Dear Members,
Your directors present the sixteenth Annual Report along with the
audited standalone and consolidated financial statements for 2022-23 (or FY2023).
Company overview
Your Company (Bajaj Finserv' or BFS' or the
Company') was incorporated on 30 April 2007,
(CIN: L65923PN2007PLC130075) and has its registered office at Bajaj
Auto Ltd. Complex , Mumbai-Pune Road, Pune - 411 035. Pursuant to demerger of Bajaj Auto
Ltd. in 2008, the undertaking comprising of windmills and investment in financial services
were transferred to the Company. The shares of the Company were listed on the BSE Ltd.
(BSE') and National Stock Exchange of India Ltd.
(NSE') in the year 2008. As on 31 March 2023, the Company stood at 23rd rank
based on market capitalisation.
Bajaj Finserv is an unregistered Core Investment Company within the
meaning of the RBI Regulations. It is is one of India's leading promoters of
financial services. BFS offers diversified portfolio through its various subsidiaries that
helps to meet financial needs and build an individual's financial resilience. Its
suite of financial solutions includes savings products, consumer and commercial loans,
mortgages, auto financing, securities brokerage services, general and life insurance and
investments.
Financial Results
The financial results of the Company are elaborated in the Management
Discussion and Analysis. The highlights of the standalone financial resultsare as under:
|
|
(` in Crore) |
Particulars |
FY2023 |
FY2022 |
Total income |
1,147.61 |
729.00 |
Total expenses |
172.99 |
165.78 |
Profit before tax |
974.62 |
563.22 |
Tax expense |
242.10 |
138.99 |
Profit for the year |
732.52 |
424.23 |
Basic and diluted earnings per share (`) |
4.6 |
2.7* |
*The basic and diluted earnings per share have been computed for
previous year on the basis of the adjusted number of equity shares in accordance with
sub-division and bonus issue.
Closing balances in reserve/other equity:
|
|
(` in Crore) |
Particulars |
FY2023 |
FY2022 |
Securities premium account |
959.59 |
941.27 |
General reserve |
1,213.79 |
1,197.14 |
Share based payments reserve |
313.57 |
219.04 |
Treasury shares |
(117.48) |
(119.97) |
Retained earnings |
2,719.34 |
2,051.15 |
Total |
5,088.81 |
4,288.63 |
The highlights of the consolidated financial results are as under:
|
|
(` in Crore) |
Particulars |
FY2023 |
FY2022 |
Total income |
82,072.01 |
68,438.98 |
Total expenses |
65,262.07 |
57,168.04 |
Profit before tax |
16,811.13 |
11,270.58 |
Tax expense |
4,601.59 |
2,957.05 |
Profit after tax |
12,209.54 |
8,313.53 |
Profit attributable to non-controlling interests |
5,792.26 |
3,756.76 |
Profit for the year |
6,417.28 |
4,556.77 |
Basic earnings per share (`) |
40.3 |
28.6* |
Diluted earnings per share (`) |
40.0 |
28.6* |
accordance with sub-division and bonus issue.
Dividend Distribution Policy
Pursuant to the provisions of regulation 43A of the Securities and
Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations,
2015 (the SEBI Listing Regulations') the Company had formulated a dividend
distribution policy, which sets out the parameters and circumstances to be considered by
the Board in determining the distribution of dividend to its shareholders and/or retaining
profit earned. The policy is available on the website of the Company and can be accessed
at https://cms-assets.bajajfinserv.in/is/content/
bajajfinance/miscellaneous-divident-policypdf?scl=1&fmt=pdf
Dividend
For FY2023, the Directors recommend, for consideration of members at
the ensuing annual general meeting (AGM), payment of a dividend of ` 0.80 per equity share
(80%) of face value of ` 1. The total amount of dividend for FY2023 is ` 127.43 crore.
The dividend recommended is in accordance with the principles and
criteria set out in the dividend distribution policy of the Company.
The dividend, if declared at the ensuing AGM, will be taxable in the
hands of the members of the Company pursuant to Income Tax Act, 1961. For further details
on taxability, please refer Notice of AGM.
Adoption of Confederation of Indian Industry (CII) charters
The Company has established several policies covering the Code of
Conduct for its directors and employees including anti-corruption clauses, as well as
policies for Fair and Responsible Workplace Practices.
These policies are integrated into business operations. The Company has
also signed the following charters of
CII in this regard, which further strengthens the Company's
commitment to these policies.
1. Model Code of Conduct for Ethical Business Practices
2. Charter on Fair & Responsible Workplace Guidelines for
Collaborative Employee Relations
3. Charter on Fair & Responsible Workplace Guidelines for Contract
Labour
Further, details of these policies are available in the Business
Responsibility and Sustainability Reporting which forms part of this Annual report. The
same is available on the website of the Company and can be accessed at
https://www.bajajfinserv.in/finserv-investor-relations-annual-reports
Operations
Detailed information on the operations of the different business lines
and state of affairs of the Company and its subsidiaries are covered in the Management
Discussion and Analysis.
Name of the Company |
% of shareholding |
Status |
Bajaj Allianz Life Insurance Company Ltd. (BALIC) |
74.00 |
Subsidiary |
Bajaj Allianz General Insurance Company Ltd. (BAGIC) |
74.00 |
Subsidiary |
Bajaj Finance Ltd. (BFL) |
52.49 |
Subsidiary |
Bajaj Finserv Direct Ltd. (BFS-D) |
80.13 |
Subsidiary |
Bajaj Housing Finance Ltd. (BHFL) (100% subsidiary of BFL) |
- |
Subsidiary |
Bajaj Financial Securities Ltd. (BFinsec) |
- |
Subsidiary |
(100% subsidiary of BFL) |
|
|
Bajaj Finserv Health Ltd. (BFS-H) |
100.00 |
Wholly-owned subsidiary |
Bajaj Finserv Ventures Ltd. (BFS-Ventures) |
100.00 |
Wholly-owned subsidiary |
Bajaj Finserv Asset Management Ltd. (BFS-AMC) |
100.00 |
Wholly-owned subsidiary |
Bajaj Finserv Mutual Fund Trustee Ltd. (BFS-Trustee) |
100.00 |
Wholly-owned subsidiary |
Bajaj Allianz Financial Distributors Ltd. (BAFDL) |
50.00 |
Joint venture |
Bajaj Allianz Staffing Solutions Ltd. (BASSL) |
- |
Joint venture |
(100% subsidiary of BAFDL) |
|
|
The Company does not have any associate. Further, during FY2023, no new
subsidiary was incorporated/ acquired. The Company has not entered into a joint venture
with any other company.
During FY2023, no fresh investments were made by the Company into
BFS-Direct. BFL holds the remaining 19.87%.
Information on the performance and financial position of
subsidiary/joint venture of the Company are provided in Form AOC-1 of consolidated
financial statements. The financial statements of the subsidiary companies are also
available on the Company's website and can be accessed at
https://www.bajajfinserv.in/finserv-investor-relations-annual-reports under the dropdown
of Bajaj Finserv Subsidiaries.
The Company's policy for determination of material subsidiary, as
adopted by the Board of Directors, in conformity with regulation 16 of the SEBI Listing
Regulations, can be accessed on the Company's website at
https://cms-assets.bajajfinserv.in/is/content/bajajfinance/policy-for-material-subsidiaries-13marchpdf?scl=1&fmt=pdf
In terms of the aforesaid Policy and as per SEBI Listing Regulations
BFL, BAGIC, BALIC and BHFL are material subsidiaries of the Company.
Directors and Key Managerial Personnel
A. Change in directorate: i) Appointments:
Pramit Jhaveri (DIN: 00186137):
On recommendation of Nomination and Remuneration Committee
(NRC'), the Board has appointed
Pramit Jhaveri as an independent director of the Company for a period
of five consecutive years effective from 1 May 2022. The same has been approved by the
members vide their resolution dated
22 June 2022.
Pramit Jhaveri is exempted from requirements of clearing the online
proficiency test pursuant to rule 6(4) of Companies (Appointment and Qualifications of
Directors) Rules, 2014, as amended.
He is a member of Risk Management Committee and Audit Committee. Radhika
Haribhakti (DIN: 02409519):
On recommendation of NRC, the Board has appointed Radhika Haribhakti as
an independent director of the Company for a period of five consecutive years effective
from 1 May 2022. The same has been approved by the members vide their resolution dated 22
June 2022.
Radhika Haribhakti is exempted from requirements of clearing the online
proficiency test pursuant to rule 6(4) of Companies (Appointment and Qualifications of
Directors) Rules, 2014, as amended. However, she has on a voluntary basis appeared and
cleared the proficiency test.
She is a member of Stakeholders' Relationship Committee and NRC. Dr.
Naushad Forbes (DIN: 00630825):
Pursuant to members approval vide their resolution dated 22 June 2022,
Dr. Forbes has been re-appointed as an independent director for a second term of five
years w.e.f. 13 September 2022. The Board is of the opinion that aforesaid independent
directors are persons of integrity, expertise, and proficiency to serve the Company as
independent directors strengthening the overall composition of the Board.
ii) Resignation:
Further, as mentioned in Directors' Report presented for last
year, Dr. Gita Piramal (DIN: 01080602), independent director, stepped down as director
w.e.f. close of business hours of 30 April 2022.
iii) Directors liable to retire by rotation:
Rajiv Bajaj (DIN: 00018262), retires by rotation at the ensuing AGM,
being eligible, offers himself for re-appointment. Brief details of Rajiv Bajaj, are given
in the Notice of AGM.
B. Key managerial personnel (KMP'):
Members vide their resolution dated 22 June 2022, have approved the
re-appointment of Sanjiv Bajaj as the Managing Director of the Company w.e.f. 1 April
2022, for a period of five years to hold office up to 31 March 2027.
Save and except as above there are no changes in KMP.
Declaration by independent directors
All the independent directors have submitted a declaration of
independence, stating that they meet the criteria of independence provided under section
149(6) of the Act read with regulation 16 of the SEBI
Listing Regulations, as amended. They also confirmed compliance with
the provisions of rule 6 of Companies (Appointment and Qualifications of Directors) Rules,
2014, as amended, relating to inclusion of their name in the databank of independent
directors.
The Board took on record the declaration and confirmation submitted by
the independent directors regarding them meeting the prescribed criteria of independence,
after undertaking due assessment of the veracity of the same in terms of the requirements
of regulation 25 of the SEBI Listing Regulations.
Policy on directors' appointment and remuneration
Pursuant to section 178(3) of the Companies Act, 2013 and regulation
19(4) read with Part D of schedule II to the SEBI Listing Regulations, the Board has
framed a Remuneration Policy. This policy, inter alia, lays down: a) The criteria
for determining qualifications, positive attributes and independence of directors; and b)
Broad guidelines of compensation philosophy and structure for non-executive directors, key
managerial personnel and other employees.
The policy is directed towards a compensation philosophy and structure
that will reward and retain talent and provides for a balance between fixed and incentive
pay reflecting short and long-term performance objectives appropriate to the working of
the Company and its goals.
The said policy can be accessed on the Company's website at
https://cms-assets.bajajfinserv.in/is/content/
bajajfinance/remuneration-policy-v2pdf?scl=1&fmt=pdf
As per the requirements of the SEBI Listing Regulations, details of all
pecuniary relationship or transactions of the non-executive directors vis-?-vis the
Company are disclosed in the Corporate Governance Report.
Compliance with code of conduct
All Board members and senior management personnel have affirmed
compliance with the Company's Code of
Conduct for FY2023.
A declaration to this effect signed by the Chairman & Managing
Director forms a part of thisAnnual Report.
Annual return
In compliance with section 134(3)(a) of the Act, a copy of the annual
return as provided under section 92(3) of the Act in the prescribed form, which will be
filed with the Registrar of Companies/Ministry of Corporate Affairs
(MCA'), is available on the website of Company and can be
accessed at https://www.bajajfinserv.in/finserv-investor-relations-annual-reports
Number of meetings of Board
Six (6) meetings of the Board were held during FY2023. Details of the
meetings and attendance thereat, form part of the Corporate Governance Report.
Directors' responsibility statement
The financial statements are prepared in accordance with the Indian
Accounting Standards (Ind AS) under historical cost convention on accrual basis except for
certain financial instruments which are measured at fair value pursuant to the provisions
of the Act and guidelines issued by SEBI. Accounting policies have been consistently
applied except where revision to an existing Accounting Standard requires a change in the
accounting policy.
In accordance with the provisions of section 134(3)(c) of the Act and
based on the information provided by the management, the directors state 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 such
accounting policies and applied them consistently and made judgments and estimates that
are reasonable and prudent so as to give a true and fair view of the state of affairs of
the Company at the end of the financial year and of the profits of the Company for FY2023;
iii. they have taken proper and sufficient care for the maintenance of adequate accounting
records in accordance with the provisions of the Act, for safeguarding the assets of the
Company and for preventing and detecting fraud and other irregularities; iv. they have
prepared the annual accounts on a going concern basis; v. they have laid down internal
financial controls to be followed by the Company and that such internal financial controls
are adequate and are operating effectively; and vi. they have devised proper systems to
ensure compliance with the provisions of all applicable laws and that such systems are
adequate and are operating effectively.
Audit committee
Manish Kejriwal, non-executive, non-independent director stepped down
as member of the Committee w.e.f. close of business hours on 31 March 2023 and Anami N
Roy, independent director, was inducted effective 1 April 2023.
The present composition of the Committee approved by the Board at its
meeting held on 15 March 2023, is as follows: Dr. Naushad Forbes (DIN: 00630825),
Chairman, D J Balaji Rao (DIN: 00025254), Pramit Jhaveri
(DIN: 00186137) and Anami N Roy (DIN: 01361110).
The composition of Committee is over and above the minimum requirement
prescribed under the Act and
SEBI Listing Regulations, of having a minimum of two-thirds of
independent directors, including the Chairman.
All members of the Committee are non-executive independent directors
possessing financial literacy, and expertise in accounting or financial management related
matters.
All recommendations of the Audit Committee were accepted by the Board.
The brief terms of reference, number of meetings and attendance record
of members for FY2023 are given in the Corporate Governance Report.
Particulars of loans, guarantees or investments
Details of loans, guarantees and investments, if any, covered under the
provisions of section 186 of the Act are provided in the notes to financial statements.
Employee stock option scheme
The Company offers stock options to select employees of the Company
& its subsidiaries, to foster a spirit of ownership and an entrepreneurial mindset.
Because of their nature, stock options help to build a holistic, long-term view of the
business and a sustainability focus in the senior management team. Stock options are
granted to tenured employees in managerial and leadership positions upon achieving defined
thresholds of performance and leadership behaviour. This has contributed to the active
involvement of the leadership and senior team who are motivated to ensure long-term
success of the Company. Grant of stock options also allows the Company to maintain the
right balance between fixed pay, short-term incentives and long-term incentives to
effectively align with the risk considerations and build the focus on consistent long-term
results.
During FY2023, with a view to strengthen the orientation of senior
leaders being part of the Bajaj Finserv group, a one time special grant of stock options
of the Company was awarded to managing directors/chief executive officers
(CEO') / Deputy CEOs of Bajaj Finance Ltd., Bajaj Housing Finance Ltd., Bajaj
Financial Securities Ltd. and Bajaj Finserv Health Ltd.
During FY2023, there has been no change in the Bajaj Finserv Ltd.
Employee Stock Option Scheme (BFS ESOS).
The same is in line with SEBI (Share Based Employee Benefits &
Sweat Equity) Regulations, 2021.
A statement giving complete details as at the year ended 31 March 2023,
in terms of regulation 14 of SEBI (Share
Based Employee Benefits & Sweat Equity) Regulations, 2021 is
available on the Company's website and can be accessed at
https://www.bajajfinserv.in/finserv-investor-relations-annual-reports
Grant wise details of options vested, exercised and cancelled are
provided in the notes to the standalone financial statements.
The Company has not issued any sweat equity shares or equity shares
with differential voting rights during FY2023.
Increase in authorised share capital
During FY2023, the Company increased its authorised share capital from
` 100 crore consisting of 20 crore equity shares of face value of ` 5 to ` 200 crore
consisting of 200 crore equity shares of face value of ` 1.
Share capital
Keeping with the spirit of inclusion and to reward the members, the
Board of Directors, at its meeting held on
28 July 2022, recommended sub-division of one equity share of face
value of ` 5 into five equity shares of the face value of ` 1 and issue of bonus shares of
face value of ` 1 for every 1 (one) fully paid-up equity share of face value of ` 1. The
members vide their resolution dated 2 September 2022 approved the aforesaid proposals.
Allotment of equity shares prior to corporate action: a) On 22 July
2022 - Allotment of 143,483 equity shares (face value of ` 5) at the respective grant
prices to the trustees of Bajaj Finserv ESOP Trust under the BFS ESOS. b) On 10 August
2022- Allotment of 619 equity shares (face value of ` 5) in respect of the rights
entitlement held in abeyance with respect to the rights issue made in 2012.
Allotment of equity shares post sub-division:
On 15 September 2022 - Allotment of 796,407,730 bonus equity shares of
face value of ` 1 (post giving effect of stock split) in the ratio of 1:1 to all eligible
shareholders holding shares on record date i.e. 14 September 2022.
The paid-up equity share capital as on 31 March 2023, was ` 159.28
crore consisting of 1,592,815,460 fully paid- up equity shares of face value of ` 1.
Related party transactions
All contracts/ arrangement/ transactions entered by the Company during
FY2023 with related parties were in compliance with the applicable provisions of the Act
and SEBI Listing Regulations. Prior omnibus approval of the Audit Committee is obtained
for all related party transactions which are foreseen and of repetitive nature. Pursuant
to the said omnibus approval, details of transaction entered into is also reviewed by the
Audit Committee on a quarterly basis.
All related party transactions entered during FY2023 were in the
ordinary course of business, at arm's length and not material under the Act and SEBI
Listing Regulations. None of the transactions required members' prior approval under
the Act or SEBI Listing Regulations.
Details of transactions with related parties during FY2023 are provided
in the notes to the financial statements. There were no transaction requiring disclosure
under section 134(3)(h) of the Act. Hence, the prescribed Form
AOC2 does not form a part of this Report.
The policy on materiality of related party transactions and on dealing
with related party transactions is hosted on the website of the Company and can be
accessed at https://cms-assets.bajajfinserv.in/is/content/
bajajfinance/policy-on-materiality-of-and-dealing-with-related-party-transactions?scl=1&fmt=pdf
Succession planning
The Company has in place a succession planning framework to address
anticipated as well as unscheduled changes in leadership. The said framework is revisited,
re-evaluated and updated every year. The Company has several programs through which high
performing talent are identified. Series of journey of interventions and experiential
environments are organised to develop their leadership qualities and skills. In line with
the principles of Governance, changes are planned from time to time in the Board of
Directors, Committees and
Top management as part of succession planning.
Material changes and commitments
There were no material changes and commitments affecting the financial
position of the Company which occurred between the end of the financial year and the date
of this report.
Conservation of energy and technology absorption
The Company being an unregistered Core Investment Company, does not
manufacture products and therefore does not discharge effluents directly. However, the
Company has windfarms in addition to its financial services activities which produce green
energy. A summary of the performance of the wind power division is available in the
Management Discussion and Analysis.
(A) Conservation of energy -
(i) Steps taken or impact on conservation of energy;
Optimum usage of parking and common area lights.
Elevator usage optimisation.
Installation of LED lamps in place of tube lights and CFL.
During FY2023, the energy consumption of the Company was reduced by
~61,000 units by taking above mentioned steps.
(ii) Steps taken by the Company for utilising alternate sources of
energy;
The Company has installed a renewable energy (wind) project with
a capacity of 65.2 MW.
During FY2023, it generated 832 lakh units, which it sold to third
parties including the Maharashtra State Electricity Distribution Company Ltd.
However, pursuant to Electricity Act, 2003 read along with Distribution
open access, Regulations, 2019, it is not permitted to make captive use of wind
energy,where monthly demand is less than 700 KW.
(iii) Capital investment on energy conservation equipments;
The amount of capital investment made by the Company on energy
conservation equipments during FY2023 was approximately ` 1.5lakh.
The Company implements various energy conservation measures and
initiatives which are highlighted in the Business Responsibility and Sustainability Report
which forms part of this Annual report. The same is available on the Company's
website and can be accessed at https://
www.bajajfinserv.in/finserv-investor-relations-annual-reports
(B) Technology Absorption -
Being essentially an investment company, no particulars regarding
technology absorption are provided considering, the nature of operations of the Company to
be given in this Report.
Foreign exchange earnings and outgo
During FY2023, the Company did not have foreign exchange earnings. The
foreign exchange outgo in terms of actual outflow amounted to ` 0.46 crore, as against `
0.28 crore in FY2022.
Risk management policy
Risk to the Company stems largely from its subsidiaries. Hence, the
primary approach of the Company's risk management is monitoring the risks of material
subsidiaries, which individually or in aggregate could culminate into a key capital or
reputational risk for the Company. The Company engages with the subsidiaries on a
continuous basis to understand the nature of risks, the assessment of risks as regards its
criticality (severity and likelihood), mitigating actions and controls, monitoring and
reporting of the same on a periodical basis to its Risk Management Committee.
Information on the development and implementation of a risk management
policy for the Company including identification, assessment and control of elements of
risk are given in the Management Discussion and Analysis. Further, there are no elements
of risk which in the opinion of the Board threaten the existence of the Company.
Corporate social responsibility (CSR')
The CSR Committee comprises of three directors viz. Dr. Naushad Forbes
(DIN: 00630825) as the Chairman,
Sanjiv Bajaj (DIN: 00014615) and Anami N Roy (DIN: 01361110) as
members.
During FY2023, the Committee met twice. Details of meetings and
attendance thereat forms part of the
Annual Report on CSR activities.
The CSR obligation of the Company for FY2023 was ` 0.52 crore. As on 31
March 2023, total amount spent on CSR activities by Company was ` 0.56 crore.
In terms of the provisions of the Act read with Companies (Corporate
Social Responsibility Policy) Rules, 2014, the Annual Report on CSR activities is annexed
to this Report.
Detailed information on CSR Policy, its salient features, details
pertaining to spent and unspent amount, if any, forms part of Annual Report on CSR
activities.
The CSR policy is hosted on the Company's website and can be
accessed at https://cms-assets.bajajfinserv.in/
is/content/bajajfinance/miscellaneous-csr-policy-21pdf?scl=1&fmt=pdf Further, the
Chief Financial Officer has certified that the funds disbursed have been utilised for the
purpose and in the manner approved by the Board for the FY2023.
Formal annual evaluation
Pursuant to section 178 of the Act, the NRC and Board have decided that
the evaluation shall be carried out by the Board only and NRC will only review its
implementation and compliance.
Further, as per Schedule IV of the Act and provisions of the SEBI
Listing Regulations, the performance evaluation of independent directors shall be done by
the entire Board excluding the director being evaluated, on the basis of performance and
fulfilment of criteria of independence and their independence from management.
On the basis of the report of the performance evaluation, it shall be
determined whether to extend or continue the term of appointment of independent director.
Accordingly, the Board has carried out an annual performance evaluation
of its own performance, that of its Committees, Chairperson and individual directors.
The manner in which formal annual evaluation of performance was carried
out by the Board for the year
2022-23 is given below:
The NRC at its meeting held on 21 May 2020, reviewed the
criteria for performance evaluation. The criteria is available on the website of the
Company at https://cms-assets.bajajfinserv.in/is/content/bajajfinance/
evaluation-criteriapdf?scl=1&fmt=pdf
Based on the said criteria, a questionnaire-cum-rating sheet was
deployed using an IT platform for seeking confidential feedback of the directors with
regards to the performance of the Board, its Committees, the
Chairperson and individual directors.
From the individual ratings received from the directors, a
report on summary of ratings in respect of performance evaluation of the Board, its
Committees, Chairperson and individual directors for the year 2022-23 and a consolidated
report thereof were arrived at.
The report of performance evaluation so arrived at was then
discussed and noted by the Board at its meeting held on 15 March 2023.
The NRC reviewed the implementation and compliance of the
performance evaluation at its meeting held on
15 March 2023.
Based on the report and evaluation, the Board and NRC at their
respective meetings held on 15 March 2023, determined that the term of appointment of all
independent directors may continue.
Details on the evaluation of Board, non-independent directors
and Chairperson of the Company as carried out by the independent directors at their
separate meeting held on 15 March 2023, have been furnished in a separate paragraph
elsewhere in this Report.
During FY2023, the criteria and process followed by the Company
were reviewed by the NRC at its meeting held on 15 March 2023 which opined these to be in
compliant with applicable provisions and found it to be satisfactory. Additionally, the
Committee advised enhancement to the feedback mechanism by introducing few qualitative
aspects to the criteria.
Other than Chairman of the Board and NRC, no other director has access
to the individual ratings given by directors.
Significant and material orders
During FY2023, no significant or material orders were passed by any
regulator or court or tribunal, impacting the going concern status and Company's
operations in future.
Internal financial controls
Internal financial controls laid down by the Company is a systematic
set of controls and procedures to ensure orderly and efficient conduct of its business
including adherence to Company's policies, safeguarding of its assets, prevention and
detection of frauds and errors, accuracy and completeness of the accounting records and
timely preparation of reliable financial information. Internal financial controls not only
require the system to be designed effectively but also to be tested for operating
effectiveness periodically.
The Board reviewed the internal financial controls of the Company and
is of the opinion that internal financial controls with reference to the financial
statements were adequate, and operating effectively and are commensurate with the size,
scale and complexity of operations.
Internal Control Systems and their adequacy has been discussed in more
detail in Management Discussion and Analysis.
Independent directors' meeting
Pursuant to the Act and SEBI Listing Regulations, the independent
directors must hold at least one meeting in a year without the presence of
nonindependent directors and members of the management.
Accordingly, independent directors of the Company met on 15 March 2023
and:
noted the report of performance evaluation of the Chairman &
Managing Director of the Company for the year 2022-23; reviewed the performance of
non-independent directors and the Board as a whole;
reviewed the performance of the Chairman of the Board, taking
into account the views of non-executive directors; assessed the quality, quantity
and timeliness of flow of information between the Company's Management and the Board
that is necessary for the Board to effectively and reasonably perform their duties; and
noted the succession planning.
The independent directors present elected Radhika Haribhakti as the
Chairperson for the meeting. All independent directors were present at the meeting.
Whistle-blower policy/vigil mechanism
The Company has a whistle-blower policy encompassing vigil mechanism
pursuant to the requirements of section 177(9) of the Act and regulation 22 of the SEBI
Listing Regulations. The whistle-blower framework has been introduced with an aim to
provide employees and directors with a safe and confidential channel to share their inputs
about such aspects which are adversely impacting their work environment. The policy/vigil
mechanism enables employees and directors to report their concerns about unethical
behaviour, actual or suspected fraud or violation of the Company's Code of Conduct or
ethics policy and leak or suspected leak of unpublished price sensitive information.
The concerns may be reported anonymously either through email or
through a Confidential Feedback
Mechanism', which is reviewed by a Whistle-Blower Committee
comprising senior management representatives from within the organisation. Pursuant to the
Whistle-Blower Policy, the summary of incidents investigated, actioned upon, founded and
unfounded are reviewed by the Audit Committee. Further, the Committee from time to time
reviews the functioning of the whistle-blower mechanism and measures taken by the
Management to encourage employees to avail of the mechanism to report unethical practice.
The whistle-blower policy is uploaded on the website of the Company and
can be accessed at
https://cms-assets.bajajfinserv.in/is/content/bajajfinance/whistle-blower-policy-website-v1pdf?scl=1&fmt=pdf
More details whistle-blower policy/vigil mechanism are given in Corporate Governance
Report.
Corporate governance
Pursuant to the SEBI Listing Regulations, a separate section titled
Report on Corporate Governance has been included in this Annual Report, along with the
Management Discussion and Analysis and report on
General Shareholder Information.
The Chairman & Managing Director and Chief Financial Officer have
certified to the Board with regard to the financial statements and other matters as
required under regulation 17(8) of the SEBI Listing Regulations. A certificate from the
statutory auditors of the Company regarding compliance of conditions of corporate
governance is annexed to this Report.
Business Responsibility and Sustainability Report (BRSR')
Pursuant to amendment in SEBI Listing Regulations, top 1,000 listed
entities based on market capitalisation are required to submit a BRSR with effect from
FY2023.
Accordingly, the Company has adopted a Policy for Responsible and
Sustainable Business Conduct. The BRSR in the format prescribed by SEBI is annexed to the
Annual Report. A detailed ESG report describing various initiatives, actions and process
of the Company towards the ESG endeavor has been hosted on Company's website and can
be accessed at https://www.bajajfinserv.in/finserv-investor-relations-annual-reports
Maintenance of cost records
Provisions relating to maintenance of cost records as specified by the
Central Government under section 148 of the Act, as applicable to the Company have been
complied with for FY2023.
Secretarial standards of ICSI
The Company has complied with the requirements prescribed under the
Secretarial Standards on meetings of the Board of Directors (SS1) and General
Meetings (SS2) read with the MCA circulars.
Internal audit
The internal audit is an integral part of corporate governance. The
objective of Internal Audit is to identify, assess and mitigate risks as well as to
evaluate and contribute to the systems of internal controls and governance processes
followed by the Company. Key elements of Internal Audit are assurance on Controls,
Governance and Compliance, Business Risk Assessment and its Mitigation and Process
Optimisation.
At the beginning of each financial year, an audit plan is rolled out
after approval of the Audit Committee. The Audit Committee regularly reviews the internal
audit reports and the adequacy and effectiveness of internal controls. Significant audit
observations, corrective and preventive actions thereon are discussed by the Audit
Committee on a quarterly basis.
Auditors
Statutory Auditors
KKC & Associates LLP (earlier known as Khimji Kunverji & Co
LLP) (FRN 105146W/ W100621) continues to be the Statutory Auditors of the Company. They
hold office for a period of 4 years upto the 19th AGM scheduled in the year 2025.
The statutory audit reports for FY2023, is unmodified i.e. does not
contain any qualification, reservation or adverse remark or disclaimer.
Secretarial Auditor
Pursuant to the provisions of section 204 of the Act, and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has
appointed Shyamprasad D. Limaye, Practising Company Secretary (FCS No. 1587, CP No. 572),
to undertake secretarial audit of the Company.
A report from the secretarial auditor in the prescribed Form MR-3 is
annexed to this Report.
As per regulation 24A(1) of the SEBI Listing Regulations, a listed
company is required to annex a secretarial audit report of its material unlisted
subsidiary to its Directors Report.
In line with the same, the secretarial audit report of BHFL (Debt
listed), BALIC and BAGIC for the FY2023 is placed on Company's website at
https://www.bajajfinserv.in/finserv-investor-relations-annual-reports
Pursuant to regulation 24A(2) of the SEBI Listing Regulations, a report
on secretarial compliance for FY2023 has been issued by Shyamprasad D. Limaye and the same
will be submitted with the stock exchanges within the given timeframe. The report will
also be made available on the website of the Company.
The secretarial audit report for FY2023, is unmodified i.e. it does not
contain any qualification, reservation or adverse remark or disclaimer.
Cost Auditor
Pursuant to section 148 of the Act, and the rules made thereunder, the
Board of Directors, on the recommendation of the Audit Committee, have re-appointed
Dhananjay V Joshi & Associates (firm registration no. 000030), Cost Accountants, to
audit the cost records of the Company for FY2024 on a remuneration of
` 70,000 plus taxes, out-of-pocket, travelling and living expenses,
subject to ratification by the shareholders at the ensuing AGM.
Accordingly, a resolution seeking members' ratification for the
remuneration payable to the Cost Auditor is included in the Notice convening the AGM.
Other Statutory Disclosures
The financial statements of the Company and its subsidiaries are
placed on the Company's website at https://
www.bajajfinserv.in/finserv-investor-relations-annual-reports
Details as required under section 197(12) of the Act read with
rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014, as amended containing, inter alia, the ratio of remuneration of directors and
key managerial personnel to median remuneration of employees, percentage increase in the
median remuneration, are annexed to this Report.
Disclosure as required under section 197(14):
Sanjiv Bajaj (DIN: 00014615), who is also the non-executive, Chairman
of Bajaj Finance Ltd. (BFL') and Bajaj Housing Finance Ltd. (BHFL')
has been paid sitting fees and commission as follows, in the same manner as is paid for
the other non-executive directors:
|
|
|
|
|
(` in lakh) |
Sr. No. |
Particulars |
Sitting Fees FY2023 |
FY2022 |
Commission FY2023* |
FY2022 |
1. |
BFL |
23 |
25 |
60.50 |
57.50 |
2. |
BHFL |
14 |
17 |
6.75 |
- |
*will be payable post adoption of financial statements for FY2023.
He is entitled for sitting fees and commission in line with the
remuneration policy and as determined by NRC
/ Board from time to time in BHFL and BFL. He does not draw any
remuneration from any other subsidiary of which he is a non -executive director.
Details of top ten employees in terms of the remuneration and
employees in receipt of remuneration as prescribed under rule 5(2) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014, containing details
prescribed under rule 5(3) of the said Rules, which form part of this Report, will be made
available to any member on request, as per provisions of section 136(1) of the Act.
The auditors, i.e. statutory auditor, secretarial auditor and
cost auditor have not reported any matter under section 143(12) of the Act and therefore,
no details are required to be disclosed under section 134(3)(ca) of the Act.
The Directors' Responsibility Statement, as required by
section 134(5) of the Act, forms a part of this Report.
The Company has a policy on prevention of sexual harassment at
the workplace. The Board, at its meeting held on 27 April 2023, reviewed the policy and
approved amendments to make it gender neutral.
The Company has complied with the provisions relating to the
constitution of Internal Complaints Committee under Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013. There was no case reported
during FY2023.
There is no change in the nature of business of the Company
during FY2023.
The securities of the Company were not suspended from trading
during the year on account of corporate actions or otherwise.
A Cash Flow Statement for the FY2023 is attached to the Balance
Sheet.
Neither any application was made, nor any proceeding is pending
under the Insolvency and Bankruptcy Code, 2016 during FY2023 against the Company.
The Company has not accepted any deposits covered under Chapter
V of the Act during the year under review nor has ever accepted.
Acknowledgement
The Board places its gratitude and appreciation for the support and
co-operation from its members and other regulators.
The Board of Directors also places on record its sincere appreciation
for the commitment and hard work put in by the Management and the employees of the
Company, its subsidiaries and joint ventures and thanks them for yet an excellent year of
performance.
On behalf of the Board of Directors
Sanjiv Bajaj
Chairman & Managing Director
DIN: 00014615
Pune: 27 April 2023
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