The Directors have pleasure in presenting the SIXTY-SEVENTH Annual Report together with the Audited Financial Statements for the Financial Year ended March 31, 2019.

1. Financial Results

The following are the financial highlights for the Financial Year 2018-19:

2. Dividend

Pursuant to the requirements of regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has adopted a Dividend Distribution Policy. This Policy is uploaded on the 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’ (Page No. 59) to this Report.

In line with the Dividend Distribution Policy, the Board has recommended a Dividend of INR 105 per share for the Financial Year 2018-19, aggregating to Mio INR 3,733.39 including Dividend Distribution Tax. The dividend payout ratio is approximately 23.4 percent. 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 is expected to slow down to 3.3 percent in 2019 from 3.6 percent in 2018 as per IMF estimates. The downward revision is primarily on account of the negative effects of tariff increases enacted in the United States and China.

Risks to the global GDP tilt towards the downside on trade tensions and risks in the Eurozone. The effect of the same has been that central banks across the world have adopted an easing policy as growth concerns. However, given the stretched balance sheets of many central banks, there is limited bandwidth for the same.

3.1.2 Indian Economy

Though 2018-19 started out on a promising note, there was a dip seen towards the end. Quarterly GDP growth which was above 8 percent for Q1 2018- 19 dipped to 5.8 percent for Q4 2018-19, primarily attributed to the liquidity crisis in the second half of the financial year.

While the industrial production and credit growth moderated, Government capital expenditure continued to hold up the economy. At the same time, since inflation was under control, the focus of the RBI has changed to accommodate growth. But delay in shortfall of monsoon is likely to negatively effect the economy.

Towards the end of 2018-19, we saw liquidity constrained on account of the NBFC (Non-Banking Financial Company) crisis and rising crude oil prices. This has affected automotive sales among other things. Though banking liquidity shows signs of improvement, it remains to be seen if this crisis will continue for a few more quarters.

On the other hand, one key positive is the political stability after a clear mandate in the elections and signs that the NPA situation in banks is improving. This could mean that banks would be in a better position to facilitate credit required by industry as the Reserve Bank of India has also taken additional steps to improve liquidity.

The key factors to watch out for would be reforms by the Government, chances of any geo-political risks in the region and heightened chances of a global slow down.

3.2 Industry Structure and Development Automotive:

Heavy Commercial Vehicles (HCVs) production posted a strong growth of 28 percent due to tenders and contracts on road and infrastructure projects. Other projects such as building of irrigation and affordable housing contributed to the growth of domestic market. Additionally, there has been strong acceptance of SCR technology, aiding the growth.

The Light Commercial Vehicles (LCVs) market grew by 22 percent due to increased thrust in FMCG, ecommerce sales and agriculture output. The current trend of warehouse consolidation has resulted in a segment shift for >2T<3.5T segment, the demand for city trucking drives the growth of LCV.

During the year under review, Passenger Car production witnessed a muted growth. Domestic market witnessed new launches especially in the Compact UV and premium hatchback segment. There were some market challenges such as higher insurance cost, higher fuel prices and higher interest rates, which has resulted in low growth.

Three-wheelers production increased by 24 percent due to higher demand driven by grant of additional permits in Delhi, Maharashtra, Kerala and Karnataka. Strong export demands from African and SAARC countries (except Sri Lanka) for last mile connectivity has driven three-wheeler market with export contribution of 45 percent.

The Tractor market grew by 14 percent driven by a good monsoon, farm loan waiver, good MSP (minimum selling price) for crops and positive farmer sentiments. The trend is moving towards farm mechanization and tractor sharing.

Two-wheeler market witnessed a growth of 6 percent during the year under review mainly due to growing export sales demands. Various OEM campaigns throughout the year have struck a good chord with the consumers, driving the sales of two wheelers in India.

The Automotive Aftermarket industry grew by ~7 percent during year under review driven predominantly by Heavy Commercial Vehicle, Light Commercial Vehicle and Three-wheeler segments.

Vehicle Production Growth Rates:

Non-Automotive:

The Indian Professional Tools market is estimated to be around INR 18 billion by value in the year 2018 and is expected to grow at 7 percent. 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 Building technology (Security technology) market in India is growing at 5 percent driven by the need to secure Critical Infrastructure, Government Buildings, Public and Private Spaces. The Technology trends in this space are evolution and maturity of IP Convergence, analytics and seamless integration. The market is also preparing itself to deal with the challenging threats and changes driven by fast-changing hardware and software. The industry is also maturing driven by the renewed scope in Regulation and Bottoms-up desire to feel safe and secure.

The solar energy sector in India stabilized since the start of the year under review, with solar PV panel prices settling and clarity in applicable GST rates coming in. As of December 2018, the total installed capacity stood at 27.9 GW, making India the third-largest solar market globally. Of the total installed capacity, rooftop solar capacity accounted for 3.3 GW, indicating a strong 66 percent growth over the previous year. The energy efficiency market continued to grow with government-led initiatives like the Partial Risk Sharing Facility for Energy Efficiency and Perform-Achieve-Trade scheme.

With India’s commitments to the Paris Climate Agreement, the energy efficiency market is expected to pick up further pace in the current financial year and drive adoption in energy-intensive industrial and commercial sectors. The solar energy market is anticipated to grow further and achieve the government target of 10 GW capacity addition for the year, with 2.5 GW capacity addition coming from rooftop solar.

Bosch Limited offers an integrated system including motor, control unit, battery, charger, display, and app.

3.3. Business and segment wise performance

The overall performance of the Company witnessed a growth of 4.9 percent. Mobility business (Automotive) posted a growth of 2.8 percent, while the Business beyond mobility (Others) grew by 17.9 percent. Domestic mobility business witnessed an increase of 3.4 percent, mainly driven by Powertrain Solutions with increased demand from Commercial Vehicle segment due to infrastructural projects, growth in FMCG and e-commerce, and demand in 3-Wheeler segment towards last mile connectivity solutions.

As the Company predominantly operates in manufacturing and trading of mobility solutions, this constituted 84.8 percent of total sales for the Financial Year 2018-19. The Business beyond mobility, comprising of Industrial Technology, Consumer Goods and Energy and Building Technology, had a share of 15.2 percent. Hence, the operating segment consists of “Mobility Business” (Automotive Products) and “Business beyond mobility” (Others).

3.3.1 Operating Segment

Mobility Business:
Powertrain Solutions

The successful merger of the former Diesel Systems and Gasoline Systems in early 2018 has given rise to Powertrain Solutions with the aim to develop and provide unmatched solutions to Automobile industry regardless of the energy source. This also helped in bringing synergy among two divisions and helped in standardization of processes and deployment of resources in a more productive manner.

The Powertrain Systems division offers an extensive range of energy-efficient, eco – friendly fuel injection systems for applications ranging from passenger cars and all kinds of commercial vehicles and agricultural equipment to large – scale industrial power – generation units. It focuses primarily on the common rail system, which comprises of a high – pressure injection pump, rail and various injectors.

The general market sentiment was buoyant in CV segment due to growth in infrastructure and higher sales in tractor segment driven by a good monsoon and new launches having targeted products manufactured by the Company led to the growth of Powertrain Systems business by 2.4 percent over the previous year. In future, the growing working population and expanding middle class will remain the key drivers of growth for the automobile industry.

The Distributor pump injection system has seen a considerable reduction post-implementation of BSIV emission norms. The In-line pump system continues to be stable on account of demand from Tractor and Genset segments. Bosch is continuously gearing up to handle the customer requirements for the upcoming BSVI emission norms implementation from 01.04.2020.

2 Wheeler business grew by 2.3 percent aided through targeted product launches. During the year, the Company has started engineering activities for BSVI projects, which are due to be delivered by late 2019, for a smooth transition into new emission norms. With the tailored product portfolio for the Indian market, we are providing vehicle manufacturers with local engineering competence – aiming towards realizing the vision of nearly emissions-free mobility.

Further during the year, we also embarked upon challenging electrification programs, which will be delivered to our customers in 2019. This will open up new stream of business for 2 Wheeler products in India.

Automotive Aftermarket

The Automotive Aftermarket division (AA) offers a comprehensive range of spare parts for passenger cars, commercial vehicles and 2-Wheelers for the aftersales-market & OES (Original Equipment – Spares). Automotive Aftermarket Division also offers unit repair solutions as well as vehicle repair solutions especially for Passenger Cars & 2-Wheelers including diagnostic for independent aftermarket. The product portfolio consists of Bosch manufactured products like Fuel Injection Equipment & Spares, Spark Plug, Braking Parts and Filter, as well as products & services like Battery, Starter Generators, Lubricants, Comfort Electronics, Wiper Blades and Lubricant 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 grew by 6.5 percent.

The division released a simplified business development policy in 2018 towards customer-centric initiative which was very much acknowledged by distributors. The division has more than 87,000 customers in BRO (Bosch Rewards On Orders), a retailer binding program and more than 55,000 customers in Bosch UKU (Ustadon Ke Ustaad) Program, a program for Independent Repair workshop for Commercial Vehicle segment which creates demand for Bosch range of parts across all vehicle segments. The division also worked in transparent and digital reimbursement of eligible 2nd Trade Level customers (Retailer & Bosch Service Partners) incentives directly to the customer’s account through NEFT.

Business beyond Mobility:

The Business beyond Mobility has grown by 17.9 percent; which was driven predominantly by Power Tool and Bosch Energy & Building Solution Division in the domestic market; which contributed to 91.3 percent of total business beyond mobility during the year under review as compared to 83.4 percent during the previous financial year. However, export sales of total business beyond mobility decreased by 39.2 percent as compared to previous financial year.

Industrial Technology – Packaging Technology

The Packaging Technology Division is a provider of packaging solutions for the food and confectionery industries. The range includes individual machines, end-to-end packaging system solutions and a comprehensive service portfolio.

Robert Bosch GmbH, the holding company, vide its press release dated June 29, 2018 informed that it intends to realign its Packaging Machinery Business (PA). The proposed slump sale of the India business is a pre-requisite to be a part of the global re-alignment.

The Board of Directors of the Company, at their meeting held on May 21, 2019, have approved the sale of Packaging Business, subject to the approval of the shareholders.

PA Business globally is characterized by tough competition and cost pressure. Packaging technology is not a core Bosch business. Due to dependence on PA global for technology and Intellectual Properties (IP), local business cannot be run profitably on standalone basis. Packaging division in India operates in a very competitive environment, competing with Small and Medium Enterprise (SMEs) with structural advantages. Even the margins in this business are very low. Hence, it has been thought fit to globally re-align the said business by seeking a joint venture partner or a buyer for opening up additional growth potential and enabling further expansion of international presence. The proposed re-alignment would enable the global PA business additional growth opportunities.

The PA Business in India (“PA-IN”) constitutes approximately 1.4 percent of the total business of the Company. The sale of PA-IN will allow the Company to sharpen its focus on transformation of the Bosch Group and its future digitalization strategy, including the internet of things and to pool its resources accordingly. The sale of PA-IN business may enable the Company to increase the overall profit margin.

Consumer Goods – Power Tools

The Power Tools business comprising corded and cordless power tools, spares, accessories, digital measuring tools and high-pressure washers witnessed a growth of 13.8 percent.

The Division achieved 100 percent growth in terms of Channel expansion to Tier 3 and Tier 4 markets. It aims at reducing the distance to its users and will continue to focus on improving their lives by providing affordable solutions. Its focus on the loyalty program and e-commerce channels for business would also continue to be essential contributors to the overall business.

Energy and Building Technology (Building Technology, Bosch Energy & Building Solutions and Thermo-technology)
Building Technology (Security Technology)

The Building Technology division manufactures innovative products and solutions in the field of security, safety and communications primarily for infrastructure and commercial applications. The portfolio includes video-surveillance, intrusiondetection, fire-detection, public address and voicealarm systems, access-control, building management systems, professional audio and conference systems.

The business achieved a growth of 8.8 percent over the previous year, driven by orders in the verticals of Transportation, Government, Oil and Gas. Futuristic products like the new high Mega-Pixel Cameras, Professional Audio speakers and Amplifiers and localized Conference Systems that were introduced were well received. During the year under review, the exports continued to increase due to rise in demand of Fire Alarm Systems from SAARC customers.

Bosch Limited’s innovative energy solutions include reliable solar power plants and customized energy efficiency solutions
Bosch Energy & Building Solutions

The division implements customized energy solutions in the solar energy and energy efficiency space for commercial and industrial clients for reduction of energy consumption, costs and carbon footprint.

The division achieved substantial growth of 63.6 percent over the previous year due to tailwinds from stable market conditions and resumption in demand compared to the previous year, combined with 2 large solar project orders. The year under review saw project completions for key clients (like Honda Motorcycle and Scooter India, Bangalore International Airport, Bagmane Tech Park, Nilons’ Enterprises and Mysore Polymers & Rubber Products) for solar energy and energy efficiency solutions.

In the current fiscal year, the division is focusing on consolidating the solar energy business with implementations for captive power consumers and scaling up the energy efficiency business with deeper penetration of its established solutions in focus customer sectors.

Thermo-technology

At the meeting of the Board of Directors held on May 21, 2019, the Board has decided to close the “Thermo-technology Business”.

This business was established in 2011 and has not been profitable since the beginning in India. The overall revenue from this business is small and not material. Considering the business competitiveness and market attractiveness, the Company does not find this business viable. Overall, it is a highly fragmented market with very high competition from unorganized players. The Company will continue to provide spare parts and service for Thermo-technology Business offerings for the next 5 years.

3.3.2 Revenue by geographical area

The export sales of the Company decreased to 7.6 percent to the total sales for the year under review as compared to 9.2 percent during the previous financial year. The Company’s exports, bulk of which were to Germany, China, Turkey, Brazil, Bangladesh and UAE decreased by ~12.0 percent as compared to previous year majorly in Packaging Division, Powertrain Solutions, Building Technology and Thermo Technology Divisions.

3.4 Financial Performance and Condition

Sale of products

Sale of products grew by 5.1 percent over previous year on a comparable basis and stood at Mio INR 117,818. The increase is attributable to better sales volumes in Powertrain Solutions division consisting of Diesel and Gasoline powertrain products.

Sale of services

Sale of services is marginally decreased by 1.7 percent over previous year, mainly due to deferral of revenues as per Ind AS 115 – “Revenue from contracts with customers”.

Other operating revenue

Other operating revenue stood at Mio INR 2,120, increased by 0.6 percent over the previous year.

Other income

Other income, which mainly comprises of mark-tomarket gains, profit on sale of marketable securities, dividend and interest income, increased by 16.3 percent over the previous year. Income from net gain on financial assets measured at Fair Value through Profit and Loss (FVTPL) was Mio INR 3,093 for the year under review as against Mio INR 2,185 in previous year.

Sale of products

Sale of products grew by 5.1 percent over previous year on a comparable basis and stood at Mio INR 117,818. The increase is attributable to better sales volumes in Powertrain Solutions division consisting of Diesel and Gasoline powertrain products.

Income from interest on bank and inter-company deposits increased by 6.2 percent due to improved interest rates yielding higher returns.

Cost of materials consumed

The cost of materials consumed as a percentage of revenue increased from 53.9 percent to 55.3 percent during the year under review. The increase is mainly driven by commodity price and foreign exchange impact, offset by various cost reduction measures undertaken by the across value chain including with suppliers.

Personnel cost

Personnel cost as a percentage of revenue decreased from 11.6 percent to 11.2 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 4,045 as against Mio INR 4,672 during the previous year ended March 31, 2018. The higher depreciation in previous year is attributable to new investments for expansion of new generation products at facilities situated in Bidadi (Karnataka) and Nashik (Maharashtra).

Provision for Tax

Tax Expense represents a net charge of Mio INR 7,430 in the year under review, as compared to Mio INR 6,698 in the previous year. The effective tax rate for the year under review was 31.7 percent as compared to 32.8 percent in the previous year due to tax refund relating to earlier years.

Profit After Tax (PAT)

Profit after tax increased by 16.6 percent to Mio INR 15,980 in the period under review from Mio INR 13,708 in previous financial year.

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 997 (net of taxes) 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 2018-19 was INR 525 per share as against INR 449 in FY 2017-18.

Share capital

As on March 31, 2019, 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 294.94 divided into 29,493,640 equity shares of INR 10 each. During the year under review, the Company had a buyback of 1,027,100 equity shares of INR 10 each.

Reserves & Surplus

Reserves & Surplus as on March 31, 2019 stood at Mio INR 82,917, which includes retained profits of Mio INR 82,491. During the year under review, Mio INR 21,569 was utilized for the purpose of buyback of equity shares.

Other Reserve

Other Reserve increased from Mio INR 7,210 to Mio INR 8,050 mainly due to change in the fair value of equity investments valued in line with Ind AS.

Shareholders’ fund

The total Shareholders’ fund decreased to Mio INR 91,262 as on March 31, 2019 from Mio INR 99,813 as on March 31, 2018, mainly due to utilization of general reserves for the purpose of buyback during the year under review; which is further offset by profits during the year under review.

Fixed assets – capital expenditure

The gross fixed asset value (including Capital Work-InProgress) as on March 31, 2019 was Mio INR 33,269 compared to Mio INR 27,629 as on March 31, 2018.

The Company made capital investments of Mio INR 5,975 during the year under review in addition to Mio INR 4,600 invested during previous year. Major investments were made towards development of Bidadi Phase II and Adugodi Phase II in Karnataka.

Investments

The total investments (excluding investment in property) as on March 31, 2019 decreased to Mio INR 40,361 as against Mio INR 52,228 as on March 31, 2018 mainly for the purpose for funding the buyback of the equity shares during the year under review.

Other Reserve

Other Reserve increased from Mio INR 7,210 to Mio INR 8,050 mainly due to change in the fair value of equity investments valued in line with Ind AS.

Working capital

Inventories

Inventory as on March 31, 2019 increased by 17.8 percent to Mio INR 14,443 from Mio INR 12,258 as on March 31, 2018 mainly due to lower inwarding from OEMs (Original Equipment Manufacturer) in Automotive segment; as an effect of production cuts in order to liquidate dealer inventory in the last quarter of the year under review.

Trade receivables

Trade receivables as on March 31, 2019 decreased to Mio INR 15,675 as against Mio INR 16,156 as on March 31, 2018 mainly due to reduction in turnover during the last quarter of the year under review. This is further supported by improved collections against overdue receivables in retail market customers of other divisions.

However, there is an increase of 4 days in Debtor Turnover Ratio due to delay in collections from export customers (SAARC countries), higher project billings with long collection period to infrastructure projects from building technology division and Machine building projects in packaging division.

Cash and Bank balances

The total cash and bank balances as on March 31, 2019 was Mio INR 12,527 (including cash and cash equivalent of Mio INR 2,032), compared to Mio INR 18,878 (including cash and cash equivalent of Mio INR 3,633) as on March 31, 2018.

Key Ratios:

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 2018 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 continues to deal with the said matters in a fair and firm manner in a journey towards “Fit for Future”.

During the year under review, increased connect with Government and statutory bodies, Engagement calendar, Compliance checklist, self-audits and cross audits, etc. were continued to strengthen Employee Relations.

The Company has received appreciations from its various customers for its best practices and approach in Employee relations with a clear focus on engagement and trust-building.

3.6 Internal Audit and Internal Financial Controls

The Company has an Internal Audit function. The Internal Audit department provides an appropriate level of assurance on the design and effectiveness of internal controls, its compliance with operating systems and policies of the Company at all locations. Based on the internal audit report, process owners undertake corrective actions in their respective areas and thereby strengthen the controls. Significant audit observations and corrective measures 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 the 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 system and enhances the reliability of the Company’s financial statements.

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.

The efficacy of the internal checks and control systems is validated by self-audits and verified by internal as well as statutory auditors.

3.7 Opportunities and Threats

The Indian economy saw a slowdown in the last quarter of 2018 and first quarter of 2019 –due to uncertainty in the market, mainly due to the impending general elections coupled with the liquidity crisis. This resulted in high inventory at the OEMs and dealers. Now, with a stable pro-reform government back in power pursuing a fiscal consolidation path, the pickup in growth is expected to be gradual. But the overall direction is clear, development being the top priority, the opportunities for the fast adoption of technology in India is certain. Upgradation of infrastructure being the fundamental foundation for development, this is an opportunity for the company’s Beyond Mobility divisions dealing in domains like Building Technology and Consumer Goods (Power Tools).

In the mobility scenario, the various initiatives of NITI Aayog and Ministry of Road Transport and Highways e.g. MOVE – the Global Mobility Summit, where stakeholders from across the sectors of mobility and transportation gathered to co-create a public interest framework to revolutionize transport – shows the importance of Mobility as a topic for India.

From the various pronouncements of the government and its agencies, it is clear that reducing the oil bill is of paramount importance and thus electrification in mobility is the way forward. While we are working closely with OEMs in various concurrent projects to deliver the BSVI mandate, electrification also opens up new opportunities and challenges in the mobility space. FAME 2 (Faster Adoption for Manufacturing of Electric and Hybrid Vehicles) has been announced providing incentives for all EVs and promoting EV infrastructure. Also, there are indications that GST for EV will be reduced to 5% from 12%. These steps clearly show the impetus given to create a demand for EVs in the country.

Two and three-wheelers will be the early adopters of electrification. This will gradually move towards fleet passenger cars, but the Internal Combustion Engine (ICE) will continue to be the dominant technology in the remaining segments. Bosch with its focus on the environment, continues research and improvements in diesel technology and applications; and has been able to achieve even lower emissions than what is mandated.

Other key areas of focus emerging from MOVE Summit was Asset Utilization and use of Analytics in Mobility. To cater to these new-age businesses we have created agile project houses, both on Electrification and Mobility Services to understand the local requirements and use the global expertise to provide localized solutions for the Indian market. These project houses being a step towards future-proofing of the Company will need time to translate to mature businesses.

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 Soumitra Bhattacharya, Managing Director, reviews the effectiveness of the process at regular intervals.

Following are the major risks and mitigation measures:

1. Disruptive norms: The automotive industry is in the midst of changes like BSVI, and Electrification. These are considered by the Company as one of the major risks.

(a) Shift to BSVI: The jump from BSIV to BSVI in a short span of about 3 years, the pace of change and the short time duration for preparedness are challenging. Shift to BSVI products, which are largely based on imports, in the initial years, 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 a global end-to-end solution provider, has its own advantage and is working closely with some of the top customers in the industry.

2. Competition: The Company operates in a highly competitive environment due to which there are risks of pressure on pricing, loss of market share 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 products 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 Powertrain 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 a more focused continuous action plan for wage settlement, offers attractive voluntary retirement schemes, Firm and Fair approach for settlement with contract labour and implement “selected” industry best practices. As the continued process in building capability initiative, special training 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. Economy/Industry: The automotive industry is going through a rough patch currently due to various issues like lower demand, tight liquidity crunch, high fluctuations in customer demand and in general slow down due to general elections. Even though most of these are likely to be temporary, it could impact the Company in short and mid-term.

3.9 Outlook

In the near term, the downtrend in the automotive market with high inventory built-up in the pipeline is a definitive threat. With the ongoing slowdown in the market and multiple manufacturers regulating their production, we perceive a very conservative outlook of this sector. Though empirical evidence in the past suggests a pre-buy in the market before the implementation of regulatory changes like the BSVI changeover. However, in the current market scenario, there is high uncertainty on a pre-buy. With a definitive deadline in place for BSVI implementation, the OEMs will be looking forward to exhausting their complete inventory and not carrying over the inventory of obsolete technology. Furthermore, the implementation of safety and emission norms will also lead to an increase in the cost of the vehicle resulting in higher TCO (total cost of ownership). Increase in fuel prices, rise in third party insurance charges, coupled with NBFC financial crisis and low employment rate would lead to poor market sentiments. Thus, FY2019-20 looks to be of muted growth at best, if not negative.

4. Manufacturing Facilities

4.1 Bengaluru (Karnataka)

The 68-year-old Bengaluru plant transforming itself into a lean and agile plant with the vision statement of ‘We Shape the Future’ is now looking beyond at being a market leader with technology & digitalization as the pillar. The new vision to aid this strategy is ‘WE LEAD’, which was launched as the direction until 2021. This Plant has the manufacturing facility for the 93-year-old product ‘A Pump’ which is still going strong in the tractor and diesel Genset segments of Automotive Market & the Single Cylinder PF Pumps. During the year under review, the plant achieved a milestone of manufacturing its 20th million A-pump & marked the highest sales number of 1.05 million in 2018.

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. With all these restructuring measures, the plant with its men & machines will get shifted to Bidadi (Phase II) by Q2 2019.

4.2 Bidadi (Karnataka)

Being one of the youngest manufacturing plants, Bidadi is progressing towards being a pioneer in I4.0 Solutions & low-cost automation solution. House to the common rail pumps, high-pressure rails & common rail single cylinder pumps the strategy is to be a benchmark manufacturer in terms of quality & cost which is driven by the new vision ‘WE LEAD’. Many COBOTS (Collaborative Robots) in manufacturing aid in simultaneously achieving two targets: significant cost reduction & improving quality by eliminating human errors.

The plant also has a ‘Carbon Neutral-2030’ strategy to reduce the carbon footprint. The solar power capacity has been upgraded to 8.7 MWp in the year under review. Apart from which numerous tree plantation and usage of LNG are in place to make the plant greener.

The plant has commenced lake rejuvenation project in the area adjacent to its facilities.

With the manufacturing facilities and people getting shifted from Bangalore plant to Bidadi plant by Q2’2019, Bidadi will become the single plant for Powertrain system products in Karnataka.

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 the 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 endeavour to use a 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 behaviour-based safety, reduction of first aid cases and capturing and 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 a good turnover in spite of reduction in other OE volumes due to implementation of BSIV 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 solutions 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 cater 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)

The Company is working towards making the IT system robust to support operational efficiency, quick decision making and ensuring the quality customer experience. During the year, the Company continued to enhance its IT infrastructure to facilitate better internal as well as external communication, by introducing various IT tools.

After the smooth rollout of GST last year, during the year under review, the Company has further upgraded its IT systems for centralized tax returns (GSTR1 and GSTR2), apart from incorporating changes based on the GST notifications on an ongoing basis.

The Company is already using industrial IoT (Internet of Things) and Industry 4.0 concepts and now plans to scale up this initiative to improve efficiency and quality.

In order to ensure our competitive edge and leverage market opportunity with emerging business models, Digital Transformation initiative was launched. This will lay thrust on various digital solutions and technology, thereby generating revenue through new business channels, drive competitiveness through process automation and focus on the transformation of the workforce from ‘Digital Naïve’ to ‘Digital Native’.

The Company is providing topmost priority for information security to insulate the Company and its operations from external threats, including cyber-attacks. The Company has put in place comprehensive measures, to provide organizational and technical protection against system outages, data loss, and data manipulation. In expanding our privacy and IT security organization, we are equipping ourselves for the growing requirements of the National Privacy Regulation and EU’s General Data Protection Regulation.

The implemented measures include mandatory documentation, awareness campaigns and risk-based security audits.

6. Change Initiatives

6.1 Continuous Improvement Process (CIP)

Structured CIP deployment and review by Senior Leadership in 2018 helped in the increase of the number of suggestions per employee by 19 percent and the number of Shop Floor CIPs / Lernstatt’s by 12 percent over 2017 leading to CIP savings increase by 40 percent.

For 2019, the emphasis has been laid for making CIP as part of Corporate Culture and the same has been addressed by rolling-out CIP approach from 2019 onwards. This will support in addressing various important cultural aspects of CIP viz. regular review by Leadership, enabling associates at different levels by means of trainings and support, building the competent pool of CIP Coordinators and recognition of outstanding contributors.

6.2 Bosch Production System (BPS)

One of the Strategic focus points from the “We are Bosch” statement is efficient processes, lean structure, high productivity, secure and increase in the value of the Company. To augment Operational excellence, People competency on Lean has been given adequate attention. Technical and Commercial Plant Managers were given insights on Improvable System approach so that Business KPR’s can be achieved on a sustainable basis. “Learn by doing” workshops for Value stream Managers were conducted at Gemba to bring “Stability in processes”. Boot camps to qualify BPS Assessors and Cross assessments have improved the understanding of Lean concepts. At the same time Learning and Sharing among plants has become the norm. BPS day for RO-IN plant was conducted in Bangalore in May 2018.

All these activities have supported us in moving swiftly up the ladder of Excellence. KPR’s on Lead time, inventory, productivity and delivery performance have improved significantly over the previous year.

Bosch had also been adjudged the winner in 3 categories organized by CII on “Lean implementation at Value streams” in Bengaluru on May 2018.

7. Business Excellence

Striving for excellence has been the Company’s strategic focal point, which will help to succeed. We measure ourselves against our strongest competitors, we are Agile and accurate. With efficient processes, lean structures, and high productivity we intend to secure and increase the value of the Company. Through Business excellence we are aiming at increasing our overall organizational efficiency to fuel our future growth.

8. Awards and Recognition

During the year under review, the Company won several awards for excellence. Few such awards are:

  • Supplier Support Award from Mahindra Swaraj
  • Customer Driven Six Sigma Project recognized by Ford India – Nashik Plant
  • “Growth Through Comprehensive Excellence” at the Maruti Suzuki Vendor Conference
  • “Best Supplier Award” by VECV at the Annual Supplier Conference 2018
  • Landmark Purchase Agreement with Hero MotoCorp Ltd (HMCL)
  • TKML 0 PPM Award for 2017
  • “Best Supplier Award” by TMTL at the Annual Supplier Conference 2018
  • Leading EPC – Solar Rooftop Award
  • National Safety Award from Govt. of India – Jaipur Plant
  • “GOLD Award” in ICQCC-2018 Singapore
  • Bajaj Quality Award – Gangaikondan Plant
  • Ashok Leyland Supplier SAMRAT Competition – Nashik Plant
  • Quality Excellence Award from SMLI
  • Best Tech Award Supporting Energy Efficiency 2018
  • “Gold Award” from Greaves Cotton Limited
  • CII-SR EHS Excellence Awards 2018 – Bidadi Plant
  • CO2 Energy Efficiency at Bosch EHS Award 2018 – Nashik Plant
  • Global Safety Award 2019: Gold category – Nashik Plant
  • NSCI Safety Award 2018 – Jaipur Plant
  • Gold Award from Greaves Cotton Limited
  • John Deere Award for New Product Development
  • John Deere Award for Commendable Performance for India Business

9. Directors and Key Managerial Personnel

9.1 Directors Retiring by Rotation

In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company, Soumitra Bhattacharya (DIN: 02783243) and Peter Tyroller (DIN: 06600928) retire by rotation at the forthcoming Annual General Meeting and being eligible, offer themselves for re-election at the said Meeting.

Brief profiles of Soumitra Bhattacharya and Peter Tyroller form part of the Notice convening the 67th Annual General Meeting of the Company.

9.2 Changes in the Key Managerial Personnel and Board

9.2.1 Board of Directors

Renu S. Karnad resigned from the Directorship of the Company due to other commitments and limitation of time with effect from September 25, 2018. The Board places on record its sincere appreciation for the valuable guidance provided by Karnad during her tenure as Director of the Company.

The Board of Directors, on the recommendation of the Nomination & Remuneration Committee and subject to the approval of the shareholders appointed Gopichand Katragadda as an Additional Director designated as an Independent Director for a term of 5 years with effect from December 04, 2018.

Bernhard Steinruecke and Bhaskar Bhat were appointed as Independent Directors of the Company for a period of 5 years with effect from April 01, 2014 to hold office upto March 31, 2019.

The Nomination & Remuneration Committee, on the basis of performance evaluation of Independent Directors and taking into account the external business environment, the business knowledge acumen, experience and the substantial contribution made by Bernhard Steinruecke and Bhaskar Bhat during their tenure, has recommended to the Board that continued association of Bernhard Steinruecke and Bhaskar Bhat as Independent Directors of the Company would be beneficial to the Company. Based on the above and performance evaluation of Independent Directors, the Board of Directors recommend re-appointment of Bernhard Steinruecke and Bhaskar Bhat as Additional Directors designated as Independent Directors of the Company, not liable to retire by rotation, to hold office for a second term of 5 consecutive years with effect from April 01, 2019 till March 31, 2024, subject to the approval of the shareholders.

Andreas Wolf was appointed as a Joint Managing Director of the Company for a period from January 01, 2017 to February 28, 2019.

On the recommendation of the Nomination & Remuneration Committee, the Board of Directors, at their meeting held on February 13, 2019, re-appointed Andreas Wolf as Joint Managing Director for a period of three years with effect from March 01, 2019 till February 28, 2022, subject to the approval of the shareholders.

The Company has received notice from Member under section 160 of the Companies Act, 2013, proposing the candidature of Gopichand Katragadda, Bernhard Steinruecke and Bhaskar Bhat for the office of Director(s) of the Company at the forthcoming Annual General Meeting.

The following resolutions, in addition to re-appointment of Soumitra Bhattacharya and Peter Tyroller, who retire by rotation, relating to the aforementioned re-constitution of the Board of Directors of the Company will form part of the Notice convening the 67th Annual General Meeting of the Company:

  1. Appointment of Gopichand Katragadda as an Independent Director for a period of 5 consecutive years with effect from December 04, 2018.
  2. Appointment of Bernhard Steinruecke as an Independent Director for a second term of 5 consecutive years with effect from April 01, 2019.
  3. Appointment of Bhaskar Bhat as an Independent Director for a second term of 5 consecutive years with effect from April 01, 2019.
  4. Re-appointment of Andreas Wolf as Joint Managing Director for a period of 3 years with effect from March 01, 2019.

Brief profiles of Gopichand Katragadda, Bernhard Steinruecke, Bhaskar Bhat and Andreas Wolf form part of the Notice convening the 67th Annual General Meeting of the Company.

9.2.2 Key Managerial Personnel

Anuj Sharma resigned as Compliance Officer (interim) with effect from November 04, 2018. The Board of Directors, on the recommendation of the Nomination & Remuneration Committee, appointed Rajesh Parte (ACS 10700) as the Company Secretary and Compliance Officer with effect from November 05, 2018.

As on the date of this report, the following have been designated as the Key Managerial Personnel of the Company pursuant to Section 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

  • Soumitra Bhattacharya – Managing Director
  • Andreas Wolf – Joint Managing Director
  • Jan-Oliver Röhrl – Executive Director
  • S.C. Srinivasan – Chief Financial Officer & Alternate Director designated as a Whole-time Director
  • Rajesh Parte – Company Secretary & Compliance Officer

9.3 Independent Directors

All 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 programmes of familiarization of the Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of industry in which the Company operates, business model of the Company and number of hours 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 S.V. Ranganath and Gopichand Katragadda as members. As on the date of this report, the CSR Committee comprises of Bhaskar Bhat (Independent Director) as its Chairman and Hema Ravichandar (Independent Director), S.V. Ranganath (Independent Director), Gopichand Katragadda (Independent Director), Soumitra Bhattacharya (Managing Director) & Andreas Wolf (Joint Managing Director) as its members.

The CSR Committee oversees the Company’s CSR initiatives.

The Board of Directors has adopted a CSR Policy in line with the provisions of the Act. 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:

New projects:

  • Bosch’s support for Lalbagh Botanical Garden in Bengaluru began including the installation of Smart Parking facility, 8 Aerators in the Lalbagh Lake, 200 waste bins for dry and wet segregation at source and Solar Power Plants saving 20 tons of CO2 every year.
  • Rejuvenation of the Shanumangala Lake in Bidadi.
  • Development of Model I.T.I. (Skill Development Center) in Government ITI, Diary Circle Bengaluru

Sustainability and scalability of existing projects:

  • BRIDGE: 20,000 less-educated youth trained and placed through 250 BRIDGE Centers across India.
  • 25 RO Plants in Jaipur.
  • 14 Check Dams in Nashik.
  • Akshaya Patra Kitchen in Jigani: 25,000 meals cooked per day (from 15,000 last year).
  • CHDP interventions in 300 Government schools.

Collaboration and Partnerships:

  • Partnership with Tata Steel and Indian Oil-led Skill Center to run the BRIDGE program in Jamshedpur and Hyderabad respectively.
  • Bosch is now a non-funded Industry partner of National Skill Development Corporation (NSDC) through which the BRIDGE program is scaled up at NSDC Centers.
  • Bosch has also partnered with MEPSC (Management Entrepreneurship and Professional Skills Council) for assessing the ‘Train the Trainer’ program.

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’ (Page No. 61) 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 appointing S.V. Ranganath (Independent Director) as the Chairman with effect from November 05, 2018. As on the date of this report, the Audit Committee comprises of S.V. Ranganath (Independent Director) as its Chairman and V.K. Viswanathan (Non-Executive and Non-Independent Director), Bernhard Steinruecke (Independent Director), Bhaskar Bhat (Independent Director) & Hema Ravichandar (Independent Director) as its members.

The Members of the Committee possess strong Accounting and Financial Management knowledge. The Company Secretary of the Company is the Secretary of the Committee.

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, Associate and Joint Venture 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 2018-19.

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’ (Page No. 66) to this Report.

13.3 Joint Venture Company

The Company has executed a Joint Venture Agreement dated March 20, 2019 with Prettl India Private Limited, its Joint Venture partner, for incorporation of the new joint venture company for the purpose of carrying out the business of manufacturing/assembly and supply of mechanical and electromechanical components and assemblies for automobile and non-automobile industry. Accordingly, PreBo Automotive Private Limited was incorporated on May 18, 2019 with its registered office at Bengaluru. This Company is yet to commence its business.

14. Remuneration Policy

The Nomination & Remuneration Policy, inter-alia, provides for criteria and qualifications for appointment of Director, Key Managerial Personnel & Senior Management, Board diversity, remuneration to Directors, Key Managerial Personnel, etc. This Policy was amended at the Board Meeting held on February 13, 2019 to amend the definition of Senior Management Personnel and to provide that the remuneration payable to the Senior Management shall be placed before the Committee for recommending the same for approval of the Board. 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 ‘D’ (Page No. 67) 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 investor@ in.bosch.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. 182).

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 longterm goals effectively and sustainably;
  • Regularly review Risk Tolerance levels of the Company as they may vary with change in the Company’s strategy;
  • 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/2018/whistle_blower_ policy-3.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. 198).

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 ‘E’ (Page No. 69) to this Report.

The Company has framed a Policy for determining materiality of Related Party Transactions and dealing with Related Party Transactions. The Policy has been revised by the Board of Directors at their meeting held on February 13, 2019. 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/2019/rpt_policy_ amended.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 ‘F’ (Page No. 70) to this Report.

22. Auditors

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.

The Auditors’ Report on the Standalone as well as Consolidated Financial Statements for the Financial Year 2018-19 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 2019-20 in terms of the provisions of Section 148 of the Act.

The Audit Committee has also received a Certificate from the Cost Auditors certifying their independence and arm’s length relationship with the Company.

In terms of the requirements of the said section, the members are required to 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 67th Annual General Meeting.

As per Section 148(1) of the Act, the Company is required to maintain Cost Records. Accordingly, Cost Records and Cost Accounts are duly maintained by the Company.

22.3 Secretarial Auditor

Pursuant to the provisions of Section 204 of the Act, and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Sachin Bhagwat, Practicing Company Secretary (Certificate of Practice No. 6029) to undertake Secretarial Audit of the Company for the Financial Year 2018-19. The Report of the Secretarial Auditor is enclosed as Annexure ‘G’ (Page No. 72) to this Report.

The Secretarial Audit Report does not contain any qualifications, reservations or adverse remarks or disclaimer.

22.4 Reporting of Fraud

During the year under review, the Statutory Auditors, Cost Auditors and Secretarial Auditor have not reported any instances of fraud committed in the Company by its Officers or Employees to the Audit Committee under Section 143(12) of the Act, details of which needs to be mentioned in this Report.

23. Directors’ Responsibility Statement

Pursuant to Section 134(5) of the Act, 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;
  • 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

Particulars of loans given, investment made or guarantee given or security provided and the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient of the loan or guarantee or security are provided in Note Nos. 6, 7 and 34 to the Financial Statements.

The particulars of loans/advances, etc., required to be disclosed in the Annual Accounts of the Company pursuant to Para A of Schedule V of the Listing Regulations are furnished separately.

25. Deposits

During the year under review, there were no deposits accepted by the Company 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. Buyback

During the year under review, the Company bought back 1,027,100 Equity Shares of face value INR 10 each representing 3.365 percent of the pre-buyback paid up share capital of the Company for an aggregate of INR 21,569,100,000 (representing 24.999 percent of the paid up share capital and free reserves of the Company on a consolidated basis). Robert Bosch GmbH, the holding company, also participated in the Buyback.

The post capital of the Company is Mio INR 294.94 consisting of 29,493,640 Equity Shares of INR 10 each.
The present shareholding pattern is as under:

28. Extract of Annual Return

The Extract of Annual Return as provided under Section 92(3) of the Act and as prescribed in Form MGT-9 under the Companies (Management and Administration) Rules, 2014 is enclosed as Annexure ‘H’ (Page No. 74) to this Report. In terms of the requirements of Section 134(3) (a) of the Act, the complete Annual Return is available on the Company’s website and can be accessed at the following link: https://www.bosch.in/media/our_ company/shareholder_information/2019/mgt_7_website. pdf

29. Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The information as regards the number of cases filed and their disposal under this Act is given in the Business Responsibility Report.

30. Secretarial Standards

The applicable Secretarial Standards i.e. SS – 1 and SS – 2, relating to “Meetings of the Board of Directors” and “General Meetings”, respectively, have been duly complied by the Company.

31. 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.

32. General

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions/events on these items during the year under review:

  1. Issue of Equity Shares with differential rights as to Dividend, voting or otherwise;
  2. Issue of Shares (including Sweat Equity Shares) to employees of the Company under any scheme;
  3. Significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and the Company’s operations in future;
  4. Voting rights which are not directly exercised by the employees in respect of Shares for the subscription/purchase of which loan was given by the Company (as there is no scheme pursuant to which such persons can beneficially hold shares as envisaged under Section 67(3)(c) of the Act).

33. Acknowledgements

The Directors express their gratitude to the various Central and State Government Departments for their continued cooperation extended to the Company. The Directors also thank all customers, dealers, suppliers, banks, members, and business partners for the excellent support received from them. The Directors would also like to acknowledge the exceptional contribution and commitment of the employees of the Company during the year under review.

For and on behalf of the Board of Directors

V. K. Viswanathan
DIN: 01782934
Chairman
Date: May 21, 2019

Annexure ‘A’ to the Report of the Directors

BOSCH LIMITED – DIVIDEND DISTRIBUTION POLICY

I. Background

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.

II. Definition

Unless the context otherwise requires:

  1. ‘Act’ means the Companies Act, 2013 and includes the rules framed thereunder;
  2. ‘Board’ means the Board of Directors of the Company and includes any Committee thereof constituted or to be constituted.
  3. ‘Company’ means Bosch Limited.
  4. ‘Dividend’ shall have the meaning ascribed to it under the Act and includes an Interim Dividend but excludes Special Dividend.
  5. ‘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.
  6. ‘Free Reserves’ shall have the meaning ascribed to it under the Act.
  7. ‘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.

IV. Parameters

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.

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:

  1. In event of loss or inadequacy of profit or cash flow.
  2. Higher capital investments on account of expansion of business, etc. by the Company.
  3. Decision to undertake any acquisition, amalgamation, merger, takeover, etc. requiring significant capital outflow.
  4. Other business condition(s) in the opinion of the Board it would be prudent to plough back the profits of the Company.
  5. De-growth in the overall business.
  6. The Company has been prohibited to declare dividends by any regulatory authority.
  7. Any other extra-ordinary circumstances.
Financial Parameters
  1. Profit After Tax considering write-off of accumulated losses, exceptional and extraordinary items, if any
  2. Accumulated reserves
  3. Cash flow and treasury position keeping in view the total debt to equity ratio
  4. Earnings Per Share
  5. Dividend Payout during the previous years
  6. Capital Expenditure
  7. Contingent Liabilities
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:-

(i) Internal Factors

  1. Business Forecast (near to medium term)
  2. Earning stability
  3. Availability of liquidity
  4. Accumulated Reserves
  5. Working capital requirements of the Company
  6. Capital Expenditure requirements of the Company
  7. Investments in new line(s) of business
  8. Expenditure on Research & Development of new products
  9. Investment in technology
  10. Acquisition of brands/businesses
  11. Replacement cost of end-of-lifecycle products

(ii) External Factors

  1. Statutory provisions, legal requirements, regulatory conditions or restrictions laid down under applicable laws
  2. Prevailing macro-economic environment
  3. Re-investment opportunities
  4. Investor Expectations
  5. Prevailing taxation structure including any amendments expected thereof.

The dividend will generally be declared once a year, 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:

  1. Funding the organic and inorganic growth of the Company
  2. Diversification of business
  3. Capacity Expansion
  4. Replacement of Capital Assets
  5. Declaration of Dividend in future years
  6. Issue of Bonus Shares
  7. Buy-back of Shares/Capital Reduction
  8. 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.

VII. Disclosure:

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.

VIII. General

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.

Notwithstanding 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 2018-19

1. 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:
https://www.bosch.in/media/our_company/shareholder_information/2017_2/csrpolicy_final.pdf

2. Composition of the CSR Committee:
  1. Bhaskar Bhat, Chairman (Independent Director)
  2. Hema Ravichandar (Independent Director)
  3. S.V. Ranganath (Independent Director)@
  4. Gopichand Katragadda (Independent Director)#
  5. Soumitra Bhattacharya (Managing Director)
  6. Andreas Wolf (Joint Managing Director)

@ Member with effect from July 01, 2018
# Member with effect from February 13, 2019

3. Average Net Profit of the Company for the last three financial years:

Mio INR 17,654

4. Prescribed CSR Expenditure (Two percent of the amount as in item 3 above):

Mio 353 INR

5. Details of CSR spent for the Financial Year:
  1. Total amount spent for the financial year: Mio INR 353.29
  2. Amount unspent, if any: Nil
  3. 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 Organisation of repute primarily providing free primary health care for the past 27 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 under the support of Deutsche Cleft Kinderilfe E.V Germany and local donors within the country.

Apollo Clinic, Nashik, is among well-known hospitals for valuable treatment in Nashik. They provide treatment to the children of Government schools in Nashik identified by the Company, at subsided rates.

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 Indian states. It is one of the largest science education programs that caters to economically disadvantaged children and teachers.

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. The energy and enthusiasm of the children
quickly saw the movement evolve into summer camps and then into ‘Civic Clubs’. The ‘Civic Club’ gained
popularity and its impressive growth propelled the two parent organisations to launch CMCA as an autonomous
body. CMCA was registered as a Public Charitable Trust on June 15, 2009.

Akshaya Patra Foundation, The Akshaya Patra Foundation is a not-for-profit organisation headquartered in Bengaluru, India. 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:

Not Applicable

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.

Soumitra Bhattacharya
DIN: 02783243
Managing Director
Andreas Wolf
DIN: 07088505
Joint Managing director
Bhaskar Bhat
DIN: 00148778
Chairman
Corporate Social Responsibility Committee

Annexure ‘C’ to the Report of the Directors

Form AOC-1

STATEMENT CONTAINING SALIENT FEATURES OF THE FINANCIAL STATEMENT OF SUBSIDIARIES/ASSOCIATE COMPANIES/JOINT VENTURES

(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)

Part “A”: Subsidiaries
Name of the subsidiary: MICO Trading Private Limited
*Turnover – Nil. Income from Investments (Fixed Deposits) – 67 TINR
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
The accompanying notes are an integral part of these consolidated financial statements.
Place: Bengaluru
Date: May 21, 2019
Rajesh Parte
Company Secretary & Compliance Officer
For and on behalf of the Board
V.K. Viswanathan – (DIN: 01782934) – Chairman
Soumitra Bhattacharya – (DIN: 02783243) – Managing Director
Andreas Wolf – (DIN: 07088505) – Joint Managing Director
Jan-Oliver Röhrl – (DIN: 07706011) – Executive Director
Bhaskar Bhat – (DIN: 00148778) – Director
Bernhard Steinruecke – (DIN: 01122939) – Director
S.V. Ranganath – (DIN: 00323799) – Director
Gopichand Katragadda – (DIN: 02475721) – Director
S.C. Srinivasan – (DIN: 02327433) – CFO & Whole-time Director

Annexure ‘D’ to the Report of the Directors

Details pertaining to remuneration as required under section 197(12) read with Rule 5(1) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014

I. Percentage increase in the remuneration of each director, Chief Financial Officer and Company Secretary during the Financial Year 2018-19 and ratio of the remuneration of each Director to the median remuneration of the employees of the Company for the Financial Year 2018-19 are as under:
(~) Employees for the above purpose and Point No. II below includes all employees except employees/associates governed under Longterm wage settlement.
(@) Renu Karnad resigned from the directorship of the Company with effect from the close of business hours on September 25, 2018.
Hence, the remuneration drawn for the year under review is not comparable with the previous year.
($) Appointed as an Additional Director and designated as an Independent Director with effect from July 01, 2018.
(*) Remuneration for 2018 is not comparable with the previous year since Hema Ravichandar joined the Board in September 2017 and last year’s remuneration is for a part of the year.
(#) Appointed as an Additional Director and designated as an Independent Director with effect from December 04, 2018.
(!) Peter Tyroller has waived his remuneration as Director of the Company.
(&) Appointed as Alternate Director to Peter Tyroller upto June 30, 2018 and consequently as an Executive Director with effect from July 01, 2018.
(%) Appointed as a Chief Financial Officer and Alternate Director to Peter Tyroller with effect from July 01, 2018.
(**) Served as the Company Secretary & Compliance Officer for a part of the previous financial year with effect from November 05, 2018.
(@@) Served as the Company Secretary for a part of the previous financial year till May 23, 2018.
($$) Served as the Joint Chief Financial Officer for a part of the previous financial year till June 30, 2018.
II. The percentage decrease in the median remuneration of employees in the Financial Year:

There was a decrease of ~ 1.4 % in the median remuneration of employees.

III. The number of permanent employees on the rolls of the Company:

As at March 31, 2019, the Company had 9,245 permanent employees on its roll.

IV. 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:

Average percentage increase made in the salaries of the employees other than the managerial personnel in the last Financial Year i.e. 2018-19 was ~ 8.2% whereas the increase in the managerial remuneration in the Finanial Year 2018-19 was ~ 39.72%.

V. 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 ‘E’ to the Report of the Directors

Form No. AOC-2

(Pursuant to clause (h) of sub-section (3) of section 134 of the Act and Rule 8(2) of the Companies (Accounts) Rules, 2014)

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 not at arm’s length basis:

There were no contracts or arrangements or transactions entered into during the year ended March 31, 2019 which were not at arm’s length basis.

2. Details of material contracts or arrangement or transactions at arm’s length basis:

Name of related party and relationship:
Robert Bosch GmbH (Holding company)

Salient Terms:
Ongoing, repetitive, in ordinary course of business and on arm’s length basis.

Date of approval by the Board, if any:
Since these transaction are in the ordinary course of business and at arm’s length basis, approval of the Board is not applicable. 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
DIN: 01782934
Chairman
Date: May 21, 2019

Annexure ‘F’ to the Report of the Directors

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

[Pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of Companies (Accounts) Rules, 2014]

A. Conservation of energy

(i) The steps taken or impact on conservation of energy:
  • Optimization of the 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 luminaires 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 the 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.
  • Optimization of compressor capacity.
(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:
i) 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 utilization. Location wise details of investment on energy conservation/solar energy equipment(s):

B. Technology absorption

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.
  • 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.
  • 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.
  • Developing alternate process for nonenvironment friendly / Obsolete Technology.
(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.
  • Elimination of Hazards through alternate process.
(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:

C. Foreign Exchange Earnings and Outgo:

For and on behalf of the Board of Directors

V.K. Viswanathan
DIN: 01782934
Chairman
May 21, 2019

Annexure ‘G’ to the Report of the Directors

SECRETARIAL AUDIT REPORT

For the financial year ended 31 March, 2019

[Pursuant to section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]

To,
The Members,
Bosch Limited

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, 2019, complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance mechanisms 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, 2019 according to the provisions of:

  1. The Companies Act, 2013 (the Act) and the rules made thereunder;
  2. The Securities Contracts (Regulation) Act, 1956 (‘SCRA’) and the rules made thereunder;
  3. The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;
  4. 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.
  5. The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’):-
  1. The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 2011;
  2. The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;
  3. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009 and The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018; (Not applicable to the Company during the audit period)
  4. The Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014; (Not applicable to the Company during the audit period)
  5. The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008; (Not applicable to the Company during the audit period)
  6. 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;
  7. The Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009; (Not applicable to the Company during the audit period); and
  8. The Securities and Exchange Board of India (Buyback of Securities) Regulations, 1998 and The Securities and Exchange Board of India (Buyback of Securities) Regulations, 2018;
  9. 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:

  1. Secretarial Standards issued by the Institute of Company Secretaries of India.
  2. 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.

1. Details of contracts or arrangements or transactions not at arm’s length basis:

There were no contracts or arrangements or transactions entered into during the year ended March 31, 2019 which were not at arm’s length basis.

2. Details of material contracts or arrangement or transactions at arm’s length basis:

Name of related party and relationship:
Robert Bosch GmbH (Holding company)

Salient Terms:
Ongoing, repetitive, in ordinary course of business and on arm’s length basis.

Date of approval by the Board, if any:
Since these transaction are in the ordinary course of business and at arm’s length basis, approval of the Board is not applicable. 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
DIN: 01782934
Chairman
Date: May 21, 2019

Place: Pune
Date: 9 May 2019
Sachin Bhagwat
ACS: 10189
CP: 6029
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 Members,
Bosch Ltd.

My report of even date is to be read along with this letter:

  1. 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.
  2. 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.
  3. I have not verified the correctness and appropriateness of financial records and books of accounts of the Company.
  4. Wherever required, I have obtained Management Representation about the compliance of laws, rules and regulations and happening of events, etc.
  5. 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.
  6. 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, 2019
Sachin Bhagwat
ACS: 10189
CP 6029

Annexure ‘H’ to the Report of the Directors

FORM NO. MGT – 9
EXTRACT OF ANNUAL RETURN

(As on the Financial Year ended March 31, 2019)

[Pursuant to Section 92(3) of the Companies Act, 2013, and rule 12(1) of the Companies (Management and Administration) Rules, 2014, as amended]

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:

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
Note: The paid-up share capital of the Company at the beginning of the Financial Year comprised of 30,520,740 Equity Shares of face value of INR 10 each. Consequent to the Buy-back of 10,27,100 Equity Shares during the year under review, the revised paid-up share capital as on the date of this report comprises of 29,493,640 equity Shares of face value of INR 10 each as at the end of the year under review.
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 (KMP):

V. INDEBTEDNESS:

The Company has not availed any loan.

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: Peter Tyroller, Non- executive director has waived his remuneration as director.
During the year under review, Renu s Karnad (upto 25.09.18), S.V. Ranganath (from 01.07.18) and Gopichand Katragadda (from 04.12.18) served as Independent Directors for approximately 6 months, 9 months and 4 months respectively. Therefore, the Commission paid to them has been calculated on pro-rata basis.

(#) 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 2,215, 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:

During Financial Year 2018 – 19, there were no penalties/punishment/compounding of offences under the Companies Act, 2013.

For and on behalf of the Board of Directors
Place: Bengaluru
Date: May 21, 2019
V. K. Viswanathan
DIN: 01782934
Chairman