The Directors have pleasure in presenting the SIXTY FIFTH Annual Report together with the Audited Financial Statements for the Financial Year ended March 31, 2017.
The Directors have pleasure in presenting the SIXTY FIFTH Annual Report together with the Audited Financial Statements for the Financial Year ended March 31, 2017.
Attention of the members is drawn to the notification dated February 16, 2015, issued by the Ministry of Corporate Affairs relating to the Companies (Indian Accounting Standards) Rules, 2015. Pursuant to the said notification, the Company has adopted Indian Accounting Standards (Ind AS) with effect from the year under review. Consequently, the financial statements for the previous year (FY 15-16) have been reinstated as per Ind AS to facilitate a like-to-like comparison.
The Company does not propose to transfer any amount to its Reserves for the year under review.
Pursuant to the requirements of the regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has adopted a Dividend Distribution Policy. This Policy is uploaded on the website and can be accessed at http://www.boschindia.com/media/in/documents/our_company_1/shareholder_information_1/2017_2/Bosch_Limited_-_Dividend_Distribution_Policy.pdf This policy is enclosed as Annexure 'A' (Page No. 56) to this Report.
The Board of Directors declared a Special Dividend of INR 75 per equity share aggregating to Mio INR 2,755 including Dividend Distribution Tax, on account of consideration received from sale of the Starter Motors and Generators business. The Special Dividend was paid in the month of February 2017.
In line with the Dividend Distribution Policy, the Board has recommended a Final Dividend of INR 90 per share for the Financial Year 2016-17, aggregating to Mio INR 3,306 including Dividend Distribution Tax. The dividend payout ratio (excluding Special Dividend) is approximately 22.9 percent, based on the profits as per Ind AS. The Final Dividend is subject to the approval of the shareholders at the forthcoming Annual General Meeting.
In order to avoid duplication between the Directors' Report and Management Discussion and Analysis, a composite summary of the Company's performance and various business segments is given below:
The global GDP was in line with expectations at around 3.1 percent. Economic activity in advanced economies and emerging economies is projected to accelerate leading to a global GDP estimate of 3.4 percent in 2017. [Source: IMF] Among advanced economies, activity rebounded strongly in the USA during the second half of 2016 and witnessed an increase in employment numbers. The economic output remained below potential in a number of other advanced economies including the European Union. In 2016, Japan witnessed a higher than expected growth rate.
Long-term interest rates increased in advanced economies in the second half of 2016 as central banks started focusing on inflation. Crude oil and commodity prices recovered in 2016 after touching a low, on the back of strong infrastructure investment in China and on expectations of fiscal easing in the USA.
GDP growth is projected to be around 7 percent for 2016-17 as compared to 7.9 percent in 2015-16. It was an eventful year and some of the key events were passage of important legislations including GST, demonetization, ban by Supreme Court on sale of BS III vehicles, etc.
Political stability provided a sound background for the Indian economy and interest rates gradually fell through the year as growth was supported by Government's capex spending and efficiency improvements. But weakness in the banking sector, signaled by the continuing trend of bad loans affected credit offtake. Uneven distribution of rainfall and a slight deficit could not boost agricultural output as expected.
Foreign investment in India continued to remain buoyant and capital flows ensured that the currency was stable. This was also aided by a moderate growth in exports. The effects of demonetization and the subsequent remonetization are still not clear though the economy seems to have moved beyond this uncertainty. On the monetary policy front though there were signs of growth slowing down, the central bank moved away from an accommodative stance to a neutral stance because of its commitment to an inflation-targeting framework.
The broad indicators for the Indian economy like fiscal deficit, current account deficit and inflation looks to be under control. However, the pickup in growth momentum is yet to be witnessed on ground.
In 2016-17, Passenger Vehicle production grew by 11 percent driven by improved market sentiments, favorable fuel prices, easy availability of finance, continued economic revival, increased disposable income and new launches.
Heavy Commercial Vehicles (HCVs) production posted subdued growth of 2 percent impacted by lower fleet expansion, demonetization and emission changeover.
The Light Commercial Vehicles (LCVs) market grew by 6 percent mainly driven by infrastructure and e-Commerce growth along with increased rural demand.
The Tractor market grew by 21 percent favored by a good monsoon and positive farmer sentiments.
Three-wheelers production declined by 16 percent due to muted domestic demand and weakening export demand.
Considering the new positive thrust to the Indian infrastructure and manufacturing sectors, and a slew of government initiatives like 'Make in India' and 'Skill India', the power tool market witnessed a considerable growth. However, the do-it-yourself (DIY) segment in power tool is yet to be developed. Unlike the developed nations, the DIY segment is still at a nascent stage in the emerging markets including India.
While pockets of opportunities for growth in security technology industry exist, the space is getting competitive and price sensitive. With the advent of embedded applications in security products, surveillance is now emerging as a tool for gathering business intelligence. The addition of video analytics software to the surveillance solutions is enabling businesses to garner deeper insights into their existing operations.
As value for money continues to characterize the packaging market, packaging solutions have to be innovative and cost efficient. The packaging equipment industry continues to ride on the growth of consumer demand, aided by increasing disposable income with low inflation. Despite a growing market for packaged items, the packaging equipment industry is highly unorganized, comprising several small players, each accounting for a two to five per cent market share. With China and India together projected to account for 21 percent of the global packaging machinery demand by 2020, localization is slated to become a major driver to capture the Indian Packaging market.
The renewable energy sector in India is growing rapidly indicating strong financial prospects. Investments in solar sector are expected to surpass coal by 2019-20, with USD 35 billion committed by global players. At the end of the year under review, India crossed 12.2 GW of cumulative solar installations and still has a way to go to achieve the ambitious target of 100 GW by 2022. Further, India has plans to add 5 GW of rooftop solar and 10 GW from large-scale solar power projects in the current fiscal year. India has a bright opportunity to reshape its energy mix. Social and economic growth are at the top of the Government's agenda, and new energy sources to serve this demand are increasingly coming from renewable energy.
The overall performance of the Company witnessed a growth of 7.6 percent. Mobility business (Automotive) posted a growth of 5.9 percent, while the Business beyond mobility (Non-Automotive) grew by 16.8 percent. Domestic mobility business witnessed an increase of 7.4 percent, largely because of rise in sale of diesel and gasoline products, marginally higher than the automotive market growth of 7.0 percent.
The Company predominantly operates in manufacturing and trading of mobility solutions, which constituted 85.5 percent of total sales for the Financial Year 2016-17. The Business beyond mobility, comprising of Industrial Technology, Consumer Goods and Energy and Building Technology, had a share of 14.5 percent. Hence, the operating segment consists of “Mobility Solutions” (Automotive Products) and “Business beyond mobility” (Others).
The Diesel Systems division is a systems supplier of key powertrain components. The division offers an extensive range of energy efficient, eco-friendly diesel injection systems for applications ranging from passenger cars and all kinds of commercial vehicles and agricultural equipments to large-scale industrial power-generation units. It focuses primarily on the common-rail system, which comprises of a high-pressure injection pump, the rail and various injectors.
The Diesel Systems business grew by 1.9 percent over the previous year. Higher sales volume of new generation Common Rail Systems (CRS) led to this increase. The Diesel Systems business will continue to ride on new generation CRS in the majority of vehicle segments for future growth. The growth in conventional products such as in-line pumps and conventional injectors may witness some slowdown with nation-wide implementation of BSIV with effect from April 01, 2017, and eventually decline with the country-wide implementation of BSVI.
The Automotive Aftermarket division offers a comprehensive range of spare parts for passenger cars, commercial vehicles and 2 Wheelers for the after sales market and repair solutions including diagnostic and repair-shop solutions. The product portfolio consists of Bosch original-equipment products, as well as products and services developed and manufactured in-house for the spare parts market i.e., Filters and Spark Plugs.
The Company's Automotive Aftermarket division is the largest Independent Aftermarket (IAM) network in India. It witnessed a muted growth of 0.3 percent due to tough liquidity conditions and the negative, initial impact of "Demonetization".
Automotive Aftermarket completed first ever Go-to-Bosch Service (GO2BS) activity, where many Bosch Diesel Service Customers were contacted in a span of 10 days resulting in an increase in secondary sales. Mega GO2BS was completed in November 2016 in which about 5,000 customers were contacted and approximately 3,782 contacts successfully established.
The Gasoline Systems division develops and manufactures innovative technologies for internal-combustion engines powered by gasoline as well as systems and components for two-wheelers. These include fuel supply systems, fuel injection systems, accelerated pedal modules and sensors. In addition, it also has a substantial portion of revenue from trading in certain kinds of sensors, connectors and electric control units.
During the year under review, Gasoline Systems grew by 21.0 percent over previous year, mainly on account of new launches resulting in increased market share in the passenger car market. New technological acquisitions made during the year will accelerate the division's growth in the coming years.
The share of domestic sales in the total sales of the mobility solutions increased to 92.7 percent from 91.6 percent in the previous year.
The Business beyond Mobility grew by 16.8 percent. It was driven predominantly by domestic sales with a share of 89.5 percent, while exports contributed 10.5 percent.
The Packaging Technology India is a provider of packaging solutions for the food and confectionery industries. The range includes individual machines, system solutions including secondary packaging and a comprehensive service portfolio.
Packaging Technology division witnessed a growth of 11.3 percent. During the year under review, the Company successfully introduced its first lot of secondary packaging machines. The secondary packaging business has good market potential and its introduction can help in gaining early mover advantage. Good orders were received for Horizontal Form, Fill and Seal (HFFS) packaging machines during the year under review.
The Power Tools business comprising of Electric tools, Accessories, measuring instruments and spare parts for Power Tools witnessed a decent growth of 11.6 percent in a challenging economy. The core business of tools achieved growth largely due to enhanced mass market access supported by channel expansion to Tier 3 and Tier 4 markets. Launch of a new range of more affordable products designed to meet the needs of users in line with the strategy of “ZERO DISTANCE TO USER” also supported the core tool business. E-commerce and the Hardware channels have also emerged as important contributors to the overall business.
The Security Technology division offers innovative products and solutions in the field of security and communications, principally for commercial applications. The product portfolio encompasses video-surveillance, intrusion-detection, fire-detection, and voice-alarm systems, as well as access-control and building management systems and professional audio and conference systems.
The Security Technology business achieved a growth of 23.0 percent, driven by orders in the Verticals of Transportation, Energy and Commercial Industry. Trend-setting products like the new range of IP Cameras, Wired Conference System, Loudspeakers, Video Fire Detection and Microphones introduced during the year were well received.
The division's revenues grew by 92.3 percent over the previous year with a significant growth seen in Solar Photovoltaic (PV) and Energy Efficiency segments. The Solar PV segment saw 100 percent increase in its installed capacity, albeit on a low base.
The energy efficiency business has made its mark in the market with new solutions being developed for energy starved commercial and industrial sectors like healthcare, dairy and textiles while continuing to leverage on the brand capital built in the secondary steel and automotive sectors.
The Solar PV Projects business has continued to leverage on the high market growth rates, acquiring projects in new and diverse customer segments ranging from educational institutions to seaports, including an additional 14MW capacity at the Cochin International Airport. In December 2016, the division commissioned a land mark solar PV project (4 MW) at the New Mangalore Port Trust, reinforcing its commitment of delivering world-class designed and engineered solar PV projects in India. In addition to CAPEX model, the division is also active in OPEX model projects based on customer requirements.
The Division's product portfolio includes heaters, solar thermal systems, heat pumps and industrial boilers.
The year under review was tough for the division on account of intense competition from China. This resulted in low growth of Solar Water heaters and boilers in India. The Company continues to explore other business opportunities including Air Conditioner business.
Domestic sales of the Company registered a growth of 8.6 percent. Share of domestic sales in the total sales increased by 1.0 percentage point to 92.3 percent from 91.3 percent in the previous year. The Company's exports, bulk of which were to Germany, China and Brazil, fell by 5.4 percent. The share of exports in the total sales declined by 1.0 percentage point to 7.7 percent over previous year.
Sale of products grew by 7.4 percent over previous year and stood at Mio INR 107,500. This growth is mainly driven by business beyond mobility which grew by 16.8 percent over previous year.
Sale of services registered a growth of 17.2 percent over previous year, mainly contributed by increase in development receipts on customer projects.
Other operating revenue at Mio INR 2,592, increased by 12.8 percent over the previous year, mainly contributed by increased rental income from leasing of office spaces to group entities.
Other income increased by 2.3 percent over the previous year.
Income from net gain on financial assets measured at Fair Value through Profit and Loss (FVTPL) was at Mio INR 3,172 for the year under review as against Mio INR 2,450 in previous year.
Income from interest on bank and inter-company deposits fell by 20.4 percent due to lower asset base and reduced interest rates.
The cost of materials consumed as a percentage of sales marginally improved to 48.3 percent as compared to previous year of 48.7 percent, through various cost reductions projects implemented by the Company to offset the price increase.
Personnel cost as a percentage of sales declined to 12.2 percent compared to 12.8 percent during the previous year. This was possible due to continuous productivity improvement measures to offset inflationary increments.
The Company continues to focus on rationalizing its workforce based on its business needs in a fair manner, while sustaining productivity and competence.
The depreciation charge for the year under review was Mio INR 4,562 as against Mio INR 3,864 during the previous year ended on March 31, 2016. The addition of fixed asset is mainly on account of expansion of new generation products at our facilities in Bidadi and other locations.
Income tax expenses for the year under review is higher by 14.1 percent due to deferred tax credit in the previous year.
PAT for the Financial Year 2016-17 at Mio INR 14,441, 4.5 percent lower than previous year due to higher tax expenses as above.
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 compressive income. Accordingly, the impact of Mio INR 1,401 during the year under review is mainly contributed by increase in fair value of those investments.
EPS (basic and diluted) of the Company (including discontinued operations) for Financial Year 2016-17 was INR 560.9 per share.
The Company has bought back 878,160 Equity Shares during the year under review. As on March 31, 2017, the Authorised Share Capital comprises of 38,051,460 Equity Shares of INR 10 each. The issued, subscribed and paid-up capital is Mio INR 305.21 divided into 30,520,740 equity shares of INR 10 each.
Reserves & Surplus as on March 31, 2017 stood at Mio INR 81,729 which includes retained profit for the year under review of Mio INR 11,335 after considering the outflow on account of special dividend of INR 75 per share.
The increase in Other Reserve from Mio INR 4,452 to Mio INR 5,962 is contributed by change in the fair value of equity instruments valued in line with Ind AS.
The total shareholder funds decreased to Mio INR 87,996 as on March 31, 2017 from Mio INR 95,349 as on March 31, 2016. Reduction is mainly due to buy-back of shares offset by profit for the year under review.
The gross fixed asset value as on March 31, 2017 was Mio INR 13,194 (tangible: Mio INR 13,194 and intangible: Nil) compared to Mio INR 11,487 (tangible: Mio INR 11,487 and intangible: Nil) as on March 31, 2016.
The Company incurred a capital expenditure of Mio INR 6,342 during the year under review in addition to Mio INR 5,982 invested during previous year.
Major investments were made towards development of new products and facilities in Bidadi and Nashik. Net value of assets transferred on carving out of Starter Motors and Generators business is Mio INR 311.
Surplus funds not required for immediate operational needs were invested prudently in tax-effective low-risk instruments. The total investments (excluding investment in property) as on March 31, 2017 was Mio INR 39,090 as against Mio INR 44,319 as on March 31, 2016.
Inventory as on March 31, 2017 decreased by 0.9 percent to Mio INR 11,804 from Mio INR 11,915 as on March 31, 2016 despite increase in sales, reflecting reduction in inventory coverage days.
Despite increased turnover, Trade receivables as on March 31, 2017 decreased to Mio INR 11,862 as against Mio INR 13,225 as on March 31, 2016.
The total cash and bank balances as on March 31, 2017 was Mio INR 17,176, including cash and cash equivalent of Mio INR 1,312, compared to Mio INR 18,315, including cash and cash equivalent of Mio INR 985 as on March 31, 2016.
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.
HR continued its catalyst role and enabled the process of change over to global tools to focus on personnel planning for mid and long term.
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 2016 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 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 has been adopted.
During the year under review, a mutually amicable agreement was concluded with ex-temporary workmen at the Bengaluru Plant with support of the Government of Karnataka.
The Company, during the first week of May 2017, successfully concluded the long-term settlement with the Associates of the Jaipur Plant to take effect from June 01, 2017 for a period of 4 years, in an amicable and fair manner, with support of the Government of Rajasthan.
As on the date of this report, talks over the long term settlements are on-going at the manufacturing facilities situated at Bengaluru, Nashik and Naganathapura. The Company continues to deal with the said matters in a fair and firm manner.
During the year under review, several new initiatives such as Introduction of Grievance policy, increase connect with Government and statutory bodies, Engagement calendar, Compliance checklist, self-audits and cross audits, etc. were taken.
The Company has an Internal Audit function. The Internal Audit Department evaluates the efficacy and adequacy of internal control system, its compliance with operating systems and policies of the Company at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee.
The Company has an effective and reliable internal financial control system commensurate with the nature of its business, size and complexity of its operations. The internal financial control system provides for well-documented policies and procedures that are aligned with Bosch global standards and processes, adhere to local statutory requirements for orderly and efficient conduct of business, safeguarding of assets, detection and prevention of frauds and errors, adequacy and completeness of accounting records and timely preparation of reliable financial information. This also identifies opportunities for improvement and ensure good practices imbibed in the processes that develop and strengthen the Internal financial control systems and enhance the reliability of company's financial statements.
The efficacy of the internal checks and control systems is validated by self-audits and verified by internal as well as statutory auditors.
The Audit Committee reviews the internal audit plan, adequacy and effectiveness of the internal control system, significant audit observations and monitors the sustainability of remedial measures. It also reviews functioning of the Whistle Blower mechanism and reviews the action taken on the cases reported.
The new government policies like smart cities will help the Company to offer solutions like surveillance cameras, power tools for infrastructure activities. Anticipated scrappage policy which is being talked about will give boost for the auto industry when enacted. Landmark GST legislation is expected to have long term positive effect after some initial hiccups.
The direct transition to BS VI from BS IV, skipping BS V is challenging and has associated risks. India will be the first country to skip one level of emission legislation and will move from BS IV to BS VI in three years, a time typically taken for one step.
Due to the strong local development and application team supported by the international development network, the Company is ready to support OEMs for timely introduction of BS VI and is working closely with customers to define the strategy to achieve BS VI norms.
BS VI is also expected to change the market mix of diesel and petrol vehicles.
In general, the demand in the automotive sector may slow down in case of slackness in the implementation of infrastructure projects. Apart from the intensified competition, which puts pressure on selling prices, any runaway increase in input costs may affect the profitability of the Company.
As regards the Business beyond Mobility, the Company's presence across multiple businesses (industrial technology, consumer goods and energy and building solutions) enables synergies for tapping the existing and prospective customer base with integrated solutions.
The Company follows a specific, well-defined risk management process that is integrated with operations for identification, categorization and prioritization of operational, financial and strategic business risks. Across the organization, there are teams responsible for the management and mitigation of risks.
The Risk Management Committee headed by Mr. Soumitra Bhattacharya, Managing Director, reviews the effectiveness of the process at regular intervals.
Following are the major risks and mitigation measures:
1. Shift to BS VI: The jump from BS IV to BS VI in a short span of about 3 years, the pace of change and the short time duration for preparedness are challenging. Even though the Company is ready with BS VI compliant technology, it is yet to be proven under Indian conditions (due to constraints such as availability of fuel for testing). Further, there could be an adverse financial impact due to BS VI products which are largely based on imports and have low replacement requirements in the Aftermarket.
The Company is currently working on project acquisitions and measures are being put in place to minimize the financial impact.
2. Competition: The Company operates in a highly competitive environment and some customers have started adopting de-risking strategies to maintain more than one source for a product. Further, new competitors have entered the market with new or similar products. Spurious parts and cheap imitations continue to put pressure on existing market shares, primarily for Automotive Aftermarket and Power Tools.
Respective business unit teams undertake a comprehensive competitor analysis periodically to evaluate competitors' strategies vis-a-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 our Diesel systems plants and uncertain result of settlement negotiations. They include possible risks arising from stoppage of production and/or leading to unpredictable cost structure and/or possible lay-off.
As part of capability building initiative, the Company has conducted special trainings on Employee Relations and adding value to front line leadership development in the plant.
4. Heavily auto sector dependent: Around 85 percent of the business is dependent on the auto sector. Performance of the Company, therefore, is highly dependent on the sector's growth.
5. Regulatory Framework: The recent Supreme Court order banning sale and registration of BS-III vehicles with effect from April 01, 2017, impacted the automotive industry. Such uncertain regulatory environment is a challenge to the mid and long term business plans of the industry. The Company, has proactively taken steps to mitigate the risk in a socio-environmentally responsible manner.
Global Geopolitical Scenario: The Company is operating in a global environment and continues to be mildly impacted by geopolitical changes such as Brexit and US elections.
GST: While GST is a welcome change, seamless implementation of GST in the country at least in the beginning could be a risk. It is expected to have a short-term negative impact during the rollout but a long-term positive impact. The Company has set up a strong task force to oversee and ensure a smooth transition to GST implementation.
The trickle-down effect of the positive sentiment seen in macro-economic indicators and financial markets is yet to be seen prominently in the real economy. With the stable Government in place and reforms like GST being implemented, India could achieve a 7 percent plus GDP growth rate in 2017-18.
The Company expects a moderate growth in the automotive industry in 2017-18, with a continued strong upward trend in passenger cars and muted growth in HCV. This is supported by improved market sentiments, pickup in economic indicators, pent-up demand, new launches and political stability.
The Non-Automotive segment is expected to perform well due to India's robust economic growth, rising household incomes and increase in consumer spending. The Company plans to expand its market share through revamping its distribution strategy and further developing the retail and e-tail channels in the consumer business.
The Company will continue to invest to meet the demands of the market.
The Bengaluru plant, with an eminent history of six decades, presently houses the manufacturing of Multi-cylinder pumps & Single-cylinder pumps.
The Plant, following a systematic approach of 'Continuous Improvement', is in the process of transforming itself from 'Fit for Future' to 'We Shape the Future', its new vision statement.
Relocation from Bengaluru to Bidadi, which started in February 2015, has been one of the major strategic actions for the year under review and will continue in the current year. The Plant has adopted a focused and proactive approach to meet the customer demands on account of change in emission norms from BS III to BS IV and thereafter to BS VI. The relocation to the Bidadi facilities is expected to be completed by early 2019.
The Bidadi Plant, which manufactures Common Rail Pumps and components, strives to remain lean and agile by improvising on productivity using Industry 4.0 solutions, an enabler of manufacturing excellence.
The Plant undertook various CSR activities like Health camp for women and children, School renovation, RO-drinking water facility in and around its location along with Bidadi Industrial Association which were well appreciated.
During the year under review, the plant successfully installed and commissioned a 3.5 MW solar power plant resulting in carbon dioxide reduction by 10 tons/day.
The Nashik Plant, which manufactures diesel injectors and components, achieved a production milestone of 20th million Common Rail Injector in 2016. During the year under review, the Plant successfully ramped up CR 2-20 body production to cater to the export demand of CKD. Further, investments were made for capacity expansion of new generation products and installation of new coating equipment.
As an eco-friendly measure, 10 MW capacity Solar Power Plant has been installed, resulting in carbon dioxide reduction by 32 tons/day.
The Jaipur Plant produces Distributor (VE) Mechanical and Electronic Diesel Control Pumps which are used in Light and Heavy Commercial Vehicles, Sports and Multi-Utility Vehicles (MUV) and tractors. Manufacturing of Conventional Injectors (NHA), which are used in Light and Heavy Commercial Vehicles, Locomotives, Tractors and Gensets, is being relocated from the Nashik Plant to Jaipur.
Growth in the domestic LCV and MUV markets resulted in good turnover despite slight contraction in OE volumes due to demonetization in last quarter of 2016. The BS III to BS IV Emission Norm changeover with effect from April 01, 2017 resulted in higher demands for VE pumps towards the end of the last quarter of the year under review. The Plant successfully met the customer demands and achieved Zero obsolescence of pumps with 100 percent delivery fulfillment.
During the year under review, the plant implemented various cost-reduction measures across the value chain.
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 along with safety and quality improvement programs.
During the year under review, Verna plant opened account in secondary packaging product line with the first sale of Baling Machine (GSV 4800). The Plant, with focused approach, continued its efforts to innovate and develop new products. Verna plant also celebrated successful 20 years of Bosch Packaging Technology in India with an 'in-house show' which was a well-attended and appreciated event.
Situated at Tirunelveli, Tamil Nadu with a 6,200 sq. meters of built up area, the state-of-the-art Gangaikondan plant is the only Gasoline Systems plant in India catering to the needs of growing Gasoline automobile market (both four and two wheelers) in India.
The Plant mainly produces Power Train Sensor products, Air Management products, Fuel supply products, Fuel Injection products for Gasoline vehicles. Effective utilization of production lines ensures that the Plant is ready to face higher demands.
The Plant has installed 40KW solar energy panels to harness solar power and reduce dependency on conventional electric supply.
The Power Tools facility admeasuring approximately 8,500 sq. meters is located at Indospace Industrial Park, Orgadam, Tamil Nadu. At present, the facility caters mainly to the Indian and SAARC markets. It primarily manufactures Small Angle grinders, Large Angle grinders, Marble cutters, Blowers, Drills and two-kg Hammers, along with their motors.
For GST preparedness, IT projects were rolled out for making the Regional SAP system GST compliant. Pre-readiness check and necessary upgrades have been completed in July 2016. Further upgradations are being made to the Regional SAP system to meet the GST go-live date.
Considering the potential for further improvement in CIP practices at the Company to foster a culture of process orientation and problem solving, a project was undertaken for defining CIP road map by end 2018 and for its structured deployment and review by Senior Leadership. This project has supported in considerable improvement in various Key Performance Indicators (KPIs) e.g. Number of Implemented Suggestions per Employee, Savings from CIP Activities, Number of CIP Workshops, No. of VSDIA (Value Stream Design in Indirect Areas) Projects, Key CIP Competencies, Processing Time per Suggestion, etc. with involvement of associates across.
To augment the BPS Vision “Competitive Products from Agile and Sustainable Waste-free Supply Chain”, BPS principles have been deployed to interface 'Source – Make – Deliver'. Using the 'Pull principle' improvements have been on “People, Process and Products”. During the year under review, the Company focused on “Lead from the Front” for Plant Managers through mentoring by Bosch BPS Experts. These initiatives led to streamlining of the process in the Value stream and has yielded sustained results like increase in productivity, first pass yield and reduction in throughput time and inventories.
Striving for Excellence is one of the 'Strategic focal points' in our mission statement 'We are Bosch'. The thrust on Business Excellence is predominantly visible in the Diesel Systems business locations in India.
As excellence is a comparative and improvement oriented journey, many initiatives have been taken up to bring in a culture of 'Outside-in' with aspects of learning good practices and benchmarking with other organizations in a structured way. Agility as a theme is one of the key focal points for this year at Diesel Systems division in order to transform ourselves towards an 'Agile Organization'. Agility is being fostered at individual, team and division levels. With visible success in Diesel Systems divisions, Business excellence concepts are now being used across other divisions.
During the year under review, the Company won several awards for excellence. Few such awards are:
Mr. Peter Tyroller retires by rotation at the forthcoming Annual General Meeting, and being eligible, offers himself for re-election at the said Meeting of the Company.
Dr. Steffen Berns who was re-appointed as the Managing Director of the Company for a period of 2 years at the 64th Annual General Meeting, resigned as Director and Managing Director with effect from close of business hours on December 31, 2016 upon assuming responsibility as President – Car Multimedia business with Robert Bosch, Germany. The Board places on record its sincere appreciation for contribution made and leadership provided by Dr. Berns during his tenure as the Managing Director of the Company.
Consequent to Dr. Berns returning to Germany, Mr. Soumitra Bhattacharya who was re-appointed as Joint Managing Director for the period January 01, 2017 to June 30, 2020 was re-designated as Managing Director for the said term.
Pursuant to changes at the Senior Management level, Dr. Andreas Wolf was appointed as Joint Managing Director for the period January 01, 2017 to February 28, 2019.
Mr. Jan Oliver Röhrl, who joined the Company as Executive Vice-President (Engineering) & Regional President (Diesel Systems) was appointed as Alternate Director to Mr. Peter Tyroller in place of Dr. Andreas Wolf. Mr. Röhrl, by virtue of being in employment of the Company has been placed in position of a Whole-time Director. The Board of Directors, therefore, approved his appointment as Whole-time Director from February 11, 2017 to December 31, 2020, subject to the approval of Central Government and shareholders.
Approval of the members for the aforementioned re-designation and appointments is being sought at the forthcoming 65th Annual General Meeting. Brief profiles of Mr. Peter Tyroller, Mr. Soumitra Bhattacharya, Dr. Andreas Wolf and Mr. Jan Oliver Röhrl forms a part of the Notice convening the 65th Annual General Meeting.
The Board of Directors, on recommendation of the Nomination and Remuneration Committee, appointed Mr. S Karthik as Joint Chief Financial Officer (Joint CFO) of the Company with effect from February 11, 2017.
Consequent to his appointment as the Joint CFO,
Mr. S Karthik relinquished his position as the Company Secretary and Compliance Officer.
Mr. R Vijay was appointed as the Company Secretary of the Company with effect from February 11, 2017
As on the date of this report, the following are the Key Managerial Personnel of the Company:
Mr. Soumitra Bhattacharya (Managing Director & Chief Financial Officer)
Dr. Andreas Wolf (Joint Managing Director)
Mr. Jan Oliver Röhrl [Executive Vice-President (Engineering) & Regional President (Diesel Systems) & Alternate Director]
Mr. S Karthik (Joint Chief Financial Officer)
Mr. R Vijay (Company Secretary)
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).
For details of the familiarization programme for Independent Directors please refer to the Corporate Governance Report.
In line with the provisions of the Act and the Listing Regulations, the Board has carried out an annual performance evaluation of its own perfomance, its Committees and individual Directors.
For details of the performance evaluation including evaluation criteria for Independent Directors, please refer the Corporate Governance Report.
During the year under review, six meetings of the Board of Directors were held. The particulars of the meetings and attendance thereat are mentioned in the Corporate Governance Report.
Consequent to resignation of Dr. Steffen Berns from directorship of the Company, the CSR Committee was reconstituted by inducting Dr. Andreas Wolf as a member in place of Dr. Steffen Berns. As on the date of this report, the CSR Committee comprises of four members. Mr. Prasad Chandran, Independent Director, is the Chairman of the Committee. The other members are Mr. Bhaskar Bhat, Independent Director; Mr. Soumitra Bhattacharya, Managing Director and Dr. Andreas Wolf, Joint Managing Director. 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 Companies Act, 2013. The CSR policy, inter-alia, deals with the objectives of the Company's CSR initiatives, its guiding principles, thrust areas, responsibilities of the CSR Committee, implementation plan and reporting framework.
Some of the key initiatives during the year under review were as under:
Details of the CSR Committee meetings and attendance of the member thereat forms part of the Corporate Governance Report.
Annual Report on Corporate Social Responsibility Activities of the Company is enclosed as Annexure - 'B' (Page No. 58) to this report.
The Audit Committee comprises of five members. Mrs. Renu S Karnad, Independent Director, is the Chairperson of the Committee. The other members are Mr. V. K. Viswanathan, Non-Executive &
Non-Independent Director, Mr. Bernhard Steinruecke, Mr. Prasad Chandran and Mr. Bhaskar Bhat, Independent Directors.
During the year under review, the Board accepted all the recommendations of the Audit Committee.
Details of the roles & responsibilities, particulars of meeting and attendance thereat are mentioned in the Corporate Governance Report.
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.boschindia.com under the “Shareholder Information” section.
The Company has one Associate Company viz., Newtech Filter India Private Limited. The Company holds 25 percent and Robert Bosch Investment Nederland BV 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 73 percent of the product sales while 27 percent were attributed to OEM and OES channels in 2016-17.
The turnover and results of NTFI are as follows:
A separate statement containing the salient features of the financial statement of the aforementioned Subsidiary and Associate is enclosed as Annexure 'C' (Page No. 62) to this Report.
The Nomination and Remuneration Policy, inter-alia, provides for criteria and qualifications for appointment of Director, Key Managerial Personnel and Senior Management, Board diversity, remuneration to directors, key managerial personnel, etc. The policy is enclosed as Annexure 'D' (Page No. 63) to this Report. The policy can also be accessed at the following link:
Disclosures pertaining to remuneration of employees and other details, as required under Section 197(12) of the Act and rules framed thereunder is enclosed as Annexure 'E' (Page No. 66) to this Report.
The information in respect of employees of the Company required pursuant to Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, will be provided on request. In terms of Section 136 of the Act, the Reports and Accounts are being sent to the Members and others entitled thereto excluding the aforementioned particulars of employees, which is available for inspection by the Members at the Registered Office of the Company during business hours on any working day. Any member desirous of obtaining a copy of the same may write to the Company at email@example.com.
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. 193).
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, stakeholder's feedback, forecast and expert judgment.
The policy, inter-alia, provides for the following:
The Company has a Whistle Blower Policy which provides a 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: http://www.boschindia.com/media/in/documents/our_company_1/shareholder_information_1/2014/Whistle_blower_policy.pdf
In terms of the requirements of Regulation 34(2)(f) of the Listing Regulations, a report on Business Responsibility in the format prescribed by Securities and Exchange Board of India forms a part of this Annual Report (Page No. 205).
The Audit Committee accords omnibus approval to Related Party Transactions which are foreseen and repetitive in nature. The Audit Committee reviews, on a quarterly basis, the details of the Related Party Transaction 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.
Consequent to the approval of the shareholders for sale of the Starter Motors and Generators business (SG Business) of the Company, the said business was transferred to Robert Bosch Starter Motors Generators India Private Limited with effect from August 01, 2016.
The details of Related Party Transactions under Section 188(1) of the Act required to be disclosed under Form AOC - 2 pursuant to Section 134(3) of the Act is enclosed as Annexure 'F' (Page No. 68).
The Company has framed a policy on determining materiality of Related Party Transaction and dealing with Related Party Transaction. The said policy has been uploaded on the website of the Company and can be accessed at the following link: http://www.boschindia.com/media/in/documents/our_company_1/shareholder_information_1/2014/RPT_Policy.pdf
The report in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 of the Act read with Rule 8 of Companies (Accounts) Rules, 2014, as amended, is enclosed as Annexure 'G' (Page No. 70) to this Report.
In terms of the provisions of Section 139 of the Companies Act, 2013, the term of office of Price Waterhouse & Co Bangalore LLP (“PWC”) will end at the conclusion of the forthcoming Annual General Meeting. The Board places on record its appreciation for services rendered by PWC as Statutory Auditors of the Company.
The Board has recommended appointment of M/s. Deloitte Haskins & Sells LLP (Firm Registration No. 117366W/W-100018) (DHS LLP) as Statutory Auditors of the Company. The aforementioned appointment is subject to approval of the shareholders at the forthcoming Annual General Meeting. Accordingly, resolution for appointment of DHS LLP as Statutory Auditors of the Company for a period of 5 consecutive years from the conclusion of the 65th (forthcoming) Annual General Meeting till the conclusion of the 70th Annual General Meeting to audit the Financial Statements of the Company from Financial Year 2017-18 is proposed for approval of the members at the forthcoming AGM.
The Auditors' Report on the Standalone as well as Consolidated Financial Statements for the Financial Year 2016-17 is unmodified i.e. it does not contain any qualification, reservation or adverse remark.
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 2017-18 in terms of the provisions of Section 148 of the Companies Act, 2013. As per the requirements of the said section, remuneration payable to the Cost Auditors is required to be ratified by the shareholders at the General Meeting. Accordingly, resolution ratifying the remuneration payable to M/s. Rao, Murthy & Associates forms a part of the Notice dated May 25, 2017 convening the 65th Annual General Meeting.
The Company appointed Mr. Sachin Bhagwat, Practicing Company Secretary, to conduct Secretarial Audit as per the provisions of the Act for the Financial Year 2016-17. The report of the Secretarial Audit is enclosed as Annexure 'H' (Page No. 72) to this report.
There were no qualifications, reservations or adverse remarks in the Report of the Secretarial Auditor.
There have been no instances of fraud reported by the aforesaid Auditors under Section 143(12) of the Act and Rules framed thereunder either to the Company or to the Central Government.
Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors report that:
Details of loans, guarantee and investments covered under section 186 of the Act, are given in the Notes to the Financial Statements.
During the year under review, there were no deposits as per the provisions of Companies Act, 2013.
There were no material changes and commitments between the end of the year under review and the date of this report, which could have an impact on the Company's operation in the future or its status as a “going concern”.
Company's manufacturing facility at Jaipur was closed for a day in the month of October 2016 consequent to notice of closure by Rajasthan State Pollution Control Board (RSPCB). Based on the representation made by the Company, RPSCB revoked their closure order.
Karnataka State Pollution Control Board (KSPCB) had vide Public Notification dated May 05, 2017 directed closure of all industrial units in the catchment area of the Bellandur Lake, Bengaluru. As an abundant caution, operations at the facility of the Company situated at Adugodi, Bengaluru were temporarily halted for a day. Based on the clarification by KSPCB regarding non-applicablity of the said public notice to the Company's Adugodi facility, operations were resumed with effect from May 08, 2017.
There was no financial impact on account of temporary closure of the facilities situated at Jaipur and Adugodi, Bengaluru pursuant to the above orders.
Further, there were no significant or material orders passed by the Regulators or Courts impacting the going concern status and Company's operations in future.
During the year under review, the Company has bought back 878,160 Equity Shares of face value of INR 10 each representing 2.796 percent of the pre-buyback paid up share capital of the Company for an aggregate consideration of Mio INR 20,197 (representing 24.99 percent of the paid up share capital and free reserves). Robert Bosch GmbH, the holding company, also participated in the Buyback.
The Post Issue capital of the Company is Mio INR 305.21 consisting of 30,520,740 Equity Shares of INR 10 each. The present shareholding pattern is as under:
In terms of the requirements of Section 134(3)(a) of the Act, an Extract of Annual Return as provided under Section 92(3) of the Act is enclosed as Annexure 'I' (Page No. 74) to this Report.
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.
Statements in the Board's Report and the Management Discussion & Analysis describing the Company's objective, expectations or forecasts may be forward looking within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed in the statement.
For and on behalf of the Board of Directors
V. K. Viswanathan
Date: May 25, 2017
SEBI vide Notification No. SEBI/LAD-NRO/GN/2016-17/008 dated July 08, 2016 amended the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 by inserting Regulation 43A, requiring the top 500 listed entities based on the market capitalization (calculated as on March 31 of every financial year) to formulate a Dividend Distribution Policy. The Company, being one of the top 500 listed companies, has formulated this Dividend Distribution Policy.
Unless the context otherwise requires:
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.
The policy shall come into force from the date of approval of the Board of Directors i.e. February 10, 2017.
Dividend payout is contingent upon various factors and their combination thereof, which are enumerated below and the Board of Directors shall before deciding the dividend consider these factors in the best interest of the Company and its shareholders.
The shareholder may not expect dividend, inter-alia, in the following circumstances, subject to discretion of the Board:
While determining the quantum of dividend the Board of Directors shall, inter-alia, consider the following financial parameters:-
The quantum of dividend is an outcome of due deliberation by the Board considering various Internal and External factors including, but not limited to:-
Dividend will generally be recommended once a year by the Board, after the approval of the Audited Financial Statement and shall be subject to approval/confirmation of shareholders at the Annual General Meeting (AGM). In certain years and to commemorate special occasions, the Board may consider declaring special dividend for its shareholders.
Considering the above factors, the Company would endeavor to declare a dividend (excluding any special dividend or a payout in the form of a one-time/special dividend) resulting in a pay-out ratio upto 30% of the annual standalone Profits after Tax (PAT) of the Company.
Subject to the applicable regulations, retained earnings may be applied for:
The Company has only one class of shares viz., Equity Shares of Face Value of INR 10 each.
Since the Company has issued only one class of equity shares with equal voting rights, all the members of the Company are entitled to receive the same amount of Dividend per share.
In terms of the requirements of the Listing Regulations, this policy has been uploaded on the website of the Company viz., www.boschindia.com and will also form a part of the Annual Report of the Company.
In case the Company declares dividend on the basis of parameter in addition to the parameters stated in this Policy, such parameters will be disclosed on the website as well as in the Annual Report of the Company.
This Policy is subject to revisions/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.
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.
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:
Average Net Profit: Mio INR 16,599
Mio INR 332
Karuna Trust, a registered trust since 1986, is a Non-Government Organisation of repute providing free primary health care for the past 26 years in partnership with various State Governments and Funding Agencies.
Ahila Bharatha Mahila Seva Samaja (ABMSS) is a social organization set up in Bengaluru in 1993 primarily to work towards the betterment of women and children. Since 2013, they added cleft lip and palate treatment as one of their major programmes with the support of Deutsche Cleft Kinderilfe E.V Germany and local donors within the country.
Shri Guruji Rugnalaya, Nashik is amongst well-known hospitals in Nashik. They provide treatment to the children of Government schools in Nashik identified by the Company, at subsidized 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 states. It is one of the largest science education programs that caters to economically disadvantaged children and teachers in the world.
Jankalyan Samiti is a voluntary Non-Government Organization (NGO) registered trust. Its aim is to promote and conduct activities relating to health care, mass literacy, employment generation training activities, etc. among the poor and the neglected residents in undeveloped colonies and slums in and around Nashik. They support in teaching science in a practical way to the Government school children.
Children Movement for Civic Awareness (CMCA) was founded in the year 2000 as a joint programme between 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 at Bengaluru. The Foundation strives to fight issues like hunger and malnutrition in India, by implementing the Mid-Day Meal Scheme in the government schools and government-aided schools.
The CSR projects were designed, implemented and periodically reviewed in accordance with the CSR Policy of the Company framed pursuant to the provisions of the Companies Act, 2013 and rules made thereunder.
Joint Managing Director
Corporate Social Responsibility Committee
(Pursuant to first proviso to sub-section (3) of section 129 read with rule 5 of Companies (Accounts) Rules, 2014)
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
In terms of Section 178 of the Companies Act, 2013 and clause 49 of the listing agreement (as amended from time to time), this policy on Nomination and Remuneration of Directors, Key Managerial Personnel (KMP) and Senior Management of Bosch Limited has been formulated by the Nomination and Remuneration Committee and approved by the Board of Directors.
This policy shall act as guidelines on matters relating to the remuneration, appointment, removal and evaluation of performance of the Directors, Key Managerial Personnel and Senior Management.
In this policy unless the context otherwise requires:
The words and expressions used but not defined herein, but defined under the Companies Act, 2013 shall have the meaning assigned therein.
The Board has the power to constitute / reconstitute the Committee from time to time in order to make it consistent with Bosch policies and applicable statutory requirements. At present, the Nomination and Remuneration Committee of the Company comprises of the following members:
Membership of the Committee shall be disclosed in the Annual Report. The terms of the Committee shall be continued unless terminated by the Board of Directors.
The meeting of the Committee shall be held at regular intervals as deemed fit and appropriate. The Company Secretary of the Company shall act as the Secretary of the Committee.
The Nomination and Remuneration Committee shall set up a mechanism to carry out its functions, any /all of its powers to any of the Executive / Whole-time Directors and/or Senior M&SS of the Company, as deemed necessary for proper and expeditious execution.
The Chairman of the Committee or in his absence any other member of the Committee authorized by him on his behalf shall attend general meetings of the Company.
This policy is effective 03.12.2014.
The appointment of Director, Key Managerial Personnel and Senior Management will be based on the outcome of strategic planning.
The recruitment process for selection to these categories of personnel commences after the approval of manpower requisitions by the appointing authority (depending upon the SLx levels). Relevant approval of concerned is also obtained as part of the process, as deemed fit depending upon the level of hiring.
The Committee shall consider the standards of qualification, expertise and experience of the candidates for appointment as Director, Key Managerial Personnel and Senior Management and accordingly recommend to the Board his/her appointment.
The Non-executive Directors and Independent Directors of the Company are entitled to sitting fees as determined by Board from time to time for attending Board / Committee meetings thereof in accordance with the provisions of Act.
The profit-linked commission shall be paid within the monetary limit approved by the shareholders of the Company subject to the same not exceeding 1% of the net profits of the Company computed as per the applicable provisions of the Act. Profit linked commission would comprise of a fixed and variable component considering the overall performance of the Company, attendance at the meetings of Board / Committees, Membership / Chairmanship of Committees and responsibilities of Directors.
The Board of Directors shall comprise of Directors having expertise in different areas / fields like Finance, Sales and Marketing, Banking, Engineering, etc. or as may be considered appropriate. In designing the Board's composition, Board diversity has been considered from a number of aspects, including but not limited to gender, age, cultural and educational background, ethnicity, professional experience, skills and knowledge. The Board shall have atleast one Board member who has accounting or related financial management expertise and atleast one woman director.
The Committee may recommend to the Board, changes in Board, Key Managerial Personnel or Senior Management Personnel subject to the provisions of the Act and applicable Company's policies i.e., Rules and Regulations of Service and Conduct for M&SS, Code of Business Conduct and Principles of legal compliance framed and adopted by the Company from time to time.
The Key Managerial Personnel and Senior Management Personnel shall superannuate as per the applicable provisions of the regulation and prevailing policy of the Company.
The Board of Directors will have the discretion to retain the Key Managerial Personnel and Senior Management Personnel in the same position / remuneration or revised remuneration after attaining the age of superannuation for organizational development reasons.
The Board of Directors on its own and/or as per the recommendations of Nomination and Remuneration Committee can amend this policy, as deemed fit from time to time.
For and on behalf of the Board of Directors
Date: May 25, 2017
The Non-Executive Directors including Independent Directors are remunerated in form of Commission and Sitting Fees. There has been no increase (for the Financial Year 2016-17) in the aggregate commission payable to Non-Executive Directors or the sitting fees per meeting. Therefore, the percentage increase in remuneration payable for the Financial Year 2016-17 has not been provided. However, the actual payout varies depending on attendance at the Board Meetings. For details of remuneration of Non-Executive Directors please refer the Corporate Governance Report.
There was an increase of ~8.1% in the median remuneration of employees.
As at March 31, 2017, the Company had 8,488 permanent employees on its rolls.
Percentage increase made in the salaries of employees other than the managerial personnel in the last Financial Year i.e. 2016-17 was ~10% whereas the increase in the managerial remuneration in the Financial Year 2016-17 was ~8.7%.
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.
Form No. AOC-2
Form for disclosure of particulars of contracts/arrangements entered into by the Company with related parties referred to in sub-section (1) of section 188 of the Companies Act, 2013 including certain arm's length transactions under third proviso thereto.
Members would recall that during the Financial Year 2015-16 their approval was sought for sale and transfer of the Starter Motors and Generators business of the Company (SG-IN) to Robert Bosch Starter Motors Generators India Private Limited (RBSG), a related party transaction within the meaning of Section 188 of the Companies Act, 2013 ('Act'). Details of the said transaction under prescribed Form AOC-2 was enclosed as an Annexure to the Directors' Report for the Financial Year 2015-16. Pursuant to the approval of the shareholders, SG-IN was transferred to RBSG effective August 01, 2016. Since the transfer of SG-IN concluded during the year under review (w.e.f. 01.08.2016), brief details of the said transaction are furnished below once again.
Name of related party and relationship: Robert Bosch GmbH, Germany (Holding company)
Salient Terms: Ongoing, repetitive and in ordinary course of business
Date of approval by the Board, if any:
Approval of the Audit Committee and the shareholders have been obtained pursuant to the requirements of 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
Date: May 25, 2017
Form No. AOC-2
[Pursuant to Section 134(3)(m) of the Companies Act, 2013 read with Rule 8(3) of Companies (Accounts) Rules, 2014]
Additionally, the Company continues to analyse energy consumption using established tools.
During the year under review, the Company focused on investments aiming to reduce usage of conventional energy, energy conservation projects and increase the generation of solar energy and or optimization of energy utilisation. Various manufacturing facilities of the Company have initiated installation of Solar Plant Equipment. Location wise details of investment on energy conservation/solar energy equipment(s):
The initiatives have resulted in benefits for our customers and the end users as enumerated below:
For and on behalf of the Board of Directors
Date: May 25, 2017
[Pursuant to section 204(1) of the Companies Act, 2013 and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014]
Bengaluru - 560 030
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, 2017, complied with the statutory provisions listed hereunder and also that the Company has proper Board-processes and compliance-mechanism 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, 2017 according to the provisions of:
I have also examined compliance with the applicable clauses of the following:
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, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that took place during the period under review were carried out in compliance with the provisions of the Act.
Adequate notice is given to all directors to schedule the Board Meetings, agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.
As per the minutes of the meetings duly recorded and signed by the Chairman, the decisions of the Board were unanimous and no dissenting views have been recorded.
I further report that there are adequate systems and processes in the Company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations and guidelines.
I further report that during the audit period, no specific events / actions took place having a major bearing on the Company's affairs in pursuance of the above referred laws, rules, regulations, guidelines, standards, etc. referred to above.
Place : Pune
[Pursuant to Section 92(3) of the Companies Act, 2013, and rule 12(1) of the Companies (Management and Administration) Rules, 2014, as amended]
Place : Bengaluru
For and on behalf of the Board of Directors
V. K. Viswanathan