsidiary Companies During the year under review, no company became/ ceased to be a subsidiary/associate/joint venture of the Company. As on March 31, 2016, the Company had the following wholly owned subsidiaries, which are presently unlisted, namely: • Uptown Properties and Leasing Private Limited • Bajaj Bangladesh Limited • Bajaj Corp International (FZE) Pursuant to the provisions of Section 129 of the Companies Act, 2013 and the Companies (Accounts) Rules, 2014, the Company has attached along with the financial statements, a separate statement containing the salient features of the financial statements of its subsidiary companies in the manner prescribed under the Companies Act, 2013 and Rules framed there under and hence not repeated here for the sake of brevity. In accordance with Section 136 of the Companies Act, 2013, the audited financial statements, including the consolidated financial statements and related information of the Company and audited accounts of each of its subsidiaries, are available on Company's website www.bajajcorp.com These documents will also be available for inspection during working hours at the Registered Office of the Company Subsidiaries Operations Uptown Properties And Leasing Private Limited During the Financial Year ended March 31, 2016, the net losses of Uptown were Rs. 102.50 Lacs as against net losses of Rs. 105.43 Lacs. There were no business activities during the Financial Year ended March 31, 2016. Bajaj Bangladesh Limited Bajaj Bangladesh Limited is carrying on their manufacturing activity through M/s. Ethical Toiletaries Limited (third party manufacturer) in Bangladesh. During the Financial Year ended March 31, 2016, the Company achieved a turnover of Rs.124.19 Lacs and net loss was Rs. 26.18 Lacs. Bajaj Corp International (FZE) Bajaj Corp International (FZE) was incorporated in December 23, 2013 to expand and to carry on the business of trading in skin and hair care products. During the Financial Year ended March 31, 2016, the Company achieved a turnover of Rs. 1,516.99 Lacs and net loss was Rs. 24.31 Lacs. Board of Directors Retirement by Rotation Pursuant to the provisions of Section 152 of the Companies Act, 2013, Mr. Kushagra Nayan Bajaj (DIN 00017575), Director, who retires by rotation and being eligible, offers himself for reappointment. Number of Meetings of the Board The Board met four times during the Financial Year 201516 namely, April 9, 2015, July 9, 2015, October 7, 2015 and January 7, 2016. Board Evaluation Pursuant to the provisions of the Companies Act, 2013 and Listing Regulations, the Board has carried out an annual evaluation of its own performance, performance of the Directors as well as the evaluation of the working of its Committees. The Nomination and Remuneration Committee has defined the evaluation criteria for the Board, its Committees and Directors. The Board's functioning was evaluated on various aspects, including inter alia degree of fulfilment of key responsibilities, Board structure, composition, establishment and delineation of responsibilities to various Committees, effectiveness of Board processes, information and functioning. Directors were evaluated on aspects such as attendance and contribution at Board/ Committee Meetings and guidance/support to the management outside Board/ Committee Meetings. In addition, the Chairman was also evaluated on key aspects of his role, including setting the strategic agenda of the Board, encouraging active engagement by all Board members. Areas on which the Committees of the Board were assessed included degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings. The performance evaluation of the Independent Directors was carried out by the entire Board, excluding the Director being evaluated. The performance evaluation of the Chairman and the Non Independent Directors was carried out by the Independent Directors who also reviewed the performance of the Board as a whole. The Nomination and Remuneration Committee also reviewed the performance of the Board, its Committees and of the Directors. The details of the policy on evaluation of Board's performance are available on the Company's website www.bajajcorp.com Familiarisation programme for Independent Directors Pursuant to the provisions of Regulation 25 of the Listing Regulations, the Company has formulated a programme for familiarising the Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company etc. through various initiatives. The details of the aforementioned programme is available on <http://www.bajajcorp.com/> images/policy/policy_familiarisation_programme_for_ independent_directors.pdf. Board Committees A. Corporate Social Responsibility (CSR) Committee The CSR Committee comprises of: 1. Mr. Gaurav Dalmia, Chairman of the Committee & Independent Director 2. Mr. Dilip Cherian, Independent Director 3. Mr. Sumit Malhotra, Managing Director B. Audit Committee The Audit Committee comprises of Independent Directors: 1. Mr. Gaurav Dalmia, Chairman of the Committee 2. Mr. Dilip Cherian 3. Mr. Aditya Vikram Ramesh Somani All the recommendations made by the Audit Committee were accepted by the Board. C. Nomination and Remuneration Committee The Nomination and Remuneration Committee comprises of Independent Directors: 1. Mr. Gaurav Dalmia, Chairman of the Committee 2. Mr. Dilip Cherian 3. Mr. Aditya Vikram Ramesh Somani Key Managerial Personnel During the year under review, Mr. Hitesh Kanani was appointed as Company Secretary and Compliance Officer of the Company in place of Mr. Sujoy Sircar, who resigned from the said position. Declaration by Independent Directors The Independent Directors of the Company have submitted the declaration of Independence as required under Section 149(7) of the Companies Act, 2013 confirming that they meet the criteria of independence under Section 149(6) of the Companies Act, 2013. Directors' Responsibility Statement To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013: a) that in the preparation of the annual financial statements for the year ended March 31, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b) that such accounting policies as mentioned in Note A-2 of the Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2016 and of the profit of the Company for the year ended on that date; c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) that the annual financial statements have been prepared on a going concern basis; I e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively; f) that systems to ensure compliance with the CD provisions of all applicable laws were in place and were adequate and operating effectively. i Related Party Transactions The Board of Directors has adopted a policy on Related Party Transactions. The objectives is to ensure proper approval, disclosure and reporting of transactions as applicable, between the Company and any of its related parties. All contracts or arrangements with related parties, entered into or modified during the Financial Year were at arm's length basis and in ordinary course of the Company's business. All such contracts or arrangements were entered into only with prior approval of the Audit Committee, except transactions which qualify under Omnibus approval as permitted under law. No material contract or arrangement with related parties were entered into during the year under review. Therefore, there is no requirement to report any transaction in Form No.AOC-2 in terms of Section 134 of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014. Further the Company has not entered into any transaction of a material nature with the Promoters, subsidiaries of Promoters, Directors, Key Managerial Personnel or their relatives etc. that may have potential conflict with the interests of the Company. Transaction with related parties are disclosed in the notes to accounts annexed to the financial statements. Internal Financial Controls The Company has an internal financial control system commensurate with the size and scale of its operations and the same has been operating effectively. The Internal Auditor evaluates the efficacy and adequacy of internal control system, accounting procedures and policies adopted by the Company for efficient conduct of its business, adherence to Company's policies, safeguarding of Company's assets, prevention and detection of frauds and errors and timely preparation of reliable financial information etc. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board. Significant and Material Orders Passed by the Regulators or Courts There are no significant material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operations. Material Changes and Commitments Affecting the Financial Position of the Company There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the Financial Year of the Company to which the financial statements relate and the date of this Report. Details Relating to Deposits, Covered Under Chapter V of the Companies Act, 2013 During the year under review, the Company has not accepted any deposit from the public. Auditors and Auditors' Report M/s. R. S. Dani & Company (Firm Registration No. 000243C), Chartered Accountants, existing Statutory Auditors will retire at the conclusion of the ensuing Tenth Annual General Meeting. Pursuant to the provisions of Section 139 of the Companies Act, 2013 and Companies (Audit and Auditors) Rules, 2014, M/s. R. S. Dani & Company are proposed to be re-appointed as Statutory Auditors, to hold office up-to the conclusion of the Eleventh Annual General Meeting. Pursuant to the provisions of Companies (Audit and Auditors) Rules, 2014, M/s. R. S. Dani & Company has certified the following: a) They are eligible for appointment and are not disqualified for appointment under the Companies Act, 2013, the Chartered Accountants Act, 1949 and Rules/Regulations made there under; b) The proposed appointment is as per the terms provided under the Companies Act, 2013; c) The proposed appointment is within the limits laid down by or under the authority of the Companies Act, 2013; d) There are no proceedings against the audit firm or any partner of the audit firm pending with respect to professional matters of conduct. The Board of Directors recommends to the Members, the appointment of M/s. R. S. Dani & Company, as Statutory Auditors of the Company. The observations and comments given in the report of the Auditors read together with notes to accounts are self-explanatory and hence do not call for any further explanation or comments under Section 134(f)(i) of the Companies Act, 2013. Secretarial Audit Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. Gupta Baul & Associates, a firm of Company Secretaries in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as Annexure 2 to this Report. Corporate Governance Your Company continue to imbibe and emulate the best corporate governance practices aimed at building trust among all stakeholders - shareholders, employees, customers, suppliers and others. Your Company believes that fairness, transparency, responsibility and accountability are the four key elements of corporate governance. The Corporate Governance Report presented in a separate section forms an integral part of this Annual Report. Consolidated Financial Statements Pursuant to the provisions of Section 129 of the Companies Act, 2013 and the Companies (Accounts) Rules, 2014, the consolidated financial statement of the Company and its subsidiaries have been prepared in the same form and manner as mandated by Schedule III to the Companies Act, 2013 and shall be laid before the forthcoming Tenth Annual General Meeting of the Company. The Consolidated Financial Statements of the Company have also been prepared in accordance with relevant Accounting Standards (AS) viz. AS 21, AS 23 and AS 27 issued by the Institute of Chartered Accountants of India form part of this Annual Report. The financial statements of the Company as well as its aforesaid subsidiaries are available on the Company's website: www.bajajcorp.com Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed herewith as Annexure 3 to this Report. Extract of Annual Return The Extract of Annual Return as provided under Section 92(3) of the Companies Act, 2013 and as prescribed in Form No. MGT-9 of the Companies (Management and Administration) Rules, 2014, is annexed herewith as Annexure 4 to this Annual Report. Disclosure Under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 The Company has in place an Anti Sexual Harassment Policy in line with the requirements of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Committee has been set up to redress the complaints received regarding sexual harassment at workplace. All employees including trainees are covered under this policy. The following is the summary of sexual harassment complaints received and disposed off during the current Financial Year. 1. Number of Complaints received: Nil 2. Number of Complaints disposed off: Nil Disclosures Pursuant to the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 1. The Disclosures pursuant to sub-rule (1) of Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are set out in Annexure 5 to this Report. 2. The Disclosures pursuant to sub-rule (2) of Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, in respect of employees of the Company are set out in the Annexure 6 to this Report. Remuneration Policy The Board has, on the recommendation of the Nomination & Remuneration Committee, framed a policy for selection and appointment of Directors, Senior Management and their remuneration. The details pertaining to criteria for determining qualifications, positive attributes and independence of a Director and remuneration policy have been provided in section of the attached Corporate Governance Report. The details of the remuneration policy of the Company is available on the Company's website www.bajajcorp.com Acknowledgements Industrial relations have been cordial at all the manufacturing units of the Company. The Directors express their appreciation for the sincere cooperation and assistance of Central and State Government authorities, bankers, customers, suppliers and business associates. Your Directors also wish to place on record their deep sense of appreciation for the committed services by your Company's employees. Your Directors acknowledge with gratitude, the encouragement and support extended by our valued shareholders. For and on behalf of the Board of Directors Kushagra Nayan Bajaj Chairman (DIN 00017575) PLACE :Mumbai, DATE : April 12, 2016 |