For the year ended March 31, 2024 To the Members,
Your Directors have the pleasure in presenting the 63rd
(Sixty-Third) Integrated Annual Report on the business and operations of the Company
together with the audited financial statements for the Financial Year ended March 31,
2024.
1. FiNANCiAL HiGHLiGHTS
The financial performance of the Company on a standalone and
consolidated basis for the Financial Year ended March 31, 2024, as compared with the
previous year is summarised below:
In ' Million
Particulars |
Standalone |
Consolidated |
1 |
31-Mar-24 |
31-Mar-23 |
31-Mar-24 |
31-Mar-23 |
Total Income |
91,309.75 |
77,232.08 |
159,094.95 |
130,831.16 |
Exports Revenue |
49,282.77 |
44,502.75 |
118,486.20 |
95,345.27 |
Net Profit |
|
|
|
|
Profit for the year before Taxation and
Exceptional item |
19,106.64 |
14,229.60 |
14,460.00 |
9,061.74 |
Share of (loss)/Profit of associates and
joint ventures |
- |
- |
53.15 |
(334.38) |
Add/(Less): Exceptional item |
(154.33) |
(402.13) |
(123.23) |
(457.91) |
Provision for Taxation: |
|
|
|
|
Current Tax |
4,960.90 |
3,759.26 |
5,690.69 |
3,951.57 |
Deferred Tax |
(258.16) |
(386.53) |
(402.36) |
(765.99) |
Profit for the year |
14,249.57 |
10,454.74 |
9,101.59 |
5,083.87 |
Less: Non-controlling interest |
- |
- |
(409.69) |
(199.77) |
Profit for the year attributable to equity
holders of parent |
14,249.57 |
10,454.74 |
9,511.28 |
5,283.64 |
Other comprehensive income not to be
reclassified to profit or loss in subsequent periods (net of tax) |
(1,939.39) |
277.34 |
(1,444.88) |
479.58 |
Total |
12,310.18 |
10,732.08 |
8,066.40 |
5,763.22 |
Balance of Profit from the previous year |
64,648.01 |
57,175.05 |
53,345.66 |
50,841.56 |
Profit available for Appropriation |
76,958.19 |
67,907.13 |
61,412.06 |
56,604.78 |
Appropriations: |
|
|
|
|
Interim Dividend on Equity Shares |
1,163.97 |
698.38 |
1,163.97 |
698.38 |
Tax on above dividend |
- |
- |
- |
- |
Final Dividend on Equity Shares |
2,560.74 |
2,560.74 |
2,560.74 |
2,560.74 |
Tax on above dividend |
- |
- |
- |
- |
Transfer to General Reserve |
- |
- |
- |
- |
Surplus retained in the Statement of Profit
and Loss |
73,233.48 |
64,648.01 |
57,687.35 |
53,345.66 |
2. DiViDEND
The Board, in its meeting held on February 12, 2024, declared an
interim dividend of ' 2.50/- per equity share (i.e. 125%) of the face value of ' 2/- each
aggregating to ' 1,163.97 million subject to deduction of income tax at source.
Based on the Company's financial performance, the Directors are
pleased to recommend, for the approval of members, a final dividend of ' 6.50/- per equity
share (i.e. 325%) of the face value of ' 2/- each. The final dividend on equity shares, if
approved by the members at the ensuing Annual General Meeting ('the AGM"), would
involve a cash outflow of ' 3,026.33million and shall be subject to deduction of income
tax at source and will be paid to those members whose name appears on the register of
members (including Beneficial Owners) of the Company as at the end of Friday, July 5,
2024.
Pursuant to Regulation 43A of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, as amended from time-to-time ("Listing
Regulations"), the Company had adopted the Dividend Distribution Policy, which is
available on the Company's website at:
https://www.bharatforge.com/assets/pdf/investor/download/Dividend-Distribution-Policy.pdf
The dividend pay-out has been determined in accordance with the
Dividend Distribution Policy of the Company.
3. RESERVES
During the year under review, the Company does not propose to transfer
any amount to the General Reserve. An amount of ' 73,233.48 million is proposed to be
retained as surplus in the Profit and Loss account.
4. PERFORMANCE OF THE COMPANY
The financial year 2023-24 saw the Indian economy clock an impressive
8.2% growth as per provisional estimates. A tighter monetary policy and a fiscally prudent
budget helped keep inflation under control. The conducive macro-economic setup was despite
the continuing geo-political tensions and upside pressures on inflation globally. The
shipping lanes in the Middle East also presented logistical challenges as freight movement
bore the collateral damage of the ongoing conflict. Despite all these challenges, your
Company clocked a revenue of ' 89,686.34 million in financial year 2023-24 representing an
impressive 18.4% YoY growth. The strong performance was a combination of steady exports
and execution of the export orders in Defence.
Tighter global inflationary conditions drove interest rates higher
in-turn affecting borrowing costs. In this environment, of rising interest rates and
strong operating cash flow growth, your Company thought it prudent to repay some high-cost
debt and deleverage further.
Domestic Business
Automotive Market: The domestic economy roared back, driven by strong
demand as disposable incomes rose at a faster clip. The combination of higher capex and
more disposable income drove Passenger Vehicles ("PV") and Commercial Vehicles
("CV") sales. The product premiumisation trend witnessed in the PV business
continued with Utility Vehicle sales now accounting for 57% of the PV market.
The domestic CV industry continued with its stable growth due to a
combination of factors. Strong economic growth, improving fleet operator profitability,
reducing discounts and enhanced road connectivity have put the CV OEMs in a sweet spot.
The expanding share of Medium and Heavy CVs ("M&HCVs") in the overall mix
has meant that your Company has participated in the market growth in a major way. Going
ahead, as the election process concludes, your Company expects the momentum for M&HCV
to come back.
Industrial: The Industrial business during the financial year 2023-24
saw a monumental growth of 72% to ' 22,359 million. A large part of the growth was due to
the supply of components and fully built guns for the export orders won by Kalyani
Strategic Systems Limited ("KSSL") (wholly-owned subsidiary) in financial year
2022-23. Some part of this business shall be carved out under KSSL once the production
facility at Jejuri comes on stream. Your Company's defence business is likely to see
good traction due to multiple factors like - Bharat Forge's formidable array of
products, 100% in-house IP ownership and increased global defence spends among others.
Defence business remains the centrepiece of our journey from components to products.
Your Company's non-defence industrial business has increased its
offerings across sectors like construction and mining, renewables, sugar, cement, power.
Your Company has always focused on products built in critical-use areas with higher
barriers to entry. The superior technical capabilities of your Company, when combined with
a conducive policy environment and improving industrial demand offer good business
opportunities in the long term.
Your Company acquired J S Auto Cast Foundry India Private Limited
("JSA"), a Coimbatore-based casting and machining company in the financial year
2022-23. This added ferrous casting (up to 400 Kg) as an additional offering to its
clients.
JSA has a strong presence in wind energy, hydraulics, earth moving,
off-highway with a total liquid metal capacity of 1,30,000 MTPA. Post the acquisition,
your Company's goodwill and reach has ensured expansion of JSA's reach to
Commercial Vehicles and Passenger Cars segments. During the year, JSA also acquired a new
asset from Indo-Shell Mould Limited, to expand capabilities in automobile castings. During
the year, JSA undertook numerous de-bottlenecking projects, expedited new product
development and undertook various efficiency augmenting initiatives. Significant capex in
bringing machining capacity on stream was made during the year to increase value-addition.
International Business
Automotive Market: The Company witnessed record exports during the year
under review and the bulk of this growth was supported by demand momentum on the
automobile side with PV revenue up 33% YoY. Demand for personal mobility continues to
remain strong with OEMs guiding for good growth even in financial year 2025. Your
Company's last man standing strategy in the ICE segment has helped it cultivate
long-term relationships with LTAs signed until year 2035. Another noteworthy achievement
is the higher value-add, increasingly more and more parts are exported as fully machined
PV components. Your Company's endeavor at diversifying the automobile basket beyond
CV has been an enviable success story.
CV business continued to hold steady, supported by a resilient Class 8
demand and some market share gains by your Company. Fleet replacement demand across key
markets of US continues to give comfort; however, European M&HCV outlook remains
gloomy. Given that the current year 2024 US class 8 outlook remains cautiously optimistic,
financial year 2025 is likely to be a year of consolidation for your Company. Your Company
continues to be a supplier of choice across European & US OEMs due to its consistent
record of accomplishment for nil-defect delivery.
Industrial: The Industrial export business had a tough financial year
2024. Though the headline numbers may look unflattering, the underlying story offers lot
of consolation. Oil & Gas business suffered because of major inventory correction seen
at an OEM's end. If we exclude the Oil & Gas piece, the overall YoY revenue
growth is a staggering 35%. The rapid growth was an outcome of high-horse power engines
(mainly Construction & Mining) and Aerospace showing a healthy performance. A good
pick-up in industrial activity driven by government capex has aided the performance. The
Aerospace business recorded revenue in excess of $26 million as program ramp-ups from
major OEM customers continued. Going ahead, this business is expected to see exponential
growth, as your Company is one of the handful organisations certified by regulatory and
industry bodies (NADCAP) for aerospace component supplies.
In the financial year 2023-24, despite unfortunate geo-political events
and logistical challenges, your Company was able to record healthy growth. Your
Company's long-standing customer relationships in automobiles and Industrials and
flawless execution in its Defence order book are likely to be key growth drivers in
financial year 2025.
Standalone & Consolidated
In the financial year 2023-24, the revenue of the Company increased by
18.4% vs 2022-23 on a standalone basis whereas Profit after Tax stood at ' 14,249.57
million.
On a consolidated basis, the Company, its subsidiaries and joint
venture companies achieved total revenue of ' 156,820.71 million as against ' 129,102.59
million, an increase of 21.4%.
5. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF
THE COMPANIES ACT, 2013 ("ACT")
Particulars of loans, guarantees and investments covered under Section
186 of the Act, forms part of notes to the financial statements provided in this
Integrated Annual Report.
6. PARTICuLARS OF CONTRACTS OR Arrangements wiTH Related PARTiES
All contracts or arrangements entered into by and between the Company
with Related Parties are on an arm's length basis and in the ordinary course of
business. All Related Party Transactions are placed before the Audit Committee for its
review and approval.
During the year under review, your Company has sought the approval of
the members at the 62nd (Sixty-Second) AGM held on Thursday, August 10, 2023
for entering into material Related Party Transactions with Saarloha Advanced
MaterialsPrivate Limited and Kalyani Steels Limited for a period of three (3) years (i.e.,
from April 01, 2024 till March 31, 2027) for such amount and transactions as detailed in
the notice thereof.
Pursuant to Section 134 of the Act, read with Rule 8(2) of the
Companies (Accounts) Rules, 2014, the particulars of transactions with related parties are
provided in Form No. AOC-2 which is annexed as Annexure "A" to this report.
Related Party disclosures as per Ind AS 24 have been provided in Note 39 to the financial
statements.
The Related Party Transaction Policy as amended in line with the
requirements of Listing Regulations has been displayed on the Company's website at:
https://www.bharatforge.com/assets/pdf/investor/download/BFL.RPT-Policy.pdf
The list of Related Party Transactions entered into by your Company for
the Financial Year 2023-24 (on a consolidated basis) is available on the Company's
website at: https://www.bharatforge.com/investors/corporate-governance/related-party-transactions
7. DEPOSITS
During the year under review, the Company has neither accepted nor
renewed any deposits under Chapter V of the Act.
8. INTERNAL FINANCIAL CONTROLS
Your Company has established an Assurance Office (Internal Audit and
Assurance) which handles Internal Audit (in addition to Internal Audit done by external
agency), Risk Management and Investigations under Whistle Blower Policy of the Company.
Your Company has in place adequate internal financial controls, with
reference to financial statements, commensurate with the size, scale and complexity of its
operations. An extensive risk-based programme of internal audits and management reviews
provides assurance to the Board regarding the adequacy and efficacy of internal controls.
The internal audit plan is also aligned with the business objectives of the Company which
is reviewed and approved by the Audit Committee. Significant audit observations, if any,
along with corrective actions thereon are presented to the Audit Committee. The Assurance
Office department monitors the adequacy and effectiveness of the internal control systems
and key observations are reviewed by the Audit Committee. The internal control system has
been designed to ensure that financial and other records are reliable for preparing
financial and other statements and for maintaining accountability of assets.
9. RISK MANAGEMENT
The Company has a robust Enterprise Risk Management ("ERM")
framework comprising risk governance structure and defined risk management processes. The
Company's ERM cycle comprises four stages i.e. identification of risk, its
evaluation, framing of mitigation plans and regular monitoring of risks and action taken
and re-assessing the risks after completion of the cycle. The risks associated with the
business are identified and prioritised and such risks are reviewed by the Senior
Management and presented to the Chairman and Managing Director and Joint Managing Director
at periodic review meetings. Subsequently, Risk Owners and appropriate review forums are
identified for each of the risks and metrics are developed for monitoring and reviewing
the risk mitigation efforts.
The Board of Directors of the Company has formed a Finance and Risk
Management Committee to frame, implement and monitor the risk management plan for the
Company. The Finance and Risk Management Committee is responsible for reviewing the risk
management plan and ensuring its effectiveness. The Audit Committee has additional
oversight in the area of financial risks and controls. The major risks identified by the
businesses and functions are systematically addressed through mitigating actions on a
continuing basis. The development and implementation of risk management policy has been
covered in the Management Discussion and Analysis (MDA), which forms part of this report.
10. MATERIAL CHANGES AND COMMITMENTS - IF ANY, AFFECTING THE FINANCIAL
POSITION OF THE COMPANY
There are no adverse material changes or commitments that occurred
after March 31, 2024, which may affect the financial position of the Company or may
require disclosure.
11. significant and material orders
There are no significant and material orders passed by the regulators
or courts or tribunals impacting the going concern status and the Company's
operations in the future.
There are no applications made or proceedings pending under the
Insolvency and Bankruptcy Code, 2016 as at the end of the financial year, nor has the
Company done any one-time settlement with any Bank or Financial Institution.
12. STATE OF Company's AFFAIRS
Discussion on the state of affairs of the Company has been covered as
part of the Management Discussion and Analysis (MDA). MDA for the year under review, as
stipulated under Regulation 34 of Listing Regulations, is presented in a separate section
forming part of this Integrated Annual Report.
13. SHARE CAPITAL
The paid-up Equity Share Capital of the Company as on March 31, 2024,
stood at ' 931.18 million.
During the year under review, the Company has not issued shares with
differential voting rights nor has granted any stock options or sweat equity. As on March
31, 2024, none of the Directors of the Company hold any instruments convertible into
equity shares of the Company.
The Company had issued Global Depository Receipts (GDR) in April 2005
which were listed on the Luxembourg Stock Exchange. The GDRs outstanding as at year end
March 31, 2024 were 800. Since the GDR holding had been substantially lowered, the Board
at its meeting held on November 06, 2023 approved the termination of the GDR program and
the said termination has been initiated effective from January 15, 2024. The GDRs would be
delisted from the Luxembourg Stock Exchange within the appropriate time frame and the
underlying equity shares of the GDR holding will continue to be listed on Bombay Stock
Exchange & National Stock Exchange.
Debt
During the financial year 2023-24, the Company issued and allotted
12,500 listed, rated, unsecured, redeemable, non-convertible debentures of the face value
of ' 1 Lakh each for cash aggregating to ' 1,250 million to identified investors on a
private placement basis.
14. TRANSFER OF uNPAID AND uNCLAIMED AMOuNTS TO INvESTOR EDuCATION AND
PROTECTION fund ('IEPF')
Pursuant to the provisions of the Act and Investor Education and
Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF
Rules"), as amended from time-to-time, the declared dividends, which remained unpaid
or unclaimed for a period of 7 (seven) years and shares in relation to such
unpaid/unclaimed dividend shall be transferred by the Company to the Investor Education
and Protection Fund (IEPF) established by the Central Government.
Accordingly, during the year, the Company transferred the following
dividends unpaid or unclaimed for a period of 7 (seven) years from the date they became
due for payment along with the shares thereof, to IEPF. The shareholders have an option to
claim their shares and/or amount of dividend transferred to IEPF. No claim shall be
entertained against the Company for the amounts and shares so transferred.
Date of Declaration |
Type of Dividend |
Amount transferred (Rs) |
No. of equity shares transferred |
March 11, 2016 |
Interim |
2,777,420 |
6,984 |
August 05, 2016 |
Final |
427,672 |
75,930 |
The list of equity shareholders whose shares are transferred to IEPF
can be accessed on the website of the Company at the link:
https://www.bharatforge.com/investors/shareholders-information/unclaimed-dividend
The Company has sent notices to respective shareholders who have not
claimed a dividend for 7 (seven) consecutive years and whose shares were liable to be
transferred to IEPF during the financial year 2023-24. The newspaper advertisementstating
the same has also been published in Loksatta, Marathi, Pune and Business Standard - All
Editions newspapers on June 3, 2023, and December 16, 2023. The list of equity
shareholders whose shares are liable to be transferred or which have been transferred to
IEPF, as the case may be, can be accessed on the website of the Company at the link:
https://www.bharatforge.com/investors/shareholders-information/unclaimed-dividend
15. ANNUAL RETURN
In accordance with Sections 92(3) read with 134(3)(a) of the Act, the
extract of the Annual Return of the Company for the financial year 2023-24 is available on
the website of the Company at https://www.bharatforge.com/investors/
shareholders-information/Annual-Return
16. DIRECTORS' RESPONSIBILITY STATEMENT
Based on the framework of Internal Financial Controls and compliance
systems established and maintained by the Company, the work performed by the Internal
Auditors, Statutory Auditors and Secretarial Auditors, including the Audit of Internal
Financial Controls over financial reporting by the Statutory Auditors and the reviews
performed by the Management and the relevant Board Committees, including the Audit
Committee, the Board is of the opinion that the Company's internal financial controls
were adequate and effective during the financial year 2023-24.
Pursuant to Section 134(5) of the Act, the Directors confirm that:
a. in preparation of the annual accounts for the financial year ended
March 31, 2024, the applicable Accounting Standards have been followed and there were no
material departures;
b. they have selected such accounting policies and applied them
consistently and made judgements and estimates that are reasonable and prudent so as to
give a true and fair view of the state of affairs of the Company as on March 31, 2024, and
of the profit of the Company for that period;
c. they have taken proper and sufficient care for the maintenance of
adequate accounting records in accordance with the provisions of the Act for safeguarding
the assets of the Company and for preventing and detecting fraud and other irregularities;
d. they have prepared the annual accounts on a going concern basis;
e. they have laid down internal financial controls to be followed by
the Company and that such internal financial controls are adequate and are operating
effectively; and
f. they have devised proper systems to ensure compliance with the
provisions of all applicable laws and that such systems were adequate and operating
effectively.
17. directors and key managerial personnel (KMP)
In terms of the provisions of the Act and the Articles of Association
of the Company, Mr. B. P. Kalyani (DIN: 00267202), Director of the Company, retires by
rotation at the ensuing AGM and being eligible has offered himself for re-appointment. A
resolution seeking members' approval for his re-appointment along with other required
details forms part of the Notice convening the 63rd AGM of the Company.
Following were the key changes in Board structure during the financial
year as well as key changes which have occurred between the end of the financial year of
the Company to which the financial statements relate and the date of the report:
a. The members, vide Postal Ballot, approved the re-appointments of Mr.
B. N. Kalyani (DIN: 00089380) as Chairman and Managing Director for a term of 5 (five)
consecutive years from March 30, 2023 up to March 29, 2028, and Mr. G. K. Agarwal (DIN:
00037678) as the Deputy Managing Director for a term of 1 (one) year from April 01, 2023
up to March 31, 2024.
b. Mr. Kishore Saletore (DIN: 01705850) resigned from the post of
Executive Director and Chief Financial Officer ("CFO") of the Company with
effect from June 30, 2023. The Board at its meeting held on Friday, May 05, 2023, accepted
the resignation and put on record its sincere appreciation for the contributions made by
Mr. Saletore during his association with the Company as a Director and CFO.
c. The Board at its meeting held on Friday, May 05, 2023, approved the
appointment of Mr. Kedar Dixit as the CFO and designated as Key Managerial Personnel of
the Company with effect from July 01, 2023.
d. The members at its 62nd AGM held on August 10, 2023
approved the revision in remuneration of Mr. B. P. Kalyani (DIN: 00267202) and Mr. S. E.
Tandale (DIN: 00266833) for their remaining respective terms of appointment.
e. The members, vide Postal Ballot, approved the appointment of Mr.
Ashish Bharat Ram (DIN: 00671567) as Non-Executive Non-Independent Director of the
Company, for a term of 3 (three) consecutive years with effect from September 01, 2023 up
to August 31, 2026 (both days inclusive).
f. The Board at its meeting held on February 12, 2024, approved the
re-appointment of Mr. Dipak Mane (DIN: 01215889) as Non-Executive Independent Director for
the second term of 5 (five) consecutive years from June 21, 2024 up to June 20, 2029 (both
inclusive), subject to the approval of members sought by way of Postal Ballot notice dated
April 3, 2024.
g. Mr. G. K. Agarwal (DIN: 00037678) superannuated as the Director and
Deputy Managing Director of the Company on March 31, 2024, upon expiry of his term as
Director and Deputy Managing Director of the Company.
h. The Board at its meeting held on April 03, 2024, approved the
re-appointment of Mr. Amit Kalyani (DIN: 00089430) as Whole-time Director designated as
"Vice-Chairman and Joint Managing Director" for another term of five (5)
consecutive years commencing from May 11, 2024 till May 10, 2029 (both inclusive), subject
to approval of members sought by way of Postal Ballot notice dated April 3, 2024.
Independent Directors' Declaration
The Company has received the necessary declarations from each
Independent Director in accordance with Section 149(7) of the Act and Regulations 16(1)(b)
and 25(8) of the Listing Regulations, that he/she meets the criteria of independence as
laid out in Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations.
In the opinion of the Board, there has been no change in the circumstances which may
affect their status as Independent Directors of the Company and the Board is satisfied of
the integrity, expertise, and experience of all Independent Directors on the Board.
18. number of meetings of the board
The Board met 4 (four) times during the year. Also, a separate meeting
of Independent Directors as prescribed under Schedule IV of the Act, was held during the
year under review. The details of meetings of the Board of Directors are provided in the
Report on Corporate Governance that forms part of this Integrated Annual Report. The
intervening gap between the meetings was within the period prescribed under the Act.
19. board evaluation
The annual evaluation process of the Board of Directors, individual
Directors and Committees was conducted in accordance with the provision of the Act and the
Listing Regulations. The Board evaluated its performance after seeking inputs from all the
Directors on the basis of criteria such as the Board composition and structure,
effectiveness of Board processes, information and functioning, etc. The performance of the
Committees was evaluated by the Board after seeking inputs from the committee members on
the basis of criteria such as the composition of committees, effectiveness of committee
meetings, etc. The performance review of Non-Independent Directors, the Chairperson and
the Board was conducted by the Independent Directors. The above criteria are broadly based
on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of
India.
The Chairman of the Board had one-on-one meetings with the Independent
Directors to obtain Directors' inputs on effectiveness of the Board/Committee
processes. The Board and the NRC reviewed the performance of individual Directors on the
basis of criteria such as the contribution of the individual Director to the Board and
Committee Meetings like preparedness on the issues to be discussed, meaningful and
constructive contribution and inputs in meetings, etc.
20. familiarisation programme
The Company regularly provides orientation and business overview to its
Directors by way of detailed presentations by the various business and functional heads at
Board meetings, Strategy meetings and through other interactive programmes. Such
meetings/programmes include briefings on the domestic and global business of the Company.
Besides this, the Directors are regularly updated about the Company's new projects,
R&D initiatives, changes in the regulatory environment and strategic direction. The
Board members are also provided with relevant documents, reports and internal policies to
facilitate familiarisation with the Company's procedures and practices, from time to
time.
The details of the familiarisation programmes for Independent Directors
are posted on the website of the Company and can be accessed at:
https://www.bharatforge.com/assets/pdf/investor/familiarisation-programme-for-independent-directors.pdf
21. BUSiNESS RESPONSiBiLiTYAND SUSTAiNABiLiTY REPORT
In accordance with the Listing Regulations, the Business Responsibility
and Sustainability Report (BRSR) forms a part of this Integrated Annual Report describing
the initiatives undertaken by the Company from an environmental, social and governance
perspective during the year under review.
22. iNFORMATiON PURSUANT TO RULE 5 OF THE COMPANiES (APPOiNTMENT AND
REMUNERATiON OF MANAGERiAL Personnel) Rules, 2014
A statement showing details of the employees in terms of Rule 5(2) of
the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 has been
provided in a separate annexure which forms part of the Directors' Report. In terms
of Section 136 of the Act, the Reports and Accounts are being sent to the shareholders
excluding the information required under Rule 5(2) and (3) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014. Any shareholder interested in
obtaining the same may write to the Company Secretary at secretarial@bharatforge.com.
The statement containing the information as required under the
provisions of Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure "B"
and forms part of this Report.
Disclosure regarding receipt of commission by a Director from the
holding or subsidiary of a Company:
Director fees of GBP 100,000 each from Bharat Forge International
Limited, U.K. for the financial year 2023-24 is payable to Mr. B. N. Kalyani and Mr. A. B.
Kalyani.
23. INFORMATiON PURSUANT TO REGULATiON 30A OF LiSTiNG REGULATiONS
The details in respect of agreements in terms of Regulation 30A read
with clause 5A to para A of part A of schedule III of Listing Regulations are available on
the Company's website at: https://www.bharatforge.com/assets/pdf/notices/2Disclosure_
pursuant.pdf
24. NOMINATION AND REMUNERATiON POLIcY
The Nomination and Remuneration Policy of the Company, inter alia,
provides that the Nomination and Remuneration Committee shall formulate the criteria for
appointment of Directors on the Board of the Company and persons holding Senior Management
positions in the Company, including their remuneration and other matters as provided under
Section 178 of the Act and Listing Regulations. The details of remuneration paid to the
Executive Directors and Non-executive Directors have been provided in the Corporate
Governance Report forming part of this Integrated Annual Report. The Policy is also
available on the Company's website at:
https://www.bharatforge.com/assets/pdf/investor/download/
NOMINATION_AND_REMUNERATION_POLICY.PDF
25. cORPORATE GOvERNANcE
The Company is committed to maintain the highest standards of corporate
governance and has also implemented several best governance practices. A separate section
on corporate governance and a certificate from the Practicing Company Secretary regarding
compliance with the conditions of corporate governance as stipulated under the Listing
Regulations forms part of this Integrated Annual Report. The Chairman and Managing
Director and the Chief Financial Officer of the Company have certified to the Board on
financial statements and other matters in accordance with Regulation 17 (8) of the Listing
Regulations pertaining to CEO/CFO certification for the financial year ended March 31,
2024.
26. subsidiaries, JOINT vENTURES, AND ASSOciATE cOMPANiES
During the year under review, the Company undertook the following
investments/acquisitions:
a. Pursuant to the Power Purchase Agreement and Share Purchase
Agreement dated July 27, 2023, J S Auto Cast Foundry India Private Limited, a step-down
subsidiary of the Company, acquired 26% of equity shares of Ratnakar Energy Private
Limited.
b. An application was made by the Company to Registrar of Companies,
Pune (ROC) for the strike-off of BF Premier Energy Systems Private Limited, a joint
venture between the Company's wholly owned subsidiary - Kalyani Strategic Systems
Limited ("KSSL") and Premier Explosives Limited which has been duly approved by
ROC vide letter dated November 25, 2023.
c. Pursuant to the Share Subscription Agreement signed on December 07,
2023, KSSL has acquired a majority stake in Zorya Mashproekt India Private Limited on
January 24, 2024 making it a step-down subsidiary of the Company.
As on March 31, 2024, the Company has 34 (Thirty-four) subsidiaries
(including step-down subsidiaries) and 2 (Two) associate companies and 2 (Two) joint
venture companies. In accordance with Section 129(3) of the Act, the Company has prepared
the consolidated financial statement, which forms part of this Integrated Annual Report.
Further, a statement containing salient features of the financial statements of our
subsidiaries in the prescribed Form AOC-1 is presented in a separate section forming part
of the financial statements.
Performance of Material Subsidiaries:
i. Bharat Forge CDP GmbH:
Bharat Forge CDP GmbH ("BF CDP") is the step-down subsidiary
of the Company located in Ennepetal, Germany.
BF CDP is engaged in the business of manufacturing forged and machined
components for commercial vehicles, passenger vehicles and industrial applications. BF CDP
recorded revenue of ' 20,645.8 million (Eur 229.9 million) as on March 31, 2024.
ii. Bharat Forge International Limited:
Bharat Forge International Limited ("BF International") is a
wholly owned subsidiary of the Company located in England, United Kingdom. BF
International is engaged in the business of trading forged and machined components for the
automotive and industrial sectors and has a revenue of ' 34,134.5 million (USD 412
million) for the year ended March 31, 2024.
Pursuant to Section 136 of the Act, the audited financial statements,
including the consolidated financial statements and related information of the Company and
separate audited accounts in respect of subsidiaries, are available on the website of the
Company at: https://www.bharatforge.com/investors/reports/annual-reports
27. AUDIT cOMMiTTEE
The Audit Committee comprises of Mr. P. G. Pawar, Independent Director
as Chairperson, Mr. P. H. Ravikumar, Independent Director, and Mr. Vimal Bhandari,
Independent Director as members. The terms of reference and other details of the Audit
Committee including details of meetings held thereof held during the financial year are
given in the Report on Corporate Governance forming part of this Integrated Annual Report.
All the recommendations made by the Audit Committee were deliberated
and accepted by the Board during the financial year 2023-24.
28. AUDITORS
A. Statutory Auditors and Audit Report
At the 61st Annual General Meeting of the Company held on
Friday, August 12, 2022, M/s. B S R & CO LLP, Chartered Accountants, Pune (ICAI Firm
Registration No. 101248W/W-100022) were appointed as Statutory Auditors to hold office for
a period of 5 (five) consecutive years till the conclusion of 66th Annual
General Meeting to be held in the year 2027.
The Auditor's Report for the financial year 2023-24 does not
contain any qualification, reservation or adverse remark. The Auditor's Report is
enclosed with the Financial Statements in this Integrated Annual Report.
B. Secretarial Auditor and the Audit
The Board has appointed M/s. SVD & Associates, Company Secretaries,
Pune, to conduct Secretarial Audit for the financial year 2023-24. The Secretarial Audit
Report for the financial year ended March 31, 2024, is appended as Annexure "C"
to this report.
The observation(s)/qualification(s) of the Secretarial Auditor in their
report are self-explanatory and therefore, the Directors do not have any further comments
to offer on the same.
Further, as required under Section 204 of the Act and rules thereunder,
the Board has appointed M/s. SVD & Associates, Company Secretaries, Pune, to also
conduct the Secretarial Audit for the financial year 2024-25.
C. Cost Auditors
The Board of Directors, on the recommendation of the Audit Committee,
has appointed M/s. Dhananjay V. Joshi & Associates, Cost Accountants, Pune, (Firm
Registration No.: 00030) as Cost Auditors to audit the cost accounts of the Company for
the financial year 2024-25. As required under the Act, a resolution seeking
shareholders' approval for the remuneration payable to the Cost Auditors forms part
of the Notice convening the 63rd AGM.
In accordance with the provisions of Section 148(1) of the Act, read
with the Companies (Cost Records & Audit) Rules, 2014, the Company has maintained cost
records.
The Cost Audit report for the financial year 2022-23 was filed with the
Ministry of Corporate Affairs on October 13, 2023.
D. Reporting of fraud by auditors
During the year under review, the Auditors of the Company have not
reported any fraud as specified under Section 143(12) of the Act to the Audit Committee.
29. CORPORATE SOCIAL RESPONSIBILITY ACTIVITIES
The Company has been carrying out various Corporate Social
Responsibility (CSR) activities. These activities are carried out in terms of Section 135
read with Schedule VII of the Act and the Companies (Corporate Social Responsibility
Policy) Rules, 2014, as amended from time-to-time.
The brief outline of the Corporate Social Responsibility (CSR) policy
of the Company and the initiatives undertaken by the Company on CSR activities during the
year under review are set out in Annexure "D" of this report in the format
prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. For
other details regarding the CSR Committee, please refer to the Corporate Governance
Report, which forms a part of this report. The CSR policy is also available on the
Company's website at the link:
https://www.bharatforge.com/assets/pdf/investor/download/BFL-CSR-Policy-Signed.pdf
30. OBLIGATION OF THE COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT
WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
Your Company's goal has always been to create an open and safe
workplace for every employee to feel empowered, irrespective of gender, sexual
preferences, and other factors. Your Company has zero tolerance for sexual harassment at
workplace and has adopted a policy on prevention, prohibition, and redressal of sexual
harassment at workplace in line with the provisions of the Sexual Harassment of Women at
Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act) and the Rules made
thereunder. All women associated (permanent, temporary, contractual and trainees) as well
as any women visiting the Company's office premises or women service providers are
covered under this Policy. Your Company has gone beyond the intention of the law and has
made this policy gender-neutral. Your Company follows this practice as a part of equal
employment opportunity including gender equality.
Your Company has constituted an Internal Complaints Committee
("ICC") in all the units of the Company to consider and resolve all sexual
harassment complaints reported. The ICC has been constituted as per the Sexual Harassment
of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, and the committee
includes external members from NGOs or with relevant experience. During the year, the ICC
of the Company has received 1 (one) complaint, which is undergoing investigation as on
March 31, 2024. Further, the Company reached out to 1,647 employees through awareness
sessions to create greater awareness with respect to the Company's Policy on Sexual
Harassment at workplace. During the year under review, video-based training on POSH
awareness was rolled out to all the employees and is being hosted on the employee portal
to create greater awareness on this subject.
31. VIGIL MECHANISM
Your Company believes in the conduct of the affairs of its constituents
in a fair and transparent manner by adopting the highest standards of professionalism,
honesty, integrity and ethical behavior. Pursuant to the provisions of Section 177(9) of
the Act, read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014
and Regulation 22 of the Listing Regulations and in accordance with the requirements of
Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015,
the Board of Directors had approved the Policy on Vigil Mechanism/Whistle Blower and the
same has been hosted on the website of the Company. Over the years, the Company has
established a reputation for doing business with integrity and displays zero tolerance for
any form of unethical behaviour. The mechanism under the Policy has been appropriately
communicated within and outside the organisation. This Policy inter-alia provides direct
access to the Chairperson of the Audit Committee. It is affirmed that no personnel of the
Company have been denied access to the Audit Committee.
The Company reaches out to employees through physical/virtual sessions
with an aim of creating greater awareness on this subject. During the year under review,
the Company has received 8 (eight) complaints under the said mechanism, the details of
which are tabulated below:
Number of complaints received during the year |
Number of complaints resolved during the
year |
Number of complaints remaining
unresolved/undergoing investigation as on March 31, 2024 |
8 |
8 |
0 |
The Whistle Blower Policy of the Company has been displayed on the
Company's website at the link: https://www.bharatforge.
com/assets/pdf/investor/download/BFL-Whistle-Blower-Policy-Signed.pdf
32. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO
The particulars relating to the conservation of energy, technology
absorption, foreign exchange earnings and outgo, as required to be disclosed under Section
134(3)(m) of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014 are
appended as Annexure "E" to this report.
33. COMPLIANCE WITH SECRETARIAL STANDARDS
The Company complies with all applicable Secretarial Standards issued
by the Institute of Company Secretaries of India.
34. ACKNOWLEDGEMENT
Your Directors would like to express their sincere appreciation for the
positive co-operation received from the Government of India, Governments of various States
in India, Financial Institutions and the Bankers. The Directors also wish to place on
record their deep sense of appreciation for the commitment displayed by all executives,
officers, workers and staff of the Company resulting in the successful performance of the
Company during the year.
The Board also takes this opportunity to express its deep gratitude for
the continued co-operation and support received from its valued shareholders.
The Directors express their special thanks to Mr. B. N. Kalyani,
Chairman and Managing Director, for his untiring efforts for the progress of the Company.
For and on behalf of the Board of Directors
B. N. KALYANI
Chairman and Managing Director DIN: 00089380
Pune: May 08, 2024