historical data Management discussions
The Directors have pleasure in presenting the 71st Annual Report together with the Audited Financial Statements for the Financial Year ended March 31, 2023.
FINANCIAL RESULTS
The following are the standalone financial highlights for the Financial Year 2022-23:
[Ml NR]
| Particulars | 1 2022-23 1 | 2021-22 |
| Sale of Products | 141,832 | 111,047 |
| Of which Export Sales | 12,371 | 11,907 |
| Profit Before Tax | 18,824 | 15,001 |
| Total tax expense | 4,579 | 2,829 |
| Profit for the year | 14,245 | 12,172 |
| Other comprehensive income (Net of tax) | 1,090 | (122) |
| Total Comprehensive income for the year | 15,335 | 12,050 |
The Company does not propose to transfer any amount to Reserves for the year under review.
DIVIDEND
The Board of Directors have recommended a final dividend of Rs 280 per equity share amounting to Rs 8,258 million for the financial year 2022-23 for the approval of the members at the 71st Annual General Meeting of the Company. The total dividend for the financial year 2022-23 aggregates to Rs 480 per equity share which includes interim dividend of Rs 200 per equity share paid in March 2023. The total dividend payout ratio is approximately 99.4% for FY 2022-23.
The interim dividend paid during the year and the final dividend recommended is in accordance with the Dividend Distribution Policy of the Company.
Pursuant to the requirements of regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has adopted a Dividend Distribution Policy. This Policy is uploaded on the website of the Company and can be accessed at https://www.bosch. in/media/our company/shareholder information/2017 2/ dividend distribution policy 2017.pdf.
MANAGEMENT DISCUSSION AND ANALYSIS
To avoid duplication between the Directors? Report and Management Discussion and Analysis, a composite summary of the Company?s performance and its various business segments is given below:
Economic Scenario Global Economy
The baseline forecast for the global economic growth will reduce from 3.4% in 2022 to around 2.8% in 2023, before settling at a level of 3.0% in 2024. Advanced economies are expected to see a pronounced growth slowdown, from a level of 2.7% achieved in 2022 to around 1.3% in 2023. If the financial sector stress continues, global growth may further decline to about 2.5% in 2023 with advanced economies growing below 1.0%. Global inflation is set to fall from 8.7% in 2022 to around 7.0% in 2023 on the back of lower commodity prices; but underlying (core) inflation is likely to decline more slowly.
The US economic growth will slow to 0.2%, as the world?s largest economy enters a mild downturn but avoids a technical recession. While the economic outlook in the Eurozone and the UK is bleak given the reduced supply and higher prices of natural gas, India is predicted to be the fastest growing G20 economy and Indonesia the fastest growing Southeast Asian economy. Chinese GDP is likely to expand by around 4.7% however, with a considerable degree of uncertainty.
Indian Economy
The uncertainties in the Global economy will weigh on India?s growth this year, but India is poised to grow by 6.5% in the medium term.
Despite the gloomy outlook for the global economy, many analysts believe that this could well be India?s decade. And there are enough reasons and data to suggest that the Indian economy has fared better than previously believed, despite continuing global uncertainties. The International Monetary Fund (IMF) expects India to grow by 5.9% in FY 2023-24 and by an average rate of 6.1% over the next five years.
India?s large, young, and rising share of the upper middle- income population will drive the consumption driven growth, however investment will play an important role over the coming years. Investments will provide India with necessary momentum to take off on a path of sustained domestic demand-led growth.
The overall outlook for the Indian economy remains positive. India will likely grow at a moderate pace of 6.0%-6.5% in FY 2023-24, as the global economy continues to struggle. Growth in the next year is likely pick up as investments will kickstart the virtuous circle of job creation, income, productivity, demand, and exports, supported by favorable demographics in the medium term.
It looks like the world has come to terms to deal with the pandemic and to live with it. Flowever, India is not insulated from the impact of the geopolitical crises, supply chain reorientations, global inflation, and tight monetary policy conditions will weigh on the outlook.
Industry Structure and Development Automotive
Automakers in India continued to post solid growth in FY 2022-23. Healthy replacement demand, relatively stable semiconductor supplies, coupled with pre-buying prior to the implementation of second phase of BS-VI emission norms from Apr 2023, acted as tailwinds to demand in FY 2022-23. The overall production volumes of 3 & 4-wheeler automotive market, put together, grew by a robust 22% in FY 2022-23 vs FY 2021-22 (although on a lesser base of FY 2021-22 which was impacted by the 2nd wave of the COVID-19 pandemic). Vehicle production across all segments reached an all-time high totaling to 7.6 million vehicles in FY 2022-23, led by strong growth in Heavy Commercial Vehicle & Passenger cars and utility vehicle segments.
Vehicle segment wise performance in FY 2022-23:
• Passenger Car (PC) sales had a good run in the full FY 2022-23, helped by positive market sentiment, new launches, preference for personal mobility and improved consumer confidence in rural and semi-urban markets. However, entry level variants remained under pressure as customers in this category were affected by high inflation. Demand outstripped supply and OEMs tried to reorganize models and trims to maximize their production amid the chip crisis. PC segment grew by 25% in FY 2022-23 vs PY.
• Heavy Commercial Vehicle (HCV) demand was strong due to increased activity in E-Commerce, construction, mining, demand for fleet buses, higher replacement demand and advance buying due to anticipated price hike. HCV segment grew by a healthy 35% in FY 2022-23 vs PY.
• Light Commercial Vehicle (LCV) segment mainly benefitted from the growth in demand from last mile connectivity and E-commerce applications. LCV segment grew by 23% in FY 2022-23 vs PY.
• Availability of finance, along with alternative fuels and state subsidies, had contributed to the growth of 3-wheeler segment. 3-wheeler segment grew by 14% in FY 2022-23 vs PY.
• Healthy rural cash flows, aided by four consecutive normal monsoons, continued to aid the demand for the Tractor industry, even as fears regarding impact of unseasonal rainfall on rabi yields and effect of a possible El Nino on south-west monsoon have emerged. The tractor segment grew by 12% in FY 2022-23 vs PY.
• Demand in the 2-Wheeler segment was supported to an extent by pre-buying prior to the implementation of 2nd phase of BS-VI emission norms, even as demand sentiments continue to remain somber. Rural demand improved to an extent, but it continues to remain weak, thereby impacting the entry level motorcycle segment. 2-wheeler segment grew by 10% in FY 2022-23 vs PY.
Trend of Vehicle Production Growth Rates for the past 8 financial years:
| Vehicle production growth rate +/- %vs PY | ||||||||
| Segment | FY15-16 | FY16-17 | FY17-18 | FY18-19 | FY19-20 | FY20-21 | FY21-22 | |
| FY 22-23 | ||||||||
| HCV | +24% | +2% | +3% | +28% | -47% | -22% | +48% | +35% |
| LCV | +3% | +6% | +18% | +22% | -21% | -15% | +20% | +23% |
| Car + UV | +6% | +11% | +6% | 0% | -15% | -11% | +19% | +25% |
| 3-Wheeler | -2% | -16% | +31% | +24% | -11% | -46% | +23% | +14% |
| Tractor | -7% | +21% | +14% | +14% | -15% | +27% | 0% | +12% |
| 2-Wheeler | +2% | +6% | +16% | +6% | -14% | -13% | -3% | +10% |
| TOTAL | +2% | +6% | +15% | +7% | -14% | -13% | +1% | +13% |
Moving into the next fiscal FY 2023-24, OEMs are closely keeping a watch on geopolitical conditions, impact on commodity & fuel prices, economic growth, interest rate hike, etc. which could be the possible headwinds for the industry. Also, production could be impacted in 2023-24 as the supply situation of electronic components remains unpredictable.
Expected El-Nino impact, when the southwest monsoon sets over the Kerala coast, may act as a threat to normal monsoon and thus impact Tractor sales / Rural economy in India.
Non-Automotive:
The Indian power tools market is expected to grow at a CAGR of 8.9% over the next 10 years (2022 to 2032). The macroeconomic factors, the blooming Indian industrial sector, rising auto sales, a rising consumer confidence index, the introduction of reliable, reasonably priced multipurpose industrial tools, the shift in consumer preference
Rnsrh I imitorl toward do-it-yourself values, and the expansion of the e-commerce market all bode well for the growth of power tools in India.
The safety and security industry in India has experienced steady growth across various segments. Rapid urbanization, expansion in manufacturing industries, infrastructure and mass transportation are driving growth in the safety and security market. End users of safety, security and communication products and services include airport, metro- rail, government enterprises, law enforcement agencies, defense, energy and manufacturing industry, IT/ITES, commercial and non-commercial enterprises. The industry is highly fragmented and price sensitive.
Business segment wise performance
The overall Net sales of the Company witnessed growth of +28% over FY 2022-23.
Mobility business (viz. Automotive sector) revenues increased by +30%, while the Business Beyond Mobility increased by +17%. Domestic mobility business witnessed increase of +33%, mainly driven by robust growth in Powertrain Solutions division by +39%, aided by strong recovery in the overall automotive market.
The Company predominantly operates in manufacturing and trading business in mobility solutions, which constituted around 86% of total sales in FY 2022-23. The Business Beyond Mobility, comprising of Industrial Technology, Consumer Goods and Energy and Building Technology, had a share of 14%. The operating segments of the Company are broadly classified into "Mobility Business" (Automotive Products) and "Business Beyond Mobility".
Performance of operating segments in FY 2022-23 Mobility Business:
Powertrain Solutions (PS)
The division Powertrain Solutions (PS) combines the strengths of the smart, diversified, and sustainable powertrain under the vision PASSION TO MOVE. PS offers integrated solutions in the market segments Passenger Cars (PC) and Commercial Vehicles (CV) and Off-Road applications and aims to become No. 1 provider of system solutions & products that cover mixture of various energy efficient powertrain solutions. We continue to promote optimized internal combustion engines for conventional and alternative fuels (viz. Biofuel blend, Natural Gas and Hydrogen) alongside electric drive systems. We are committed to using renewable synthetic fuels for safe, sustainable, and inspiring mobility. We actively engage with key energy sector players and OEMs for potential future core business opportunities. We are also adequately prepared for TREM 5 norms that would support our long-term growth plans.
FY 2022-23 witnessed a comeback of the auto industry in India after two consecutive years of growth challenges due to the COVID-19 pandemic. The auto market is now back at the 2018 levels. The PS division grew by a robust +36% in FY 2022-23 over PY. Aided by strong recovery in the heavy commercial vehicle segment which grew by +35%, followed passenger cars and utility vehicles segment by +25% and light commercial vehicle segment by +23%, domestic sales of PS division posted a robust growth of +39%. Due to the implementation of BS-VI stage 2, the content per vehicle also increased with sales of Exhaust Gas Treatment (EGT) components to the OEMs increasing. Though, the supplies of semi-conductors improved compared to PY, supply situation is yet to stabilize, which had an impact on the overall sales in the auto segment. Cost increases due to increase in prices of raw materials & electronic components and due to increase in prices of imported components form EU region resulting from high energy costs & inflation, had an adverse impact on the cost situation in FY 2022-23 and continues to remain a challenge going ahead in FY 2023-24 as well.
FY 2022-23 also witnessed good demand for Common rail systems (viz. CP4, CRI, CRIN, CRR, etc.) which grew by +45%, mainly due to improvement in supplies of semiconductors (viz. Electronic Control Units) compared to PY and due to higher volumes of sensors resulting from implementation of BS-VI OBD-2 norms. The conventional
systems (viz. Inline pumps, VE pumps, NHA, etc.) also grew by +21% vs PY.
Automotive Aftermarket (AA)
Bosch Automotive Aftermarket Division has presence in supply, sales, and distribution of automotive parts for vehicle servicing, diagnostics equipment for workshops and technical information, training, and consulting for after-sales service for Bosch automotive products and systems.
The Automotive Aftermarket Division has over 5,000 outlets in India, spread across 1,000 cities and towns, catering to over 12,000-part numbers to ensure widespread availability of both products and aftersales services.
The product range in the Automotive Aftermarket in India is the largest under one brand, which finds extensive applications in 2 & 3 wheelers, Cars, MUVs, LCVs, HCVs, buses, tractors, railways, off-road applications, and stationary engines.
The division also manages over 2,100 Workshop / Service network comprising over500 Bosch CarService, 1,000 Bosch Diesel Service Centers, 500 Electric Modules & 100 Express Car Service in India. These centers provide highest quality of customer service and solutions to the vehicle owners. Two new workshop concepts "Express Car Service" & "Express Bike Service" have been added to the network. There are 15 Bosch Training Centers in India which offer training to customers on both technical and commercial aspects.
The products marketed by the aftermarkets division include Diesel / Gasoline Fuel Injection System & Components, Alternators, Starter Motors, Spark Plugs, Automotive Filters, Automotive Batteries, Automotive Belts, Wiper Blades, Horns, Lighting, Automotive Lubricants, 2 & 3-wheeler Clutch Plates, Diagnostic Equipment?s, and Automotive software.
Automotive Aftermarket Division (AA-IN) achieved the highest ever Total Net Sales of 27.9 bln. ? in FY 2022-23 with a growth of +15% compared to PY, which had grown by +26% last year. AA-IN also exports fuel injection components mainly to Bosch, Germany. Exports constitute -15% of total net sales of after-market division. The 1AM (Independent After Market segment) which is the largest segment with 64% of total sales coming from this segment, grew by a robust +27% in FY 2022-23. The Zing+ strategy of AA-IN has worked well which focuses on deeper market penetration with increased overall visibility through ‘Har Shop Mein Bosch? concept across Rural markets covering 60+ rural towns, Branding uplift across dealer network & Top Retail Branding in key towns. The market share continued to grow in key products such as diesel and rotating machines. Robust growth was also seen in sales of lubricants, spark plugs & filters in FY 2022-23 vs PY.
2-wheeler & Power sports (2WP)
The 2-wheeler business mainly caters to high end vehicles in the range of 125 CC and above. The product range includes exhaust sensors, fuel injectors, fuel supply modules & ECU?s.
During FY 2022-23 the 2-wheeler business grew by +15%, mainly from new projects from customer coupled with overall growth in 2-wheeler production volumes by +10% over PY. The semiconductor supply crisis stabilized in 2022-23 which also aided the overall growth in volumes. Business is expected to improve in 2023-24 due to BS-VI OBD2 change over and the 2WP business is forecasted to grow by +15% over PY.
Business Beyond mobility:
The Business Beyond Mobility sales have increased by +14% in FY 2022-23 vs PY, which was driven predominantly by Power Tool and Bosch Energy & Building Solution Division in domestic market, which contributed to 97% of total business of beyond mobility during the year.
Consumer Goods - Power Tools
The Power Tools division supplies power tools, power- tool accessories, and measuring technology and home & garden tools. The division has a wide range of products which can cater to professional users in trade and industry and to users in the DIY market and amateur crafters. The focus is to provide tools which are convenient and of high- performance value.
During FY 2022-23, the division?s revenue grew by 11% vs PY, of which cordless business, which constitutes around 7% of the total sales, grew by a robust 44%. The division continues to focus on increasing the share of localization of high volumes products and thereby offering better value to customers. The division also aims at reducing the distance to its users and will continue to focus on improving their lives by providing affordable solutions.
The power tools business is expected to grow around 16% in FY 2023-24. Focus will be on the Be Connected user & trade engagement program and E-commerce channels which will be the essential contributors to the overall business growth, apart from new launches and increase in localization content in high growth products.
Energy & Building Technology - Security Technology
Bosch provides solutions for building safe, secure, and enjoyable spaces. The broad spectrum of services includes video surveillance, access control, fire, evacuation, and speech alarm systems, as well as robbery and break- in notification systems via networked time and building integration management systems. Critical Communication Systems, Professional audio, and conference systems for communication of voice, sound and music complete the range. Bosch offers the most suitable solution for every building or application. We seamlessly integrate with other Bosch divisions? products, offering holistic solutions for buildings across the world.
The security technology business saw a growth of 39% in revenue overthe previous yearwith key wins across verticals. As regards segment-wise growth, the Communications business grew by 49% and Video Systems by 37% YoY. Verticals of Transportation, Government, Energy and Commercial sector continued to contribute to the business growth in addition to support coming in from the Education and Flealthcare vertical. We see a positive outlook for the security technology business in 2023-24 with a forested growth of around 14% YoY.
Revenue by geographical area
Contribution of export sales to the total sales was around 9% in FY 2022-23. Bulk of the exports are to other Bosch companies, mainly of manufactured goods from Power train solutions and Automotive aftermarket divisions. Close to 85% of the total products exported are to Robert Bosch, Germany.
Financial Performance Profit & Loss statement Sale of products
Sale of products grew by a healthy +28% over PY and stood at 141,832 MINR in FY 2022-23.
Bosch Limited?s Mobility Solutions business sector increased product sales by +29% in fiscal 2022-23, primarily on account of post COVID 2nd wave recovery and overall automotive market growth of +22% (w/o 2 wheelers). Aftermarket and 2-Wheeler segments also witnessed good growth over previous year due to strategic projects, market recovery and improved semi-conductor supplies.
Sale of services
Income from sale of services in FY 2022-23 saw a marginal decline of -4.5% over PY. There was a higher recognition of income from application projects completed during PY.
Other operating revenue
Other operating revenue stood at 3,175 MINR, which increased by +39% over PY. This increase is mainly due to higher rental income from additional properties leased to group companies during FY 2022-23 and due to receipt of Govt, grants from Govt, of Maharashtra with respect to the tax subsidy under the Mega project scheme.
Other income
Other income, which mainly comprises of mark-to-market gains on mutual fund investments and interest income on fixed deposits, increased by +21% in FY 2022-23 over PY, mainly due to increase in interest rates by 250 basis points during FY 2022-23 as compared to previous FY, resulting in higher mark-to-market gains on mutual funds and higher interest income on fixed deposits and intercompany loans.
Cost of materials consumed (including traded goods)
The cost of materials consumed as a percentage of total revenue from operations increased to 63.4% in 2022- 23 from 61.9% in 2021-22. The increase is contributed by change in product mix with higher share of traded goods and increase in raw material prices, mainly steel, aluminum, and electronic components, which have seen steep increases over PY.
Employee benefit expense
Personnel cost in FY 2022-23 was 11,459 MINR as against 10,666 MINR in PY. Personnel cost has reduced from 9.1% of total revenue in FY 2021-22 to 7.7% of revenue in FY 2022- 23 due to restructuring of permanent workmen undertaken in the past few years, thereby increasing the flexibility of the workforce resulting in stabilization of personnel costs.
Depreciation and amortization expense
The depreciation charge for FY 2022-23 was 3,856 Ml NR as against 3,243 MINR during the PY. The increase is due to additions to fixed assets, viz. new building (Adugodi Spark. NXT campus) and machinery (for localization imported products, namely common rail injectors, sensors, etc.) in FY 2022-23, which led to higher depreciation.
Other expenses
Other expense mainly comprises of spending towards plant operating expenses, selling & administrative overheads, royalty payments (including one-time technical access fees) and spending on new business areas, viz. electrification, etc. Other expenses were at 16.8% of total revenue in FY 2022- 23 as compared to 16.6% of total revenue in PY. During the year 2022-23, one-time technical access fees was incurred for localization of ECU?s, Common rail injectors & Sensors. Also, spending towards new business areas was higher in FY 2022-23 compared to PY.
Total tax expense
Tax Expense for FY 2022-23 was 4,579 MINR, as compared to 2,829 MINR in PY. The effective tax rate for FY 2022-23 was 24.3% as compared to 18.9% in PY. In the previous year tax expense was lesser due to tax credits resulting from completion of tax assessments related to earlier years amounting to 854 MINR.
Profit after Tax (PAT)
Profit after tax increased by +17% to 14,245 MINR in FY 2022-23 from 12,172 MINR in PY. The increase is on account of increase in PBT by +26%, off-set by relatively higher tax expense in FY 2022-23 as explained above.
Other Comprehensive Income
The investment in equity shares is classified as financial assets through other comprehensive income as per the requirements of Ind AS 109. The changes in fair value of equity shares are recognized under other comprehensive income. Accordingly, the gain of 1,090 MINR (net of taxes) during the year is mainly due to increase in the fair value of those Investments and also due to gain from post-employment benefit obligations pertaining to employee benefits.
Earnings per Share (EPS)
EPS (basic and diluted) of the Company for Financial Year 2022-23 improved by +17% to 483 ? per share as against 413 ? per share in PY.
Balance Sheet Share capital
As on March 31st, 2023, the Authorized Share Capital comprises of 38,051,460 Equity Shares of Rs 10/- each. The issued, subscribed, and paid-up capital is 295 MINR divided into 29,493,640 equity shares of Rs 10/- each.
Reserves & Surplus
Reserves & Surplus as on March 31st, 2023, stood at 98,625 MINR, as compared to 96,456 MINR in PY. The increase is on account of profit after tax earned during the year 2022- 23, after payment of final dividend for FY 2021-22 and interim dividend for FY 2022-23.
Other Reserves
Other Reserves increased from 10,128 MINR in PY to 11,202 MINR as on March 31st, 2023, mainly due to change in the fair value of equity investments valued in line with Ind AS-109.
Shareholders? funds
The total Shareholders? funds increased to 110,122 MINR as on March 31st, 2023, from 106,879 MINR as on March 31st, 2022, contributed by increase in retained earnings for the year.
Property, Plant and Equipment (viz. Fixed assets)
The gross fixed asset value (including Capital Work-In- Progress) as on March 31st,2023 was 42,294 MINR compared to 40,249 MINR as on March 31st, 2022. The Company added fixed assets worth 5,185 MINR during the year 2022- 23, mainly in plant and machinery for new products and for additions to buildings at Adugodi campus in Bengaluru.
Financial Investments
The total financial investments (Current & Non-Current) as on March 31st, 2023, was 49,853 MINR as against 54,902 MINR as on March 31st, 2022. The investments were liquidated for payment of final dividend for FY 2021-22 and interim dividend for FY 2022-23.
Working capital Inventories
Inventory as on March 31st, 2023, increased by +10% to 19,029 MINR from 17,293 MINR as on March 31st, 2022. The increase is mainly on account of increase in Net sales compared to PY.
Trade receivables
Trade receivables as on March 31st, 2023, stood at 19,029 MINR as against 15,343 MINR as on March 31st, 2022. The increase is in line with increased sales in FY 2022-23.
Cash and Bank balances
The total cash and bank balances as on March 31st, 2023, was 20,569 MINR (including cash and cash equivalent of 3,792 MINR), compared to 17,054 MINR (including cash and cash equivalent of 1,432 MINR) as on March 31st, 2022.
Key Ratios:
| Ratios | 2022-23 | 2021-22 |
| Average Trade Receivables days (Avg. receivables/Total revenue per day) | 42 | 45 |
| Average Inventory days (Avg. inventory / Total revenue per day) | 44 | 47 |
| Current Ratio (Current assets / Current liabilities) | 1.76 | 1.83 |
| Working Capital days (Current Assets-Current liabilities / Total revenue per day) | 93 | 114 |
| Operating Profit Margin % (Earnings before interest & taxes / Total revenue) | 9.5% | 9.7% |
| Profit after Tax (PAT) % (PAT / Total revenue) | 9.5% | 10.3% |
| Return On Capital Employed % (ROCE) | 17.1% | 14.2% |
Human Resource Development and Industrial Relations Human Resource Development
Mega trends like increase in global political uncertainty, the emergence of Knowledge culture, enhanced Individualization and the change in work and workplace relationship are challenging the fundamental premise of Human relationships. This is coupled with Transformation within Bosch addressing the needs of the strategic challenges around sustainability, Digitalization, connectivity, and user centricity. The mega trends and transformation will demand a changed expectations around Leadership, Cross collaboration and networking, newly organized work, working conditions, upskilling, and learning in the moment of need and life-long learning.
We at Bosch in India are well prepared to address these challenges. Our fundamental vision remains to create an environment that fosters people?s passion and enables them to contribute to the company?s long-term success. We are guided by a positive view of human nature, our Bosch values, and our striving for excellence.
The people who choose to work for Bosch should think "This is where I want to be," "This is where I belong to" each day and every day. We create a culture where people are empowered to succeed in a highly adaptable and flexible environment.
In the current year, our focus will be to sustain and further strengthen our efforts across 7 key dimensions.
(a) Talent Strategy - Future-focused, business driven approach to meet differential Talent needs. This program comprising of cross-functional leaders and talent, focusses on delivering organization and talent readiness for the future of businesses, creating delightful talent experiences, and building HR capabilities for the future is yielding results and is appreciated by the Talent across the organization .
(b) Learning - Build future-ready competencies & nurture transformational capabilities of people. Our Bosch Learni ng campus is a testi mony to this fact that we aspi re to become a Learning company. We Offer continuous learning on all levels as a prerequisite to master the transformation and support the business, building knowledge fast, effective, and efficiently in a competitive manner
(c) Being an employer of choice - We are proud about the fact that we are a certified Great Place to Work third year in a row. Recognition as one of the Best in Auto & Auto Components in India and systematic pursuit of further actions necessary in our journey to deliver extraordinary employee experience.
(d) Diversity, Equity & Inclusion - We appreciate everyone?s uniqueness and value diversity as key for our business success. By including everyone and ensuring equal opportunities we unleash our full potential. Key focus areas will be Gender, Generational and Persons with Disabilities.
(e) Leadership Development - We live by the We lead Bosch principles and are proactively developing the Leaders of the future.
(f) HR Capability Building - we consciously invest in the capability building of the HR fraternity to Maximize human potential at Bosch.
(g) Health and Wellness- Employee health and wellness will be an important imperative with strong focus on Physical and Emotional wellness
Industrial Relations/ Employee Relations
With the sustained approach of positive engagement and enhanced collaboration and being openness and trust as our core values, Employee Relations across the plants remained in a cordial state.
A Performance driven, flexible and cost-competitive Labour Model Transformation initiatives with a strengthened base of Governance mechanism continued to be the driving force to be a globally preferred Value Chain Partner and future ready organization. Two Plants viz. Jaipur and Nasik have witnessed amicable conclusion of productivity linked long term settlements with the respective recognized Union for a period of 5 years with inclusion of concepts like Maximum Job Value (MJV) and Performance linked variable pay.
Bosch is committed to develop the skilled resource to minimize the gap between the availability of skilled manpower and Industry requirements through the state- of-the-art factories, training Centre and manufacturing excellence. Thus, contributes to enhancing the employability of the youth with the right intervention of skilling initiatives. With the best manufacturing facility and the availability of experienced engineer/industry experts, sophisticated training centres in Bosch, more than 1000 youths are engaged in various employability enhancement schemes of Government of India. Bosch was recognized in multiple forums of Government bodies for the quality of training provided to such youths.
Diversity continued to be focused on various employment categories with a structured approach to create a healthy and inspiring ecosystem for diversified workforce. Multiple interventions including the engagement of LGBTQ in small way lead to increased diversity ratio compared to previous years.
We at Bosch have Employee Relations environment with highly engaged and collaborative culture in all manufacturing and business units. Each of our plant creates an Employee Relation Strategy guided by Employee Relation Policy of the company. Employee Relations strategy is mainly based on:
(a) Employment (Labour) Model: Performance oriented labour model, Enabler for localization and future business growth, Implementation of MJV (Maximum Job Value) and Digital performance assessment system.
(b) Front Line Managers Development: Exclusive
Training model supported by a well-established TQS to enhance the skills and competencies of Front-Line Managers to be ‘Fit for future?
Multiple and structured training and capability building interventions are imparted to all category of employees to reskill and upskill to be equipped for future.
The 100% participation rate of Blue-Collar workers from the overall scope of 25% of the strength in Great Place to Work Survey indicate their trust and interest in the approach adopted by the Organization to hear the voice of employees. Bosch is certified as ‘Great Place to work? for the third time.
Series of engagement initiatives are conducted on commemoration of 100 years of Bosch presence in India. Family members of employees, Suppliers, Customers and Government Bodies were part of these celebrations at Bosch. Multiple engagement initiatives including a strong focus on Physical and mental wellbeing of employees are appreciated and welcomed by employees across regions.
The year also saw increased connect with Government and statutory bodies, stringent compliance monitoring through self-audits and cross-audits etc. Bosch was represented in multiple Employer Forums such as NHFtD, NIPM, EFSI, etc. with relevant and value addition topics. Thus, the Industry connect continued to grow stronger.
Multiple organizations benchmarked Bosch through multiple visits and constant connect on its best practices in the Employee Relations space. Inspired and Business oriented workforce helped the organization to sustain its best practices, initiate new interventions and stay focused in its strategy.
Internal Audit and Internal Financial Controls
The Company has an Internal Audit function. The Internal Audit department provides an appropriate level of assurance on the design and effectiveness of internal controls, its compliance with operating systems and policies of the Company at all locations. Based on the internal audit report, process owners undertake corrective actions in their respective areas and thereby strengthen the controls. Significant audit observations and corrective measures thereon are presented to the Audit Committee.
The Company has an effective and reliable internal financial control system commensurate with the nature of its business, size, and complexity of its operations. The internal financial control system provides for well- documented policies and procedures that are aligned with Bosch global standards and processes, adhere to local statutory requirements for orderly and efficient conduct of business, safeguarding of assets, detection and prevention of frauds and errors, adequacy and completeness of accounting records and timely preparation of reliable financial information. This also identifies opportunities for improvement and ensures that good practices are imbibed in the processes that develop and strengthen the internal financial control system and enhances the reliability of the Company?s financial statements.
The Audit Committee reviews the internal audit plan, adequacy and effectiveness of the internal control system, significant audit observations and monitorsthesustainability of remedial measures. It also reviews functioning of the Whistle Blower mechanism and reviews the action taken on the cases reported.
The efficacy of the internal checks and control systems is validated by self-audits and verified by internal as well as statutory auditors.
Opportunities and Threats
India is presented with a strategic opportunity to assume a greater role in the world arena. Besides the inherent domestic momentum, global factors such as volatile geopolitics, supply chain dislocations, trade skirmishes, climate change and challenging demographics provide the ignition to lift the economy towards its goal of $5trn nominal GDP in 2025 from estimated $3.4trn this year. India, which is the 5th biggest economy, is also the fastest growing among the large economies today.
While India is on a steady recovery path post Covid pandemic, global geo-political developments and COVID-19 resurgence in some countries may have some impact on capex investments and consumption amidst uncertainty. Broad supply chain disruptions will continue to cause cost inflationary pressure in the near future in both automotive and consumer goods business.
Goods and service exports from India face a challenging outlook as global growth is expected to slow markedly in US, Europe, UK, and China. India has been promptly doing considerable groundwork on bilateral FTAs, with closer ties with the Gulf Cooperation Council (GCC) countries, UK, EU, and Canada on the cards in 2023. India took over the G20 Presidency for 2023, providing a platform to not only host global partners over strategic topics but also revitalize bilateral trade, investment, and sustainability discussions on the sidelines. All these steps are expected to help the Company become more competitive and also increase exports.
The Union Budget 2023-24 focused on growth and promoting technology-enabled development, energy transition and climate action.
Government of India continues to strengthen key sectors of the Indian economy with capex and policy initiatives to drive long-term sustainable growth. The launch of Gatishakti program is expected to fast track the execution of projects in the National Infrastructure Pipeline and National Logistics Policy, which will be a boost to not just Automotive sector but also Consumer Goods & Building Technologies with focus on Airports, Ports, Metro, Data Centers etc. Production Linked Incentives in 14 key sectors such as Automotive, Electronics & Consumer Goods will go a long way in strengthening the local supply base to make India more self-reliant. The Company?s application under Auto component PLI has received necessary approval.
India is firmly on a digital transformation journey. Globally, India ranks first in digital transactions and second in smartphone and internet users. India?s data center capacity is expected to double from 2021 to 2023 driven by rising adoption by government, enterprises and public. This will give impetus to key Government initiatives such as of making our cities smarter and safer. It will also drive enterprises to adopt digitally enabled innovative business models. The Company?s Mobility Solutions business is well poised to participate and contribute to the digital transformation of India.
International crude oil prices have risen sharply. This has impacted growth due to rise in inflation, depreciatory pressure on the rupee, reducing discretionary spends of households and lower profit margins. The Company keenly monitors the Energy prices as it affects overall consumption and thereby market conditions.
India has committed to lowering its emission intensity and increase non-fossil capacity to 500GW by 2030. Maintaining strong growth while making this shift presents a challenging yet crucial opportunity towards Hydrogen, alternate fuels etc. The Company is investing in Hydrogen based technologies - both for mobility and stationary applications. Based on the evolution of Hydrogen market in India, the Company would bring appropriate technologies into the Country. The Company is also in discussion with customers towards bringing relevant Hydrogen product offerings to India market.
After two and three-wheelers adopting electrification which picked up pace from last year, there is also early adoption by passenger cars. However, the Internal Combustion Engine (ICE) is expected to be the dominant technology in the remaining segments. The Company with its focus on environment and being technology agnostic, will continue to provide wide range of powertrain solutions including new age technology solutions in Battery Electric, Hydrogen, and alternate fuels, as per market requirements.
Risks and Concerns
Followingarethemajorrisksreviewedbythe Risk Management Committee and with applicable mitigation measures:
1. Supply chain risk: We rely on third parties for sourcing raw materials, parts and components for our manufacturing operations and ability to supply components to manufacturing operations at the required time is key to successful production schedules. On account of COVID-19 lockdowns in China and Ukraine crises we witnessed disruptions in supply chain resulting steep increase in commodity prices, especially precious metals and steel witnessed exponential price increases. However, our effective supply chain risk management framework enables effective engagement with our suppliers to mitigate potential disruptions. We work closely with our suppliers and customers to build safety stocks and inventory planning. We have taken several initiatives to mitigate semiconductor crisis. We continue to maintain and develop strong partnerships with key strategic suppliers to ensure a stable future supply of components. We continue to closely monitor and keep customers updated on progress and developing of alternate strategy to mitigate the risk.
2. Geopolitical risk: Being a global organisation, we are exposed to changes in the geopolitical environment, as well as other external factors including but not limited to trade tensions, localisation, wars, natural disasters etc. We continue to closely monitor global developments that may pose challenge on sourcing, order fulfilment, TAT, and pressure on bottom line, by timely implementing mitigation plans, as necessary. Business units works closely with the customers and Supply Chain functions to monitor and manage suppliers that may pose supply risk.
3. IT infrastructure and data security: As technology is increasingly central to our business, safeguarding our information assets, ensuring privacy, and reducing human risk are paramount. Like other organisations, we are also operating in cyber climate. We strive to reduce information cyber security risks and continue to deliver great experiences for our customers and value for our shareholder by managing associated risk strategically and through various programs by developing additional measures and BCM to ensure smoother and secure operations.
4. Disruptive norms:
a. Technological changes: The Indian Automotive sector will witness many new regulations in next few years like CAFE, iRDE, FAME, TREM, apart from government?s initiative of exploring alternate fuels (Electrification, Natural Gas, BioFuel blend among others). The changes are spread across market segments. With many fuel technology options available for the end consumer, identification of customer demand and volume will take more effort and time. Bosch being a global leader in automotive technology, the solution is already available with the parent company. Shift to these technologies, will lead to higher imports content in the initial years. Once the company sees an opportunity, based on demand or volumes, it opts for localization. The investments in machinery for production in Bosch Limited will be at a cost, considering the technology transfer fee and higher royalty for new products as compared to old generation. These will also have low replacement requirements in the Aftermarket in the initial years and will may have an adverse financial impact on the Company.
b. Electrification: There have been discussions on electrification by various stakeholders including the Government, OEMs, media, and auto component manufacturers with uncertainty on volume and pace of electrification across market segments. However, the Company, being a global end-to-end technology solution provider in mobility sector, has its own advantage and is working closely with some of the top customers in the industry.
c. Dependency on mobility sector: About 85% of the business is dependent on the auto sector. Performance of the Company, therefore, is dependent on this sector?s growth.
5. Industrial Relations (IR): IR-related risks continue. They include possible risks arising from stoppage of production and the uncertain result of settlement negotiations leading to unpredictable cost structure.IR- related issues continue to be dealt with, in a fair and firm manner. Initiatives such as strengthening of the Front-Line Managers are expected to reduce IR risks in the upcoming settlements. There has been extensive engagement with labour unions and several steps and welfare measures have been taken to ensure safety and well-being of employee
Outlook
India moved to become the world?s 3rd largest automotive producer in the world. Overall, the automotive industry saw an increase of 22% (without 2Wheeler) in automotive production during FY22-23 as compared to FY21-
22. Passenger vehicle production grew by 25% YoY with a strong demand for the SUV segment aided by easing up of semiconductor shortages. In commercial vehicle, HCV segment grew by 34% YoY growing sequentially inching towards pre-Covid highs supported by the favorable macroeconomic environment, replacement demand and pick up in infrastructure, mining, and construction activities. The LCV segment grew by 23% YoY near the previous peak of FY2019 demand continued to remain stable supported by healthy demand from agriculture and the allied sectors, last mile transportation requirements, especially from e-commerce, and the stable domestic macroeconomic environment. For tractors, Industry volumes remained at healthy levels in FY2023 with 11% YoY growth aided by favorable underlying drivers for rural cash flows.
Two-wheeler only grew by 10% YoY on a low base despite improvement in festive season, volumes lag pre-pandemic levels in domestic market while export volumes under pressure amid local currency depreciation and forex availability issues. Three-wheeler segment grew by 14% YoY showing a sequential recovery.
MANUFACTURING AND OTHER FACILITIES Bidadi (Karnataka)
The Bidadi Plant (BidP) located in Ramanagara district, Karnataka spanning an area of 98 acres is one of the key manufacturing destinations of Bosch India. The plant caters to the futuristic and strategic needs of powertrain solutions business ranging from the legendary diesel product "A-pump," which is a 96-year-old product to the latest Lambda Sensors, which is a non-diesel product catering to 2W segment. Other products manufactured at Bidadi include PF pumps, CBx pumps, (state of the art successor of A-Pump in TREM5 and BS6 markets), CP4, Common rail, Glow plug along with latest additions - FCU, Feed pump, CP4iME in the year 2022.
Gearing up for the dynamic changes in the VUCA world and with a quest of being future relevant and future ready, the plant has been rapidly transforming into being a cost competitive and preferred smart manufacturing location enabled by its vision "Diesel & Beyond "and labour model transformation initiatives.
Sustainability being the crux of our operations, ‘Project Vasundhara? was flagged off in 2022 which encompasses the following elements - Zero accidents, Zero Waste to landfill, C02, and water neutrality. The plant is C02 neutral since 2020 and our goal of going water neutral by 2025 has now reached a major milestone with our Rain Water Flarvesting (RWFI) project with a capacity of lOmioL of water storage which will go live in Q2?23 thereby enabling us to be water neutral for 6 months in a year. Captive solar power and green energy share overall consumption.
We continue our efforts in the direction of behavior-based safety and purpose driven solutions with digitalization as an enabler to ensure Zero accidents and the various awards coming in, is a clear testimony to it. BidP has received the prestigious Golden Peacock award and the Bosch global GR award in addition to the recognition from Government of Karnataka namely the EFIS award and the Best Safety Officer Award for the year 2022.
BidP has been in the forefront of digitalization and i4.0 solutions. Continuing this journey, there has been more traction towards implementation of advance analytics & i4.0 solutions than previous years. From detecting defects through Al enabled AVIS vision system to Al based video analytics solution, Bidadi plant is making strong and sustainable i4.0 initiatives enabling BPS drives, G focus, RFID based Kanban system & flow improvements across various value chain. Even in the areas of Logistics, plant has made good progress in terms of digital solutions by implementing solutions like connected dock and yard management solution INTRAC which is a Bosch solution & BidP being the first to implement in Asia and 6th in Bosch world. RPAs, Label validation through SAP etc are some more examples.
Various energy analytics solutions like DEEP sights, NEXUS+ & Al enabled AHU management along with technology upgradations like EC+ fans have helped the plant reduce energy consumption by 7.2% (2926Mwh) for the year 2022. Bidadi Plant also made a mark in this segment by bagging the Cl I Award for both Energy efficiency and Water Management.
The year 2022 was eventful all through with manufacturing milestones like SOP of 3 new products, production of 25m pcs of A pump, 7.5 m pcs. of Rail, 0.5m pcs. of CBx and CP4 each. In terms of developing competency of people in the new areas, BidP could add 5 Global GB CoC & 6 associate memberships helping not only the plant but also other Bosch entities in India.
Our sustained improvement of GPTW score to 82% is a clear reflection of our focus on people. Initiatives like encouraging psychological safety, improving employee experience & engagement and positive leadership under the "Inspired Minds @work," a leading initiative under our BidP vision are the enablers for the sustained improvement in the trust index.
Nashik (Maharashtra)
Nashikplantin Maharashtra was set up in 1972 as the second manufacturing site by Bosch India. The Plant manufactures Common Rail Injectors (CRI) and components including nozzles for both common rail, conventional diesel injectors and off-high way applications. During the year, the Plant has reached its milestone of 40th millionth of Injector and 150th millionth of Nozzles.
During the year under review, the Plant diversified its product lineup from passenger cars to ‘heavy commercial vehicle? application. Under Govt of India?s Aatma Nirbhar Bharat mission and Make in India drive, the Plant has brought localization of the Common Rail Injector CRIN in September 2022.
2022 has been a year of milestones for Bosch India, With Bosch turning a century young in India, year 2022 is extra special for Nashik as it marks its golden jubilee of delivering precision components. Think Precision Think Nashik was the theme of the Golden Jubilee Event.
Nashik plants drive towards ESG is unparallel. The Plant continued its endeavor to use renewable source of energy and green initiatives. The Plant has an overall green energy share of solar energy generation. The plant is the first Bosch Plant in India and fifth worldwide to receive ISO 50001:2001 certification for Energy Management. Globally in the Bosch Group, Nashik Plant was awarded the best in "Energy Efficiency & Environment Category." Miyawaki based tree plantation has been done in 1085 sq. mts. and more is in the planning, around -2500 trees have been planted under /Miyawaki concept. Under CSR drive plant has undertaken afforestation of 50 acres through planting -31 thousand trees to support the biodiversity (the project work has already started in 2022-23).
Plant is certified IATF: 16949. Nashik plants drive for improvements through BPS speed week and extensive use of problem-solving technique continues. Data culture, speed Shainin concept, Scrum as an agile tool is extensively used in the plant successfully. VSO culture has brought further synergy among direct and indirect departments, accountability towards the product/Plant purpose.
Nashik plant was awarded in the field of digitalization by The Automotive Component Manufacturers Association of India (ACMA) on its 8th Atmanirbhar Excellence Awards & Technology Summit, also received Platinum award for Quick Change Over by CM. For its relentless pursuit in the field of the ESG Nashik plant was awarded with Bosch Global award for the sustainability. Plant has improved its statistics on trust index conducted by great place to work. With different strategies like Lakshya. Nxt, Value Chain Strategy and Nashik Reboot, Nashik plant is growing at a steady pace and attracting new products to its portfolio.
Jaipur (Rajasthan)
The Jaipur Plant manufactures VE Pumps and Conventional Injectors (NHA) having applications mainly in Light and Heavy Commercial Vehicles, tractors and other off- highway applications. The plant was established in the year 1999 with VE pump as its first product and started the manufacturing of NHA later in the year 2016. Jaipur plant is known for its operational excellence and has always been a front runner in SQCD (Safety, Quality, Cost, Delivery) parameters. At the same time Jaipur plant is having a very high amount of focus in "Sustainability." In 2022, Jaipur plant expanded its share of green energy from a level of 28% to 40% by installing new Solar facility in the plant. In the area of water conservation, we have recently inaugurated a new water reservoir which is capable of storing 1200KL of rainwater. The Jaipur plant has come a long way in the field of Digitalization. Key technologies like MES, artificial intelligence, RPA, and Data analytics are being adopted to make the systems and processes more robust and free from manual interventions. The team in Jaipur is able to leverage Digitalization for Energy conservation as well, more than 500 MWh of energy was saved in 2022 by using Artificial Intelligence in managing the Air compressors operations.
One of the important part of the strategy at Jaipur Plant is to have engaged and energize employees. Various initiatives and campaigns are being organized in the plant to keep the morale of its people high. The plant was awarded "Cleverle award" (Internal Bosch worldwide award for employee involvement) consecutively second time in row for the year 2021 for having high level of involvement of its employees in giving ideas and suggestions and driving improvement activities across the plant. Other Bosch plants and even
the external industries have considered Jaipur plant as benchmark in this field.
The Jaipur plant team is working on consolidating VE IPN business to Jaipur plant along with team from Higashimatsuyama plant. In 2022, supply of VE components started from Jaipur to Higashimatsuyama and by 2025 entire VE manufacturing will be shifted to Jaipur plant. As a part of future preparedness, the team is working on 3D printing technology which will be important considering the complexity, varieties, and small lot sizes it will be handling. The competency building of metallic 3D printing is in progress and Jaipur plant will be the hub for 3D printing for entire ROIN in future.
Naganathapura (Karnataka)
The Naganathapura Plant produces Spark Plugs, a product produced by the Bosch group for over a century. The Plant became a zero liquid discharge plant with installation of an evaporator along with a boiler and thereby exceeds the requirements specified the Karnataka State Pollution Control Board and has become a benchmark for the same. It is a Carbon Neutral plant since July 2020. Productivity improvement projects were implemented in addition to safety and quality improvement programs. The plant produced its highest ever volumes in 2022 and has made significant progress on its transformation journey of best performance. Digital Transformation continues to be a strategic focus area and the Plant is moving towards improving its digital footprint for Industry 4.0. The Plant is improving its operational excellence through structured implementation of Bosch Production System (BPS) together with focus on low- cost automation. Naganathapura plant was rated highest across all Bosch Plants, Locations in India in the Trust Index, in the GPTW survey conducted in December-2022 by "Great Place to Work (GPTW)" organisation. Spark Plugs business received increased orders for the export market, thereby Naganathapura Plant is transforming itself from being a "Local for Local" to "Local for Global" Plant. For the first time in recent years, the Plant has received export orders for an OE customer across three continents. Family Day on 18.09.2022 and Experience Day on 04.12.2022 were celebrated in the Plant for both current and former employees on the occasion of Centenary celebrations of Bosch presence in India. The Plant has improved on Gender Diversity with >30% of the flexible workforce being women deployed in shopfloor as of 1st quarter of 2023.
Gangaikondan (Tamil Nadu)
Gangaikondan Plant (GanP) in Tamil Nadu is a proven strategic cost competitive location in Asia and has made its presence felt with the competitive labor cost and quality levels, which meet IPN standards. The Plant continues to have product portfolio which comprises of Gasoline power train sensors, Fuel Supply modules, Air management products & Fuel Charge assemblies. Business Units like Sensor Division (SU), Components & Connectors (CC) and Gasoline Injection (Gl), Diesel Injection (Dl) are further trying to enhance in-house manufacturing by relocating of lines from other overseas locations to support the "Local for Local" strategy. As Localization continued to be the key focus area for GanP Growth strategy in line with the Value Chain strategy, 2022 was a very successful year in terms of product relocation. A Fully Automatic Low-pressure Sensor (DSX3) assembly line was relocated from Germany to meet the increasing demand from Local customers to avoid exports. This is the 1st fully automatic line which demonstrates the technical competency of GanP in handling advanced manufacturing technologies of future. Various digitalization projects were completed successfully by leveraging the data. GanP became the 1st plant in Powertrain Solutions to rollout PROCON solution in logistics. Next Generation Workplace (NGW) office was newly inaugurated to provide improved working conditions to associates. Plant received "Excellent" ratings from customers for the sustained delivery and Quality performance. The Plant is highly diversified with competitive women labour model and also first transgender associates onboarded - living DEI initiative. GanP team participated in various external and internal events and won many certifications and accolades. 1st place in Bosch Group in India QCM for Q4.0 project and Golden award in QCFI Problem solving projects are the few to name
Chennai (Tamil Nadu)
The Power Tools facility admeasuring approximately 7,000 sq. meters is located at SIPCOT Industrial Growth Center, Oragadam, Tamil Nadu. At present, the facility caters mainly to the Indian and SAARC markets. Chennai Plant tops the list of largest Power Tools Manufacturer in India locally. It primarily manufactures Small Angle grinders, Large Angle grinders, and Marble cutters, Blowers, Drills, and two- kg Flammers, along with the respective motors. The Plant produces Blowers for the entire global market. The main highlight of the Plant is that 100% of associates on the Assembly lines at the shop floor are women. The Plant is certified for IS014001:2015 and IS045001:2018. The Plant is already a carbon neutral Plant which is mainly achieved by in house solar and purchase of green energy.
The Plant achieved a production volume of > 1.5 mio. Pcs in theyear2022. The Plant is relocated to Plot No.A-20/2, Sipcot Industrial Growth Centre, Oragadam, Sriperumbudur Taluk, Kancheepuram - 602105 premises and has started SOP in new location from Aug 2022. In order to support Local for local and Local for Global, Power Tools Board Management has decided to set up a local Engineering Center this year 2023 which will work for Engineering & development of both Corded and Cordless Power Tools. Currently the Plant is working on several initiatives such as increasing local content by way of intensified localization of components and remain future relevant by embracing digitalization in key business processes to enhance operational efficiency.
Smart Campus
Year 2022 marked the completion of Bosch?s 100-year journey in India. From nurturing the development of the nation?s automotive and manufacturing industries to the green revolution, Bosch India has consistently contributed to the country?s progress. Building on this significant milestone Bosch inaugurated its fully artificial intelligence of things (AloT)-enabled Smart Campus in Adugodi, Bengaluru. With an investment of ?800 crores made over the last five years, this 76-acre campus in the heart of Bengaluru is Bosch?s largest tech center outside of Europe and will host the second-highest number of Bosch employees, worldwide.
From driving insightful strategies to agile methods of working and digital initiatives, Bosch India is well on its way to becoming a data-driven improvement organization and will continue to seize the narrative for the new ways of work. Bosch has conceptualized its smart campus on the three pillars of the Spark.NXT agenda: spark, sustainability, and future. As a leading supplier of technology and services, and an AloT company, Bosch India has leveraged its world- class Al, loT, automation, and digitalization capabilities to develop this campus to pursue its vision for a digital, sustainable, efficient, and self-reliant India. The smart campus underpins Bosch?s ability to develop user-centric key solutions and accelerate its carbon neutrality journey aligned with India?s sustainability targets.
Furtheringits century-longjourney insupport of Atmanirbhar Bharat, Bosch has accelerated its digital strategy to make Indian cities smarter, greener, secure, and connected through rapid urbanization and next-generation infrastructure with an increased focus on localization of our digital portfolio.
INFORMATION TECHNOLOGY AND DIGITAL TRANSFORMATION (IT AND DT)
The IT infrastructure hardware is continuously upgraded to take care of ever-increasing security challenges. This ensures the safeguarding of our data and business operations and being future ready. Innovative solutions were implemented to improve the User Experience with respect to IT Infrastructure and Services.
1. In our quest towards IT cost reduction, we focused on ensuring removal of unused servers, optimization of user licenses based on usage, reconfiguration of mailbox storage and archiving.
2. The Technical Upgrade of Enterprise Application was applied to enhance Security and activation of SAP business functions.
3. Effective data management is key for efficient business operations. Towards this goal we embarked on a continuous Program to improve and sustain data quality. This data will be used for business insights, automated data processing and dashboarding. Another initiative launched towards this goal is the Process Maturity Assessment. This helps identify gaps and improve adherence to standards.
4. Various NextGen workspace solutions like Agile Workplace, Parking, Wayfinder have been implemented on the Mobile platform to enable smart and flexible working. Apart from that, certain web applications were deployed to meet employee needs for Covid management, boost learning and performance management. In order to derive benefits of new technology, progressive web applications have been developed on Low-Code No-Code platform, thereby providing improved user experience and quick turnaround time.
5. We continue to orchestrate our Digital Transformation journey focused on "Knowing Digital to Doing Digital to Being Digital." We have made progress in each of the strategic action pillars - Automation, Data Driven Decisions, People-Capabilities, New and emerging business. Our strategic framework has helped us to drive digital initiatives across multiple functions and business divisions, enabling us to serve our stakeholders better and enhance operational efficiency. This has been possible with our consistent efforts to enhance digital capabilities and foundational topics like infrastructure.
6. Accelerating Adoption of Automation.
7. To drive our operational efficiency, we established Center of Excellence for Automation. This initiative aimed to create a community of citizen developers who could drive automation across our operations. Through this initiative, we have been able to leverage automation to enhance our productivity, reduce costs and improve quality of work. Center of Excellence - Automation has trained 80+ Digital Pioneers as green- belt certified citizen developers. These pioneers have helped us complete 100+ automation projects spread across 8 different functions, resulting in -35,000+ automation hours.
8. We were able to accelerate adoption of automation based on the foundation set by digital fluency, support from Center of Excellence and by conducting Speedathons (location specific accelerator program).
9. Overall impact of the automation CoE can be seen in multi-dimension as below
10. Awards and Accolades:
We are delighted to have received several industry awards and accolades this year for the digital transformation efforts. We were recognized with the best digital transformation in Asia-Pacific region from Bosch CFO. Best innovation award in digital transformation category from Cll is testament of our work and progress.
Based on the work done so far, our transformation journey continues. We will be focusing on analytics to leverage data-driven decisions.
Starting 2022, we extended scope of our strategy to cover entire value chain. We have merged manufacturing strategy and supply chain strategy which was otherwise running parallel to have one holistic comprehensive value chain strategy with a vision to make India a preferred global value chain partner. Our Mission - We. Perform. Transform is a sentence in itself towards reorienting our manufacturing and supply chain process in India. Value chain strategy has 12 strategic action fields with defined KPIs and KPRs focusing on value chain excellence, collaboration, and leadership topics.
We were also able see the realization in plants on the various initiatives of VCS, leveraging the best practices between plants, one common vision strengthened the bonding between plants, to a greater degree; VSO could demonstrate the close working of logistics and Manufacturing with other functions.
i4.0 in Bosch Limited
Connected Industry (i4.0) is speed boaster for production performance and it is one of the key strategic pillars for Now, Next, and Beyond. Under Vale Chain Strategy - Connected Value Chain is one of the strategic action field to strengthen E2E connectivity (KPI: % connectivity and Digital assessment index), Analytics platform to build use case for business benefits and Standard solutions for improving maturity across manufacturing plants for benchmarking performance.
Bosch Production System (BPS)
BPS in Value Chain is one of the strategic action fields in our Value Chain Strategy. Through this, focus is to promote Intrapreneurship, Race to Result and Flexible Value Chain.
BPS Improvable System framework supports achieving Value stream Business requirements by cascading as System CIP Projects, where Benchmark levels of 2 months cycle has been achieved with Agile way of working.
To enable faster realization of projects, Digitalization enablers like My Measures, MES are installed to give more transparency and faster decision making. This helps to achieve Business performance target in an efficient manner.
To increase speed and agility, SCIP projects are also conducted as Speed weeks. The results are fast tracked as the project realization is within 3- 5 days. This is possible by CFT team and guided by a Coach. There are now more than 50 + Speed week Coaches who are groomed to handle complex projects. Focus is given to improve Machine utilization (OEE), Reduce Change over time, improve productivity, reduce Lead time, and improve Material flow for manufacturing and thereby meet the expectations of the Customer and business case.
Co- Create platforms to Share Best practices among different Business units of Bosch has inspired many to learn and adapt the practices to their plants for better Business performance.
To foster Flexibility in Value Chain, Gemba based learning models and "Standardized work Experts" are developed for more Value creation in the Assembly lines.
Carbon Neutrality
Bosch sees itself as a pioneer in climate action and has anchored this aspiration in its sustainability vision. The corresponding strategy includes four levers: improving energy efficiency, generating more energy from renewable sources, expanding the purchase of green electricity and - as a last resort - offsetting unavoidable C02 emissions with Renewable energy certificates (IREC) and Carbon credits.
Bosch limited has adopted a systematic 4E (Energy Audit, Energy re-tuning, Energy Lifecycle and Energy Culture) approach and embracing digitization thro? 4C approach (Connect, Communicate, Consolidate and Cognitive). Across India, 8 locations will benefit from improved energy efficiency projects. The target is to realize 2% reduction year on year.
Under the banner of new clean power, Bosch aims to drive renewable energy generation - both through in-house generation at its company locations and through long-term supply contracts that will ultimately enable the external construction of new photovoltaic plants and wind farms.
The installation of more than 23 MW in-house solar power plants at Indian sites has resulted in 31 GWh of renewable power, which fulfils 21% of the total energy requirement of Indian sites. Further increasing the overall green energy content by 22% through group captive business model will add capacity to the ecosystem by building renew-able energy sources thereby reducing carbon footprint.
At the same time, we are broadening the focus of our activities to also reduce emissions produced outside Bosch?s direct sphere of influence, for example at suppliers, in logistics, or when our products are used - known as scope 3 emissions. We want to reduce these upstream and downstream emissions by 15% in absolute terms by 2030.
Safety
Bosch strives to motivate associates to integrate safety measures in their lives and educate others about those measures. Maintaining and promoting the health & safety of our employees is a very high priority at Bosch. We want to prevent accidents and illnesses from happening in the workplace.
At Bosch, we are driving Value Chain Strategy (VCS) where one of the key strategic action fields is the topic of "Zero Accident." This strategy has 3 pillars: 1. Mindset 2. Responsibility & 3. Engagement.
Under mindset, the objective is to reinforce safety culture across different levels. The initiative of learn to see, trains the employee to observe unsafe acts and unsafe conditions which would enable reporting of near miss cases.
Front Line Manager (FLM) empowerment is an initiative which empowers and motivates the line managers to enhance the safety culture within their respective areas of responsibilities.
Near miss capturing will continue to be the focus across all locations. During the year 2022, more than 9,000 near misses were captured. This has resulted in deploying about 7,800 improvement measures across locations to realize next level of maturity in terms of work safety.
Based on the analysis on the accidents, Near miss cases and opportunities for improvement from learn to see, LIFE model during year 2022, we now have adopted sub action fields, Behavior based safety(BBS) approach, Industrial hygiene to encourage reporting all first aid cases and Automation of safety measure where safety controls with better mistake proof mechanism.
Climate Action
Since 2020, Bosch locations worldwide have been climate neutral (scopes 1 and 2).
Being pioneers in fulfilling climate action aspirations, Bosch has a strategy driven approach that includes four levers: improving energy efficiency, generating more energy from renewable sources, expanding the purchase of green electricity and - as a last resort - offsetting unavoidable C02 emissions with Carbon credits.
Bosch limited has adopted a systematic 4E (Energy Audit, Energy re-tuning, Energy Lifecycle and Energy Culture) approach. Across India, 8 locations will benefit from improved energy efficiency projects. The target is to realize 3% reduction year on year.
As part of strategy - new clean power, Bosch aims to drive renewable energy generation - both through in-house generation at its company locations and through long-term supply contracts that will ultimately enable the external construction of new photovoltaic plants and wind farms.
The installation of more than 30 MW in-house solar power plants at Indian sites has resulted in 34 GWh of renewable power, which fulfils 22% of the total energy requirement of Indian sites.
Further increasing the overall green energy content by 23.7 GWh through the group captive business model which contributes 15%. This will add capacity to the ecosystem by building renew-able energy sources thereby reducing carbon footprint.
At the same time, we are broadening the focus of our activities to also reduce emissions produced outside Bosch?s direct sphere of influence, for example at suppliers, in logistics, or when our products are used - known as scope 3 emissions. We want to reduce these upstream and downstream emissions by 15% in absolute terms by 2030.
13 MW capacity in-house solar power generation at Nashik Plant
Work safety
Bosch strives to motivate associates to integrate safety measures in their lives and educate others about those measures. Maintaining and promoting the health & safety of our employees is a very high priority at Bosch. We want to prevent accidents and illnesses from happening in the workplace.
At Bosch, we are driving Value Chain Strategy (VCS) where one of the key strategic action fields is the topic of "Zero Accident." This strategic action field has 3 sub field: 1. Mindset
2. Responsibility & Accountability and 3. Engagement.
The objective of the sub fields of strategic action is to reinforce safety culture across different levels. The initiative of Behavior Based Safety drive, Industrial hygiene practice is to enhance the reporting of incidents, First aid cases, and to establish the better safety culture among the associates & to improve the safety performance.
Also, the initiative of Front-Line Manager (FLM) empowerment which empowers and motivates the line managers to enhance the safety culture within their respective areas of responsibilities.
In the area of automation of safety measures and digitization of the safety process, we continue to use evolving technology to strengthen safety interlocks in conventional MAE and the objective is to establish a foolproof safety interlock system for the risk prone machines to achieve Zero accident-free
Machines. Also, sustaining the strategy of digitization and horizontal deployment of process like near miss reporting, online work permit system, MAE safety release and chemical management system.
Enhancement of competency among HSE team members and flexible manpower is another focused topic to establish the required competency within their respective areas of responsibilities and contribute to achieve zero accidents.
Near miss capturing will continue to be the focus across all locations. During the year 2022, more than 9900 near misses were captured. This has resulted in deploying about 3,200 improvement measures across locations to realize next level of maturity in terms of work safety.
Quality Management
At Bosch India we strongly believe Quality is our base for success and our true north is ‘Zero Defect? in the entire value chain as covered in our value chain strategy.
Strategic action field focusses mainly on Customer First initiatives, Robust Value Chain and Problem preventing company. Enthusiastic team from across Bosch India is coming together to focus and improve on 9 sub strategic action fields with a clear KPIs to track the progress and adapt. There has been very good improvement in all KPIs that were tracked as part of strategic action field. With temporary labor model, we continue to have high focus on training and skill development of new associates. This is imperative to ensure quality of our products. Quality mindset drive focusing on 14Q basics, FMEA line walks, mini teach sessions etc., were planned and followed to finish.
As future focus, data analytics is being driven across Bosch India to focus on competency enhancement, problem prevention and reduction in failure cost using prediction model with Al and ML.
There has been a 26% reduction in ‘0? km customerincidences in 2022 over previous year (OPY). Logistics incidences were reduced to the tune of 17% (OPY). Despite addition of new products, Internal defect cost were reduced by 9.3% (OPY).
AWARDS AND RECOGNITION
During the year under review, the Company won several awards for excellence. Few such awards are:
| Location/Department | Name of the Award |
| Jaipur Plant | PS Cleverle Award |
| 2nd runner up at 19th Quality Circle Competition ACMA | |
| Bosch CSR project (RO plants in Jaipur) All India Management Association (AIMA) | |
| 3rd Cll National DigiTech competition 2022 | |
| Digitalization in Maintenance. & Energy Management | |
| Cll- National Poka3 award in TOPS competition- Indian Society for Quality - Yoke Competition | |
| 3 awards in TOPS competition- Indian Society for Quality | |
| Platinum award in Supplier Quality Improvement Contest- KOEL | |
| Best EHS Practices for the AY 2022 | |
| First Position in "5th Poka-yoke competition"- ACMA | |
| Gangaikondan Plant | Platinum award at the 17th Cll National Circle Competition for "Human Error Prevention approach in QMM Inspection Lab" Cll- ‘The Champion of Champions trophy |
| Location/Department | Name of the Award |
| Nasik Plant | Bosch Ltd NaP List of Awards- CM National Energy Efficiency Circle Competition 2022 |
| Cll National Award for Excellence in water Management 2022 | |
| Consistent Quality Performer Award- Ashok Leyland | |
| ACMA Atmanirbhar Excellence Award 2022 - Silver Trophy for "Excellence in Digitalization" category | |
| 2nd Prize in 18,h Cll Maharashtra State Level Kaizen Competition | |
| Quality Council of India - Quality Improvement Initiative Competition | |
| Quality Council of India - Quality Quiz Competition (Individual category) | |
| Cll - Maharashtra State Level - QCO competition 1st Runner Up | |
| Bosch Global Sustainability Award | |
| Value Chain Conference- Best Plant Award | |
| Value Chain Conference - 1st place in Shainin Red X | |
| Value Chain Conference- Best"Q Mindset" Plant | |
| PS Award for Best 8D case - Global | |
| Greentech Safety Excellence Award - 2021 | |
| 7,h Cll National Competition in Low-Cost Automation Gold Award | |
| Advanced Problem-Solving Project- Ashok Leyland | |
| Bosch Global Sustainability Award Category - Energy Efficiency & C02 Reduction | |
| ACMA Safety and sustainability award | |
| Safe India Hero Plus award (Individual category) | |
| SEA Award for HSE Leadership (Individual category) | |
| Cll National EHS Safety circle Competition | |
| Managing Risk and Risk assessment at work - Inventicon Award | |
| EHS Sustainability award | |
| 6,h National Competition for Managers 2nd Runner up | |
| Bidadi Plant | Promising Engineer Award Golden Peacock Award: Occupational Health & Safety |
| Gold award at the CCQC forum | |
| Cll National Award | |
| Excellence in Energy Management 2022 | |
| Manufacturing Today Award: Excellence in Health & Safety 2022 | |
| Cll STATE AWARD For Excellence in "BEST USE OF QUALITY TOOL" - 2022 | |
| POKA-YOKE 2022 - NCQC Award | |
| Cll National Competition on Low-Cost Automation | |
| Cll National Competition on Quick Changeover | |
| Indian Society for Quality (ISQ) Award in Advanced Problem solving | |
| Quality Circle Forum of India State Level Quality Convention - 2022 36,h Cll Karnataka State Level Quality Circle Competition - 2022 | |
| 36,h National Convention on Quality Concepts - 2022 | |
| 10,h Cll National Excellence Practice Competition Best Practice Sharing Fest | |
| Best Safe Industry Award by Directorate of Boilers & Factories, Government of Karnataka | |
| Cll EHS Excellence Award | |
| Cll EHS leadership Award | |
| Cll Q-Safety Practice award | |
| Golden Peacock Award by Institute of Directors, India | |
| BOSCH Global Real Estate award - Digitilization (Agni Divya) | |
| Automotive Aftermarket 2-wheeler & Power sports Real Estate | Best Safe Officer Award by Directorate of Boilers & Factories, Government of Karnataka 2nd place for Cll Industrial Innovation Awards 2022 Best SPD Performance award - Mahindra Farm Division 2023 Business Award: TVS 3kW Hub Drive System during 2nd quarter of 2022 Global Safety Award 2022, |
| The Energy & Environment Foundation International Safety Award 2022, | |
| British Safety Council People & Smart Work GR Awards 2022, | |
| Customer Centric RE Services, GR Awards 2022, | |
| Location/Department | Name of the Award |
| CSR | All India Management Association?s (AIMA) 9th Business Responsibility Project Excellence Award to RO Plants project in Jaipur |
| The CSR Universe?s Social Impact Award 2022 for Bosch?s BRIDGE program | |
| Government of Rajasthan?s Bhamashah ‘Shiksha Vibhushan? Award for Bosch?s educational initiatives in Jaipur | |
| NHRD Bangalore Chapter?s ‘CSR Best Practice? Award 2022 to BIF?s Artisan Training Program | |
| Golden Peacock Award for Corporate Social Responsibility (GPACSR) - 2022 [overall award with BRIDGE as a case study] | |
| Shanumangala Lake Rejuvenation Project in Bidadi by Bosch Limited featured as a case study in a book titled "Benchmarking ESG & CSR: A Compendium of Best Practices in ESG & CSR in India" published by the Indian Institute of Corporate Affairs (IICA), New Delhi, in June 2022. | |
| Other | Dun & Bradstreet?s India?s Top 500 Companies 2022 - Top performer in the Auto Components sector |
| Golden Peacock Award for Excellence in Corporate Governance? for the year 2022 under the ‘Automobile Ancillary? | |
| Bosch India Foundation wins NHRD award. The award recognizes BIF?s Artisan Training program for "CSR Best Practice" | |
| Bosch Ltd. was recognised for ‘Special award for partnership and Collaboration for year 2021-22 "at the VECV Annual Supplier Conference -2022 | |
| Golden Peacock Award for Corporate Social Responsibility (CSR)-2022? under the Automotive sector Bosch declared winners of best innovation in the category of smart cities at the 13th annual Aegis Graham Bell Innovation Awards held at NDMC convention centre, New Delhi Finest Skills & Talents (FIST) Award 2022 - Winner of product of the Year: Fire Detection |
DIRECTORS AND KEY MANAGERIAL PERSONNEL Directors Retiring by Rotation
In accordance with the provisions of the Companies Act, 2013 and Articles of Association of the Company. Mr. Markus Bamberger (DIN: 09200475) retires by rotation at the forthcoming Annual General Meeting and is not seeking re-election. As a part of succession planning, Mr. Markus Bamberger vide his letter dated May 02, 2023 has informed that he will not be offering himself for re-appointment at the ensuing Annual General Meeting.
Changes in the Board and Key Managerial Personnel Board of Directors
The Shareholders approved:
(1) The re-appointment of Ms. Hema Ravichandar (DIN: 00032929) as an Independent Director for a second term of five (5) years from September 2, 2022, till September 1, 2027.
(2) The appointment of Ms. Padmini Khare (DIN:
00296388) as an Independent Director from May 19, 2022, till May 18, 2027.
(3) The appointment of Ms. Filiz Albrecht (DIN: 0009607767) as a Non-Executive Director.
(4) The appointment of Mr. Karsten Mueller (DIN:
08998443) as a Whole-time Director from July 1, 2022, to June 30, 2025.
Mr. Soumitra Bhattacharya, Managing Director will superannuate with effect from the close of office hours on June 30, 2023, after an illustrious career of ~ 28 years in the Company.
Based on the recommendations of the Nomination and Remuneration Committee, the Board at its meeting held on March 22, 2023:
1. Appointed Mr. Guruprasad Mudlapur (DIN: 07598798) as Managing Director for a term up to 3 years from July 1, 2023
2. Appointed Mr. Sandeep Nelamangala (DIN: 08264554) as Joint Managing Director from July 1, 2023, to June 30, 2026
Ms. Filiz Albrecht (DIN: 0009607767) resigned as Non-
Executive Director of the Company with effect from 15, April
2023 as she has moved out of Bosch Group.
Based on the recommendations of the Nomination and
Remuneration Committee, the Board at its meeting held on May 10, 2023:
1. Appointed Mr. Stefan Grosch (DIN: 10145827 as a Non- Executive Director.
2. Re-appointed Mr. Gopichand Katragadda (DIN: 02475721) as an Independent Director for a second term of five (5) years from December 4, 2023, to December 3, 2028).
3. Appointed Mr. Soumitra Bhattacharya (DIN: 02783243) as a Director (Non- Executive, Non-Independent) of the Company from August 2, 2023.
4. Took note of the resignation of Mr. Markus Bamberger (DIN: 09200475) as a Chairman and Director of the Company from the close of business hours on August 1, 2023.
5. Appointed Mr. Soumitra Bhattacharya as the Chairman of the Board with effect from August 2, 2023.
The Board places on record their deep appreciation of the valuable contributions made by Ms. Filiz Albrecht, Mr. Soumitra Bhattacharya and Mr. Markus Bamberger to the growth and profitability of the Company.
The Board welcomes Mr. Bhattacharya as Chairman of the Board w.e.f. August 2, 2023, and Mr. Stefan Grosch as a Director.
Key Managerial Personnel
As on the date of this report, the following persons have been designated as the Key Managerial Personnel of the Company pursuant to Section 2 (51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:
(a) Mr. Soumitra Bhattacharya - Managing Director
(b) Mr. Guruprasad Mudlapur - Joint Managing Director and Chief Technology Officer
(c) Mr. Sandeep Nelamangala - Executive Director
(d) Mr. Karsten Mueller- Whole-time Director
(e) Ms. Karin Gilges- Chief Financial Officer
(f) Mr. V. Srinivasan - Company Secretary and Compliance Officer.
Independent Directors and Lead Independent Director
All the independent directors of the Company meet the criteria of independence as provided under sub-section (6) of Section 149 of the Companies Act, 2013 and Regulation 16(l)(b) of SEBI(LODR) Regulations, 2015. Declarations to this effect have been received from them. The Independent Directors of the Company have registered themselves with the databank maintained by the Indian Institute of Corporate Affairs ("MCA") and are either exempt from the requirement to undertake online proficiency self-assessment test or passed the same. The Board is of the opinion that all the Independent Directors are persons of integrity and possess relevant expertise and experience (including proficiency).
The Board of Directors at its meeting held on May 20, 2021, based on the recommendation of Independent Directors, appointed Mr. BhaskarBhatas the Lead Independent Director.
As the Lead Independent Director, he shall be responsible for the following:
(a) Lead exclusive meetings of the IDs and provide feedback to the Chairperson/Board of directors after such meetings;
(b) Serve as liaison between the chairperson of the Board and the IDs;
(c) Have the authority to call meetings of the IDs; and
(d) If requested by shareholders (case to case basis), ensure that he/she is available for consultation and direct communication.
Familiarization Programme for Independent Directors
The Company familiarizes its Independent Directors with their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, etc., through various programmes. These sessions are delivered upon induction of a new Director, as well on an ongoing basis
Regular presentations are made at the Board Meetings by the Executive Directors and other Senior Management persons which gives an opportunity to the Directors to interact with the Management and get an overview of the operations and familiarize with matters related to the Company?s values and commitments. The Directors are provided with all information on regular basis to enable them to have a better understanding of the Company, its operations, and the industry in which it operates. The Directors are also made aware about their roles and responsibilities on regular basis.
For details of familiarization programmes of the Independent Directors and number of hours please refer to the Corporate Governance Report.
Performance Evaluation of Directors
In line with the provisions of the Act and the Listing Regulations, the Nomination & Remuneration Committee and the Board have carried out an annual performance evaluation of its own performance, Committees, and individual Directors.
For details of the performance evaluation including evaluation criteria for Independent Directors, please refer the Corporate Governance Report.
BOARD MEETINGS
During the year under review, five (5) meetings of the Board of Directors were held. The particulars of the meetings and attendance thereat are mentioned in the Corporate Governance Report.
CORPORATE SOCIAL RESPONSIBILITY (CSR) COMMITTEE AND INITIATIVES
As on the date of this report, the CSR Committee comprises of Mr. Bhaskar Bhat (Independent Director) as its Chairman, Ms. Hema Ravichandar (Independent Director), Mr. S.V. Ranganath (Independent Director), Dr. Gopichand Katragadda (Independent Director), Mr. Soumitra Bhattacharya (Managing Director), Dr. Pawan Kumar Goenka (Independent Director) and Ms. Padmini Khare (Independent Director) as its members.
The CSR Committee oversees the Company?s CSR initiatives.
Details of the CSR Committee meetings and attendance thereat forms a part of the Corporate Governance Report.
The Board of Directors at its meeting held on May 20, 2021, amended the CSR policy in line with the provisions of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021. The CSR policy, inter-alia, deals with the objectives of the Company?s CSR initiatives, its guiding principles, thrust areas, responsibilities of the CSR Committee, implementation plan and reporting framework.
Some of the key CSR initiatives during the year under review include the following:
1. Employment-Enhancing Vocational
Skill Development
a. BRIDGE (Bosch?s Response to India?s Development & Growth through Employability Enhancement): Under this unique vocational training initiative, BRIDGE, less-educated youth are reached out to and are imparted industry-relevant, short-term skills development training leading to their entry-level employment in the service industry. This program helps lesser-privileged, unemployed youth get suitable employment soon after the program completion. It is a three-month program with two months of classroom training and one month of On-the-Job Training (OJT). 13271 youth were trained through BRIDGE through 800+ BRIDGE centers across India during this year. Of them, 47% of the beneficiaries were girl students.
b. Skills Training Program for Youth with Disabilities (PwD): To make BRIDGE inclusive, 100 disabled youth were trained in sector specific skills. This included 77 Boys and 23 Girls including 20 of them visually impaired, 53 of them speech and hearing impaired, and 27 of them physically handicapped. 63% of the beneficiaries have been placed so far.
c. Train the Trainer: Trainers are the crucial resource for skilling. One of the key challenges in scaling up vocational training initiatives in India is the shortage of trained trainers who have the competence to impart employability skills to the target youth. To address this gap, Bosch has been offering an exclusive ‘Train the Trainer? (TTT) program. 270 trainers were trained in 2022-23.
d. Paramedics (Care Giver program): This program addresses the need of professional caregivers to the elderly in home and healthcare settings. The focus of the Paramedics-Care Giver program is to develop soft skills and basic medical care skills of the young trainees augmented by on-the-job training opportunities facilitated at hospitals and nursing institutions. 1,700 youth have benefitted from this program.
e. Skill Entrepreneurship: Bosch?s skill
entrepreneurship project titled "Participatory and Research-based Initiative to foster Decent Employment and Entrepreneurial Skills (PRIDE)" was started in July 2022 with an aim of developing socially conscious entrepreneurs in the skilling space. 100 young graduates who have become skill entrepreneurs through this initiative have trained 1,552 less-educated youth on soft skills program to enhance their employability.
f. Rural Micro-Entrepreneurship: The objective of this program is to identify rural youth and women, to impart relevant skills which would make them employable and enterprising. Through this initiative Bosch is creating rural micro entrepreneurs in the areas of Automotive, Ayurveda and Beautician trainings. 463 youth have benefitted through this program during the year.
g. NGO Stakeholder Capacity Building: Bosch?s "NGO Capacity Building Program" aims to enhance knowledge and capabilities of participants regarding NGO/ NPO governance, management, and organizational sustainability. This program, which includes three modules, also contributes to increased operational effectiveness and social impact of the NGOs. This year, 47 NGOs benefitted from this program.
h. Women and Tribal Livelihood Empowerment:
Through the ‘Kishori Manch? project in Jaipur, Bosch supports the overall development of adolescent girls focusing on improvement of their life skills, personal health hygiene, menstrual hygiene, and better understanding of their duties and rights through sessions such as communications, presentation, and leadership. SHGs were also supported across locations. Bosch also supported the introduction of a "Tribal Treasures on Wheels" Food Truck project for ease of mobile sale in Gangaikondan, which benefited 27 members of local tribal communities through new income generation. This was appreciated by the Tirunelveli District Administration.
2. HEALTH & HYGIENE SUPPORT TO COMMUNITY
a. Cataract Surgery Program: The cataract surgery by Bosch has been designed to support the rural elderly who face the issue of cataract. 3480 deserving and needy beneficiaries have benefitted from this program in FY2022-23. Bosch partnered with LAICO (Lions Aravind Institute of Community Ophthalmology), the training and consulting arm of Aravind Eye Care Systems, which is one of the best institutes in the country & has received global accreditation for its work and services. The surgeries are done at highly subsidized costs which includes both pre-operative and post operative medication.
b. RO Plants: The RO Plants by Bosch provide access to clean drinking water in areas in and around Jaipur where there is an acute scarcity of drinking water due to high fluoride content. 2 RO Plants was built this year, adding the total count to 33 RO Plants since 2008 benefitting 22,500 families and 100,000 lives each year.
c. Other Healthcare interventions: Other
interventions included supporting NQAS Certification Project for PHC in Gangaikondan, extending operational support to Adugodi PHC and Akshaya Patra Mid-Day Meals Program in Bangalore andsupportfor Multi pie Sclerosis Society of India (MSSI) on their sustainability initiatives.
3. Environment Sustainability & Water Conservation
a. Lake Rejuvenation Projects: The Shanumangala
Lake was taken up for rejuvenation with an object of protecting the lake from getting encroached and conserving it for use of future generations, enhance the water holding capacity by removing the silt and develop the lake into the receptacle for rainwater harvest, develop green cover in the lake fore shore as an oxygen rich pocket and restore bio-diversity inclusive of flora & fauna. The lake is being maintained by Bosch over the past 3 years including this year. New interventions this year included initial steps of rejuvenating the Rayasandra Lake at Naganathapura and Sheshagi rihalli Lake.
b. Afforestation Project: To help combat climate change, Bosch commenced Afforestation project with initial concentrations in Nashik, Jaipur and Chennai resulting in the plantation of 30,000, 10,000 and 1,000 saplings, respectively. Bosch CSR Team collaborates with local government agencies to facilitate these large-scale plantation of forest saplings in common lands and agricultural fields leading to diffused and broad-based growth of trees and enhancement of greenery. In addition, Bosch has undertaken the Agro Forestry project in Bidadi which includes encouraging farmers to plant fruit-yielding trees in the borders of their agricultural lands that enhances their income as well as contribute to reduced carbon footprints in the locality.
c. Other Environmental Initiatives: Other interventions include support for renovation of Percolation Tank at Torandongari in Nashik, maintenance at RIICO Circle in Jaipur and Tree Plantation Drives at multiple location.
4. Quality Education: Infrastructure, Value Education
& Creative Learning Program
a. School Infrastructure Support near Hubli:
Bosch has developed new educational facilities in three remote areas near Hubli - Biriampali, Parkarwada and Chaapali. These facilities include a newly built Anganwadi at Biriampali and two new Government school classrooms, one in Parkarwada and the other in Chaapali, in Joida Taluk, Karwar District. These new classrooms come as a relief to the students (several of them from tribal backgrounds) and teachers there who were managing many more children in fewer classrooms than they can accommodate.
b. School InfrastructureSupportnear Belagavi: In another location, a RO Plant was installed, and two classrooms were upgraded to ‘Smart Classrooms? at the Government Model Primary School in Yergatti village near Belagavi in Karnataka. This upgradation included new furniture and smart interactive boards, 500 LPH Clean Drinking Water with 1000 Ltr SS Water storage tank and CCTV installations to make the school premises more secure. This initiative is to minimize drop out from the Government School and raising its standards at par with private schools.
c. Other education-related initiatives: Other
educational initiatives included Science & Practical Learning program support to identified schools through Agastya International Foundation, Creative Learning program support to identified schools through ArtSparks, Value Education program support to identified Schools through CMCA, support for Nashik Run that benefits needy
children through education and community welfare in Nashik and Children?s Program and Public Engagement supporting Bengaluru Traffic Police?s initiatives for improved traffic management.
5. INTEGRATEDVILLAGEDEVELOPMENTINITIATIVES
a. Community Development Centers (CDCs):
‘Community Development Center (CDC)? is a new initiative by Bosch designed to serve as a nodal center for driving positive change in the villages around Bosch Plants. 5 CDCs have been set up by Bosch through Bosch India Foundation in Bidadi, Nashik, Jaipur, Gangaikondan and Chennai. These centers offer various training and capacity building opportunities for the village community including access to IT facilities and support to avail various Government schemes benefiting the citizens and needy people.
Annual Report on Corporate Social Responsibility Activities of the Company is enclosed as Annexure ‘B? to this Report.
AUDIT COMMITTEE
As on the date of this report, the Audit Committee comprises of Mr. S.V. Ranganath (Independent Director) as its Chairman, Dr. Pawan Goenka (Independent Director), Mr. Bhaskar Bhat (Independent Director), Ms. Hema Ravichandar (Independent Director), Mr. Markus Bamberger (Non-Executive Director & Chairman) Dr. Gopichand Katragadda (Independent Director) and Ms. Padmini Khare (Independent Director) as its members.
The Members of the Committee possess accounting and/ or financial management knowledge and expertise. The Company Secretary of the Company is the Secretary of the Committee.
During the year under review, the Board accepted all the recommendations of the Audit Committee.
In pursuance of the amended SEBI Listing Regulations effective from January 01, 2022, members of the audit committee who are Independent Directors approve the related party transactions.
Details of the roles and responsibilities, particulars of meeting and attendance thereat are mentioned in the Corporate Governance Report.
SUBSIDIARY, ASSOCIATE AND JOINT
VENTURE COMPANIES
Subsidiary Companies
MICO Trading Private Limited (MTPL)
The summary of financial nos. of MICO Trading Private Limited (MTPL) for the FY 2022-23 are given below:
(TINR)
| Particulars | 1 FY 2022-23 | FY 2021-22 |
| Total Revenue | 43 | 52 |
| Profit/(Loss) before tax | (2) | (15) |
| Profit/(Loss) after tax | (2) | (15) |
The Audited Statement of Accounts of MTPL can be accessed on the website of the Company at www.bosch.in under the "Shareholder Information" section.
Robert Bosch India Manufacturing & Technology Private Limited (RBIM)
RBIM was incorporated as a subsidiary of Bosch Ltd. in 2020, with the objective to manufacture automotive products including automotive and electrical components. The company is yet to start commercial activities.
The summary of financial nos. for the FY 2022-23 are given below:
(TIN R)
| Particulars | 1 FY 2022-23 | FY 2021-22 |
| Total Revenue | - | - |
| Profit/(Loss) before tax | (2,050) | (1,550) |
| Prof it/(Loss) after tax | (2,050) | (1,550) |
The Audited Statement of Accounts of RBIM can be accessed on the website of the Company at www.bosch.in under the "Shareholder Information" section.
Associate Companies
Newtech Filter India Private Limited (NTFI)
The Company holds 25% and Robert Bosch Investment Nederland B.V. holds 75% of the paid-up share capital of Newtech Filter India Private Limited.
NTFI is the manufacturer of automotive filters, selling their products to the Company, which further sells the same to end customers.
The financial performance of NTFI during FY 2022-23 is as under:
(Ml NR)
| Particulars | I FY 2022-23 | FY 2021-22 |
| Turnover | 1,006 | 834 |
| Profit/(Loss)before tax | 32 | (23) |
| PBT % on Turnover | 3.2% | -2.8% |
Autozilla Solutions Private Limited (Autozilla)
The Company holds 26% in Autozilla Solutions Private Ltd., a Hyderabad based start-up, offering B2B e-commerce solutions for manufacturers, sellers, and buyers of automobile spare parts, as part of an initiative to establish effective digital ecosystem around vehicle workshops.
The financial performance of Autozilla during FY 2022-23 is as under:
(Ml NR)
| Particulars | I FY 2022-23 | FY 2021-22 |
| Turnover | 23 | 14 |
| Profit/(Loss)before tax | (31) | (12) |
| PBT % on Turnover | -135% | -86% |
Joint Venture Company
PreBo Automotive India Private Limited
Prebo Automotive Private Limited ("PreBo") is a Joint Venture Company in which the Company holds 40% of the paid-up share capital. PreBo is in the business of manufacturing/ assembly and supply of mechanical and electromechanical components and assemblies for automobile and nonautomobile industry.
The financial performance of PreBofor FY 2022-23 is as under:
(Ml NR)
| Particulars | FY 2022-23 | FY 2021-22 |
| Total Revenue | 1,218 | 601 |
| Profit/(Loss) before tax | 56 | 32 |
| PBT % on Turnover | 4.6% | 5.3% |
A separate statement containing the salient features of the financial statement of the aforementioned Subsidiaries, Associate and Joint Venture is enclosed as Annexure ‘E? to this Report.
REMUNERATION POLICY
The Nomination and Remuneration Policy, inter-alia, provides for criteria and qualifications for appointment of Director, Key Managerial Personnel and Senior Management, Board diversity, remuneration to Directors, Key Managerial Personnel, etc. The policy can be accessed at the following link: https://www.bosch.in/media/our company/shareholder information/2022/investor service request forms/nrcpolicyboschltd.pdf
PARTICULARS OF EMPLOYEES
Disclosures pertaining to remuneration of employees and other details, as required under Section 197(12) of the Act and rules framed thereunder is enclosed as Annexure ‘G? to this Report.
The information in respect of employees of the Company required pursuant to Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended will be made available before the Annual General Meeting in electronic mode to any shareholder upon request sent at secretarial.corp@in.bosch.com.
RISK MANAGEMENT
The Company follows a specific, well-defined risk management policy which is integrated with its operations. The Policy has been developed after taking cognizance of the relevant statutory guidelines, Bosch Guidelines on risk management, empirical evidence, stakeholders? feedback, forecast and expert judgment. The Company has Risk Management Committee (RMC) consisting of Board Members to examine and review the risk inventory as well certify the risk mitigation plan. The RMC functions as per Regulation 21 of the SEBI Listing Regulations. Further to RMC, the other subordinate risk management teams comprising of Senior Executives of the Company addressing functional, operational, and strategic risk management in their corresponding area of responsibility covering overall risks in the area of commercial, technical, information technology and statutory compliance. The Committee inter-alia provides for the following: a) In-built pro-active processes within the Risk Management Manual for reporting, evaluating, and resolving risks; b) Identifying and assessing risks associated with various business decisions before they materialize. Take informed decisions at all levels of the organization in line with the Company?s risk appetite;
c) Ensuring protection of shareholders? stake by establishing an integrated Risk Management Framework for identifying, assessing, mitigating, monitoring, evaluating and reporting all risks; d) Strengthening Risk Management through constant learning and improvement; e) Adoption and implementation of risk mitigation measures at every level in order to achieve long- term goals effectively and sustainably; f) Regularly review Risk Tolerance levels of the Company as they may vary with change in the Company?s g) strategy; and h) Ensuring sustainable business growth with stability. Further to this, the Company has constituted a Corporate Risk Council to support RMC with assessing the risk situation. This includes periodical review, exchange of relevant information as well as the submission of statements and evaluation on risk related subjects.
WHISTLE BLOWER POLICY/VIGIL MECHANISM
The Company has a Whistle Blower Policy, which includes vigil mechanism for dealing with instances of fraud and mismanagement.
Details of the Whistle Blower Policy have been mentioned in the Corporate Governance Report. The Whistle Blower Policy has also been uploaded on the website of the Company and can be accessed at the following link: https://www.bosch. in/media/our company/shareholder information/2018/ whistle blower policy-3.pdf.
RELATED PARTY TRANSACTIONS
Prior approval of the Audit Committee is obtained for all related party transactions. The Audit Committee accords omnibus approval for Related Party Transactions which are in ordinary course of business, foreseen, repetitive in nature and satisfy the arm?s length principles. The Audit Committee reviews, on a quarterly basis, the details of the Related Party Transactions entered pursuant to the aforementioned omnibus approval.
Additionally, the Company obtains a half yearly certificate from a Chartered Accountant in Practice confirming that the related party transactions during the said period were in ordinary course of business, repetitive in nature and satisfy the arm?s length principles.
The details of Related Party Transactions under Section 188(1) of the Act required to be disclosed under Form AOC
- 2 pursuant to Section 134(3) of the Act is enclosed as Annexure ‘F? to this Report.
The Company has framed a Policy for determining materiality of Related Party Transactions and dealing with Related Party Transactions. During February 2022, the Policy has been revised in line with regulatory amendments in SEBI Listing Regulations. The said Policy is hosted on the website of the Company and can be accessed at the following link: https://www.bosch.in/media/ our company/ shareholder information/2022/related party transaction policy 09022022.pdf.
ENERGY CONSERVATION, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO
The report in respect of conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134 of the Act read with Rule 8 of Companies (Accounts) Rules, 2014, is enclosed as Annexure ‘H? to this Report.
AUDITORS Statutory Auditor
Pursuant to provisions of Section 139 of the Act read with the Companies (Audit and Auditors) Rules, 2014, Messrs. S. R. Batliboi & Associates LLP (member firm of Ernst & Young) (Firm Regn. no. 101049W/E300004)), were appointed as Statutory Auditors of the Company for a term of 5 years, to hold office from the conclusion of 70th Annual General
Meeting held on August 3, 2022, until the conclusion of 75th Annual General Meeting to be held in 2027.
The Audit Committee annually reviews and monitors the performance, independence of the Statutory Auditors and effectiveness of audit process.
The Auditors have issued a modified opinion on the Financial Statements, for the financial year ended March 31,2023. The said Auditors? Report(s) for the financial year ended March 31, 2023, on the financial statements of the Company forms part of this Annual Report.
Auditor Observation:
1. As disclosed in note 36 to the accompanying standalone financial statements, the Company has not obtained prior approval from its shareholders as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 in respect of related party transactions of Rs 11,999 Million. Pending final outcome of the Company?s actions as more fully disclosed in the said note, we are unable to comment on the possible consequential effects thereof.
Management Response:
Bosch Limited is a subsidiary of Robert Bosch GmbH, Germany ("RB GmbH") which has its presence across the globe. Bosch Group is a leading global supplier of technology and services in the automotive sector. The Company is a listed subsidiary of RB GmbH in India. RB GmbH, the ultimate holding company, holds 67.76% equity stake in the Company through Robert Bosch Internationale Beteiligungen AG.
The Company enters into transactions for sale and purchase of goods and raw materials and for availing / rendering services from / to RB GmbH & other Bosch Group companies, being related parties as defined under Regulation 2(1)(zb) of the SEBI LODR Regulations. Such transactions are carried out in the ordinary course of business and at arm?s length basis. As a part of related-party transactions, RB GmbH has granted the Company access to Bosch Group?s synergies, state of the art products & technologies and competencies which are essential for the Company to carry out its business operations, including but not limited to manufacturing activities. In the absence of such transactions the Company would no longer have access to Bosch Group products, licenses or technologies or the use of "Bosch" and other Bosch Group-owned brands.
As a part of this set up the Company has been buying components, viz., Electronic Control Units ("ECUs") from its fellow subsidiary company in India, viz., Bosch Automotive Electronics India Pvt. Ltd. ("RBAI"), a related party, since 2009. These components are then sold as a part of the overall Fuel Injection Equipment ("FIE") system supplied to Original Equipment Manufacturers ("OEMs") in India.
At the beginning of F.Y. 2022-23, the total value of the transactions forecast with RBAI were approx. Rs 978 crores for F.Y. 2022-23. Since the forecast was within the materiality threshold of Rs 1,000 crores, as prescribed under Regulation 23(1) of the SEBI LODR Regulations, there was no requirement of obtaining a shareholders? approval in terms of Regulation 23(4) of the SEBI LODR Regulations. The Audit committee also granted omnibus approval for the proposed transactions with RBAI for F.Y. 2022-23 in terms of Regulation 23(3) of the SEBI LODR Regulations.
However, with the easing of semiconductor supply- chain issues at the beginning of 2023, there was better fulfillment of pending and new orders of ECUs which are sold as a part of FIE systems by the Company to OEMs. The sudden & unexpected high increase in demand from OEMs in the fourth quarter of F.Y. 2022- 23, led to higher purchases of ECUs from RBAI, which was unanticipated, and the value of transactions with RBAI for F.Y. 2022-23 crossed the threshold limit of Rs 1,000 crores in the fourth quarter of F.Y. 2022-23.
In terms of Regulation 23(4) of the SEBI LODR Regulations, since the transaction with RBAI was deemed to be material, the Company was required to obtain approval from its shareholders prior to entering into these transactions.
The Board of the Company vide its resolution dated May 10, 2023, has resolved that the Company is required to obtain a post-facto approval from its shareholders at the ensuing Annual General Meeting scheduled on August 01, 2023.
It is relevant to note that as soon as the inadvertent potential non-compliance came to the attention of the Company, the Company immediately took steps to rectify the inadvertent non-compliance. The non- compliance by the Company is not deliberate. The Company has not made any undue profit or avoided any loss on account of the non-compliance and no harm or loss has been caused to any investor.
In view of the above, the Company seeks to suo-moto and voluntarily settle all proceedings that may arise and engage with the Securities and Exchange Board of India on such terms as may be mutually acceptable, in accordance with the applicable regulations on settling the same by consent in full and final settlement of any and all proceedings that may be proposed or contemplated in this respect.
2. The Company?s internal control with respect to compliance with provisions of related party transactions prescribed under Regulation 23 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 as detailed in Note 36 of the accompanying standalone financial statements were not operating effectively which could potentially result in a material misstatement in the standalone financial statements.
Management Response:
In our opinion, except for the possible effects of the material weaknesses described above on the achievement of the objectives of the control criteria, the Company has maintained, in all material respects, adequate internal financial controls with reference to these standalone Ind AS financial statements and such internal financial controls with reference to standalone
Ind AS financial statements were operating effectively as of March 31, 2023, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note issued by ICAI.
Auditor Observation
3. Except for the matter described in the Basis for Qualified Opinion paragraph and except that the Company does not have server physically located in India for the daily backup of the books of account and other books and papers maintained in electronic mode, in our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books;
Management response:
The books of accounts maintained in electronic mode is currently being backed-up on a daily basis on a server which is located in Bosch Germany and in Singapore. The Company is evaluating a cost- effective solution for backing-up the relevant data on a daily basis on a server which is physically located in India. The Company expects that the same would be implemented in FY 2023-24.
Cost Audit & Cost Auditors
The Board of Directors, on recommendation of the Audit Committee, appointed M/s. Rao, Murthy & Associates, Cost Accountants, Bengaluru (Registration No.000065) as Cost Auditors to audit the following cost records of the Company for the Financial Year 2023-24 in terms of the provisions of Section 148 of the Companies Act, 2013.
| Sr. No. | Name of Product(s)/ Service(s) | Industries/ sectors/ product services (For MCA Reporting) | CETA Heading (Wherever Applicable) | No. of tariff items/ Products/ Services |
| 1 | (a) Spark Plugs | Electricals or electronic machinery | 8511 | 2 |
| (b) Glow Plugs | ||||
| 2 | (a) Nozzle Holder Assembly | Other machinery and Mechanical Appliances | 8409 | 3 |
| (b) Components | ||||
| (c) Fuel Rail Assembly | ||||
| 3 | (a) LAG, SAG Rotary Drill, Hammer, Marble Cutter | Other machinery and Mechanical Appliances | 8467 | 2 |
| (b) Impact Drilling Machine | ||||
| 4 | (a) Fuel Injection Pump | Other machinery and Mechanical Appliances | 8413 | 1 |
The Audit Committee has also received a Certificate from the Cost Auditors certifying their independence and arm?s length relationship with the Company.
In terms of the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditor requires ratification by the Members of the Company.
In terms of the requirements of the said section, the members are required to ratify remuneration payable to the Cost Auditors. Accordingly, resolution ratifying the remuneration payable to M/s. Rao, Murthy & Associates will form part of the Notice convening the 71st Annual General Meeting.
As per Section 148 (1) of the Companies Act, 2013, the Company is required to maintain Cost Records. Accordingly, Cost Records and Cost Accounts are duly maintained by the Company.
Secretarial Auditor
Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed Mr. Pramod S.M, Partner BMP and Co. LLP, Company Secretaries, for the Financial Year 2022- 23. The Report of the Secretarial Auditor is enclosed as Annexure ‘D? to this Report. The Secretarial Auditors? Report have the following observations.
Auditor Observations:
a) Non-Compliance of Regulation 23(4) of SEBI (LODR) Regulations 2015: During the FY 2022-23, the Company has entered into related party transactions with Bosch Automotive Electronics India Private Limited which is in excess of rupees one thousand crore without the prior approval of the Shareholders. The Audit Committee of the Company has accorded its approval/ ratified the transaction ,but since this transaction is a material related party transaction, the prior approval of shareholders of the Company has not been obtained as per the requirements of Regulation 23(4) of SEBI (LODR) Regulations, 2015. The shareholder approval for this transaction shall be obtained by the Company at the ensuing General Meeting.
b) Deviations from Approvals Limits of RPT: The Audit Committee in its meeting held on 13th February 2023 had consented in a revision on its existing omnibus approval and the total transaction limit was increased to mlNR 89,853. During the the quarter ended March 31, 2023, certain transactions had deviated from the approved limits due to high last quarter purchases owing to high customer demand. The deviated transactions have been ratified by the Audit Committee on May 10, 2023.
Management response to points a) & b):
Bosch Limited is a subsidiary of Robert Bosch GmbH, Germany ("RB GmbH") which has its presence across the globe. Bosch Group is a leading global supplier of technology and services in the automotive sector. The
Company is a listed subsidiary of RB GmbH in India. RB GmbH, the ultimate holding company, holds 67.76% equity stake in the Company through Robert Bosch Internationale Beteiligungen AG.
The Company enters into transactions for sale and purchase of goods and raw materials and for availing / rendering services from / to RB GmbH & other Bosch Group companies, being related parties as defined under Regulation 2(l)(zb) of the SEBI LODR Regulations. Such transactions are carried out in the ordinary course of business and at arm?s length basis. As a part of related-party transactions, RB GmbH has granted the Company access to Bosch Group?s synergies, state of the art products & technologies and competencies which are essential for the Company to carry out its business operations, including but not limited to manufacturing activities. In the absence of such transactions the Company would no longer have access to Bosch Group products, licenses or technologies or the use of "Bosch" and other Bosch Group-owned brands.
As a part of this set up the Company has been buying components, viz., Electronic Control Units ("ECUs") from its fellow subsidiary company in India, viz., Bosch Automotive Electronics India Pvt. Ltd. ("RBAI"), a related party, since 2009. These components are then sold as a part of the overall Fuel Injection Equipment ("FIE") system supplied to Original Equipment Manufacturers ("OEMs") in India.
At the beginning of F.Y. 2022-23, the total value of the transactions forecast with RBAI were approx. Rs 978 crores for F.Y. 2022-23. Since the forecast was within the materiality threshold of Rs 1,000 crores, as prescribed under Regulation 23(1) of the SEBI LODR Regulations, there was no requirement of obtaining a shareholders? approval in terms of Regulation 23(4) of the LODR Regulations. The Audit committee also granted omnibus approval for the proposed transactions with RBAI for F.Y. 2022-23 in terms of Regulation 23(3) of the LODR Regulations.
However, with the easing of semiconductor supply- chain issues at the beginning of 2023, there was better fulfillment of pending and new orders of ECUs which are sold as a part of FIE systems by the Company to OEMs. The sudden & unexpected high increase in demand from OEMs in the fourth quarter of F.Y. 2022- 23, led to higher purchases of ECUs from RBAI, which was unanticipated, and the value of transactions with RBAI for F.Y. 2022-23 crossed the threshold limit of Rs 1,000 crores in the fourth quarter of F.Y. 2022-23.
In terms of Regulation 23(4) of the LODR Regulations, since the transaction with RBAI was deemed to be material, the Company was required to obtain approval from its shareholders prior to entering into these transactions.
The Board of the Company vide its resolution dated May 10, 2023, has resolved that the Company is required to obtain a post-facto approval from its shareholders at the ensuing Annual General Meeting scheduled on August 01, 2023.
It is relevant to note that as soon as the inadvertent potential non-compliance came to the attention of the Company, the Company immediately took steps to rectify the inadvertent non-compliance. The non- compliance by the Company is not deliberate. The Company has not made any undue profit or avoided any loss on account of the non-compliance and no harm or loss has been caused to any investor.
In view of the above, the Company seeks to suo-moto and voluntarily settle all proceedings that may arise and engage with the Securities and Exchange Board of India on such terms as may be mutually acceptable, in accordance with the applicable regulations on settling the same by consent in full and final settlement of any and all proceedings that may be proposed or contemplated in this respect.
Auditor Observations:
c) Maintenance of physical servers in India as per Rule 3 of the Companies (Accounts) Rules, 2014:
As per the requirements of Rule 3 of the Companies (Accounts) Rules, 2014, the Company needs to maintain its servers for a daily back-up physically in India, but the Company does not have server physically located in India. However proper books of account as required by law have been kept by the Company.
Management response:
The books of accounts maintained in electronic mode is currently being backed-up on a daily basis on a server which is located in Bosch Germany and in Singapore. The Company is evaluating a cost- effective solution for backing-up the relevant data on a daily basis on a server which is physically located in India. The Company expects that the same would be implemented in FY 2023-24.
REPORTING OF FRAUD
During the year under review, the Statutory Auditors, Cost Auditors and Secretarial Auditor have not reported any instances of fraud committed in the Company by its Officers or Employees to the Audit Committee under Section 143 (12) of the Act.
DIRECTORS? RESPONSIBILITY STATEMENT
Pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors report that:
i. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;
ii. they have selected and consistently applied accounting policies and have made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and the profit of the Company for that period;
iii. properandsufficientcarehasbeentakenfor maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the
Company and for preventing and detecting fraud and other irregularities;
iv. the annual accounts have been prepared on a ‘going concern? basis;
v. proper internal financial controls are in place and that such controls are adequate and are operating effectively; and
vi. proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.
DETAILS OF LOANS, ADVANCES, GUARANTEES OR INVESTMENTS
Particulars of loans given, investment made, or guarantee given or security provided and the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient of the loan or guarantee or security are provided in Note Nos. 6 and 7 to the Financial Statements.
Further, particulars of loans and advances in the nature of loans to subsidiaries, associates and firms/companies in which directors are interested is given below:
(MioRs )
| Particulars | Name of the Firm/ Company | Amounts at the year end and the maximum number of loans/ advances/ Investments outstanding during the year. |
| Loans and advances in | Robert Bosch India | 25 |
| the nature of loans to | Manufacturing and | |
| subsidiaries | Technology Private Limited | |
| Loans and advances in the nature of loans to associates | Nil | NA |
| Loans and advances in | Bosch Automotive | 2,500 |
| the nature of loans to | Electronics India | |
| firms/companies in which directors are interested | Private Limited |
DEPOSITS
During the year under review, there were no deposits accepted by the Company as per the provisions of Companies Act, 2013.
MATERIAL CHANGES AND COMMITMENTS
There were no material changes and commitments between the end of the year under review and the date of this report affecting the financial position of the Company.
EXTRACT OF ANNUAL RETURN
Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2023, is available on the Company?s website at https://www.bosch.in/media/ our companv/shareholder information/2023/annual return-2023.pdf
SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
The company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.
1. Number of complaints of sexual harassment received in the financial year (April 1, 2022, to March 31, 2023):3
2. Number of complaints disposed off during the financial year: 3
3. Number of cases pending for more than 90 days: Nil
4. Number of workshops or awareness programmes carried out in connection with sexual harassment: 2
5. Remedial measures taken by the Company: continued awareness mailers / sessions
BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT
In terms of the requirements of Regulation 34 (2) (f) of the Listing Regulations, Business Responsibility and Sustainability Report in the prescribed format forms a part of this Annual Report as Annexure ‘A? to this Report
CORPORATE GOVERNANCE
A report on Corporate Governance in terms of the requirements of the Listing Regulations and a certificate from the Practicing Company Secretary, forms part of this Annual Report as Annexure - ‘C? to this Report.
INSOLVENCY AND BANKRUPTCY CODE, 2016(31 OF 2016)
There was no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the financial year.
SECRETARIAL STANDARDS
The applicable Secretarial Standards i.e., SS - 1 and SS - 2, relating to "Meeting of the Board of Directors" and "General Meetings", respectively, have been duly complied by the Company.
GENERAL
Your Directors state that no disclosure or reporting is required i n respect of the followi ng items as there were no transactions/ events on these items during the year under review:
i. Issue of Equity Shares with differential rights as to Dividend, voting or otherwise.
ii. Issue of Shares (including Sweat Equity Shares) to employees of the Company under any scheme.
iii. Significant or material orders passed by the Regulators or Courts or Tribunals which impact the going concern status and the Company?s operations in future.
iv. Voting rights which are not directly exercised by the employees in respect of Shares for the subscription/ purchase of which loan was given by the Company (as
there is no scheme pursuant to which such persons can beneficially hold shares as envisaged under Section 67 (3) (c) of the Act).
v. Difference between amount of valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions.
FOREIGN EXCHANGE MANAGEMENT (NON-DEBT INSTRUMENTS) RULES, 2019
The Company has complied with Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 and certificate from the auditor?s certifying compliance of the said provisions has been obtained.
ACKNOWLEDGEMENTS
The Directors express their gratitude to the Government of India and State Governments of Karnataka, Maharashtra, Rajasthan, and Tamil Nadu for their continued cooperation extended to the Company. The Directors also thank all customers, dealers, suppliers, banks, members, and
business partners for the excellent support received from them. The Directors would also like to acknowledge the exceptional contribution and commitment of the employees of the Company during the year under review.
CAUTIONARY STATEMENT
Statements in the Board?s Report and the Management Discussion & Analysis describing the Company?s objective, expectations or forecasts may be forward looking within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed in the statement.
| For and on behalf of the Boai | rd of Directors |
| Soumitra Bhattacharya | Guruprasad Mudlapur |
| DIN:02783243 | DIN:07598798 |
| Managing Director | Joint Managing Director & Chief Technology Officer |
| Place: Stuttgart, Germany Date: May 10, 2023 |
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ATTENTION INVESTORS
- Prevent Unauthorized Transactions in your demat / trading account Update your Mobile Number/ email Id with your stock broker / Depository Participant. Receive information of your transactions directly from Exchanges on your mobile / email at the end of day and alerts on your registered mobile for all debits and other important transactions in your demat account directly from NSDL/ CDSL on the same day." - Issued in the interest of investors.
- KYC is one time exercise while dealing in securities markets - once KYC is done through a SEBI registered intermediary (broker, DP, Mutual Fund etc.), you need not undergo the same process again when you approach another intermediary.
- No need to issue cheques by investors while subscribing to IPO. Just write the bank account number and sign in the application form to authorise your bank to make payment in case of allotment. No worries for refund as the money remains in investor's account."
www.indiainfoline.com is part of the IIFL Group, a leading financial services player and a diversified NBFC. The site provides comprehensive and real time information on Indian corporates, sectors, financial markets and economy. On the site we feature industry and political leaders, entrepreneurs, and trend setters. The research, personal finance and market tutorial sections are widely followed by students, academia, corporates and investors among others.
Risk Disclosure on Derivatives
- 9 out of 10 individual traders in equity Futures and Options Segment, incurred net losses.
- On an average, loss makers registered net trading loss close to Rs. 50,000.
- Over and above the net trading losses incurred, loss makers expended an additional 28% of net trading losses as transaction costs.
- Those making net trading profits, incurred between 15% to 50% of such profits as transaction cost.
Copyright © IIFL Securities Ltd. All rights Reserved.
Stock Broker SEBI Regn. No: INZ000164132, PMS SEBI Regn. No: INP000002213, IA SEBI Regn. No: INA000000623, SEBI RA Regn. No: INH000000248
We are ISO 27001:2013 Certified.
This certificate demonstrates that IIFL as an organization has defined and put in place best-practice information security processes.