Dear Members,
The directors present their Eighth Annual Report and audited financial
statements for the year ended 31 March 2015
Financial results
The highlights of the Standalone Financial Results are as under:
(Rs. In Crore)
Particulars FY 2015 FY 2014
Total revenue 211.66 157.30
Total expenses 53.56 51.79
Profit before tax 158.10 105.51
Tax expense 32.17 22.00
Profit after tax 125.93 83.51
Profit for the year 125.93 83.39
Transfer to Reserve fund under
section 45-IC(1) of the
Reserve Bank of India Act, 1934 25.19 16.68
Transfer to General reserve 12.59 8.34
Proposed dividend 27.85 27.85
Balance carried to Balance Sheet 60.30 30.52
Earnings per share (B) 7.9 5.2
The highlights of the Consolidated Financial Results are as under:
(Rs. In Crore)
Particulars FY 2015 FY 2014
Gross revenue:
i. Gross written premium
a) Life insurance - Bajaj Allianz Life
Insurance Co. Ltd. 6,017.30 5,843.14
b) General insurance - Bajaj Allianz
General Insurance Co. Ltd. 5,300.66 4,583.89
ii. Gross income - Bajaj Finance Ltd. 5,418.28 4,074.35
iii. Income from windpower generation -
Bajaj Finserv Ltd. 50.31 60.44
iv. Investment income (excluding
accretions on unit linked
investment) 2,685.38 2,059.49
v. Others 117.33 91.78
Total 19,589.26 16,713.09
(Rs. In Crore)
Particulars FY 2015 FY 2014
Revenue from operations and other
income 7,102.49 5,386.91
Amount transferred from the
policyholders'' account 487.89 639.10
Total revenue 7,590.38 6,026.01
Profit before tax 3,246.15 2,901.61
Tax expense 841.94 710.49
Profit after tax 2,404.21 2,191.12
Tax(debits)/credits pertaining to
earlier years 4.96 (0.19)
Minority interest 719.38 646.85
Profit for the year 1,689.79 1,544.08
Earnings per share (B) 106.2 97.0
The financial results of the Company are elaborated in the Management
Discussion and Analysis Report.
Dividend
Your directors recommend for consideration of the shareholders at the
ensuing annual general meeting, payment of a dividend of Rs. 1.75 per
share (35%) for the year ended 31 March 2015.
The amount of dividend and the tax thereon to the extent applicable
aggregates to Rs. 27.85 crore.
Dividend paid for the year ended 31 March 2014 was also Rs. 1.75 per
share (35%). The amount of dividend and the tax thereon to the extent
applicable aggregated to Rs. 27.85 crore.
Share capital
The paid-up equity share capital as on 31 March 2015 was Rs. 79.56 crore.
During the Rights Issue of equity shares made by the Company in 2012,
certain shares had been kept in abeyance as required by law. With
resolution of a few cases during the year under review, the Company has
allotted 2,832 equity shares of the face value of Rs. 5 each at the
original Rights Issue price of Rs. 650 per share to the eligible
shareholders.
There was no public issue, rights issue, bonus issue or preferential
issue etc. during the year.
The Company has not issued shares with differential voting rights,
sweat equity shares nor has it granted any stock options.
Registration as a Systemically Important Non-Deposit taking NBFC/Core
Investment Company
Your Company was registered on 30 October 2009 by Reserve Bank of India
as a Non-Banking Financial Institution (Non-Deposit taking). In terms
of provisions of Non-Banking Financial (Non-Deposit Accepting or
Holding) Companies Prudential Norms (Reserve Bank)
Directions, 2007, your Company is categorised as a ''Systemically
Important Non-Deposit taking Non-Banking Financial Company''. Your
Company has not accepted public deposits during the year under review.
Your Company, being eligible, has intimated RBI on 25 November 2014 of
its intention to convert itself into a Core Investment Company (CIC).
RBI has responded vide letter dated 30 December 2014, communicating its
requirements in this regard. The Company is currently in the process of
complying with the said RBI requirements keeping in view the provisions
of Master circular on Regulatory Framework for Core Investment Company
dated 1 July 2014.
Operations
Detailed information on the operations of the different business lines
of the Company and details on the state of affairs of the Company are
covered in the Management Discussion and Analysis Report.
Extract of annual return
The extract of annual return as provided under sub-section (3) of
section 92 of the Companies Act, 2013, in the prescribed Form MGT-9 is
annexed to this Report.
Number of meetings of the Board
There were 6 meetings of the Board held during the year. Detailed
information is given in the Corporate Governance Report.
Directors'' responsibility statement
As required under clause (c) of sub-section (3) of section 134 of
Companies Act, 2013 directors, to the best of their knowledge and
belief, state that -
- in the preparation of the annual accounts, the applicable
Accounting Standards had been followed alongwith proper explanation
relating to material departures;
- the directors had selected such accounting policies and applied
them consistently and made judgments 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 of the profit and
loss of the Company for that period;
- the directors had taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of Companies Act, 2013 for safeguarding the assets of the
Company and for preventing and detecting fraud and other
irregularities;
- the directors had prepared the annual accounts on a going concern
basis;
- the directors had laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and were operating effectively; and
- the directors had devised proper systems to ensure compliance with
the provisions of all applicable laws and that such systems were
adequate and operating effectively.
Declaration by independent directors
The independent directors have submitted the Declaration of
Independence, as required pursuant to section 149(7) of the Companies
Act, 2013 stating that they meet the criteria of independence as
provided in sub-section (6).
Directors'' Remuneration Policy and criteria for matters under section
178
Information regarding Directors'' Remuneration Policy and criteria for
determining qualifications, positive attributes, independence of a
director and other matters provided under sub-section (3) of section
178 are provided in the Corporate Governance Report.
Particulars of loans, guarantees or investments
Information regarding loans, guarantees and investments covered under
the provisions of section 186 of the Companies Act, 2013 are detailed
in the Financial Statements.
Related party transactions
There were no related party transactions (RPTs) entered into by the
Company during the financial year, which attracted the provisions of
section 188 of Companies Act, 2013. There being no ''material'' related
party transactions as defined under clause 49 of the Listing Agreement,
there are no details to be disclosed in Form AOC-2 in that regard.
During the year 2014-15, pursuant to section 177 of the Companies Act,
2013 and clause 49 of the Listing Agreement, all RPTs were placed
before Audit Committee for its prior/omnibus approval.
The Policy on RPTs as approved by Board is uploaded on the Company''s
website www.bajajfinserv.in
Material changes and commitments
There have been no material changes and commitments, affecting the
financial position of the Company, which have occurred between the end
of the financial year of the Company and the date of this Report.
Conservation of energy and technology absorption
The Company is engaged in wind-farm activities in addition to its
financial services activities. Hence, the subject of conservation of
energy is applicable to the Company only with regard to its wind-farm
business for the Company, being by and large a financial services
company, there are no particulars regarding technology absorption
required to be given.
Particulars regarding conservation of energy are given below:
a) the steps taken on conservation of energy and for utilising
alternate sources of energy:
The Company has installed renewable energy (wind) project with a
capacity of 65.2 MW.
It generated 746 lakh units and sold to third parties. It, however, is
unable to make captive use of wind energy, because new regulations do
not permit the same, where monthly demand is less than 800 KW. The
Company has installed LED lamps in place of failed Tube lights and CFL
thereby reducing energy consumption in lighting by 7 KW during the
year.
b) the capital investment on energy conservation equipment:
Not applicable, since BFS is a non-manufacturing company, coming under
the notified industries covered under Energy Conservation Act, 2001.
Also, energy demand/connected load of building utilised for the
Company''s corporate/commercial activities etc. is less than 500 KW,
which is the threshold for applicability of Energy Conservation Act.
Foreign exchange earnings and outgo
Total foreign exchange earned by the Company was Nil during the year
under review, as well as during the previous year.
Total foreign exchange outflow during the year under review was Rs. 1.53
crore, as against Rs. 1.96 crore during the previous year.
Risk Management Policy
Information on the development and implementation of a Risk Management
Policy for the Company including identification therein of elements of
risk which in the opinion of the Board may threaten the existence of
the Company is given in the Corporate Governance Report.
Corporate Social Responsibility
Detailed information report on Corporate Social Responsibility Policy
developed and implemented by the Company on CSR initiatives taken
during the year pursuant to section 135 of the Companies Act, 2013 is
given in the annexed Annual Report on CSR activities.
Formal annual evaluation of the performance of Board, its Committees
and Directors
Information on the manner in which formal annual evaluation has been
made by the Board of its own performance and that of its Committees and
individual directors is given in the Corporate Governance Report.
Subsidiaries and joint venture
Following are the subsidiary and joint venture companies of the Company
as at 31 March 2015:
Name of the company % Shareholding Status
Bajaj Allianz Life Insurance Company Ltd. 74% Subsidiary
Bajaj Allianz General Insurance Company Ltd. 74% Subsidiary
Bajaj Finance Ltd. 61.53% Subsidiary
Bajaj Housing Finance Ltd.
(erstwhile Bajaj Financial Solutions Ltd.)
(100% subsidiary of Bajaj Finance Ltd.) - Subsidiary
Bajaj Financial Securities Ltd.
(100% subsidiary of Bajaj Housing Finance
Ltd.) - Subsidiary
Bajaj Financial Holdings Ltd. 100% Subsidiary
Bajaj Allianz Financial Distributors Ltd. 50% Joint Venture
Bajaj Allianz Staffing Solutions Ltd.
(100% subsidiary of Bajaj Allianz Financial
Distributors Ltd.) - Joint
Venture
During the year under review, the Company sold its 100% shareholding in
Bajaj Financial Solutions Ltd. (which includes its 100% holding in
Bajaj Financial Securities Ltd.) at Rs. 17 crore to Bajaj Finance Ltd.
The name of Bajaj Financial Solutions Ltd. was subsequently changed to
Bajaj Housing Finance Ltd. These steps were taken to facilitate Bajaj
Finance Ltd. to commence its new line of business in the area of
housing finance.
Detailed information on the performance and financial position of each
subsidiary/joint venture of the Company is covered in the Management
Discussion and Analysis Report.
Directors and Key Managerial Personnel
As reported previously, Dr. Gita Piramal was appointed as an additional
director in the category of non-executive, independent director of the
Company, in the meeting of the Board held on 27 March 2014. Thereafter,
at the seventh annual general meeting of the Company held on 16 July
2014, the members of the Company appointed Dr. Gita Piramal as an
Independent Director under the Companies Act, 2013 for a period of 5
years effective from 16 July 2014.
Pursuant to section 149(4) of the Companies Act, 2013, every listed
company is required to appoint at least one third of its directors as
independent directors. The Board already has one half of its directors
in the category of independent directors in terms of clause 49 of the
Listing Agreement. The Board in its meeting held on 27 March 2014
appointed the existing independent directors under clause 49 as
''independent directors'' pursuant to Companies Act, 2013 as well.
The members at the annual general meeting held on 16 July 2014,
approved the appointment of the existing independent directors for a
term of 5 years effective from 1 April 2014.
Pursuant to section 203 of the Companies Act, 2013, the Company has
appointed S Sreenivasan, President (Finance) of the Company as Chief
Financial Officer (CFO) with effect from 1 October 2014 in place of
Kevin D''sa. This change became necessary since as required under the
said section 203, Kevin D''sa, who was the CFO of Bajaj Auto Ltd., BFS
and Bajaj Holdings & Investment Ltd. (BHIL) chose to continue as CFO in
Bajaj Auto Ltd. and relinquished his position as CFO of BFS and BHIL
with effect from 1 October 2014.
The Company already has Sanjiv Bajaj, Managing Director and Sonal R
Tiwari, Company Secretary as the other Key Managerial Personnel of the
Company.
In light of the provisions of the Companies Act, 2013, Rajiv Bajaj
retires from the Board by rotation this year and being eligible, offers
himself for re-appointment. The information as required to be disclosed
under clause 49 of the Listing Agreement in case of re-appointment of
the director is provided in the Notice of the ensuing annual general
meeting.
Significant and material orders passed by the regulators or courts
During the year under review, there were no significant and material
orders passed by the regulators or courts or tribunals, which may
impact the going concern status of the Company and its operations in
future.
Adequacy of internal financial controls
Internal financial controls with reference to the financial statements
were adequate and operating effectively.
Presentation of financial results
The financial results of the Company for the year ended 31 March 2015
have been disclosed as per Schedule III to the Companies Act, 2013.
Consolidated financial statements
The directors also present the audited consolidated financial
statements incorporating the duly audited financial statements of the
subsidiaries and joint venture and as prepared in compliance with the
Companies Act, 2013, Accounting Standards and the Listing Agreement as
prescribed by SEBI.
A separate statement containing the salient features of its
subsidiaries and joint ventures in the prescribed form (AOC-1) is
annexed separately.
Statutory disclosures
The summary of the key financials of the Company''s subsidiaries and
joint ventures (Form AOC-1) is included in this Annual Report. A copy
of audited financial statements for the said companies will be made
available to the members of the Company, seeking such information at
any point of time. The audited financial statements for each of the
subsidiary companies will be kept for inspection by any member of the
Company at its registered office during business hours.
The same are placed on the Company''s website www.bajajfinserv.in
As required under the section 197(12) of the Companies Act, 2013 read
with the rule 5 of Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, the prescribed particulars are set
out in an annexure to the Directors'' Report. As per provisions of
section 136(1) of the said Act, these particulars will be made
available to shareholder on request.
Disclosures as prescribed by Non-Banking Financial (Non-Deposit
Accepting or Holding)
Companies Prudential Norms (Reserve Bank) Directions, 2007 and other
NBFC Directions have been made in this Annual Report.
A Cash Flow Statement for the year 2014-15 is attached to the Balance
Sheet.
Pursuant to the legislation ''Prevention, Prohibition and Redressal of
Sexual Harassment of Women at Workplace Act, 2013'' introduced by the
Government of India, which came into effect from 9 December 2013, the
Company has framed a Policy on Prevention of Sexual Harassment at
Workplace. There was no case reported during the year under review
under the said Policy.
Corporate governance
Pursuant to clause 49 of the Listing Agreement with stock exchanges, a
separate section titled ''Corporate Governance'' has been included in
this Annual Report, alongwith the reports on Management Discussion and
Analysis and General Shareholder Information.
All Board members and Senior Management personnel have affirmed
compliance with the Code of Conduct for the year 2014-15. A declaration
to this effect signed by the Managing Director of the Company is
contained in this Annual Report.
The Managing Director and CFO have certified to the Board with regard
to the financial statements and other matters as required in clause 49
of the Listing Agreement and the said certificate is contained in this
Annual Report.
Certificate from auditors of the Company regarding compliance of
conditions of corporate governance is annexed to this Report.
Auditors Statutory auditor
Pursuant to the provisions of section 139 of the Companies Act, 2013
and the Rules made thereunder, the current auditors of the Company,
Dalal & Shah, Chartered Accountants (registration number: 102021W) were
appointed by the shareholders at the 7th annual general meeting to hold
office until the conclusion of the 10th annual general meeting, subject
to ratification by shareholders at each annual general meeting.
The members are requested to ratify the appointment of Dalal & Shah,
Chartered Accountants, (registration number: 102021W) as statutory
auditors of the Company and to fix their remuneration for the year
2015-16.
The statutory audit report does not contain any qualification,
reservation or adverse remark or disclaimer made by statutory auditor.
Secretarial auditor
Pursuant to the provisions of section 204 of the Companies Act, 2013
and Rules made thereunder the Company has appointed, Shyamprasad D
Limaye, (membership number: 1587) Company Secretaries in Practice, to
undertake the secretarial audit of the Company. Secretarial Audit
Report for the year 2014-15 given by Shyamprasad D Limaye in the
prescribed form MR-3 is annexed to this Report. The Secretarial Audit
Report for the year under review does not contain any qualification,
reservation or adverse remark or disclaimer made by the secretarial
auditor.
Cost auditor
Pursuant to section 148 of the Companies Act, 2013 and Rules made
thereunder, Board of Directors had, on the recommendation of the Audit
Committee, appointed Dhananjay V Joshi and Associates, (firm
registration number: 000030) Cost Accountants, to audit the cost
accounts of the Company for the financial year 2015-16 at a
remuneration of Rs. 50,000 plus service tax, out-of pocket and travel and
living expenses, subject to ratification by the shareholders at annual
general meeting. Accordingly, a resolution seeking members''
ratification for the remuneration payable to cost auditor is included
in the Notice convening the annual general meeting.
On behalf of the Board of Directors,
Rahul Bajaj
Chairman
Pune: 20 May 2015
The directors present their Seventh Annual Report and audited statement
of accounts for the year ended 31 March 2014. Since this Report
pertains to financial year that commenced prior to 1 April 2014 the
contents therein are governed by the relevant
provisions/schedules/rules of the Companies Act, 1956, in compliance
with General Circular No. 08/2014 dated 4 April 2014 issued by the
Ministry of Corporate Affairs.
Financial results
The financial results of the Company are elaborated in the annexed
Management Discussion and Analysis Report.
The highlights of the Standalone Financial Results are as under:
(Rs. In Crore)
Particulars FY2014 FY2013
Total revenue 157.30 152.25
Gross profit before interest and depreciation 106.81 107.44
Depreciation 1.30 1.28
Profit before exceptional item and tax 105.51 106.16
Exceptional item- Provision for diminution
in value of investment - (27.00)
Profit before tax 105.51 79.16
Tax expense 22.00 28.32
Profit after tax 83.51 50.84
Profit for the year 83.39 50.84
Add: Balance brought forward from previous
year 161.53 149.81
Profit available for appropriation 244.92 200.65
Transfer to Reserve fund u/s 45-IC(1) of
Reserve Bank of India Act, 1934 16.68 10.17
Transfer to General reserve 8.34 5.08
Proposed dividend 27.85 23.87
Balance carried to Balance Sheet 192.05 161.53
Earnings per share (Rs.) 5.2 3.3
The highlights of the Consolidated Financial Results are as under:
(Rs. In Crore)
Particulars FY2014 FY2013
Gross revenue:
i. Gross written premium
a) Life insurance - Bajaj Allianz Life
Insurance Co. Ltd. 5,843.14 6,892.70
b) General insurance - Bajaj Allianz
General Insurance Co. Ltd. 4,583.89 4,109.39
ii. Gross income - Bajaj Finance Ltd. 4,073.33 3,109.66
iii.Income from wind power generation -
Bajaj Finserv Ltd. 60.44 73.38
iv. Investment income (excluding
accretions on unit linked investment) 2,059.57 1,548.72
v. Others 91.78 77.97
Total 16,712.15 15,811.82
(Rs. In Crore)
Particulars FY2014 FY2013
Revenue from operations and other
income 5,385.89 4,155.70
Amount transferred from the
policyholders'' account 639.10 917.48
Total revenue 6,024.99 5,073.18
Profit before tax 2,901.61 2,708.11
Tax expense 710.49 493.94
Profit after tax 2,191.12 2,214.17
Minority interest 646.85 640.53
Profit for the year 1,544.08 1,573.64
Earnings per share (Rs.) 97.0 103.0
Banking Licence application
The Company applied for a bank licence when the RBI had opened this
window. As one of India''s most successful NBFCs with a strong record of
growth, a solid Balance Sheet, constant adherence to prudential lending
and income recognition standards that well exceed the RBI norms and a
top class Management team, we expected Bajaj Finserv/Finance Ltd. to
get a licence. Unfortunately, we did not get it.
The process of approving new bank licences may re-commence soon. It is
hoped that the Company would be successful at that time.
Dividend
The directors recommend for consideration of the shareholders at the
ensuing annual general meeting, payment of a dividend of Rs. 1.75 per
share (35 per cent) for the year ended 31 March 2014. The amount of
dividend and the tax thereon to the extent applicable aggregates to Rs.
27.85 crore.
Dividend paid for the year ended 31 March 2013 was Rs.1.50 per share (30
per cent).
The amount of dividend and the tax thereon to the extent applicable
aggregated to Rs. 23.87 crore.
Registration as a Systemically Important Non-Deposit taking NBFC
Your Company has been registered on 30 October 2009 by Reserve Bank of
India as a Non-Banking Financial Institution (Non-Deposit taking). In
terms of provisions of Non-Banking Financial (Non-Deposit Accepting or
Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007,
your Company is categorised as a ''Systemically Important Non-Deposit
taking Non-Banking Financial Company''. The Company has not accepted
public deposits during the year under review.
Operations
Detailed information on the operations of the different business lines
of the Company are covered in the Management Discussion and Analysis
Report.
Conservation of energy
The Company, is engaged in wind-farm activities in addition to its
financial services activities, hence the subject of conservation of
energy is applicable to the Company only with regard to its wind-farm
business. Information on this is contained in the Management Discussion
and Analysis Report.
Foreign exchange earnings and outgo
Total foreign exchange earned by the Company was Rs. Nil during the year
under review, as against Rs. 0.25 crore during the previous year.
Total foreign exchange outflow during the year under review was Rs. 1.96
crore, as against Rs. 1.92 crore during the previous year.
Subsidiaries and joint venture
Following are the subsidiary and joint venture companies of the Company
as at 31 March 2014:
% Shareholding of
Bajaj Finserv Ltd.
Name of the company as on 31 March 2014 Status
Bajaj Allianz Life Insurance
Company Ltd. 74% Subsidiary
Bajaj Allianz General Insurance
Company Ltd. 74% Subsidiary
Bajaj Finance Ltd. 61.54% Subsidiary
Bajaj Financial Solutions Ltd. 100% Subsidiary
Bajaj Financial Securities Ltd.
(100% subsidiary of Bajaj
Financial Solutions Ltd.) 100% Subsidiary
Bajaj Financial Holdings Ltd.
(incorporated on 7 February
2014) 100% Subsidiary
Bajaj Allianz Financial
Distributors Ltd. 50% Joint venture
Detailed information on the operations of each subsidiary of the
Company is covered in the Management Discussion and Analysis Report.
Corporate Social Responsibility
The Companies Act, 2013 notified section 135 of the Act concerning
Corporate Social Responsibility along with the Rules there under and
revised Schedule VII to the Act on 27 February 2014 to come into effect
from 1 April 2014.
The Company being covered under the provisions of the said section has
taken necessary initial steps in this regard. A Committee of the
directors, titled ''Corporate Social Responsibility Committee'', has been
formed by the Board in its meeting held on 27 March 2014, consisting of
the following directors -
1. Rahul Bajaj, Chairman
2. Sanjiv Bajaj
3. Nanoo Pamnani
The Committee has formulated its CSR policy for the Company and is in
the process of its implementation.
The said section being enacted with effect from 1 April 2014, necessary
details as prescribed under the said section shall be presented to the
members in the Annual Report for the year 2014-15.
Even when the said provisions were not mandated by the Ministry of
Corporate Affairs, the Bajaj group continued its Corporate Social
Responsibility (CSR) initiatives in various fields, during the year
2013-14. Activities in this area are set out in detail in the annexed
CSR Report.
Directors
During the year under review, Dr. Gita Piramal was appointed as an
Additional Director in the category of non-executive, independent
director of the Company, in the meeting of the Board held on 27 March
2014, to hold office up to the date of the ensuing Annual General
Meeting (AGM) of the Company. Resolution for appointment of Dr. Gita
Piramal is put up for the approval of shareholders in the Notice of
AGM.
Pursuant to the provisions of the Companies Act, 2013 which have been
enacted with effect from 1 April 2014, Dr. Gita Piramal, if appointed
at the forthcoming AGM shall be an ''independent director'' under the
said Act for a period of 5 years with effect from the date of the AGM.
On appointment of Dr. Gita Piramal, the provisions of section 149(1) of
the Companies Act, 2013 of having at least one woman director on the
Board of the Company, stand complied.
In light of the provisions of the Companies Act, 2013, Rahul Bajaj has
now become a retiring director, thus Rahul Bajaj retires from the Board
by rotation this year and being eligible, offers himself for
re-appointment. The information as required to be disclosed under
clause 49 of the listing agreement in case of re-appointment of
director is provided in the Notice of the ensuing annual general
meeting.
Pursuant to section 149(4) of the Companies Act, 2013, every listed
company is required to appoint at least one third of its directors as
independent directors. The Board already has one half of its directors
in the category of independent directors in terms of the provisions of
clause 49 of the listing agreement. The Board therefore, in its meeting
held on 27 March 2014 appointed the existing independent directors
under clause 49 as ''independent directors'' pursuant to Companies Act,
2013, subject to approval of shareholders.
As required under the said Act and the Rules made there under, the same
is now put up for approval of members at the ensuing annual general
meeting. Necessary details have been annexed to the Notice of the
meeting in terms of section 102(1) of the Companies Act, 2013.
The independent directors have submitted the declaration of
independence, as required pursuant to section 149(7) of the Companies
Act, 2013 stating that they meet the criteria of independence as
provided in sub-section(6).
With the appointment of independent directors, the conditions specified
in the Act and the Rules made there under as also under new clause 49 of
the listing agreement stand complied.
Directors'' responsibility statement
As required by sub-section (2AA) of section 217 of the Companies Act,
1956, directors state:
- that in the preparation of annual accounts, the applicable accounting
standards have been followed along with proper explanation relating to
material departures;
- that the directors had selected such accounting policies and applied
them consistently and made judgments 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 of the profit or
loss of the Company for that period;
- that the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
- that the directors had prepared the annual accounts on a going
concern basis.
Presentation of financial results
The financial results of the Company for the year ended 31 March 2014
as in the previous year have been disclosed as per the revised Schedule
VI to the Companies Act, 1956, pursuant to notification dated 28
February 2011 and General Circular No. 8/2014 dated 4 April 2014 issued
by the Ministry of Corporate Affairs.
Consolidated financial statements
The directors also present the audited consolidated financial
statements incorporating the duly audited financial statements of the
subsidiaries and joint venture and as prepared in compliance with the
accounting standards and listing agreement as prescribed by SEBI.
Information in aggregate for each subsidiary company is disclosed
separately in the consolidated Balance Sheet.
Statutory disclosures
Ministry of Corporate Affairs General circular no. 2/2011 dated 8
February 2011 has given general exemption with regard to attaching of
the Balance Sheet, Statement of Profit and Loss and other documents of
its subsidiary companies subject to fulfillment of conditions mentioned
therein. The Company has fulfilled all the necessary conditions in
this regard and hence is not attaching Balance Sheet, Statement of
Profit and Loss and other documents of its subsidiary companies.
The summary of the key financials of the Company''s subsidiaries is
included in this Annual Report. The annual accounts of the subsidiary
companies and the related detailed information will be made available
to the members of the Company and its subsidiary companies, seeking
such information at any point of time. The annual accounts of the
subsidiary companies will be kept for inspection by any member of the
Company at its registered office and also at the registered office of
the concerned subsidiary company.
As required under the provisions of sub-section (2A) of section 217 of
the Companies Act, 1956 read with the Companies (Particulars of
Employees) Rules, 1975 as amended, particulars of the employees are set
out in an Annexure to the Directors'' Report. As per provisions of
section 219(1) (b) (iv) of the said Act, these particulars will be made
available to any shareholder on request.
The Company, being by and large a financial services company, there are
no particulars regarding technology absorption required to be given
under section 217(1)(e) of the Companies Act, 1956 and Companies
(Disclosure of Particulars in the report of Board of directors) Rules,
1988 for the year under review. Particulars required to be given
relating to conservation of energy in its wind energy generation
business and foreign exchange earnings and outgo have been set out
separately in this Report.
Directors'' responsibility statement as required by section 217(2AA) of
the Companies Act, 1956 appears in a preceding paragraph.
Certificate from auditors of the Company regarding compliance of
conditions of corporate governance is annexed to this Report.
Disclosures as prescribed by Non-Banking Financial (Non-Deposit
Accepting or Holding) Companies Prudential Norms (Reserve Bank)
Directions, 2007 and other NBFC regulations have been made in this
Annual Report.
A Cash Flow Statement for the year 2013-14 is attached to the Balance
Sheet.
During the year under review, pursuant to the new legislation
"Prevention, Prohibition and Redressal of Sexual Harassment of Women at
Workplace Act, 2013" introduced by the Government of India, which came
into effect from 9 December 2013, the Company has framed a Policy on
Prevention of Sexual Harassment at Workplace. There was no case
reported during the year under review under the said Policy.
Corporate governance
Pursuant to clause 49 of the listing agreement with stock exchanges, a
separate section titled ''Corporate Governance'' has been included in
this Annual Report, along with the reports on Management Discussion and
Analysis and General Shareholder Information.
SEBI vide its circular No. CIR/CFD/POLICY CELL/2/2014 dated 17 April
2014 has notified the revised clause 49 of the listing agreement to be
applicable with effect from 1 October 2014. This Report therefore
stands complied against the previous clause 49 of the listing
agreement.
All Board members and senior management personnel have affirmed
compliance with the code of conduct for the year 2013-14. A declaration
to this effect signed by the Managing Director/CEO of the Company is
contained in this Annual Report.
The Managing Director/CEO and CFO have certified to the Board with
regard to the financial statements and other matters as required in
clause 49 of the listing agreement and the said certificate is
contained in this Annual Report.
Secretarial Standards of ICSI
Companies Act, 2013 has now mandated certain Secretarial Standards
specified by the Institute of Company Secretaries of India from time to
time. The Company is, however, complying with the Secretarial Standards
for many years now.
Auditors'' report
The observations made in the Auditors'' Report, read together with the
relevant notes thereon are self-explanatory and hence, do not call for
any comments under section 217 of the Companies Act, 1956.
Auditors
Pursuant to the provisions of section 139 of the Companies Act, 2013
and the Rules made there under, the current auditors of the Company,
Dalal & Shah, Chartered Accountants are eligible to hold the office for
a period of three years only.
The members are therefore requested to appoint Dalal & Shah, Chartered
Accountants, (registration number: 102021W) as auditors for three years
from the conclusion of the ensuing annual general meeting till the
conclusion of the 10th annual general meeting scheduled in 2017 and to
fix their remuneration for the year 2014-15.
On behalf of the Board of Directors,
Rahul Bajaj
Chairman
14 May 2014
The directors present their sixth annual report and the audited
statements of accounts for the year ended 31 March 2013.
Financial results
The financial results of the Company are elaborated in the annexed
Management Discussion and Analysis Report.
The highlights of the Standalone Financial Results are as under:
(Rs. In Crore)
2013 2012
Total revenue 152.25 144.18
Gross profit before interest and depreciation 107.44 109.26
Depreciation 1.28 1.56
Profit before exceptional item and tax 106.16 107.70
Exceptional item-
Provision for diminution in value of investment (27.00) -
Profit before tax 79.16 107.70
Tax expense 28.32 31.13
Profit after tax 50.84 76.57
Profit available for appropriation 200.65 194.48
Transfer to Reserve fund under section
45-IC (1) of the Reserve Bank of India Act, 1934 10.17 15.31
Transfer to General reserve 5.08 7.66
Proposed dividend 23.87 21.70
Balance carried to Balance Sheet 161.53 149.81
Earnings per share (Rs.) 3.3 5.2
The highlights of the Consolidated Financial Results are as under:
(Rs. In Crore)
2013 2012
Gross Revenue:
i) Gross written premium
a) Life Insurance -
Bajaj Allianz Life Insurance Co. Ltd. 6,892.70 7,483.80
b) General Insurance -
Bajaj Allianz General Insurance Co. Ltd. 4,109.39 3,675.89
ii) Gross income-Bajaj Finance Ltd. 3,111.37 2,171.91
iii) Income from windpower generation-
Bajaj Finserv Ltd. 73.38 84.37
iv) Investment income (excluding accretions
on unit-linked Investment) 1,548.72 1,048.33
v) Others 77.97 62.11
Total 15,813.53 14,526.41
Revenue from operations and other income 4,157.41 2,835.65
Amount transferred from the policyholders''
account 917.48 1,069.13
Total revenue 5,074.89 3,904.78
Profit before tax 2,708.11 2,226.22
Tax expense 493.94 336.47
Profit after tax 2,214.17 1,889.75
Minority interest 640.53 551.98
Profit for the year 1,573.64 1,337.77
Earnings per share (Rs.) 103.00 90.60
Capital raising through rights equity issue
To meet Company''s different requirements, the Company during the year
under review, pursuant to the applicable Board, shareholders and
statutory approvals raised Rs. 938.52 crore of equity by way of a
rights issue. 14,438,842 equity shares of the face value of Rs. 5 each
were issued at a premium of Rs. 645 per share by way of a rights issue
to the existing shareholders in the ratio of 1:10. After the issue, the
paid equity share capital of the Company has increased from Rs. 72.34
crore to Rs. 79.56 crore. Allotment of the shares was done on 17
October 2012 and these shares commenced trading on BSE and NSE w.e.f.
22 October 2012.
Dividend
The directors recommend for consideration of the shareholders at the
ensuing annual general meeting, payment of a dividend of Rs. 1.50 per
share (30 per cent) for the year ended 31 March 2013 on the expanded
capital of the Company after the rights issue referred to above. The
amount of dividend and the tax thereon to the extent applicable
aggregates to Rs. 23.87 crore.
Dividend paid for the year ended 31 March 2012 was also Rs.1.50 per
share (30 per cent).
The amount of dividend and the tax thereon to the extent applicable
aggregated to Rs. 21.70 crore.
Registration as a Systemically Important Non-Deposit taking NBFC
Your Company has been registered on 30 October 2009 by Reserve Bank of
India as a Non-Banking Financial Institution (non-deposit taking). In
terms of provisions of Non-Banking Financial (Non-Deposit Accepting or
Holding) Companies Prudential Norms (Reserve Bank) Directions, 2007,
your Company is categorised as a ''systemically important non-deposit
taking non-banking financial company''. The Company does not hold nor
does it accept deposits from the public.
Operations
Detailed information on the operations of the different business lines
of the Company are covered in the Management Discussion and Analysis
Report.
Conservation of energy
The Company, is engaged in wind farm activities in addition to its
financial services activities, hence the subject of conservation of
energy is applicable to the Company only with regard to its wind farm
business. Information on this is contained in the Management Discussion
and Analysis Report.
Foreign exchange earning and outgo
Total foreign exchange earned by the Company was Rs. 0.25 crore during
the year under review, as against Rs. 0.19 crore during the previous
year.
Total foreign exchange outflow during the year under review was Rs.
1.92 crore, as against Rs. 0.88 crore during the previous year.
Subsidiaries and joint venture
Following are the companies, which are the subsidiary and joint venture
companies of the Company as at 31 March 2013:
% Shareholding
of Bajaj
Finserv Ltd.
as on
Name of the company 31 March 2013 Status
Bajaj Allianz Life Insurance Company Ltd. 74% Subsidiary
Bajaj Allianz General Insurance Company Ltd. 74% Subsidiary
Bajaj Financial Solutions Ltd. 100% Subsidiary
Bajaj Financial Securities Ltd. (100%
subsidiary of Bajaj Financial
Solutions Ltd.) 100% Subsidiary
Bajaj Finance Ltd. 61.99% Subsidiary
Bajaj Allianz Financial Distributors Ltd. 50% Joint venture
Detailed information on the operations of each subsidiary of the
Company is covered in the Management Discussion and Analysis Report.
Bajaj Financial Solutions Ltd. and Bajaj Financial Securities Ltd. were
formed with a main objective of promoting Bajaj Finserv Ltd.''s wealth
management services. In view of the accumulated losses and the
uncertain gestation period, by way of prudence, the Company has made a
provision of Rs. 27 crore towards diminution in the value of investment
in these two companies.
Corporate Social Responsibility
During the year 2012-13, Bajaj Group continued its Corporate Social
Responsibility initiatives in various fields. Activities in this area
are set out in greater detail in the annexed Corporate Social
Responsibility Report.
Directors
D J Balaji Rao and S H Khan retire from the Board by rotation this year
and being eligible, offer themselves for re-appointment.
Directors'' responsibility statement
As required by sub-section (2AA) of section 217 of the Companies Act,
1956, directors state:
- that in the preparation of annual accounts, the applicable
accounting standards have been followed along with proper explanation
relating to material departures;
- that the directors had selected such accounting policies and
applied them consistently and made judgments 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 of the
profit or loss of the Company for that period;
- that the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
- that the directors had prepared the annual accounts on a going
concern basis.
Presentation of financial results
The financial results of the Company for the year ended 31 March 2013
as in the previous year have been disclosed as per the revised Schedule
VI to the Companies Act, 1956, pursuant to notification dated 28
February 2011 issued by the Ministry of Corporate Affairs.
Consolidated financial statements
The directors also present the audited consolidated financial
statements incorporating the duly audited financial statements of the
subsidiaries and joint venture and as prepared in compliance with the
accounting standards and listing agreement as prescribed by SEBI.
Information in aggregate for each subsidiary company is disclosed
separately in the consolidated Balance Sheet.
Statutory disclosures
The Company having complied with the necessary conditions is eligible
for an exemption from the Central Government under section 212(8) of
the Companies Act, 1956 with regard to attaching of the Balance Sheet,
Profit and Loss Account and other documents of five subsidiaries of the
Company for the year 2012-13 as general exemption is now available
under Ministry of Corporate Affairs General circular no. 2/2011 dated 8
February 2011.
The summary of the key financials of the Company''s subsidiaries is
included in this annual report.
The annual accounts of the subsidiary companies and the related
detailed information will be made available to the members of the
Company and its subsidiary companies, seeking such information at any
point of time. The annual accounts of the subsidiary companies will be
kept for inspection by any member of the Company at its registered
office and also at the registered office of the concerned subsidiary
company.
As required under the provisions of sub-section (2A) of section 217 of
the Companies Act, 1956 read with the Companies (Particulars of
Employees) Rules, 1975 as amended, particulars of the employees are set
out in an Annexure to the directors'' report.
As per provisions of section 219(1) (b) (iv) of the said Act, these
particulars will be made available to any shareholder on request.
The Company, being by and large a financial services company, there are
no particulars regarding technology absorption required to be given
under section 217(1)(e) of the Companies Act, 1956 and Companies
(Disclosure of Particulars in the report of Board of directors) Rules,
1988 for the year under review. Particulars required to be given
relating to conservation of energy in its wind energy generation
business and foreign exchange earning and outgo have been set out
separately in this report.
Directors'' responsibility statement as required by section 217(2AA) of
the Companies Act, 1956 appears in a preceding paragraph.
Certificate from auditors of the Company regarding compliance of
conditions of corporate governance is annexed to this report.
Disclosures as prescribed by Non-Banking Financial (Non-Deposit
Accepting or Holding) Companies Prudential Norms (Reserve Bank)
Directions, 2007 and other NBFC regulations have been made in this
annual report.
A Cash Flow Statement for the year 2012-13 is attached to the Balance
Sheet.
Corporate governance
Pursuant to clause 49 of the listing agreement with stock exchanges, a
separate section titled ''Corporate Governance'' has been included in
this annual report, along with the reports on Management Discussion and
Analysis and General Shareholder Information.
All Board members and senior management personnel have affirmed
compliance with the code of conduct for the year 2012-13. A declaration
to this effect signed by the Managing Director/CEO of the Company is
contained in this annual report.
The Managing Director/CEO and CFO have certified to the Board with
regard to the financial statements and other matters as required in
clause 49 of the listing agreement and the said certificate is
contained in this annual report.
Secretarial standards of ICSI
Secretarial standards issued by the Institute of Company Secretaries of
India (ICSI) from time to time are currently recommendatory in nature.
Your Company is, however, complying with the same.
Auditors'' report
The observations made in the Auditors'' Report, read together with the
relevant notes thereon are self-explanatory and hence, do not call for
any comments under section 217 of the Companies Act, 1956.
Auditors
The members are requested to appoint Messrs Dalal & Shah, Chartered
Accountants, as auditors for the period from the conclusion of the
ensuing annual general meeting till the conclusion of the next annual
general meeting and to fix their remuneration.
On behalf of the Board of Directors,
Rahul Bajaj
Chairman
15 May 2013
