- CII National Energy Efficiency Circle Competition
- CII Lean Award – Jaipur Plant
- National Safety Award by Government of India in two categories : Accident free years and Lowest Average Frequency Rate – Jaipur Plant
- Confederation of Indian Industry: Business Practices Competition Award – Bengaluru Plant
- 3R Award 2018 - Nashik Plant
- Quality and OPPM awards from Toyota Kirloskar Motors
- Business Award from Maruti Suzuki India Limited
- Best New Product Development Award from Greaves
- PHD Annual Award 2017 for outstanding contribution to Social Welfare – Jaipur Plant
- Best Supplier Quality Award from General Motors, India – Nashik Plant
- KOEL Supplier Quality Improvement Contest Award – Bengaluru Plant
- Award for energy conservation and management by Government of Maharashtra – Nashik Plant
- Environmental Best Practice – Most Innovative Award Greenco. – Nashik Plant
- CSR Award for Quality Education by Government of Rajasthan – Jaipur Plant
- Finest India Skills and Talent Award 2017 – Bengaluru Plant
- The Machinist Super Shop Floor Award for Safety – Bengaluru Plant
- Supplier of the year award from SMLI
- Zero Defect Supplier for 2017 by Hyundai India – Nashik Plant
Directors’ Report including Management Discussion and Analysis
The Directors have pleasure in presenting the SIXTY SIXTH Annual Report together with the Audited Financial Statements for the Financial Year ended March 31, 2018.
1. Financial Results
The following are the financial highlights for the Financial Year 2017-18:
The Company does not propose to transfer any amount to its Reserves for the year under review.
Pursuant to the requirements of the regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has adopted a Dividend Distribution Policy. This Policy is uploaded on website of the Company and can be accessed at https://www.bosch.in/media/our_company/shareholder_information/2017_2/dividend_distribution_policy_2017.pdf. This policy is enclosed as Annexure ‘A’ to this Report.
In line with the Dividend Distribution Policy, the Board has recommended a Dividend of INR 100 per share for the Financial Year 2017-18, aggregating to Mio INR 3,679.4 including Dividend Distribution Tax. The dividend payout ratio is approximately 26.8 percent based on the profits as per Ind AS. The Dividend is subject to the approval of the shareholders at the forthcoming Annual General Meeting.
3. Management Discussion and Analysis
In order to avoid duplication between the Directors’ Report and Management Discussion and Analysis, a composite summary of the Company’s performance and its various business segments is given below:
3.1 Economic Scenario
3.1.1 Global Economy
The global economy grew by 3.8 percent in 2017. The pick-up in global growth has been broad-based with notable upside surprises in Europe and Asia. The global growth forecast for 2018 is expected to tick up to 3.9 percent. [Source: IMF]
Advanced economies are expected to continue their growth trajectory while emerging markets and developing economies are projected to show an improvement. Risks to the global economy arises from increasing protectionism as was witnessed by the tariffs introduced by US and China, rising commodity prices and increase in global interest rates.
3.1.2 Indian Economy
GDP growth for 2017-18 is projected at 6.6 percent against 7.1 percent in 2016-17 which is ascribed to the temporary slow-down induced by the rollout of structural reforms such as GST and demonetization. Subsequently, there has been a revival in the last few quarters and the quarterly GDP for the December quarter improved to 7.2 percent. This is based on a revival in demand post-demonetization. Strong infrastructure spending, pick-up in rural growth and supportive global factors are also other positive factors.
Continuing strength in economic indicators like IIP indicate that an economic recovery is in place. Recently, the GST collections of above the INR 1 Trillion mark in April also reinforced the positive trend. It is important that this momentum continues and improves into a consistent economic trend. Some of the concerns for the Indian economy are increase in prices of crude oil and other commodities putting pressure on the trade deficit and the challenge of financing the budget deficits of the central government as well as state governments.
Consumer inflation has been under control so far but recent movements in the fixed income market suggests that markets have concerns on this aspect. Going forward, monsoons in 2018 and political risk in the run-up to the general elections in 2019 will be the key factors affecting the Indian Economy.
3.2 Industry Structure and Development
Heavy Commercial Vehicles (HCVs) production posted a subdued growth of 3 percent due to changeover in the emission norms and GST impact.
The Light Commercial Vehicles (LCVs) market grew by 18 percent predominantly due to changeover in the emission norms, GST impact and increased thrust in agriculture based FMCG and e-commerce sectors.
In 2017-18, Passenger Car production grew by 6 percent on account of new launches and a favorable GST impact.
Three-wheelers production increased by 31 percent due to higher demand driven by abolition of permit system in Maharashtra and Karnataka and granting of new permits in Delhi.
The Tractor market grew by 14 percent driven by a good monsoon and positive farmer sentiments.
The Automotive Aftermarket industry grew by ~5.5 percent in 2017 driven predominantly by Passenger Cars and Tractor segments.
The Indian Power Tools market is expected to grow at 6 percent in 2018 over the previous year. This is in line with the estimated growth of the construction sector, which is its biggest customer. The market trend is shifting towards the mid-price category indicating that the users are steadily upgrading from hand tools to power tools. The Indian Professional Tools market is estimated to be around INR 16.9 billlion by value in year 2017 and is expected to grow at 5-6 percent over the next few years, year-on-year.
The Security technology market in India is evolving rapidly. The overall market is expected to grow at around 4 percent in 2018 over the previous year, on account of the increased awareness around Security, Safety and Communication topics and convergence of technology around Intellectual Property and Software Analytics. The growth in this space will be supported by growth in segments of Transportation and Government led Infrastructure projects. Additionally, the market is preparing itself to deal with security threats originating at different locations and levels.
The growth of the Indian packaging industry is heavily influenced by changing demographics such as growing urbanization and rising proportion of middle class consumers in the country. These changes drive the need for new packaging formats like different sizes, materials and material strength. Flexible packaging, the leading pack type in the Indian packaging industry, is expected to continue its growth. Over the last few years, the demand for flexible packaging, which is used extensively in food, household and cosmetics and toiletries industries, has been largely driven by innovative and convenient designs from manufacturers, thus making the packaging more appealing to consumers.
The solar energy sector in India experienced uncertainties during the year under review mainly due to changes in tax structure (GST) and increase in the price of imported solar modules. Despite these uncertainties, the cumulative solar installations in India crossed the 20 GW mark in January 2018. The momentum in the solar energy is expected to strengthen in the current fiscal year with continued investments in the sector by domestic and international players. It continues to be a focus sector for the government’s plans for sustainable economic growth.
3.3. Business and segment wise performance
The overall performance of the Company witnessed a growth of 12.8 percent. Mobility business (Automotive) posted a growth of 15.0 percent, while the Business beyond mobility (Others) grew by 0.3 percent. Domestic mobility business witnessed an increase of 14.8 percent, higher than the automotive market growth of 11 percent, mainly driven by Powertrain Solutions with the increased demand from LCV segment and demand of new generation products subsequent to the introduction of BS-IV emission norms effective April 01, 2017.
As the Company predominantly operates in manufacturing and trading of mobility solutions, this constituted 86.4 percent of total sales for the Financial Year 2017-18. The Business beyond mobility, comprising of Industrial Technology, Consumer Goods and Energy and Building Technology, had a share of 13.6 percent. Hence, the operating segment consists of “Mobility Solutions” (Automotive Products) and “Business beyond mobility” (Others).
3.3.1 Operating Segment
The Powertrain Solutions division was formed effective January 01, 2018. The former Diesel Systems and Gasoline Systems divisions were merged to form this division. The objective of the merger of the divisions is to develop comprehensive and flexible solutions in powertrain technology regardless of the energy source.
The Diesel Systems division (now a part of Powertrain Solutions) is a systems supplier of key powertrain components. It offers an extensive range of energy efficient, eco-friendly diesel injection systems for applications ranging from passenger cars and all kinds of commercial vehicles and agricultural equipments to large-scale industrial power-generation units. It focuses primarily on the common-rail system, which comprises of a high-pressure injection pump, the rail and various injectors.
The Diesel Systems business grew by 17.9 percent over the previous year. Higher sales volume of new generation Common Rail System (CRS) coupled with higher price of the said system due to nation-wide implementaion of BS-IV emission norms, with effect from April 01, 2017, resulted in this increase. The Diesel Systems business will continue to ride on new generation CRS in the majority of vehicle segments for future growth. The distributor pump injection system has seen a considerable reduction post implementation of BS-IV emission norms. The In-line pump system continues to be stable on account of demand from Tractor and Genset segments
Gasoline Systems division (now a part of Powertrain Solutions) registered a growth of 40.8 percent over the previous financial year. This growth is mainly due to growth in demand for 2-Wheeler products (Fuel System Maintenance, Injectors and Sensors), overall growth in the passenger car market and new launches having Gasoline Products manufactured by the Company.
During the year under review, the 2-Wheeler business acquired major customers which will secure its future business. The current year is vital for the division on account of key customer acquisition due to proposed BS-VI implementation in both 2-Wheeler and passenger car businesses.
The Automotive Aftermarket division (AA) offers a comprehensive range of spare parts for passenger cars, commercial vehicles and 2-Wheelers for the aftersales-market and repair solutions including diagnostic and repair-shop solutions. The product portfolio consists of Bosch manufactured products
like Fuel Injection Equipment and Spares, Spark Plug and Filter, as well as products and services like Battery, Lubricant and Lighting developed and manufactured by other manufacturers.
The Automotive Aftermarket division is the largest Independent Aftermarket (IAM) network in India. During the year under review, the Division de-grew by 0.5 percent due to liquidity constraint in secondary market post-demonetization and apprehensions due to GST roll out.
The division re-organized its IAM sales structure to address the specific needs of each vehicle segment and unlock growth potential, especially in the 2-Wheeler and passenger car segments. During the year under review, first ever “Order Pe Offer” campaign was completed in November 2017, reaching out to more than 10,000 retailers across India, to help in increasing the secondary sales.
Business beyond Mobility:
The Business beyond Mobility witnessed a muted growth of 0.3 percent. It was driven predominantly by exports which contributed to 16.8 percent of total business beyond mobility during the year under review as compared to 10.3 percent during the previous financial year.
The Packaging Technology Division is a provider of packaging solutions for the food and confectionery industries. The range includes individual machines, system solutions including secondary packaging and a comprehensive service portfolio.
Packaging Technology division witnessed a moderate growth of 6.7 percent. During the year under review, the division made progress in Horizontal Form, Fill and Seal (HFFS) product line and bagged orders primarily on the on-edge technology which ensures an optimal product control throughout the packaging line. In the confectionery (CC) product line, the Company has been designated as the global supplier for Bosch CC machines and the first such order to Japan will be executed during the current financial year.
The export sales increased by 70.8 percent over the previous financial year due to new System Solution projects with customers in Bangladesh.
The Power Tools business comprising of Electric tools, Accessories, measuring instruments and spare parts for Power Tools witnessed a growth of 3.7 percent.
The Division achieved 100 percent growth in terms of Channel expansion to Tier 3 and Tier 4 markets. “Zero distance to user” strategy also supported the core tool business. Launch of more affordable products has played vital role in business growth and also helped in overcoming systematic risk. E-commerce channels emerged as important contributors to the overall business.
The Building Technology division offers innovative products and solutions in the field of security, safety and communications primarily for commercial applications. The product portfolio encompasses video-surveillance, intrusion-detection, fire-detection, public address and voice-alarm systems, accesscontrol, building management systems, professional audio and conference systems.
The business achieved a growth of 13.3 percent, driven by orders in the verticals of Transportation, Commercial and Energy. Trend-setting products like the new range of IP Cameras, Professional Audio speakers and Amplifiers, Conference Systems, Loudspeakers and Microphones introduced were well received.
During the year under review, the exports increased due to rise in demand of Video Systems (VS) from SAARC customers.
The division’s revenue de-grew over the previous year owing to challenging market conditions in the Solar Photovoltaic (PV) segment. The Solar PV market witnessed a slowdown during the year under review due to change in tax structure and an unexpected increase in price of solar modules. Despite the above challenges, the business was successful in executing various key projects with reputed customers like Bangalore International Airport Limited.
With the momentum in the market set to regain in the current fiscal year, the division has set its sights on a large segment of the market that needs captive power generation, thus enabling ‘energy self-reliance’ for its customers.
The Energy Efficiency (EE) business, which is part of the said division since January 2014, has grown over the previous financial year. This business primarily focuses on providing energy cost savings to industries and commercial buildings through customized solutions for optimization in heating and cooling processes.
Electric water heater continues to dominate the water heater space. Though the market for Solar water heater and heat pumps for hot water is small, there is increasing trend of heat pump and hybrid of solar water heater and heat pump picking up due to their overall energy efficiency and potential savings. KUSUM initiative of Government is expected to provide thrust to the solar water pump market.
3.3.2 Revenue by geographical area
The export sales of the Company contributed 9.2 percent to the total sales for the year under review as compared to 8.3 percent during the previous financial year. The Company’s exports, bulk of which were to Germany, China, Turkey, Bangladesh and Brazil increased by 39.9 percent majorly from Powertrain Solutions and Energy & Building Technology Divisions.
3.4 Financial Performance and Condition
Sale of products
Sale of products grew by 12.8 percent over previous year on a comparable basis and stood at Mio INR 113,929. The Powertrain Solutions division consisting of Diesel and Gasoline powertrain products has mainly driven this growth.
Sale of services
Sale of services registered a growth of 15.1 percent over previous year, mainly contributed by increase in development receipts from BS-VI projects.
Other operating revenue
Other operating revenue at Mio INR 2,108, decreased by 18.7 percent over the previous year, due to higher provision written back in the previous year.
Other income, which mainly comprises of mark-to-market gains, profit on sale of marketable securities, dividend and interest income, decreased by 17.1 percent over the previous year. Income from net gain on financial assets measured at Fair Value through Profit and Loss (FVTPL) was Mio INR 2,185 for the year under review as against Mio INR 3,172 in previous year.
Income from interest on bank and inter-company deposits increased by 1.9 percent due to higher asset base.
Cost of materials consumed
The cost of materials consumed as a percentage of revenue increased from 50.9 percent to 53.9 percent during the year under review. This increase is mainly due to change in the product mix from conventional to new generation in the Powertrain Solutions division subsequent to the change in the emission norms.
Personnel cost as a percentage of revenue decreased from 12.9 percent to 11.6 percent during the year under review. This is attributed to continuous productivity improvement measures and reduced depth of production of new generation products.
The Company continues to focus on rationalizing its workforce based on its business needs in a fair manner, while sustaining productivity and competence.
Depreciation and amortization
The depreciation charge for the year under review was Mio INR 4,672 as against Mio INR 4,562 during the previous year ended on March 31, 2017. The addition of fixed asset is mainly on account of the expansion of new generation products at facilities situated in Bidadi (Karnataka) and Nashik (Maharashtra).
Provision for Tax
Income tax expenses for the year under review is 3.0 percent higher due to discontinuation of investment allowance exemption and additional depreciation.
Profit After Tax (PAT)
PAT for the Financial Year 2017-18 was Mio INR 13,708, a decrease of 5.1 percent mainly due to higher tax expenses as above.
Other Comprehensive Income
The investment in equity securities is classified as financial assets through other comprehensive income as per the requirements of Ind AS 109. The changes in fair value of equity securities is recognized under other comprehensive income. Accordingly, the impact of Mio INR 1,415 during the year under review is mainly contributed by increase in fair value of those investments.
Earnings per Share (EPS)
EPS (basic and diluted) of the Company for Financial Year 2017-18 was INR 449 per share.
As on March 31, 2018, the Authorized Share Capital comprises of 38,051,460 Equity Shares of INR 10 each. The issued, subscribed and paid-up capital is Mio INR 305.21 divided into 30,520,740 equity shares of INR 10 each.
Reserves & Surplus
Reserves & Surplus as on March 31, 2018 stood at Mio INR 92,298, which includes retained profit for the year under review of Mio INR 70,313.
Other Reserve increased from Mio INR 5,962 to Mio INR 7,210 mainly due to change in the fair value of equity investments valued in line with Ind AS.
The total Shareholder’s fund increased to Mio INR 99,813 as on March 31, 2018 from Mio INR 87,996 as on March 31, 2017, mainly due to profit for the year under review.
Fixed assets – capital expenditure
The gross fixed asset value (including Capital Work-InProgress) as on March 31, 2018 was Mio INR 27,629 compared to Mio INR 23,257 as on March 31, 2017.
The Company made capital investments of Mio INR 4,600 during the year under review in addition to Mio INR 6,267 invested during previous year. Major investments were made towards development of new products and facilities in Bidadi (Karnataka) and Nashik (Maharashtra) as well as towards solar power project at Belagavi (Karnataka).
Surplus funds not required for immediate operational needs were invested prudently in tax effective low risk instruments. The total investments (excluding investment in property) as on March 31, 2018 was Mio INR 52,228 as against Mio INR 39,090 as on March 31, 2017.
Inventory as on March 31, 2018 increased by 3.9 percent to Mio INR 12,258 from Mio INR 11,804 as on March 31, 2017 to support growth in sales. However, Inventory Turnover Ratio has reduced by 1 day as an effect of GST implementation, which enabled consolidation of warehouses and continuous focused measures on Inventory reduction.
Trade receivables as on March 31, 2018 increased to Mio INR 16,156 as against Mio INR 11,862 as on March 31, 2017. This increase is a result of an increase in sales, change in the product mix and increase in average collection period in Powertrain Solution Division majorly affected by liquidity constraint in OE market.
Cash and Bank balances
The total cash and bank balances as on March 31, 2018 was Mio INR 18,878 (including cash and cash equivalent of Mio INR 3,633), compared to Mio INR 17,176 (including cash and cash equivalent of Mio INR 1,312) as on March 31, 2017.
3.5 Human Resource Development and Industrial Relations
Human Resource Development
During the year under review, Human Resources (HR) continued its transformation initiatives, in a volatile and uncertain business environment, to cater to the organizational requirements.
The Company has collaborated with the global organization ‘Great Place to Work’, in its endeavor to become a great place to work. The objective is to bring about a High Performance Culture and Ownership and build a High Trust Culture of collaboration and thereby achieve Organizational Objectives.
The Company continued its efforts to foster and drive younger generation towards future leadership. The Company was again recognized at the National competition for Young Managers 2017 conducted by the All India Management Association with the Company bagging the national level award.
The Company, through its Integrated Talent Management initiatives, continued to enable learning, networking and collaboration by emphasizing on cross entity movement between different Bosch legal entities enabling holistic development and encouraging integration across different entities/locations.
Industrial Relations (Employee Relations)
Industrial Relations in all plants generally remained cordial during the year under review. Transitioning from ‘Industrial Relations’ to ‘Employee Relations’, a more focused approach on increased Employee Engagement and increased collaboration between various plants, corporate departments and amongst all level of employees was continued.
The Company, during the first week of May 2017, successfully concluded the long-term settlement with the Associates of the Jaipur Plant effective June 01, 2017 for a period of 4 years, in an amicable and fair manner, with support of the Labour department, Government of Rajasthan.
As on the date of this report, negotiations over the longterm settlements at the manufacturing facilities situated at Bengaluru, Nashik and Naganathapura are ongoing. The Company continues to deal with the said matters in a fair and firm manner.
During the year under review, several initiatives such as introduction of Grievance policy, increase connect with Government and statutory bodies, Engagement calendar, Compliance checklist, self-audits and cross audits, etc. were continued to strengthen Employee Relations.
3.6 Internal Audit and Internal Financial Controls
The Company has an Internal Audit function. The Internal Audit Department evaluates the efficacy and adequacy of internal control system, its compliance with operating systems and policies of the Company at all locations of the Company. 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.
The Company has an effective and reliable internal financial control system commensurate with the nature of its business, size and complexity of its operations. The internal financial control system provides for well-documented policies and procedures that are aligned with Bosch global standards and processes, adhere to local statutory requirements for orderly and efficient conduct of business, safeguarding of assets, detection and prevention of frauds and errors, adequacy and completeness of accounting records and timely preparation of reliable financial information. This also identifies opportunities for improvement and ensures that good practices are imbibed in the processes that develop and strengthen the Internal financial control systems and enhances the reliability of the Company’s financial statements.
The efficacy of the internal checks and control systems is validated by self-audits and verified by internal as well as statutory auditors.
The Audit Committee reviews the internal audit plan, adequacy and effectiveness of the internal control system, significant audit observations and monitors the sustainability of remedial measures. It also reviews functioning of the Whistle Blower mechanism and reviews the action taken on the cases reported.
3.7 Opportunities and Threats
The various government initiatives put in place to bridge the gap of India and the developed nations offers a gamut of opportunities for the fast adaptation of technology in India. The budget demonstrates a very significant push on infrastructure including rural infrastructure which opens up opportunities for the Company’s beyond mobility divisions like Building Technology and Consumer Goods (power tools).
In the mobility scenario, the various initiatives of NITI Aayog/Ministry of Road Transport and Highways have provided an impetus to close the technology gap as India moves from BS-IV to BS-VI in three years, time typically taken for one step. In this challenging environment, the Company is closely working with the OEMs in various concurrent projects to deliver the BS-VI mandate. In the new product mix that will evolve with BS-VI, localization and dieselization trends are the focus areas.
The push for digital India and the digital trendy demographics of India encourages the use of technology to create a connected mobility ecosystem. The Company has this trend in its radar and is working actively towards catering to this demand.
With regard to the Business beyond mobility, the Company is providing integrated solutions in the areas of industrial technology, consumer goods and energy and building solutions for turn-key mega infrastructure projects such as airports, metro stations and smart cities.
3.8 Risks and Concerns
The Company follows a specific, well-defined risk management process which is integrated with its operations, for identification, categorization and prioritization of operational, financial and strategic business risks. Across the organization, there are teams responsible for the previously mentioned processes who report to the senior management.
The Risk Management Committee headed by Mr. Soumitra Bhattacharya, Managing Director reviews the effectiveness of the process at regular intervals.
Following are the major risks and mitigation measures:
1. Disruptive norms:
Major changes influencing the industry like BS-IV, BS-VI, Electrification, etc., are considered by the Company as a major risk(s).
(a) Shift to BS-VI: The jump from BS-IV to BS-VI in a short span of about 3 years, the pace of change and the short time duration for preparedness are challenging. Shift to BS-VI products, which are largely based on imports and have low replacement requirements in the Aftermarket, may have an adverse financial impact on the Company. The Company is currently working on customer project acquisitions and measures are being enforced to minimize the financial impact.
(b) Electrification: There has been a lot of discussion on electrification by various stakeholders including the Government, OEMs and auto component manufacturers. The technological dominance, which the Company currently has in the auto component industry, might not be available once electrification has its way into the industry. However, the Company, being an end-to-end solution provider, has its own advantage and is working closely with some of the top customers in the industry.
The Company operates in a highly competitive environment due to which there are risks of pressure on pricing, loss of market due to de-risking from some customers, judicial changes and increased import content. Spurious parts and cheap imitations continue to put pressure on existing market share, primarily for Automotive Aftermarket and Power Tools divisions.
The Company, as a strategy, localizes products over a period resulting in reduction of price of the product and consequent increase in the market share. Respective business unit teams undertake a comprehensive competitor analysis periodically to evaluate competitors’ strategies vis-à-vis, our own products and services and define our counter strategic and marketing plans.
3. Industrial Relations (IR):
IR-related risks continue on account of surplus capacity at the Company’s Diesel systems plants and high lead time for wage settlement. These include possible risks arising from stoppage of production and/or leading to unpredictable cost structure and/or possible lay-off.
The Company adopts more focused continuous action plan for wage settlement, offers attractive EVR schemes, Firm and Fair approach for settlement with contract labour and implement “selected” best practices. As continued process in building capability initiative, special trainings were conducted on Employee Relations and adding value to Front line leadership development in the plant.
4. Heavily auto sector dependent:
About 85 percent of the business is dependent on the auto sector. Performance of the Company, therefore, is dependent on this sector’s growth.
5. Low diesel image:
Diesel engines are being portrayed as polluter & environment unfriendly due to anti-Diesel lobbying. One of the major challenges currently faced is poor market for alternate fuels segment. The share of diesel in the total passenger cars’ sales has reduced in the last 4-5 years and possess further challenges. The Company has proactively taken steps to mitigate the risk in a socio-environmentally responsible manner.
Geopolitical Scenario: The Company is operating in a Global business environment and continues to be impacted by any major geopolitical changes. The build up to the general elections in India from second half of 2018 might also impact the performance of the Company.
The signs of growth indicate that an economic recovery is underway in India. Sustaining and enhancing the momentum would be the key factors determining this recovery.
The Company is optimistic of an overall growth in the automotive industry in 2018-19, with continued strong upward trend in passenger cars, LCVs and tractors. Predicted favorable monsoon and faster economic growth this year are likely to boost farm income, which, in turn, will boost rural sales of 2-Wheelers, passenger cars and tractors.
For the non-automotive segment, the Company is cautiously optimistic inspite of having positive economic indicators like robust economic growth, rising household incomes and increase in consumer spendings due to unprecedented business exigencies.
4. Manufacturing Facilities
4.1 Bengaluru (Karnataka)
The 67 year old Bengaluru plant is transforming itself into a lean and agile plant with its 90 year old product ‘A Pump’ still going strong in the tractor and diesel genset segments of Automotive Market. During the year under review, the plant achieved a milestone of manufacturing its 20th million A-pump.
The Plant has implemented an intensive System Continuous Improvement Process for improving and sustaining quality and remaining cost competitive. With this as a blueprint, the restructuring of machinery and equipment together with focus on increasing operational efficiency on the shop floor have made value streams even leaner. Additionally, the Plant is using low cost automation solutions for process optimization and reduction of manual effort resulting in better quality and speed in the value chain.
4.2 Bidadi (Karnataka)
The Bidadi plant progressed by integrating low cost Cobots (Collaborative Robots) for common rail pumps, simultaneously achieving two targets: creating a clear finish time for products within the manual line and significant cost reduction.
Locally developed Industry 4.0 solution for deviation management are implemented at all stations. These applications are developed locally instead of using standard solutions available in Europe.
The plant has commenced lake rejuvenation project in the area adjacent to its facilities.
During the year under review, 1.2 MW of solar power capacity has been installed in addition to the existing 3.5 MW of solar power capacity.
4.3 Nashik (Maharashtra)
Nashik plant manufactures the Common Rail Injectors (CRI) and components including nozzles for both common rail and conventional diesel injectors. During the year under review, the plant successfully transferred the production facility of Conventional Injectors (NHA) to Jaipur plant. Additional capacity was added for CRI product by relocation of a high volume line from Bosch Turkey plant. Nashik plant celebrated the production of 25th million CRI and became the second largest manufacturer of CRI 2-16 injectors in the Bosch group globally.
During the year under review, the Nashik Plant continued its endeavor to use renewable source of energy. The Plant has an overall capacity of 13 MWp of solar energy generation. The plant is the first Bosch plant in India and fifth worldwide to receive ISO 50001:2001 certification for Energy Management.
Focusing on behavior based safety, reduction of first aid cases and capturing & working on near miss incidents, the Plant recorded a “zero accident” year. The Plant was awarded by CII for the Manufacturing excellence practices of Industry 4.0.
4.4 Jaipur (Rajasthan)
The Jaipur Plant produces Distributor (VE) Mechanical and Electronic Diesel Control Pumps used in Light and Heavy Commercial Vehicles, Sports and Multi-Utility Vehicles and tractors. Relocation of manufacturing of Conventional Injectors from Nashik to Jaipur was successfully completed during the year under review. These are used in both on-highway and off-highway applications including Light and Heavy Commercial Vehicles, Locomotives, Tractors and Gensets.
Growth in the domestic LCV and tractor markets resulted in good turnover inspite of reduction in other OE volumes due to implementation of BS-IV Emission Norms with effect from April 01, 2017.
The Plant is the first Bosch plant in India to win the “National Safety Award” in two categories ‘Accident free year’ and ‘Lowest Average Frequency Rate’ from the Government of India in September 2017. The Plant also won other awards including CII Lean Award for lean manufacturing.
4.5 Naganathapura (Karnataka)
The Naganathapura Plant produces Spark Plugs, a product produced by the Bosch group for over a century. The year under review witnessed an increase in the turnover mainly due to higher demand from OE and Independent Aftermarket segments.
Focusing on improving cost competitiveness, productivity improvement projects were implemented in addition to safety and quality improvement programs.
During the year under review, Machine building division and manufacturing of automotive service solutions were relocated from the Bengaluru Plant to Naganathapura Plant.
4.6 Verna (Goa)
The Verna Plant provides a variety of applications and solution relating to packaging market in India and SAARC countries. The products and solutions of the Plant also have good presence in Africa.
During the year under review, Verna plant executed many challenging projects, made successful product transfers and took big steps in Horizontal Form, Fill & Seal product line. The plant also introduced new products like SVI 4000WR and BVK 1200 in the market.
4.7 Gangaikondan (Tamil Nadu)
Situated at Tirunelveli, Tamil Nadu with a 6,200 sq. meters of built up area, the state-of-the-art Gangaikondan plant is the Powertrain Solutions plant in India catering to the needs of growing Gasoline automobile market (both four and two-wheelers) in India. This plant was inaugurated in 2015 and achieved a break-even during the year under review.
The Plant mainly produces Powertrain Sensor products, Air Management products, Fuel supply Modules, Fuel Injection products for Gasoline vehicles. Year on year, the Plant has increased its output by 30 percent and is ready to face the market demands.
4.8 Chennai (Tamil Nadu)
The Power Tools facility admeasuring approximately 8,500 sq. meters is located at Indospace Industrial Park, Orgadam, Tamil Nadu. At present, the facility caters mainly to the Indian and SAARC markets. It primarily manufactures Small Angle grinders, Large Angle grinders, Marble cutters, Blowers, Drills and two-kg Hammers, along with their motors. The Plant produces Blowers for the entire global market.
The Plant was accredited with Power Tools plant excellence award for the second consecutive year as well as best improving plant within the Power Tools international network.
5. Information Technology (IT)
As part of GST preparedness and business process readiness, all relevant IT systems have been upgraded with necessary changes as per GST time line. Additional GST changes are being incorporated in respective IT systems based on GST notifications on an ongoing basis.
During the year under review, the Company continued to enhance its IT Infrastructure to facilitate better internal as well as external communication providing an opportunity to employees to ‘work from anywhere’ seamlessly.
6. Change Initiatives
6.1 Continuous Improvement Process (CIP)
Considering the potential for further improvement in CIP practices at the Company to foster a culture of process orientation and problem solving, a project has been undertaken for defining CIP road map by end 2018 and for its structured deployment and review by Senior Leadership. This project has supported in considerable improvement in various Key Performance Indicators like Number of Implemented Suggestions per Employee, Savings from CIP Activities, No. of CIP Workshops, No. of VSDIA (Value Stream Design in Indirect Areas) Projects, Key CIP Competencies, Processing Time per Suggestion, etc. with involvement of associates across the Company.
6.2 Bosch Production System (BPS)
In this competitive business scenario where Customers demand zero defects, reduction in costs and quick response, the only way to stay competitive and be agile is to practice BPS as a way of life. During the year under review, the theme has been on “Collaboration and Synergy” across all the Company’s manufacturing facilities.
The focus has been primarily on People. “Improved Competence in People result in effective processes and thereby products which lead markets”.
While leaders were coached on Key BPS element twice a year by Bosch central experts, BPS week was conducted at different plants where all associates had a chance to work on simulation with a concept “Learn by Doing” enabling a better understanding on BPS which will lead to swift implementation of BPS Projects.
Through various forums like “Share and Learn”, benchmark practice sharing by visiting different plants and training, the Company was able to achieve increase in productivity, reduction in inventories and on-time delivery fulfilment to customers.
7. Business Excellence
Agility, Customer centricity and Empowered teams are the founding principles forming the basis for all transformation. Strategy Management, Risk Management, Process Management, Benchmarking & Good Practices, which are core to business excellence are integrated, bringing in uniformity & cross learning within the organization.
The year under review saw major organizational transformation both in Bosch world and the Company. Two of the biggest units - Diesel Systems & Gasoline Systems were merged to form Powertrain Solutions (PS) effective January 01, 2018. Business Excellence has played a pivotal role in integrating the two and creating synergy, agility and efficiency.
8. Awards and Recognition
During the year under review, the Company won several awards for excellence. Few such awards are:
9. Directors and Key Managerial Personnel
9.1 Director Retiring by Rotation
In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Mr. V. K. Viswanathan retires by rotation at the forthcoming Annual General Meeting, and being eligible, offers himself for re-election at the said meeting.
9.2 Changes in the Key Managerial Personnel and Board
9.2.1 Board of Directors
Mr. Prasad Chandran resigned from the Directorship of the Company with effect from the close of business hours on September 01, 2017. The Board places on record its sincere appreciation for the valuable guidance provided by Mr. Chandran during his tenure as Director of the Company.
The Board of Directors, on recommendation of the Nomination & Remuneration Committee, appointed Ms. Hema Ravichandar and Mr. S. V. Ranganath as Additional Director(s) in capacity of an Independent Director(s) for an initial term of 5 years and 3 years respectively with effect from September 02, 2017 and July 01, 2018 respectively.
Mr. Jan-Oliver Röhrl resigned as Alternate Director to Mr. Peter Tyroller with effect from the close of business hours on June 30, 2018.
The Board of Directors, on recommendation of the Nomination & Remuneration Committee appointed Mr. Röhrl as an Additional Director and Executive Director with effect from July 01, 2018.
The Company has received notice(s) from member(s) under section 161 of the Companies Act, 2013, proposing candidature of Ms. Ravichandar, Mr. Ranganath and Mr. Röhrl for the office of Director(s) of the Company at the forthcoming Annual General Meeting.
Mr. S. C. Srinivasan, who joins the Company as Chief Financial Officer with effect from July 01, 2018 was appointed as an Alternate Director to Mr. Peter Tyroller with effect from the aforementioned date. Mr. Srinivasan, by virtue of being in employment of the Company on July 01, 2018, would be placed in position of a Whole-time Director. The Board of Directors, therefore, approved his appointment as a Whole-time Director from July 01, 2018 to June 30, 2021, subjected to the approval of the shareholders.
The following resolutions, in addition to re-appointment of Mr. Viswanathan, who retires by rotation, relating to the aforementioned re-constitution of the Board of Directiors of the Company will form part of the Notice convening the 66th Annual General Meeting of the Company:
- Appointment of Mr. Jan-Oliver Röhrl as Director.
- Appointment of Mr. Jan-Oliver Röhrl as Executive Director with effect from July 01, 2018.
- Appointment of Ms. Hema Ravichandar as Independent Director for a period of 5 consecutive years with effect from September 02, 2017.
- Appointment of Mr. S. V. Ranganath as Independent Director for a period of 3 consecutive years with effect from July 01, 2018.
- Appointment of Mr. S. C. Srinivasan as a Whole-time Director with effect from July 01, 2018.
Brief profiles of Mr. V. K. Viswanathan, Ms. Hema Ravichandar, Mr. S. V. Ranganath, Mr. Jan-Oliver Röhrl and Mr. S. C. Srinivasan will form part of the Notice convening the 66th Annual General Meeting of the Company.
9.2.2 Key Managerial Personnel
Mr. Soumitra Bhattacharya, Managing Director & Chief Financial Officer and Mr. S. Karthik, Joint Chief Financial Officer have relinquished their positions as Chief Financial Officer and Joint Chief Financial Officer respectively with effect from the close of business hours on June 30, 2018. Mr. Bhattacharya and Mr. Karthik will continue to discharge their responsibilities as Managing Director and Vice-President (Corporate Finance & Accounts) respectively.
The Board of Directors, on the recommendation of the Nomination & Remuneration Committee and Audit Committee appointed Mr. S. C. Srinivasan as Chief Financial Officer of the Company with effect from July 01, 2018. Mr. Srinivasan has also been appointed as an Alternate Director to Mr. Peter Tyroller with effect from the aforementioned date and consequently as a Whole-time Director. The appointment as Whole-time Director is subject to approval of the members at the forthcoming Annual General Meeting.
Mr. R. Vijay, Company Secretary and Compliance Officer resigned from the Company with effect from the close of business hours on May 23, 2018. The Nomination and Remuneration Committee will identify and recommend to the Board appointment of new Company Secretary. In the interim, the Board of Directors, on recommendation of the Nomination & Remuneration Committee, appointed Mr. Anuj Sharma as the Compliance Officer of the Company (interim) in terms of the requirements of Securities & Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulations, 2015, with effect from May 24, 2018.
As on the date of this report (i.e. May 22, 2018), the following are the Key Managerial Personnel of the Company:
- Mr. Soumitra Bhattacharya (Managing Director & Chief Financial Officer)
- Dr. Andreas Wolf (Joint Managing Director)
- Mr. Jan-Oliver Röhrl (Chief Technical Officer & Alternate Director)
- Mr. S. Karthik (Joint Chief Financial Officer)
- Mr. R. Vijay (Company Secretary)
9.3 Independent Directors
The Independent Directors have given a declaration to the Company that they meet the criteria of independence prescribed under section 149(6) of the Companies Act, 2013 (the Act) and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations).
9.3.1. Familiarization Programme for Independent Directors
For details of the familiarization programme for Independent Directors, please refer to the Corporate Governance Report.
9.4 Performance Evaluation of Directors
In line with the provisions of the Act and the Listing Regulations, the Board has carried out an annual performance evaluation of its own performance, its Committees and individual Directors.
For details of the performance evaluation including evaluation criteria for Independent Directors, please refer the Corporate Governance Report.
10. Board Meetings
During the year under review, five meetings of the Board of Directors were held. The particulars of the meetings and attendance thereat are mentioned in the Corporate Governance Report.
11. Corporate Social Responsibility (CSR) Committee and Initiatives
Consequent to changes in the Board of Directors during the year under review, the CSR Committee was re-constituted by inducting Ms. Hema Ravichandar as a member and re-designating Mr. Bhaskar Bhat as Chairman of the Committee with effect from September 02, 2017. As on the date of this report, the CSR Committee comprises of Mr. Bhaskar Bhat (Independent Director) as its Chairman and Ms. Hema Ravichandar (Independent Director), Mr. Soumitra Bhattacharya (Managing Director) & Dr. Andreas Wolf (Joint Managing Director) as its members.
The CSR Committee oversees the Company’s CSR initiatives.
The Board of Directors have adopted a CSR policy in line with the provisions of the Companies Act, 2013. The CSR policy, inter-alia, deals with the objectives of the Company’s CSR initiatives, its guiding principles, thrust areas, responsibilities of the CSR Committee, implementation plan and reporting framework.
Some of the key CSR initiatives during the year under review include the following:
- Reaching out to less-educated, lesser-privileged youth and bringing them into the fold of employment through BRIDGE (Bosch’s Response to India’s Development and Growth through Employability Enhancement) program in 148 BRIDGE Centers across India. Approximately 16,000 youth have been trained and placed at entry level jobs through the BRIDGE program till date. During the year under review, 25 Model BRIDGE Centers were established with technical facilities of a smart classroom.
- Expansion of Child Health Development Program (CHDP) under Health, Hygiene and Education Initiative to other cities besides Bengaluru covering approximately 300 government schools in Nashik, Bidadi and Jaipur, benefitting 70,000 children.
- Upgradation of local dispensary in Adugodi, Bengaluru at par with a private healthcare facility.
- Make Your Own Lab (MYOL) initiative was launched to enable Science Teachers in Government schools develop innovative kit.
- Neighbourhood project as per the local needs identified the Company’s plants: Setting up of Reverse Osmosis Plant in Jaipur, Check Dams in Nashik, construction and operation of “Bosch-Akshaya Patra” kitchen in Jigani, etc.
Details of the CSR Committee meetings and attendance thereat forms a part of the Corporate Governance Report.
Annual Report on Corporate Social Responsibility Activities of the Company is enclosed as Annexure ‘B’ to this Report.
12. Audit Committee
Consequent to changes in the Board of Directors during the year under review, the Audit Committee was re-constituted by inducting Ms. Hema Ravichandar as a member in place of Mr. Prasad Chandran with effect from September 02, 2017. As on the date of this report, the Audit Committee comprises of Ms. Renu S. Karnad (Independent Director) as its Chairperson and Mr. V. K. Viswanathan (Non-Executive and Non-Independent Director), Mr. Bernhard Steinruecke (Independent Director), Mr. Bhaskar Bhat (Independent Director) & Ms. Hema Ravichandar (Independent Director) as its members.
During the year under review, the Board accepted all the recommendations of the Audit Committee.
Details of the roles and responsibilities, particulars of meeting and attendance thereat are mentioned in the Corporate Governance Report.
13. Subsidiary and Associate Companies
13.1 Subsidiary Company
MICO Trading Private Limited (MTPL)
The Company has only one subsidiary viz., MICO Trading Private Limited. The financial performance of MTPL is as under:
The Directors’ Report along with the Audited Statement of Accounts of MTPL has been uploaded on the website of the Company at www.bosch.in under the “Shareholder Information” section.
13.2 Associate Company
Newtech Filter India Private Limited (NTFI)
The Company has one Associate Company viz., Newtech Filter India Private Limited. The Company holds 25 percent and Robert Bosch Investment Nederland B.V. holds 75 percent of the paid-up share capital of NTFI.
NTFI is the manufacturer of automotive filters, selling their products to the Company which further sells the same to end customers. Aftermarket contributed to 72 percent of the product sales while 28 percent were attributed to OEM and OES channels in 2017-18.
The financial performance of NTFI is as under:
A separate statement containing the salient features of the financial statement of the aforementioned Subsidiary and Associate is enclosed as Annexure ‘C’ to this Report.
14. Remuneration Policy
The Nomination and Remuneration Policy, inter-alia, provides for criteria and qualifications for appointment of Director, Key Managerial Personnel and Senior Management, Board diversity, remuneration to Directors, etc. The policy is enclosed as Annexure ‘D’ to this Report. The policy can also be accessed at the following link: https://www.bosch.in/media/our_company/shareholder_information/2015/nomination_and_remuneration_policy.pdf .
15. Particulars of Employees
Disclosures pertaining to remuneration of employees and other details, as required under Section 197(12) of the Act and rules framed thereunder is enclosed as Annexure ‘E’ to this Report.
The information in respect of employees of the Company required pursuant to Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended will be provided on request. In terms of Section 136 of the Act, the Reports and Accounts are being sent to the Members and others entitled thereto excluding the aforementioned particulars of employees, which is available for inspection by the Members at the Registered Office of the Company during business hours on any working day. Any member desirous of obtaining a copy of the same may write to the Company at email@example.com.
16. Corporate Governance
A report on Corporate Governance in terms of the requirements of the Listing Regulations and a certificate from the Practicing Company Secretary, forms part of this Annual Report (Page No. 191).
17. Risk Management
The Company has a well-defined Risk Management policy. The policy has been developed after taking cognizance of the relevant statutory guidelines, Bosch Guidelines on risk management, empirical evidences, stakeholders’ feedback, forecast and expert judgment.
The policy, inter-alia, provides for the following:
Risk Management framework;
- In-built pro-active processes within the Risk Management Manual for reporting, evaluating and resolving risks;
- Identifying and assessing risks associated with various business decisions before they materialize. Take informed decisions at all levels of the organization in line with the Company’s risk appetite;
- Ensuring protection of shareholders’ stake by establishing an integrated Risk Management Framework for identifying, assessing, mitigating, monitoring, evaluating and reporting all risks;
- Strengthening Risk Management through constant learning and improvement;
- Adoption and implementation of risk mitigation measures at every level in order to achieve long-term goals effectively and sustainably;
- Regularly review Risk Tolerance levels of the Company as they may vary with change in the Company’s strategy; and
- Ensuring sustainable business growth with stability.
In the opinion of the Board, there are no risks that may threaten the existence of the Company.
18. Whistle Blower Policy/Vigil Mechanism
The Company has a Whistle Blower Policy, which includes vigil mechanism for dealing with instances of fraud and mismanagement.
Details of the Whistle Blower Policy have been mentioned in the Corporate Governance Report. The Whistle Blower Policy has also been uploaded on the website of the Company and can be accessed at the following link: https://www.bosch.in/media/our_company/shareholder_information/2014/whistle_blower_policy.pdf .
19. Business Responsibility Report
In terms of the requirements of Regulation 34(2)(f) of the Listing Regulations, a report on Business Responsibility in the prescribed format forms a part of this Annual Report (Page No. 204).
20. Related Party Transactions
The Audit Committee accords omnibus approval to Related Party Transactions which are in ordinary course of business, foreseen, repetitive in nature and satisfy the arm’s length principles. The Audit Committee reviews, on a quarterly basis, the details of the Related Party Transactions entered pursuant to the aforementioned omnibus approval. Additionally, the Company obtains a half yearly certificate from a Chartered Accountant in Practice confirming that the related party transactions during the said period were in ordinary course of business, repetitive in nature and satisfy the arm’s length principles.
The details of Related Party Transactions under Section 188(1) of the Act required to be disclosed under Form AOC - 2 pursuant to Section 134(3) of the Act is enclosed as Annexure ‘F’ (Page No. 80) to this Report.
The Company has framed a policy for determining materiality of Related Party Transactions and dealing with Related Party Transactions. The said policy is hosted on the website of the Company and can be accessed at the following link: https://www.bosch.in/media/our_company/shareholder_information/2014/rpt_policy.pdf .
21. Energy Conservation, Technology Absorption, Foreign Exchange Earnings & Outgo
The report in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 of the Act read with Rule 8 of Companies (Accounts) Rules, 2014, as amended, is enclosed as Annexure ‘G’ (Page No. 81) to this Report.
22.1 Statutory Auditor
The shareholders at the 65th Annual General Meeting of the Company held on September 01, 2017 appointed M/s. Deloitte Haskins & Sells LLP (Firm Registration No. 117366W/W-100018) as Statutory Auditors of the Company for a period of 5 years until the conclusion of the 70th Annual General Meeting of the Company subject to ratification of their appointment at every subsequent AGM. The Ministry of Corporate Affairs vide notification dated May 07, 2018 obliterated the requirement of seeking Members’ ratification at every AGM on appointment of Statutory Auditors during their tenure of 5 years.
The Auditors’ Report on the Standalone as well as Consolidated Financial Statements for the Financial Year 2017-18 is unmodified i.e. it does not contain any qualification, reservation or adverse remark.
22.2 Cost Audit & Cost Auditors
The Board of Directors, on recommendation of the Audit Committee, appointed M/s. Rao, Murthy & Associates, Cost Accountants, Bengaluru (Registration No.000065) as Cost Auditors to audit the cost accounts of the Company for the Financial Year 2018-19 in terms of the provisions of Section 148 of the Companies Act, 2013.
In terms of the requirements of the said section, the members shall ratify remuneration payable to the Cost Auditors. Accordingly, resolution ratifying the remuneration payable to M/s. Rao, Murthy & Associates will form a part of the Notice convening the 66th Annual General Meeting.
22.3 Secretarial Auditor
The Company appointed Mr. Sachin Bhagwat, Practicing Company Secretary, to conduct Secretarial Audit as per the provisions of the Act for the Financial Year 2017- 18. The Report of the Secretarial Audit is enclosed as Annexure ‘H’ (Page No. 83) to this Report.
There were no qualifications, reservations or adverse remarks in the Report of the Secretarial Auditor.
22.4 Reporting of Fraud
There have been no instances of fraud reported by the aforesaid Auditors under Section 143(12) of the Act and Rules framed there under either to the Company or to the Central Government.
23. Directors’ Responsibility Statement
Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors report that:
- in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
- they have selected and consistently applied accounting policies and have made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and the profit of the Company for that period;
- proper and sufficient care has been taken for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
- the annual accounts have been prepared on a ‘going concern’ basis;
- proper internal financial controls are in place and that such controls are adequate and are operating effectively; and
- proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.
24. Details of Loans, Guarantees or Investments
Details of loans, guarantees or investments covered under Section 186 of the Act, are provided in the Notes to the Financial Statements.
During the year under review, there were no deposits as per the provisions of Companies Act, 2013.
26. Material Changes and Commitments
There were no material changes and commitments between the end of the year under review and the date of this report affecting the financial position of the Company.
27. Material Order Passed by Regulators or Courts
No material orders impacting the ‘going concern’ status of the Company or its operations in future were passed by the Regulators or Courts or Tribunals during the year under review.
28. Extract of Annual Return
In terms of the requirements of Section 134(3)(a) of the Act, an Extract of Annual Return as provided under Section 92(3) of the Act is enclosed as Annexure ‘I’ (Page No. 85) to this Report.
29. Cautionary Statement
Statements in the Board’s Report and the Management Discussion & Analysis describing the Company’s objective, expectations or forecasts may be forward looking within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed in the statement.
For and on behalf of the Board of Directors
V. K. Viswanathan
Date: May 22, 2018
Annexure ‘A’ to the Report of the Directors
BOSCH LIMITED - DIVIDEND DISTRIBUTION POLICY
SEBI vide Notification No. SEBI/LAD-NRO/ GN/2016-17/008 dated July 08, 2016 amended the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 by inserting Regulation 43A, requiring the top 500 listed entities based on the market capitalization (calculated as on March 31 of every financial year) to formulate a Dividend Distribution Policy. The Company, being one of the top 500 listed Companies, has formulated this Dividend Distribution Policy.
Unless the context otherwise requires:
- ‘Act’ means the Companies Act, 2013 and includes the rules framed thereunder;
- ‘Board’ means the Board of Directors of the Company and includes any Committee thereof constituted or to be constituted.
- ‘Company’ means Bosch Limited.
- ‘Dividend’ shall have the meaning ascribed to it under the Act and includes an Interim Dividend but excludes Special Dividend.
- ‘Listing Regulations’ or ‘SEBI LODR’ means Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, including any statutory modifications or re-enactments thereto.
- ‘Free Reserves’ shall have the meaning ascribed to it under the Act.
- ‘Policy’ means Bosch Limited - Dividend Distribution Policy.
The words or expressions used but not defined herein, but defined under Companies Act, 2013 or the Listing Regulations shall have the same meaning assigned therein.
Words in singular number include the plural and vice-versa.
III. Effective Date:
The policy shall come into force from the date of approval of the Board of Directors i.e. February 10, 2017.
Dividend payout is contingent upon various factors and their combination thereof, which are enumerated below and the Board of Directors shall before deciding the dividend consider these factors in the best interest of the Company and its shareholders.
1. Circumstances under which the shareholder may not expect dividend
The shareholder may not expect dividend, inter-alia, in the following circumstances, subject to discretion of the Board:
- In event of loss or inadequacy of profit or cash flow.
- Higher capital investments on account of expansion of business, etc. by the Company.
- Decision to undertake any acquisition, amalgamation, merger, takeover, etc. requiring significant capital outflow.
- Other business condition(s) in the opinion of the Board it would be prudent to plough back the profits of the Company.
- De-growth in the overall business.
- The Company has been prohibited to declare dividends by any regulatory authority.
- Any other extra-ordinary circumstances.
2. Financial Parameters
While determining the quantum of dividend the Board of Director shall, inter-alia, consider the following financial parameters:-
- Profit After Tax considering write-off of accumulated losses, exceptional and extraordinary items, if any
- Accumulated reserves
- Cash flow and treasury position keeping in view the total debt to equity ratio
- Earnings Per Share
- Dividend Payout during the previous years
- Capital Expenditure
- Contingent Liabilities
3. Factors to be considered while declaring dividend
The quantum of dividend is an outcome of due deliberation by the Board considering various Internal and External factors including, but not limited to:-
- Business Forecast (near to medium term)
- Earning stability
- Availability of liquidity
- Accumulated Reserves
- Working capital requirements of the Company
- Capital Expenditure requirements of the Company
- Investments in new line(s) of business
- Expenditure on Research & Development of new products
- Investment in technology
- Acquisition of brands/businesses
- Replacement cost of end-of-lifecycle products
- Statutory provisions, legal requirements, regulatory conditions or restrictions laid down under applicable laws
- Prevailing macro-economic environment
- Re-investment opportunities
- Investor Expectations
- Prevailing taxation structure including any amendments expected thereof.
Dividend will generally be recommended once a year by the Board, after the approval of the Audited Financial Statement and shall be subject to approval/confirmation of shareholders at the Annual General Meeting (AGM). In certain years and to commemorate special occasions, the Board may consider declaring special dividend for its shareholders.
Considering the above factors, the Company would endeavor to declare a dividend (excluding any special dividend or a payout in the form of a one-time/special dividend) resulting in a pay-out ratio upto 30% of the annual standalone Profits after Tax (PAT) of the Company.
V. Utilization of Retained Earnings
Subject to the applicable regulations, retained earnings may be applied for:
- Funding the organic and inorganic growth of the Company
- Diversification of business
- Capacity Expansion
- Replacement of Capital Assets
- Declaration of Dividend in future years
- Issue of Bonus Shares
- Buy-back of Shares/Capital Reduction
- Other permissible purposes
VI. Parameters that shall be adopted with regard to various classes of shares
The Company has only one class of shares viz., Equity Shares of Face Value of INR 10 each.
Since the Company has issued only one class of equity shares with equal voting rights, all the members of the Company are entitled to receive the same amount of Dividend per share.
In terms of the requirements of the Listing Regulations, this policy has been uploaded on the website of the Company viz., www.bosch.in and will also form a part of the Annual Report of the Company
In case the Company declares dividend on the basis of parameter in addition to the parameters stated in this Policy, such parameters will be disclosed on the website as well as in the Annual Report of the Company.
This Policy is subject to revision/amendments in accordance with the guidelines as may be issued by the Ministry of Corporate Affairs, SEBI or other regulatory authority from time to time, on the subject matter. Accordingly, the Company reserves the right to alter, modify, add, delete or amend any of the provisions of this Policy.
Not withstanding anything contained herein but subject to the applicable laws, the Board may, at their discretion revise, amend or modify the policy, which they in their absolute discretion may deem fit.
In case of any amendment(s), clarification(s), circular(s), etc. issued by the relevant authorities, not being consistent with the provisions laid down under this Policy, then such amendment(s), clarification(s), circular(s), etc. shall prevail upon the provisions of this Policy and this Policy shall stand amended accordingly from the effective date as laid down under such amendment(s), clarification(s), circular(s), etc.
IX. Cautionary Statement
The Policy reflects the intent of the Company to reward its shareholders by sharing a portion of its profits after retaining sufficient funds for growth of the Company. The Company shall pursue this Policy to pay, subject to the circumstances and factors enlisted herein above, which shall be consistent with the performance of the Company over the years.
This document does not solicit investment in the Company’s shares nor is it an assurance of guaranteed returns (in any form), for investments in the Company’s shares.
The Policy is not an alternative to the decision of the Board for recommending dividend, which is made generally every year after taking into consideration all the relevant circumstances contained in this Policy as may be decided by the Board.
Annexure ‘B’ to the Report of the Directors
ANNUAL REPORT ON CORPORATE SOCIAL RESPONSIBILITY (CSR) ACTIVITIES FOR THE FINANCIAL YEAR 2017-18
A brief outline of the Company’s CSR Policy,
including overview of projects or programs proposed to
be undertaken and a reference to the web-link to the CSR policy and projects or programs.
Brief outline of the CSR Policy and overview of projects and programs undertaken are given in the Directors’ Report.
The CSR Policy can be accessed at:
- Mr. Prasad Chandran, Chairman (erstwhile Independent Director) @
- Mr. Bhaskar Bhat, Chairman (Independent Director)#
- Ms. Hema Ravichandar (Independent Director)$
- Mr. Soumitra Bhattacharya (Managing Director)
Dr. Andreas Wolf (Joint Managing Director)
@ Chairman of the CSR Committee upto September 01, 2017
# Member upto September 01, 2017; appointed as Chairman with effect from September 02, 2017
$ Member with effect from September 02, 2017.
Average Net Profit of the Company for the last three financial years:
Mio INR 18,122
Prescribed CSR Expenditure (Two percent of the amount as in item 3 above):
Mio INR 362
Details of CSR spent for the Financial Year:
- Total amount spent for the financial year: Mio INR 363
- Amount unspent, if any: Nil
- Manner in which amount spent in the financial year is detailed below:
Details of the implementing agencies:-
Karuna Trust, a registered trust since 1986, is a Non-Government Organization of repute primarily providing free primary health care for the past 26 years in partnership with various State Governments and Funding Agencies.
Akhila Bharatha Mahila Seva Samaja (ABMSS) is a social organization set up in Bengaluru in 1993 primarily to work towards the betterment of women and children. Since 2013, they added cleft lip and palate treatment as one of their major programmes with the support of Deutsche Cleft Kinderilfe E.V Germany and local donors within the country.
Agastya International Foundation (“Agastya”), founded in 1999 in Bengaluru is an Indian education trust and non-profit organization whose mission is to spark curiosity, nurture creativity and build confidence among economically disadvantaged children and teachers in India. Agastya runs hands-on science and art education programs in rural and semi-urban regions across 18 states. It is one of the largest science education programs that caters to economically disadvantaged children and teachers in the world.
Children’s Movement for Civic Awareness (CMCA) was founded in the year 2000 as a joint programme of Public Affairs Centre and Swabhimana, two Bengaluru based NGOs. CMCA was registered as a Public Charitable Trust on June 15, 2009.
Akshaya Patra Foundation is a not-for-profit organisation headquartered in Bengaluru. The Foundation strives to fight issues like hunger and malnutrition in India, by implementing the Mid-Day Meal Scheme in the government schools and government-aided schools.
Academy for Creative Teaching Trust (ACT) is an institution for teacher training and educational consultancy set up in 2005. It has resources of academicians and academic administrators.
Bosch India Foundation (BIF) is a trust formed in 2008 by Bosch group companies in India for public purpose of community and societal development, with a clear focus on sustainability, thus sustaining the philanthropic values of the Bosch Group in India. The trust is governed by the Board of Trustees who are the heads of the entities of Bosch Group in India.
6. Reasons for not spending the amount specified in Point 5 (b) above:
7. A responsibility statement of the CSR Committee that the implementation and monitoring of CSR Policy is in compliance with CSR objective and Policy of the company.
The CSR projects were designed, implemented and periodically reviewed in accordance with the CSR Policy of the Company framed pursuant to the provisions of the Companies Act, 2013 and rules made thereunder.
Joint Managing director
Corporate Social Responsibility Committee
Annexure ‘C’ to the Report of the Directors
STATEMENT CONTAINING SALIENT FEATURES OF THE FINANCIAL STATEMENT OF SUBSIDIARIES/ASSOCIATE COMPANIES/JOINT VENTURES
Part “A”: Subsidiaries
Name of the subsidiary: MICO Trading Private Limited
1. Names of subsidiaries which are yet to commence operations: MICO Trading Private Limited
2. Names of subsidiaries which have been liquidated or sold during the year: None
Part “B”: Associates and Joint Ventures
Name of Associate: NewTech Filter India Private Limited
1. Names of associates or joint ventures which are yet to commence operations: Nil
2. Names of associates or joint ventures which have been liquidated or sold during the year: Nil
|For and on behalf of the Board|
Place : Bengaluru
V. K. Viswanathan
Annexure ‘D’ to the Report of the Directors
NOMINATION AND REMUNERATION POLICY
In terms of Section 178 of the Companies Act, 2013 and clause 49 of the listing agreement (as amended from time to time), this policy on Nomination and Remuneration of Directors, Key Managerial Personnel (KMP) and Senior Management of Bosch Limited has been formulated by the Nomination & Remuneration Committee and approved by the Board of Directors.
This policy shall act as guidelines on matters relating to the remuneration, appointment, removal and evaluation of performance of the Directors, Key Managerial Personnel and Senior Management.
In this policy unless the context otherwise requires:
- Act means the Companies Act, 2013 and rules made thereunder, as amended from time to time.
- Company means Bosch Limited.
- Board means Board of Directors of Bosch Limited.
- Independent Director means a Director referred to in Section 149(6) of the Companies Act, 2013 read with clause 49 of the listing agreement.
- Committee means Nomination & Remuneration Committee of the Company as constituted by the Board from time to time.
- M&SS means Managerial & Superintending Staff of the Company.
- Key Managerial Personnel or KMP means Managing Director, Joint Managing Director, Whole-time Director, Chief Financial Officer, Company Secretary and such other persons who may be deemed to be KMP under the Companies Act, 2013.
- Senior Management Personnel means personnel of the Company comprising of all members of management one level below the executive directors including the functional heads. The designation and categories of such Personnel will be determined by the Company based on the functional and reporting structure.
- ASR means Annual Salary Review.
- SLx means Salary Level.
The words and expressions used but not defined herein, but defined under the Companies Act, 2013 shall have the meaning assigned therein.
3. Constitution of the Nomination & Remuneration Committee:
The Board has the power to constitute / reconstitute the Committee from time to time in order to make it consistent with Bosch policies and applicable statutory requirements. At present, the Nomination & Remuneration Committee of the Company comprises of the following members:
- Mr. Bernhard Steinruecke, Chairman, Independent Director
- Mr. V. K. Viswanathan, Non-Executive Non-Independent Director
- Mr. Prasad Chandran, Independent Director
- Mr. Bhaskar Bhat, Independent Director
Membership of the Committee shall be disclosed in the Annual Report. The terms of the Committee shall be continue unless terminated by the Board of Directors.
4. Key objectives of the Committee:
- To guide the Board in relation to the appointment and changes in Directors, Key Managerial Personnel and Senior Management including appointment of M&SS in KMP and Senior Management positions;
- To evaluate the performance of the Members of the Board and provide necessary report to the Board for further evaluation;
- To recommend to the Board on remuneration payable to the Directors, Key Managerial Personnel and Senior Management;
- To develop a succession plan for the Board and to regularly review the plan;
- To determine remuneration based on Company’s financial position, trends and practices on remuneration prevailing in the industry;
- To retain, motivate and promote talent and to ensure long term sustainability of M&SS talent including KMPs & Senior Management Personnel and create competitive advantage; and
- Consider any other matters as may be requested by the Board.
The meeting of the Committee shall be held at regular intervals as deemed fit and appropriate. The Company Secretary of the Company shall act as the Secretary of the Committee.
The Nomination and Remuneration Committee shall set up a mechanism to carry out its functions, any/all of its powers to any of the Executive / Whole-time Directors and/or Senior M&SS of the Company, as deemed necessary for proper and expeditious execution.
The Chairman of the Committee or in his absence any of other member of the Committee authorized by him on his behalf shall attend the General Meetings of the Company.
6. Committee members interest:
- A member of the Committee is not entitled to participate in the discussions when his/her own remuneration is discussed at a meeting or when his/her performance is being evaluated.
- The Committee may invite such executives, as it considers appropriate, to be present at the meetings of the Committee.
7. Effective Date:
This policy shall be effective 03.12.2014.
8. Appointment of Director, Key Managerial Personnel & Senior Management - Criteria & Qualification:
The appointment of Director, Key Managerial Personnel and Senior Management will be based on the outcome of strategic planning.
The recruitment process for selection to these categories of personnel commences after the approval of manpower requisitions by the appointing authority (depending upon the SLx levels). Relevant approval of concerned is also obtained as part of the process, as deemed fit depending upon the level of hiring.
The Committee shall consider the standards of qualification, expertise and experience of the candidates for appointment as Director, Key Managerial Personnel and Senior Management and accordingly recommend to the Board his/her appointment.
9. Remuneration to Directors, Key Managerial Personnel, Senior Management Personnel and other employees:
- The Key Managerial Personnel, Senior Management Personnel and other employees shall be paid remuneration as per the Compensation and Benefit Policy of the Company as revised through the Annual Salary Review process from time to time.
- The Human Resource department will inform the Committee, the requisite details on the proposed increments for every ASR cycle / process including payouts for the variable part (Performance Incentive).
- The Compensation structure will also be based on the market salary survey. The survey for total remuneration would be commissioned with external consultants. The basket of companies will be finalized by HR department after considering all the relevant aspects.
- The composition of remuneration so determined by the Committee shall be reasonable and sufficient to attract, retain and motivate the Key Managerial Personnel and Senior Management of the quality required to meet high standards of performance. The relationship of remuneration to performance shall be clear and meet appropriate performance benchmarks. The Committee may review remuneration of identified senior management personnel from time to time.
Remuneration to Non-Executive & Independent Directors
The Non-executive Directors and Independent Directors of the Company are entitled to sitting fees as determined by Board from time to time for attending Board / Committee meetings thereof in accordance with the provisions of Act.
The profit-linked Commission shall be paid within the monetary limit approved by the shareholders of the Company subject to the same not exceeding 1% of the net profits of the Company computed as per the applicable provisions of the Act. Profit linked commission would comprise of a fixed and variable component considering the overall performance of the Company, attendance at the meetings of the Board/ Committees, Membership/Chairmanship of Committees and responsibilities of Directors.
10. Policy on Board diversity:
The Board of Directors shall comprise of Directors having expertise in different areas / fields like Finance, Sales and Marketing, Banking, Engineering, etc. or as may be considered appropriate. In designing the Board’s composition, Board diversity has been considered from a number of aspects, including but not limited to gender, age, cultural and educational background, ethnicity, professional experience, skills and knowledge. The Board shall have at atleast one Board member who has accounting or related financial management expertise and atleast one woman director.
11. Changes amongst Directors, Key Managerial Personnel & Senior Management:
The Committee may recommend to the Board, changes in Board, Key Managerial Personnel or Senior Management Personnel subject to the provisions of the Act and applicable Company’s policies i.e., Rules and Regulation of Service and Conduct for M&SS, Code of Business Conduct and Principles of legal compliance framed and adopted by the Company from time to time.
The Key Managerial Personnel and Senior Management Personnel shall superannuate as per the applicable provisions of the regulation and prevailing policy of the Company.
The Board of Directors will have the discretion to retain the Key Managerial Personnel and Senior Management Personnel in the same position/remuneration or revised remuneration after attaining the age of superannuation for organizational development reasons.
12. Amendments to the Nomination and Remuneration Policy:
The Board of Directors on its own and/or as per the recommendations of Nomination and Remuneration Committee can amend this policy, as deemed fit from time to time
For and on behalf of the Board of Directors
V. K. Viswanathan
Date: May 22, 2018
Annexure ‘E’ to the Report of the Directors
I. The ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the Financial Year:
* Employees for the above purpose and Point No. III below includes all employees except employees/associates governed under Long-term wage settlement.
@ resigned from the directorship of the Company with effect from the close of business hours on September 01, 2017.
$ appointed as an Additional Director in capacity of an Independent Director with effect from September 02, 2017.
% Mr. Peter Tyroller has waived his remuneration as Director of the Comp
II. Percentage increase in the remuneration of each director, Chief Financial Officer, Chief Executive Officer and Company Secretary in the financial year:
|@||Mr. Prasad Chandran resigned from the directorship of the Company with effect from the close of business hours on September 01, 2017. Hence, the remuneration drawn for the year under review is not comparable with the previous year.|
|#||Appointed as Additional Director in capacity of an Independent Director with effect from September 02, 2017.|
|$||Mr. Peter Tyroller has waived his remuneration as Director of the Company.|
|*||Appointed as Alternate Director to Mr. Peter Tyroller and consequently as a Whole-time Director with effect from February 11, 2017. The remuneration drawn for the previous year is for the period February 11, 2017 to March 31, 2017. The percentage increase in remuneration in the financial year is calculated on a propotionate basis.|
|&||Served as the Company Secretary for a part of the previous financial year. The remuneration drawn for the previous year as Company Secretary is for the period February 11, 2017 to March 31, 2017. The percentage increase in remuneration in the financial year is calculated on a propotionate basis.|
III. The percentage increase in the median remuneration of employees in the Financial Year:
There was an increase of ~5.37% in the median remuneration of employees.
IV. The number of permanent employees on the rolls of the Company:
As at March 31, 2018, the Company had 9,934 permanent employees on its roll.
V. Average percentile increase already made in the salaries of employees other than the managerial personnel in the last Financial Year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:
Percentage increase made in the salaries of the employees other than the managerial personnel in the last Financial Year i.e. 2017-18 was ~8.9% whereas the increase in the managerial remuneration in the Financial Year 2017-18 was ~23.55%.
VI. Affirmation that the remuneration is as per the remuneration policy of the Company:
It is hereby affirmed that the remuneration paid to the Directors, Key Managerial Personnel and Employees is as per the Nomination and Remuneration Policy of the Company.
Annexure ‘F’ to the Report of the Directors
Form No. AOC-2
Form for disclosure of particulars of contracts/arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arm’s length transactions under third proviso thereto.
1. Details of contracts or arrangements or transactions pursuant to section 188(1):
2. Details of material contracts or arrangement or transactions at arm’s length basis:
Robert Bosch GmbH (Holding company)
Ongoing, repetitive, in ordinary course of business and on arm’s length basis.
Approval of the Audit Committee and the shareholders have been obtained pursuant to the requirements of erstwhile Listing Agreement/SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Companies Act, 2013, for an aggregate amount upto Mio INR 50,000 for each financial year.
For and on behalf of the Board of Directors
V. K. Viswanathan
Date: May 22, 2018
Annexure ‘G’ to the Report of the Directors
CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
A. Conservation of energy
(i) The steps taken or impact on conservation of energy:
- Optimization of ventilation system.
- Use of energy efficient pumps and motors in Air Handling Units
- Heat Pump utilization for Aqueous cleaning machine.
- Installation of centralized Programmable Logic Controller (PLC) control for ACs.
- Use of Carbon Fiber Composite (CFC) trays in place of Metallic trays for batch loading of heat treatment furnaces.
- Adoption of Auto Power Factor Control.
- Replacement of conventional luminaries with LED lights.
- Variable Frequency Drive (VFD) installed for Compressors, etc.
- ‘Dew point’ based control of compressed air dryers.
- Use of timers & motion sensors for office lighting.
- Energy Saver Panel for lightings to consume optimum electrical energy.
- Installation of solar thermal unit for generation of hot water at the kitchen block of canteen.
- Thermal imaging of the furnaces and leakage correction.
- Energy analytics to review energy conservation on line.
- Temperature optimization in Dürr cleaning machine.
- Interlocking of exhaust fans with machine controls.
- Elimination of standalone chiller unit for centralized oil filtration system.
- Batch quantity and charge grate weight optimization in furnace and heat treatment.
- Roof exhaust fan automation.
(ii) The steps taken by the Company for utilising alternate sources of energy:
- The Company has installed Solar Plants at its various manufacturing location for using solar energy as a source in place of conventional sources.
- The details of the installed solar capacity of the various manufacturing facilities of the Company is given below:
(iii) The capital investment on energy conservation equipment(s):
During the year under review, the Company focused on investments aiming to reduce usage of conventional energy, energy conservation projects and increase the generation of solar energy and/or optimization of energy utilisation. Location wise details of investment on energy conservation/solar energy equipment(s):
B. Technology absorption
(i) The efforts made towards technology absorption:
- Introduction of Heat Pumps in place of electrical heating.
- Introducing lean manufacturing concept for energy efficiency projects through leveling and auto loading for increasing utilization of machines.
- Smart LED lighting technology for street lighting and office areas.
- Energy analytics to monitor energy consumption and take energy conservation measures.
- Energy efficient chiller.
- Energy efficient control drives used for furnace.
- Quench oil optimization in conveyer brazing furnace.
(ii) The benefits derived like product improvement, cost reduction, product development or import substitution:
The initiatives have resulted in benefits for customers and the end users as enumerated below:
- Synchronization of Diesel Generator with purchased electricity to ensure the fuel economy which result in emission reduction.
- Reducing exhaust emissions.
- Improving fuel economy and consequent reduction in CO2.
- Optimum cost/benefit ratio for system solutions.
(iii) In case of imported technology (imported during the last three years reckoned from the beginning of the financial year)
(iv) The expenditure incurred on Research and Development:
For and on behalf of the Board of Directors
V. K. Viswanathan
Date: May 22, 2018
Annexure ‘H’ to the Report of the Directors
SECRETARIAL AUDIT REPORT
For the financial year ended 31 March, 2018
I have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices by Bosch Limited (hereinafter called “the Company”). Secretarial Audit was conducted in a manner that provided me a reasonable basis for evaluating the corporate conduct/statutory compliances and expressing my opinion thereon.
Based on my verification of the Company’s books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information provided by the Company, its officers, agents and authorised representatives during the conduct of Secretarial Audit, I hereby report that in my opinion, the Company has, during the audit period covering the financial year ended on 31 March, 2018, complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliancemechanism in place to the extent, in the manner and subject to the reporting made hereinafter:
I have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on 31 March, 2018 according to the provisions of:
- The Companies Act, 2013 (the Act) and the rules made thereunder;
- The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder;
- The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;
- Foreign Exchange Management Act, 1999 and the rules and regulations framed thereunder to the extent of foreign direct investment. The provisions of external commercial borrowings and overseas direct investment were not applicable to the Company.
The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):-
- The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
- The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;
- The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009; (Not applicable to the Company during the audit period)
- The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014; (Not applicable to the Company during the audit period)
- The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; (Not applicable to the Company during the audit period)
- The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;
- The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; (Not applicable to the Company during the audit period); and
- The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998; (Not applicable to the Company during the audit period)
- As per the representation made by the Company, no law was applicable specifically to the Company.
I have also examined compliance with the applicable clauses of the following:
- Secretarial Standards issued by the Institute of Company Secretaries of India
- Listing Agreements entered into by the Company with BSE Ltd. and the National Stock Exchange of India Ltd. and The Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.
During the period under review the Company has complied with the provisions of the Act, Rules, Regulations, Guidelines, Standards, etc. mentioned above.
I further report that:
The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, NonExecutive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.
Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.
As per the minutes of the meetings duly recorded and signed by the Chairman, the decisions of the Board were unanimous and no dissenting views have been recorded.
I further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
I further report that during the audit period, no specific events / actions took place having a major bearing on the Company’s affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards, etc. referred to above.
Place : Pune
Date: 9 May 2018
This report is to be read with my letter of even date which is annexed as Annexure and forms an integral part of this report.
Annexure to the Secretarial Audit Report
My report of even date is to be read along with this letter:
- Maintenance of secretarial records is the responsibility of the management of the Company. My responsibility is to express an opinion on these secretarial records based on my audit.
- I have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. I believe that the process and practices I followed provide a reasonable basis for my opinion.
- I have not verified the correctness and appropriateness of financial records and books of accounts of the Company.
- Wherever required, I have obtained Management Representation about the compliance of laws, rules and regulations and happening of events, etc.
- The compliance of the provisions of corporate and other applicable laws, rules, regulations, standards is the responsibility of management. My examination was limited to the verification of procedures on test basis.
- The Secretarial Audit report is neither an assurance as to future viability of the Company nor of the efficacy or effectiveness with which the management has conducted the affairs of the Company.
Place : Pune
Date: 9 May 2018
Annexure ‘I’ to the Report of the Directors
FORM NO. MGT - 9
EXTRACT OF ANNUAL RETURN
(As on the Financial Year ended March 31, 2018)
I. REGISTRATION AND OTHER DETAILS:
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY:
All the business activities contributing 10% or more of the total turnover of the Company are given below:-
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES:
IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)
i) Category-wise Share Holding
ii) Shareholding of Promoters:
iii) Change in Promoter/Promoter Group’s Shareholding:
iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):
v) Shareholding of Directors and Key Managerial Personnel:
Indebtedness of the Company including interest outstanding/accrued but not due for payment
VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. Remuneration to Managing Director (MD), Whole-Time Directors (WTD) and/or Manager:
B. Remuneration to other directors:
Note: Mr. Peter Tyroller, Non-Executive Director has waived his remuneration as director.
# Total remuneration to Managing Director, Whole-time Director and other Directors [being the total of (A) and (B)]. The ceiling for the total remuneration to all directors is Mio INR 1,973.2, being 11 percent of the profits calculated as per Section 198 of the Companies Act, 2013.
C. Remuneration To Key Managerial Personnel Other Than MD/Manager/WTD
VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES:
For and on behalf of the Board of Directors
Place : Bengaluru
Date: May 22, 2018
V. K. Viswanathan