Bajaj Electricals Ltd Directors Report.

Dear Shareholders,

Your Directors are pleased to present the 82nd Annual Report of the Company, together with the audited financial statements for the financial year ended March 31, 2021. This Report states compliance as per the provisions of the Companies Act, 2013 ("Act"), the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") and other rules & regulations as applicable to the Company.

FINANCIAL RESULTS

The highlights of the Standalone Financial Results are as under:

(Amount: Rs in crore, except for Earnings Per Share ("EPS"))

Particulars FY 2020-21 FY 2019-20
Revenue from Operations & Other Income 4,645.75 5,029.72
Gross Profit before Finance Cost and Depreciation 374.23 259.56
Less: Finance Cost 75.55 169.16
Less: Depreciation 69.26 68.01
Profit/(Loss) before Exceptional Items and Tax 229.42 22.39
Exceptional Items 11.76 -
Profit/(Loss) before Taxes 241.18 22.39
Less: Provision for Tax expenses 57.54 22.52
Profit/(Loss) after Tax 183.64 (0.13)
Less: Other Comprehensive Income (6.95) 8.54
Add: Balance in Profit & Loss Account 262.23 314.12
Less: Dividend including Dividend Distribution Tax paid during the year - 43.22
Add: Transferred to retained earnings for vested cancelled options 1.23 -
Amount transferred to General Reserves (18.36) -
Balance available for appropriation 435.68 262.23
Basic EPS (Rs.) 16.08 (0.01)
Diluted EPS (Rs.) 16.02 (0.01)

The highlights of the Consolidated Financial Results are as under:

Particulars FY 2020-21 FY 2019-20
Revenue from Operations & Other Income 4,653.81 5,033.39
Profit/(Loss) before Exceptional Items and Tax 220.78 10.01
Exceptional Items 25.49 -
Profit/(Loss) before Taxes 246.27 10.01
Share of Profit/(Loss) of subsidiaries, associates & joint ventures - (2.85)
Profit/(Loss) before Taxes 246.27 7.16
Less: Provision for Tax expenses 57.31 17.44
Profit/(Loss) for the period 188.96 (10.29)
Basic EPS (Rs.) 16.54 (0.99)
Diluted EPS (Rs.) 16.49 (0.99)

Return on Net Worth, Return on Capital Employed and EPS for the financial year ended March 31, 2021 and for the last four financial years, are given below:

Particulars 2020-21 2019-20 2018-19 2017-18 2016-17
Return on Net Worth (%) 12.31 (0.01) 15.50 8.85 12.35
Return on Capital Employed (%) 13.85 8.20 14.13 13.43 17.54
Basic EPS (after exceptional items) (Rs.) 16.08 (0.01) 16.34 8.23 10.65

The financial results of the Company are elaborated in the Management Discussion and Analysis Report, which forms part of the Annual Report.

STATE OF COMPANY AFFAIRS / OPERATIONS

• Revenue from Consumer Product Segment increased by 7.10% to RS. 3,303.54 crore.

• Revenue from EPC Segment decreased by 32.90% to RS. 1,268.93 crore.

As at March 31, 2021, the gross property, plant and equipment, investment property and other intangible assets including leased assets, stood at RS. 694.63 crore and the net property, plant and equipment, investment property and other intangible assets, including leased assets, at RS. 460.83 crore. Capital Expenditure during the year amounted to RS. 21.46 crore (RS. 29.21 crore in the previous year).

The Companys cash and cash equivalent as at March 31, 2021 was RS. 45.63 crore. The Company manages cash and cash flow processes assiduously, involving all parts of the business. The Company continues to focus on judicious management of its working capital. Receivables, inventories and other working capital parameters were kept under strict check through continuous monitoring. Foreign Exchange transactions are partly covered and there are no materially significant uncovered exchange rate risks in the context of Companys imports and exports. The Company accounts for mark-to-market gains or losses every quarter end, are in line with the requirements of Ind AS 21.

The Company has transferred Rs. 18.36 crore to the General Reserves from retained earnings during the current financial year.

During the year under review, there has been no change in the nature of business of the Company.

Detailed information on the operations of the different business segments of the Company are covered in the Management Discussion and Analysis Report, which forms part of the Annual Report.

DIVIDEND & DIVIDEND DISTRIBUTION POLICY

The Board of Directors has not recommended any dividend on the Equity Shares of the Company for the financial year 2020-21.

The Dividend Distribution Policy containing the requirements mentioned in Regulation 43A of the SEBI Listing Regulations is attached as Annexure A and forms part of this Report. This Policy can also be accessed on the Companys website at: https://www.bajajelectricals.com/investors-updates/.

SHARE CAPITAL

The paid-up equity share capital of the Company as on March 31, 2021 was RS. 22.91 crore. The increase in number of shares during the year is on account of (i) allotment of 4,71,420 equity shares of RS. 2 each to the shareholders of Hind Lamps Limited ("Demerged Company") pursuant to the Scheme of Arrangement between the Demerged Company and Company and their respective shareholders and creditors, in consideration for the demerger in compliance with the provisions of Section 2(19AA) of the Income Tax Act, 1961; (ii) allotment of 7 rights equity shares of RS. 2/- each, which were kept in abeyance in the Rights Issue-2020; and (iii) allotment of 2,97,485 equity shares of RS. 2 each to the employees upon their exercise of stock options. These shares were included, on weighted average basis, for the computation of EPS. The Company has not issued shares with differential voting rights.

No disclosure is required under Section 67(3)(c) of the Act, in respect of voting rights not exercised directly by the employees of the Company, as the provisions of the said Section are not applicable.

The equity shares of the Company continue to remain listed on BSE Limited and National Stock Exchange of India Limited (collectively "Stock Exchanges"). The listing fees for financial year 2021-22 have been paid to the Stock Exchanges.

DEPOSITORY SYSTEM

The Companys shares are compulsorily tradable in electronic form. As on March 31, 2021, 98.59% of the Companys total paid up capital representing 11,29,22,084 equity shares are in dematerialised form.

In light of the provisions of Notification No. SEBI/LAD/NRO/GN/2018/24 dated June 8, 2018 and Press Release dated December 3, 2018 issued by the Securities and Exchange Board of India ("SEBI"), Members may please note that, with effect from April 1, 2019, transfer of shares (except transmission and transposition of shares) will be in dematerialised form only. In view of the above and to avail advantages offered by the Depository system as well as to avoid frauds, Members holding shares in physical mode are advised to avail the facility of dematerialisation from either of the Depositories viz. National Securities Depository Limited and Central Depository Services (India) Limited.

DEPOSITS

During the year under review, the Company has not accepted any deposits covered under Chapter V of the Act. Accordingly, no disclosure or reporting is required in respect of details relating to deposits.

NON-CONVERTIBLE DEBENTURES ISSUED ON PRIVATE PLACEMENT BASIS

During the financial year 2018-19, the Company had issued 1850 Unsecured Listed Redeemable Non-Convertible Debentures ("NCDs") of RS. 10,00,000 each, aggregating to RS. 185 crore, on private placement basis, in 3 options viz., Option A of 350 NCDs, Option B of 750 NCDs and Option C of 750 NCDs, listed on National Stock Exchange of India Limited under ISIN ‘INE193E08038, ‘INE193E08020 and ‘INE193E08012, respectively. Out of the said NCDs, Option A NCDs were redeemed on February 18, 2021. Since the redemption date (i.e. February 19, 2021) in respect of the said Option A NCDs fell on a day which was not a Business Day, the payment(s) due was made on the previous Business Day (i.e. on February 18, 2021) as per the terms of Information Memorandum dated February 18, 2019.

Axis Trustee Services Limited is the Debenture Trustee for the Debenture holders, whose details are provided in the Corporate Governance Section which forms a part of the Annual Report. Further, pursuant to Regulation 53 of the SEBI Listing Regulations, disclosures in compliance with the Accounting Standard on "Related Party Disclosures" are given in the notes to the financial statements.

CREDIT RATING

The below table depicts Companys credit ratings profile in a nutshell:

Instrument Rating Agency Rating Outlook
Line of Credit (long-term) ICRA Limited [ICRA]A Stable
Line of Credit (short-term) ICRA Limited [ICRA]A1 Stable
Non-convertible debentures ICRA Limited [ICRA]A Stable

RELATED PARTY TRANSACTIONS

In line with the requirements of the Act and SEBI Listing Regulations, the Company has formulated a Policy on Materiality of Related Party Transactions which is also available on the Companys website at: https:// www.bajajelectricals.com/investors-updates/. The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and its Related Parties.

All related party transactions are placed before the Audit Committee for review and approval. Pursuant to the provisions of the Act and SEBI Listing Regulations with respect to omnibus approval, prior omnibus approval is obtained for related party transactions on a yearly basis for transactions which are of repetitive nature and entered in the ordinary course of business and are at arms length. Transactions entered into pursuant to omnibus approval are verified and a statement giving details of all related party transactions are placed before the Audit Committee and the Board for review and approval on a quarterly basis.

All transactions entered with related parties for the year under review were in ordinary course of business and at arms length basis. No Material related party transactions, i.e. transactions exceeding 10% of the annual consolidated turnover as per the last audited financial statement, were entered during the year by the Company. Accordingly, the disclosure of related party transactions as required under Section 134(3)(Rs.) of the Act, in Form AOC-2 is not applicable. Further, there are no material related party transactions during the year under review with the Promoters, Directors or Key Managerial Personnel, which may have a potential conflict with the interest of the Company at large.

All related party transactions are mentioned in the notes to the accounts. The Directors draw attention of the members to Note No.38 to the standalone financial statements which sets out related party disclosure.

Pursuant to the provisions of Regulation 34(3) and 53(f) read with clause 2 of Part A of Schedule V of the SEBI Listing Regulations, the listed entity shall make disclosures in respect of loans and advances in compliance with the Accounting Standard on Related Party Disclosures. The required disclosure is as under:

Name Category Balance of loans and advances as on March 31, 2021* Maximum outstanding during the year*
Nirlep Appliances Private Limited ("Nirlep") Subsidiary 39.00 39.00
Hind Lamps Limited ("Hind Lamps") Associate - 15.77
Starlite Lighting Limited ("Starlite") Joint Venture 72.40 72.40

* Excluding trade advances.

During the year under review, the following person(s) or entity(ies) belonging to the promoter/promoter group which held 10% or more share in the paid-up equity share capital of the Company:

Name of the person/entity Shareholding (%)
Jamnalal Sons Private Limited 19.59
Bajaj Holdings and Investment Limited 16.41

Disclosures of transactions pursuant to the provisions of Regulation 34(3) and 53(f) read with clause 2A of Part A of Schedule V of the SEBI Listing Regulations is attached as Annexure B and forms part of this Report.

PARTICULARS OF LOANS AND ADVANCES, GUARANTEES OR INVESTMENTS

Pursuant to the provisions of Section 186 of the Act and the rules framed thereunder, the particulars of the loans given, investments made or guarantees given or security provided are given in the Notes to the standalone financial statements.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the Regulators/Courts/ Tribunal which would impact the going concern status of the Company and its operations in the future.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY WHICH OCCURRED BETWEEN THE END OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENT RELATE TILL THE DATE OF THIS REPORT

There are no material changes and commitments, affecting the financial position of the Company, which has occurred between the end of the financial year for the Company, i.e. March 31, 2021 and the date of this Directors Report, i.e. May 25, 2021.

APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 DURING THE YEAR ALONGWITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR

i. Datamax Marketing Consultants, sole proprietor - Shri Amit Thaper ("Datamax"), a sub-contractor appointed by the Company for supply of (skilled/semi-skilled/unskilled) manpower at different locations across various states for execution of power distribution work, has filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 before the Honble National Company Law Tribunal, Mumbai Bench, against the Company, claiming an amount of RS. 2.72 crore from the Company, on account of non-payment of dues by the Company towards services supplied by Datamax. The Company is contesting the matter on the ground of double billing, non-payment of statutory dues, non-submission of data/records for reconciliation purposes by Datamax. The matter is currently pending.

ii. Shivpriya Cables Private Limited ("Shivpriya") has filed an application under Section 9 of the Insolvency and Bankruptcy Code, 2016 before the Honble National Company Law Tribunal, Mumbai Bench, against the Company, claiming an amount of RS. 0.92 crore from the Company, on account of non-payment of dues by the Company towards goods supplied by Shivpriya. The Company is contesting the matter considering the issues of substandard material supplied, subsequent debarment by Madhyanchal Vidyut Vitran Nigam Limited, and that the Company has legal and equitable hold on the payments of Shivpriya. The matter is currently pending.

DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF

During the year under review, there was no instance of one-time settlement with banks or financial institutions.

SCHEME OF MERGER BY ABSORPTION OF STARLITE LIGHTING LIMITED WITH BAJAJ ELECTRICALS LIMITED

The Board of Directors of the Company, at its meeting held on May 25, 2021, has considered and approved the Scheme of Merger by Absorption of Starlite Lighting Limited with Bajaj Electricals Limited and their respective shareholders under Sections 230 to 232 and other applicable provisions of the Act ("Merger Scheme").

The Merger Scheme is subject to the necessary statutory and regulatory approvals including the approvals of Honble National Company Law Tribunal, the shareholders and creditors of each of the companies.

CORPORATE SOCIAL RESPONSIBILITY

The Company is having a Policy on Corporate Social Responsibility ("CSR") and has constituted a CSR Committee as required under the Act for implementing various CSR activities. The CSR Committee comprised of Shri Shekhar Bajaj, as the Chairperson of the Committee and Dr. (Smt.) Indu Shahani and Shri Siddharth Mehta, as the members of the Committee. The CSR policy is available on the website of the Company: www.bajajelectricals.com.

Other details about the CSR Committee are provided in Corporate Governance Report which forms part of this Report.

The Company has implemented various CSR projects directly and/or through implementing partners and the said projects undertaken by the Company are in accordance with its CSR Policy and Schedule VII to the Act.

Report on CSR activities as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014 is given in Annexure C, which forms part of this Report.

BUSINESS RESPONSIBILITY REPORT

Regulation 34(2) of the SEBI Listing Regulations, inter-alia, provides that the Annual Report of the top 1000 listed entities based on market capitalisation (calculated as on March 31 of every financial year), shall include a Business Responsibility Report ("BRR").

The Company, being one of such top 1000 listed entities, has included BRR for financial year 2020-21, as part of this Annual Report, describing initiatives taken from an environmental, social and governance perspective.

CORPORATE GOVERNANCE

Maintaining high standards of Corporate Governance has been fundamental to the business of the Company since its inception.

As per Regulation 34(3) read with Schedule V of the SEBI Listing Regulations, a separate section on corporate governance practices followed by the Company, together with the following declarations/certifications forms an integral part of this Corporate Governance Reporting:

a. A declaration signed by Shri Shekhar Bajaj, Chairman and Managing Director, stating that the members of board of directors and senior management personnel have affirmed compliance with the Companys Code of Business Conduct and Ethics;

b. A compliance certificate from the Companys Statutory Auditors confirming compliance with the conditions of Corporate Governance;

c. A certificate of Non-Disqualification of Directors from the Secretarial Auditor of the Company; and

d. A certificate of the CEO and CFO of the Company, inter alia, confirming the correctness of the financial statements and cash flow statements, adequacy of the internal control measures and reporting of matters to the Audit Committee, is also annexed to the Report on Corporate Governance.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The Management Discussion and Analysis Report on the operations of the Company, as required under the SEBI Listing Regulations is provided in a separate section and forms an integral part of this Annual Report.

ANNUAL RETURN

Pursuant to the provisions of Section 134(3)(a) and Section 92(3) of the Act read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company for the financial year ended March 31, 2021 can be accessed at https://www.bajajelectricals.com/investors-updates/.

VIGIL MECHANISM

The Company has a Whistle Blower Policy to report genuine concerns or grievances about any poor or unacceptable practice and any event of misconduct and to provide adequate safeguards against victimisation of persons who may use such mechanism. The Whistle Blower Policy has been posted on the website of the Company at: https://www.bajajelectricals.com/ investors-updates/.

EMPLOYEES STOCK OPTION SCHEME

The Company implemented the Employees Stock Option Scheme ("ESOP Scheme") in accordance with the SEBI (Share Based Employee Benefits) Regulations, 2014 ("SEBI SBEB Regulations") as a measure to reward and motivate employees as also to attract and retain talent. During the year under review, the ESOP Scheme was amended by shareholders at their 81st annual general meeting held on August 28, 2020 by increasing the maximum number of employee stock options ("Options") to be granted to an individual employee from 40,000 (Forty Thousand) Options to 1,00,000 (One Lakh) Options under the Scheme. The ESOP Scheme is in compliance with SEBI SBEB Regulations.

During financial year under review, 2,07,500 stock options were granted to the eligible employees at the market price prevailing on the National Stock Exchange of India Limited as on the date of their grant. Details of the shares issued under ESOP Scheme, as also the disclosures in compliance with SEBI SBEB Regulations is uploaded on the website of the Company www. bajajelectricals.com, which forms part of this Report. No employee has been issued stock options, during the year, equal to or exceeding 1% of the issued capital of the Company at the time of grant. The issuance of equity shares pursuant to exercise of stock options does not affect the profit and loss account of the Company, as the exercise is made at the market price prevailing as on the date of the grant plus taxes as applicable.

The Company has obtained a Certificate from the Statutory Auditors stating that ESOP Scheme has been implemented in accordance with the SBEB Regulations. The said Certificate will be made available for inspection through electronic mode by writing to the Company at legal@bajajelectricals. com from the date of circulation of the Annual General Meeting ("AGM") Notice till the date of the AGM i.e. August 11, 2021.

The Board, at its meeting held on May 25, 2021, has approved an amendment to the ‘Bajaj Electricals Limited Employee Stock Option Plan 2015 ("Scheme") of the Company by increasing the limit for maximum number of employee stock options ("Options") to be granted to an individual employee from 1,00,000 (One Lakh) Options to 2,00,000 (Two Lakh) Options under the Scheme, subject to the approval of the shareholders at the ensuing 82nd AGM of the Company.

SUBSIDIARY, JOINT VENTURE AND ASSOCIATE

Details of subsidiary/associate companies/joint ventures of the Company

Name % of shareholding of the Company as on March 31, 2021 Status
Nirlep Appliances Private Limited ("Nirlep") 79.85 Subsidiary
Hind Lamps Limited ("Hind Lamps") 19.00 Associate
Starlite Lighting Limited ("Starlite") 47.00 Joint Venture

Performance of Subsidiary, Joint Venture and Associate

Nirlep: Total income of Nirlep for financial year 2020-21 stood at RS. 51.37 crore (Previous Year: RS. 42.21 crore). Loss for the year was at RS. 4.69 crore (Previous Year Loss: RS. 4.36 crore).

Hind Lamps: Total income of Hind Lamps for financial year 2020-21 stood at RS. 3.81 crore (Previous Year: RS. 2.97 crore). Profit for the year was at RS. 0.17 crore (Previous Year Profit: RS. 0.16 crore).

Starlite: Total income of Starlite for financial year 2020-21 stood at RS. 181.82 crore (Previous Year: RS. 173.44 crore). Loss for the year was at RS. 49.35 crore (Previous Year Loss: RS. 49.29 crore).

Pursuant to the provisions of Section 129(3) of the Act, a Report on the performance and financial position of the subsidiary, associate and joint venture included in the Consolidated Financial Statement and their contribution to the overall performance of the Company in Form AOC-1 is given in Annexure D, which forms part of this Report.

In accordance with the third provision to Section 136(1) of the Act, the Annual Report of Company, containing therein its Standalone and Consolidated Financial Statements are available on the Companys website at: https://www. bajajelectricals.com/investors-updates/. Further, as per fourth proviso to the said Section, the annual accounts of the subsidiary, joint venture and associate of the Company are also available on the Companys website at: https://www. bajajelectricals.com/investors-updates/. Any member who may be interested in obtaining a copy of the aforesaid documents may write to the Company Secretary at the Companys Registered Office. Further, the said documents will be available for examination by the shareholders of the Company at its Registered Office during all working days except Saturday, Sunday, Public Holidays and National Holidays, between 11.00 a.m. to 01.00 p.m.

The Policy for Determining Material Subsidiary as approved by the Board may be accessed on the Companys website at: https://www.bajajelectricals. com/investors-updates/.

Executive of Control Transfer Agreement and Share Subscription Agreement

a. With the approval granted by the Board of Directors at its Meeting held on April 30, 2021 ("Mentioned Meeting"), the Control Transfer Agreement ("CTA") has been executed by and amongst: (i) the Company, (ii) Shri Ravindra Bharati and Shri Arvind Bharati (collectively, the "Outgoing Promoters"), who, along with the Company, were Promoters/ Joint Promoters of Starlite, (iii) some other shareholders of Starlite (related to the Outgoing Promoters or belonging to their business group), and (iv) Starlite, on April 30, 2021 ("Effective Date"), inter-alia:

• to terminate the Shareholders Agreement dated February 22, 2007 by and between the Outgoing Promoters, Company and Starlite; and

• to record the agreed terms and conditions for the relinquishment and transfer of the joint Control and Management Rights of Starlite by the Outgoing Promoters in favour of the Company such that the Company shall have the sole Control and Management Rights of Starlite from the start of the business hours on the Effective Date.

b. In consideration of the said relinquishment and transfer of joint Control and Management Rights of Starlite by Outgoing Promoters in favour of the Company, the Company has paid an aggregate control premium of RS. 14.80 crore, plus GST as applicable, to the Outgoing Promoters, subject to the terms and conditions of the said CTA.

c. Consequently, Starlite has become a subsidiary of the Company with effect from the Effective Date.

d. Further, as per the terms of Share Subscription Agreement dated April 30, 2021 executed by and amongst: (i) the Company, (ii) Starlite, (iii) Shri Ravindra Bharati, and (iv) Shri Arvind Bharati, pursuant to the approval granted by the Board of the Company at its Mentioned Meeting, on May 11, 2021, the Company has acquired 4,49,99,990 Equity Shares of Starlite ("Subscription Shares") at a price of RS. 10/- per Equity Share

("Price") on private placement/preferential allotment basis ("Mode"). Further, 10 Equity Shares of Starlite were acquired by the Companys ten (10) identified purchasers at the same Price and through the same Mode.

e. With the aforesaid acquisition of the Subscription Shares, the total equity shareholding of the Company in Starlite has increased from 47% to 88.48%, whereas, Bajaj Group holding in Starlite (i.e. aggregate holdings of the Company along with its promoter group entity - ‘Jamnalal Sons Private Limited) has increased from 60% to 91.30%.

CONSOLIDATED FINANCIAL STATEMENTS

The Directors also present the audited consolidated financial statements incorporating the duly audited financial statements of the subsidiary, associate and joint venture prepared in compliance with the Act, applicable Accounting Standards and the SEBI Listing Regulations and they form part of this Report.

FINANCIAL STATEMENTS

The financial statements of the Company for the year ended March 31, 2021 as per Schedule III to the Act forms part of this Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Appointments/Re-appointments and Director coming up for retirement by rotation

The Board of Directors of the Company basis the recommendation of the Nomination and Remuneration Committee has appointed Shri Shailesh Haribhakti (DIN: 00007347) as an Independent Director of the Company, not liable to retire by rotation, for a period of five (5) years commencing from August 7, 2019 to August 6, 2024 and the said appointment was approved by the shareholders at their 81st annual general meeting held on August 28, 2020.

In accordance with the provisions of Section 152 of the Act and the Companys Articles of Association, Shri Madhur Bajaj (DIN: 00014593) and Shri Rajiv Bajaj (DIN: 00018262), are the Directors liable to retire by rotation at the forthcoming AGM and being eligible offers themselves for re-appointment.

The Board recommends re-appointments of Shri Madhur Bajaj and Shri Rajiv Bajaj for the consideration of the Members of the Company at the forthcoming AGM. The relevant details including profiles of Shri Madhur Bajaj and Shri Rajiv Bajaj are included separately in the Notice of AGM and Report on Corporate Governance of the Company, forming part of the Annual Report.

As on the date of this Report, the Companys Board comprises of eleven (11) Directors, out of which, nine (9) are Non-Executive Directors (NEDs) including two (2) Woman Directors. NEDs represent 81.82% of the total strength. Further, out of the said nine (9) NEDs, six (6) are independent directors representing 54.55% of the total strength of the Board. The composition of the Board is in conformity with Regulation 17 of the SEBI Listing Regulations and also with the provisions of the Act.

Shri Siddharth Mehta (DIN: 03072352), an Independent Director of the Company, whose current term is expiring on May 29, 2021, has conveyed his desire not to seek reappointment for the second term, owing to his professional commitments. Accordingly, Shri Siddharth Mehtas tenure as an Independent Director of the Company shall come to an end on May 29, 2021.

Independent Directors

All Independent Directors of the Company have given declarations under Section 149(7) of the Act that they meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16(1)(b) and other applicable provisions of the SEBI Listing Regulations. In terms of Regulation 25(8) of the SEBI Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence. The Independent Directors hold office for a fixed term of five years and are not liable to retire by rotation. All Independent Directors of the Company have valid registration in the Independent Directors databank of Indian Institute of Corporate Affairs as required under Rule 6(1) of the Companies (Appointment and Qualification of Director) Fifth Amendment Rules, 2019. In the opinion of the Board, the Independent Directors, fulfil the conditions of independence specified in Section 149(6) of the Act and Regulation 16(1)(b) and other applicable provisions of the SEBI Listing Regulations.

The terms and conditions of appointment of the Independent Directors are placed on the website of the Company at: https://www.bajajelectricals.com/ investors-updates/.

In compliance with the requirement of SEBI Listing Regulations, the Company has put in place a familiarisation programme for the independent directors to familiarise them with their role, rights and responsibility as directors, the working of the Company, nature of the industry in which the Company operates, business model, etc. The details of familiarisation programme are explained in the Corporate Governance Report and the same are also available on the website of the Company at: https://www.bajajelectricals. com/investors-updates/.

Key Managerial Personnel

Pursuant to the provisions of Sections 2(51) and 203 of the Act, read with the Rules framed thereunder, the Board has designated Shri Shekhar Bajaj, Chairman & Managing Director, Shri Anant Purandare, President & Chief Financial Officer and Shri Ajay Nagle, EVP and Head - Legal & Company Secretary and Compliance Officer, as Key Managerial Personnel of the Company.

None of the Key Managerial Personnel of the Company has resigned during the year under review.

Further, the Board of Directors of the Company, at its meeting held on May 25, 2021, has:

a. Taken on record the retirement of Shri Anant Purandare, President & Chief Financial Officer and Key Managerial Personnel of the Company, with effect from the close of business hours on June 30, 2021, upon his attaining the age of superannuation; and

b. Considered and approved the appointment of Shri E C Prasad, the existing Vice President - Finance and Finance Controller of the Company, as the new Chief Financial Officer and Key Managerial Personnel of the Company with effect from the start of business hours on July 1, 2021.

NUMBER OF MEETINGS OF THE BOARD

Six (6) Board meetings were held during the financial year 2020-21. The intervening gap between the meetings was within the period prescribed under the Act and SEBI Listing Regulations. The details of meetings of the Board held during the financial year 2020-21 forms part of the Corporate Governance Report.

COMMITTEES OF THE BOARD

As on March 31, 2021, the Board of Directors had the following Committees:

a. Audit Committee;

b. Nomination and Remuneration Committee;

c. Stakeholders Relationship Committee;

d. Risk Management Committee;

e. Corporate Social Responsibility Committee; and

f. Finance Committee.

The details of the Committees along with their composition, number of meetings and attendance at the meetings are provided in the Corporate Governance Report which forms a part of this Annual Report.

BOARD EVALUATION

Pursuant to the provisions of the Act and the SEBI Listing Regulations, the Board has carried out the annual performance evaluation of the Directors individually as well as evaluation of the working of the Board and of the Committees of the Board, by way of individual and collective feedback from Directors. The manner in which the evaluation was conducted by the Company and evaluation criteria has been explained in the Corporate Governance Report which forms part of this Annual Report.

The Board of Directors has expressed its satisfaction with the evaluation process.

POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION

The Board of Directors has framed a policy which lays down a framework in relation to appointment and remuneration of Directors, Key Managerial Personnel, Senior Management and other employees of the Company ("Policy"). The Policy broadly lays down the guiding principles, philosophy and the basis for payment of remuneration to Executive and Non-executive Directors (by way of sitting fees and commission), Key Managerial Personnel, Senior Management and other employees. The Policy also provides the criteria for determining qualifications, positive attributes and independence of Director and criteria for appointment of Key Managerial Personnel/ Senior Management and performance evaluation which are considered by the Nomination and Remuneration Committee and the Board of Directors whilst taking a decision on the potential candidates. The said Policy was last amended by the Board at its meeting held on February 4, 2021.

The above Policy is given in Annexure E, which forms part of this Report, and has also been posted on the website of the Company at: https://www. bajajelectricals.com/investors-updates/.

RISK AND INTERNAL CONTROLS ADEQUACY

The Companys internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested and certified by Statutory as well as Internal Auditors and cover all offices, factories and key business areas. Significant audit observations and follow up actions thereon are reported to the Audit Committee. The Audit Committee reviews adequacy and effectiveness of the Companys internal control environment and monitors the implementation of audit recommendations, including those relating to strengthening of the Companys risk management policies and systems.

Based on the report of the Statutory Auditors, the internal financial controls with reference to the standalone financial statements were adequate and operating effectively.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

REPORTING OF FRAUD

There was no instance of fraud reported during the year under review, which required the Statutory Auditors, Cost Auditor or Secretarial Auditor to report the same to the Audit Committee of the Company under Section 143(12) of Act and Rules framed thereunder.

RISK MANAGEMENT

The Company has formulated a risk management policy and has in place a mechanism to inform the Board about risk assessment and minimisation procedures along with a periodical review to ensure that executive management controls risk by means of a properly designed framework.

AUDIT COMMITTEE

The Audit Committee comprises of four Directors viz. Shri Shailesh Haribhakti as the Chairman of the Committee, Dr. (Smt.) Indu Shahani, Dr. Rajendra Prasad Singh and Shri Siddharth Mehta, as the members of the Committee.

During the year under review all the recommendations of the Audit Committee were accepted by the Board. Details of the role and responsibilities of the Audit Committee, the particulars of meetings held and attendance of the Members at such Meetings are given in the Report on Corporate Governance, which forms part of the Annual Report.

AUDITORS AND AUDITORS REPORT

Statutory Auditors

The Members at their 78th Annual General Meeting ("78th AGM") of the Company held on August 3, 2017, had appointed Messrs S R B C & Co. LLP, Chartered Accountants (ICAI Registration No.324982E/E300003) as the Statutory Auditors of the Company to hold office for a term of five years i.e. from the conclusion of 78th AGM till the conclusion of 83rd Annual General Meeting of the Company to be held in 2022, subject to ratification of their appointment by the shareholders, every year. In accordance with the Companies Amendment Act, 2017, enforced on May 7, 2018, by the Ministry of Corporate Affairs, the appointment of Statutory Auditors is not required to be ratified at every AGM.

The Auditors Report on the financial statements forms part of this Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

Cost Auditors

Pursuant to the provisions of Section 148 of the Act read with the Rules framed thereunder, the cost audit records maintained by the Company in respect of its manufacturing activities are required to be audited. Messrs R. Nanabhoy & Co. (Firm Registration No.000010), Cost Accountants carried out the cost audit for applicable businesses during the year.

Based on the recommendation of the Audit Committee, the Board of Directors have appointed Messrs R. Nanabhoy & Co. (Firm Registration No.000010), Cost Accountants as Cost Auditors for the financial year 2021-22. The Company has received a certificate from Messrs R. Nanabhoy & Co., confirming that they are not disqualified from being appointed as the Cost Auditors of the Company.

The remuneration payable to the Cost Auditors is required to be placed before the members in the general meeting for their ratification. Accordingly, a resolution seeking members ratification for the remuneration payable to Messrs R. Nanabhoy & Co., Cost Accountants, is included at Item No.7 of the Notice of the ensuing AGM.

The particulars of the Cost Auditors and cost audit conducted by them for financial year 2019-20 are furnished below:

ICWA Membership No. 7464
Registration No. of Firm 000010
Address Jer Mansion, 70, August Kranti Marg,
Mumbai 400036
Cost Audit Report Financial year 2019-20
Due date of filing of Report September 30, 2020
Actual date of filing of Report September 7, 2020

As per Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, the Company is required to maintain cost records and accordingly, such accounts and records are maintained.

Secretarial Auditors

The Board had appointed Messrs Anant B. Khamankar & Co., Practicing Company Secretaries (Membership No. FCS 3198; CP No. 1860) as Secretarial Auditor to conduct the Secretarial Audit of the Company for the financial year ended March 31, 2021, as per the provisions of Section 204 of the Act read with Rules framed thereunder. The Secretarial Audit Report in Form MR-3 is given as Annexure F and forms part of this Report. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.

Pursuant to the provisions of Regulation 24A of the SEBI Listing Regulations read with SEBI Circulars issued in this regard, the Company has undertaken an audit for the financial year 2020-21 for all applicable compliances as per SEBI Regulations and Circulars/Guidelines issued thereunder. The Annual Secretarial Compliance Report duly signed by Messrs Anant B. Khamankar & Co., Practicing Company Secretaries (Membership No. FCS 3198; CP No. 1860) has been submitted to the Stock Exchanges within 60 days of the end of the Financial Year.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND

Transfer of Unpaid/Unclaimed Dividend to Investor Education and Protection Fund

Pursuant to the provisions of Sections 124 and 125 of the Act read with. investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), as amended, unpaid and/ or unclaimed dividend of RS. 8,98,552/- pertaining to the financial year ended on March 31, 2013 were transferred during the year to the Investor Education and Protection Fund ("IEPF").

Transfer of shares to IEPF

Pursuant to the provisions of Section 124 of the Act read with the IEPF Rules, 57,171 equity shares of face value of RS. 2 each, in respect of which dividend was not paid or claimed by the members for seven consecutive years or more, have been transferred by the Company to IEPF during the year. Details of shares transferred have been uploaded on the website of IEPF as well as the Company.

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

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as Annexure G which forms a part of this Report.

HUMAN RESOURCES AND INDUSTRIAL RELATIONS

The Company takes pride in the commitment, competence and dedication shown by its employees in all areas of its business. The Company considers people as its biggest assets and hence has put in concerted efforts in talent management and succession planning practices, strong performance management and learning, coupled with training initiatives to ensure that it consistently develops inspiring, strong and credible leadership. Apart from continued investment in skill and leadership development of its people, the Company has also focused on employee engagement initiatives and drives aimed at increasing the culture of innovation and collaboration across all strata of the workforce. These are discussed in detail in the Management Discussion and Analysis Report forming part of the Annual Report.

The relations with the employees of the Company have continued to remain cordial.

ENVIRONMENT, HEALTH AND SAFETY

The Company is conscious of the importance of environmentally clean and safe operations. The Companys policy requires conduct of operations in such a manner so as to ensure safety of all concerned, compliances of environmental regulations and preservation of natural resources.

PROTECTION OF WOMEN AT WORKPLACE

In order to comply with provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules framed thereunder, the Company has formulated and implemented a policy on prevention, prohibition and redressal of complaints related to sexual harassment of women at the workplace. All women employees either permanent, temporary or contractual are covered under the above policy. The said policy has been uploaded on the internal portal of the Company for information of all employees. This has been widely disseminated. An Internal Complaint Committee (ICC) has been set up in compliance with the said provisions.

Number of cases filed and their disposal under Section 22 of the POSH, as at March 31, 2021, is as follows:

Particulars Numbers
Number of complaints pending as on the beginning of the financial year Nil
Number of complaints filed during the financial year 1
Number of complaints pending as on the end of the financial year Nil

PARTICULARS OF EMPLOYEES

Disclosures relating to remuneration and other details as required in terms of the provisions of Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure H, which forms part of this Report.

Further, in accordance with the provisions of Sections 197(12) & 136(1) of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the list pertaining to the names and other particulars of employees drawing remuneration in excess of the limits set out in the aforesaid Rules, is kept open for inspection during working hours at the Registered Office of the Company and the Report & Accounts as set out therein are being sent to all the Members of the Company. Any Member, who is interested in obtaining these, may write to the Company Secretary at the Registered Office of the Company.

DIRECTORS RESPONSIBILITY STATEMENT

The Directors confirm that:

a. in the preparation of the Annual Accounts for the year ended March 31, 2021, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b. they have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the loss of the Company for that period;

c. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities;

d. they have prepared the annual accounts on a going concern basis;

e. they have laid down internal financial controls to be followed by the Company and that sucRs. internal financial controls are adequate and were operating effectively; and

f. they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

APPRECIATION AND ACKNOWLEDGEMENT

The Directors place on record their deep appreciation to employees at all levels for their hard work, dedication and commitment, which is vital in achieving the over-all growth of the Company.

The Board places on record its appreciation for the support and co-operation the Company has been receiving from its suppliers, distributors, business partners and others associated with it as its trading partners. The Company looks upon them as partners in its progress and has shared with them the rewards of growth. It will be the Companys endeavour to build and nurture strong links with the trade based on mutuality of benefits, respect for and co-operation with each other, consistent with consumer interests. The Directors also take this opportunity to thank all Shareholders, Clients, Vendors, Banks, Government Regulatory Authorities and Stock Exchanges, for their continued support.

The Directors regret the loss of life due to COVID-19 pandemic globally and are deeply grateful and have immense respect for every person who risked their life and safety to fight this pandemic.

ANNEXURES

The following annexures form part of this Report:

a. Dividend Distribution Policy - Annexure A;

b. Disclosures of transactions pursuant to the provisions of Regulation 34(3) and 53(f) read with clause 2A of Part A of Schedule V of the SEBI Listing Regulations - Annexure B;

c. Annual Report on CSR Activities - Annexure C;

d. Statement containing salient features of the financial statement of subsidiaries/associate companies/joint ventures - Annexure D;

e. Policy for Appointment and Remuneration of Directors, Key Managerial Personnel, Senior Management and other employees of the Company - Annexure E;

f. Secretarial Audit Report - Annexure F;

g. Report on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo - Annexure G; and

h. Disclosures under Section 197(12) of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 - Annexure H.

For and on behalf of
the Board of Directors of Bajaj Electricals Limited
Shekhar Bajaj Anuj Poddar
Chairman & Managing Director Executive Director
DIN: 00089358 DIN: 01908009
Anant Purandare Ajay Nagle
President & CFO EVP & Head - Legal and Company Secretary
Mumbai, May 25, 2021 ICSI Membership No. A9855