Dear Members,
Your directors present the seventeenth Annual Report along with the audited standalone
and consolidated financial statements for 2023-24 (or FY2024).
Company overview
Your Company ('Bajaj Finserv' or 'BFS' or the 'Company') was incorporated on 30 April
2007 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 2024, the Company stood at 29th rank based
on market capitalisation.
In accordance with the Core Investment Companies (Reserve Bank) Directions, 2016, as
amended ('Directions') your Company, is a Core Investment Company with an asset size of
above ' 100 crore but not accessing public funds. Accordingly, it is not required to be
registered under section 45IA of the Reserve Bank of India Act, 1934 and is termed as
'Unregistered CIC'. Your Company continues to carry on the business permitted for
Unregistered CIC. In terms of the Directions, the Company continues to invest 90% of its
investment in the group companies of which 60% is in the form of equity investment. This
allows a Group with homogenous businesses to operate under a common brand while
participating in multiple opportunities through its subsidiaries. Accordingly, BFS,
through its various subsidiaries provides a complete suite of financial solutions for
customers which 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.
Highlights of the standalone financial results are as under:
(' In Crore)
Particulars |
FY2024 |
FY2023 |
Total Income |
1,733.91 |
1,147.61 |
Total expenses |
196.99 |
172.99 |
Profit before tax |
1,536.92 |
974.62 |
Tax expense |
366.86 |
242.10 |
Profit for the year |
1,170.06 |
732.52 |
Basic and diluted earnings per share |
7.3 |
4.6 |
Closing balances in reserve/other equity: |
|
(' In Crore) |
Particulars |
FY2024 |
FY2023 |
Securities premium account |
1,098.48 |
959.59 |
General reserve |
1,219.58 |
1,213.79 |
Share based payment reserve |
436.37 |
313.57 |
Treasury shares |
(104.31) |
(117.48) |
Retained earnings |
3,759.44 |
2,719.34 |
Total |
6,409.56 |
5,088.81 |
Note: Detailed movement of above reserves can be seen in 'Statement of Changes in
Equity'.
Highlights of the consolidated financial results are as under:
(' In Crore)
Particulars |
FY2024 |
FY2023 |
Total income |
110,383.00 |
82,072.01 |
Total expenses |
89,016.06 |
65,262.07 |
Profit before tax |
21,375.03 |
16,811.13 |
Tax expense |
5,779.67 |
4,601.59 |
Profit after tax |
15,595.36 |
12,209.54 |
Profit attributable to non-controlling interests |
7,447.57 |
5,792.26 |
Profit for the year |
8,147.79 |
6,417.28 |
Basic earnings per share (?) |
51.2 |
40.3 |
Diluted earnings per share (?) |
50.7 |
40.0 |
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 has 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. As a part of
the review process, the dividend distribution policy was reviewed at the meeting of the
Board held on 21 March 2024 and there were no changes to the principles, criteria or
parameters set out in the dividend distribution policy basis which dividend is recommended
or declared.
The policy is available on the website of the Company and can be accessed at
https://cms-assets.bajajfinserv. in/is/content/bajajfinance/dividend-policypdf?scl=1
&fmt=pdf.
Dividend
For FY2024, your Directors recommend, for the consideration of members at the ensuing
annual general meeting (AGM), payment of final dividend of ' 1 per equity share (100%) of
face value of ' 1, out of the profits for FY2024. The total amount of dividend for FY2024
is ' 159.55 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. The list of the important policies adopted by the
Company is given in Report on Corporate Governance.
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
The said policies are available on the website of the Company and can be accessed at
https://www. aboutbajajfinserv.com/investor-relations-policies-and-codes
Operations
Detailed information on the operations and state of affairs of the Company and of its
subsidiaries are covered in the Management Discussion and Analysis.
The standalone total income for FY2024 is Rs 1,733.91 crore as against Rs.1,147.61
crore for FY2023, whereas the profit after tax for FY2024 stands at Rs ' 1,170.06 crore as
against ' 732.52 crore for FY2023.
The consolidated total income for FY2024 is ' 110,383.00 crore as against Rs '
82,072.01 crore for FY2023, whereas the consolidated profit after tax for FY2024 amounted
to Rs ' 8,147.79 crore as compared to ' Rs 6,417.28 crore for FY2023.
Governance of subsidiaries
Through structured institutional processes including appointment of qualified and
competent members on the subsidiaries' board, your Company engages with its subsidiaries
on long-term strategy, annual operating plans, corporate governance, risk management,
financial controls, key policies related to employee and corporate conduct, employee
well-being, remuneration policies and sustainability practices. Such engagement enables
your Company to pursue its vision of becoming the first choice provider of financial
services for every Indian. Your Company's Board and its Committees, oversee and monitor
the activities of the other group companies. The Chairman and senior management of the
Company devote substantial time in engagement and policy-making with the subsidiaries. As
a practice, at each meeting of the Board/Committees, key elements of the businesses of the
subsidiary companies and risks emanating from subsidiaries are discussed. Further, in line
with the SEBI Listing Regulations, an independent director of your Company is on the Board
of all its unlisted material subsidiaries.
Subsidiaries, associates and joint venture
Following are the subsidiary and joint venture companies of the Company as at 31 March
2024:
Name of the company |
% of equity |
Relationship |
Bajaj Allianz Life Insurance Company Ltd. (BALIC)* |
74.00 |
Subsidiary |
Bajaj Allianz General Insurance Company Ltd. (BAGIC)* |
74.00 |
Subsidiary |
Bajaj Finance Ltd. (BFL)* |
51.34 |
Subsidiary |
Bajaj Housing Finance Ltd. (BHFL) (100% subsidiary of BFL)* |
- |
Subsidiary |
Bajaj Finserv Direct Ltd. (BFS-D) |
80.13# |
Subsidiary |
Bajaj Financial Securities Ltd. (BFinsec) (100% Subsidiary of BFL) |
- |
Subsidiary |
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) (100% subsidiary of
BAFDL) |
- |
Joint venture |
Snapwork Technologies Private Ltd. (associate of BFL) |
41.50** |
- |
Pennant Technologies Private Ltd. (associate of BFL) |
26.53** |
- |
*material subsidiary of the Company within the meaning of SEBI Listing Regulations.
** On fully diluted basis.
#The remaining 19.87% shareholding is held by BFL.
The Company does not have any associate. Further, during FY2024, no new subsidiary was
incorporated/ acquired. The Company has not entered into a joint venture with any other
company. Further, during FY2024, no company ceased to be an associate, subsidiary or joint
venture of BFS.
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.aboutbajajfinserv.com/investor-relations-annual-reports. 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-subsidiariespdf?scl=1 &fmt=pdf
Acquisition of Vidal Healthcare Services Private Ltd.
During FY2024, BFS-H, entered into a share purchase agreement for acquisition of 100%
equity stake in Vidal Healthcare Services Private Ltd. ('VHC'). The acquisition of VHC has
been completed in April 2024. Vidal Health Insurance TPA Private Ltd. and VH Medcare
Private Ltd., two wholly owned subsidiaries of VHC, have in turn become indirect wholly
owned subsidiaries of BFS-H and the Company. BFS-H has indirectly acquired ~21.3% equity
stake in IntentHealth Technologies Private Ltd., which is an associate of VHC.
The acquisition of VHC significantly expands Bajaj Finserv's capabilities in the
healthcare space, empowering it to service consumer needs for hospitalisation.
Preferential issue of warrants by BFL
During the year under review, BFL raised capital through qualified institutions
placement and a preferential issue. As a token of commitment and support to BFL, your
Company participated in preferential issue.
Accordingly, your Company subscribed to 1,550,000 warrants, fully convertible into
equivalent number of equity shares, issued by its subsidiary i.e., BFL at a price of '
7,670 per warrant, pursuant to the provisions of Chapter V of SEBI (Issue of Capital and
Disclosure Requirements) Regulations, 2018.
As per the terms of the preferential issue and in accordance with applicable law, 25%
of the issue price of the warrants has to be subscribed upon issuance of warrants and the
balance 75% may be invested within a maximum period of 18 months from the date of issue.
Accordingly, your Company has invested ' 297.21 crore on 2 November 2023, i.e., 25% of
issue price of warrants and balance ' 891.64 crore shall be payable within 18 months.
Directors and Key Managerial Personnel
A. Change in directorate:
i) Re-Appointment:
Anami N Roy (DIN: 01361110):
Pursuant to members approval vide their special resolution dated 7 December 2023, Anami
N Roy has been re-appointed as an independent director for a second term of five years
w.e.f. 1 January 2024 and also to continue as a director on the Board, post completion of
75 years during his second tenure.
The Board is of the opinion that Anami N Roy is a person of integrity, expertise,
experience and proficiency to serve the Company as independent director strengthening the
overall composition of the Board.
ii) Sad demise of Independent Director:
Your directors express their profound grief on the sudden demise of D J Balaji Rao. He
was an independent director on the Board of the Company since 30 January 2008. He was
member of Audit Committee and Chairman of Nomination and Remuneration Committee. He passed
away on 28 November 2023 and consequently ceased to be a director of the Company. The
Board places on record its sincere appreciation for the invaluable guidance, services and
mentorship provided by him in his tenure as a director of the Company.
iii) Directors liable to retire by rotation:
Madhur Bajaj (DIN: 00014593), retires by rotation at the ensuing AGM and has not
offered himself for re-appointment.
B. Key managerial personnel ('KMP'):
There were no changes during the year. For details on changes in the senior management
team composition, please refer to the Report on Corporate Governance.
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 Companies
Act, 2013 (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 Act and regulation 19(4) read with Part D of schedule
II to the SEBI Listing Regulations, the Board has framed a Remuneration Policy. The said
policy was reviewed on 21 March 2024 and no changes were proposed. 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-v3pdf?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-a-vis the Company are
disclosed in the Report on Corporate Governance.
Compliance with code of conduct
All Board members and senior management personnel have affirmed compliance with the
Company's Code of Conduct for FY2024.
A declaration to this effect signed by the Chairman & Managing Director forms part
of this Annual 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.aboutbajajfinserv.com/
investor-relations-annual-reports.
Number of meetings of Board
Seven (7) meetings of the Board were held during FY2024. Details of the meetings and
attendance thereat, form part of the Report on Corporate Governance.
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 FY2024;
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
Anami N Roy was inducted as a member of the Committee effective 1 April 2023. D J
Balaji Rao ceased to be a member of the Committee, consequent to his demise.
The Audit Committee comprises of the following independent directors: Dr. Naushad
Forbes (DIN: 00630825), Chairman, Pramit Jhaveri (DIN: 00186137) and Anami N Roy (DIN:
01361110). All members of the Committee are considered financially literate and are deemed
to have necessary accounting or financial management related expertise in terms of SEBI
Listing Regulations.
All the recommendations of the Audit Committee were accepted by the Board.
The brief terms of reference, number of meetings and attendance record of members are
given in the Report on Corporate Governance.
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, in accordance with the Securities and Exchange Board of India (Share Based
Employee Benefits and Sweat Equity) Regulations, 2021 (the 'SBEB Regulations'), 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 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. Your Company has a
group talent management programme which seeks to provide employees to work across group
companies and thereby preparing them for future roles in a well-planned manner. 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.
On 23 March 2024, the shareholders approved modification to the Bajaj Finserv Limited
Employee Stock Option Scheme ('BFS ESOS') through postal ballot, to include enabling
provisions for inclusion of employees from the Group and associate companies and treatment
of stock options in case of retirement, death, permanent incapacity, transfers and
deputation. BFS ESOS, as amended, is in compliance with the SBEB Regulations.
As per BFS ESOS, the total number of options that can be granted is 45,000,000
convertible into equivalent number of equity shares of face value of '1.
A statement giving complete details as at the year ended 31 March 2024, in terms of
regulation 14 of SBEB Regulations is available on the Company's website and can be
accessed at https://www.aboutbajajfinserv.com/ 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 FY2024.
Capital Structure
The authorised capital of the Company as on 31 March 2024 stood at Rs ' 200 crore
consisting of 200 crore equity shares of face value of ' 1.
On 31 July 2023, the Allotment Committee allotted 2,673,353 equity shares of face value
of ' Rs 1 to the Bajaj Finserv ESOP Trust under the BFS ESOS, thereby increasing the paid
up capital from ' 159.28 crore consisting of 1,592,815,460 fully paid- up equity shares to
Rs ' 159.55 crore consisting of 1,595,488,813 fully paid - up equity shares.
Except as stated above, there was no other issue of shares by way of public issue,
rights issue, bonus issue or preferential issue during the year under review.
Related party transactions
All contracts/ arrangement/ transactions entered by the Company during FY2024 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. Such transactions
are reviewed by the Audit Committee, on a quarterly basis.
All related party transactions entered during FY2024 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 FY2024 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 AOC-2 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-transactionspdf?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 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) 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 FY2024, the energy consumption of the Company was reduced by 71,600 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 FY2024, it generated 9.04 crore units, which it sold to Maharashtra State
Electricity Distribution Company Ltd.
However, captive use would be possible only after operative guidelines of the Nodal
Agency are issued, following the Maharashtra Electricity Regulatory Commission's
notification of Green Energy Open Access.
(iii) Capital investment on energy conservation equipment;
• The amount of capital investment made by the Company on energy conservation
equipments during FY2024, was approximately ' 1.35 lakh.
• 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.
Foreign exchange earnings and outgo
During FY2024, the Company did not have foreign exchange earnings. The foreign exchange
outgo in terms of actual outflow amounted to ' 1.68 crore, as against ' 0.46 crore in
FY2023.
Risk management
The Company has adopted a Risk Management Policy in accordance with the provisions of
the Act and regulation 17(9) of the SEBI Listing Regulations. Managing risk is fundamental
to financial services industry and it is key to ensure sustained profitability and
stability. In a rapidly changing economic, geopolitical, regulatory and financial
environment, your Company and its subsidiaries have continued to leverage on their strong
risk management capabilities.
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 is given in the Management Discussion and Analysis. The Board is of the opinion
that there are no elements of risk that may threaten the existence of the Company.
Corporate social responsibility ('CSR')
'Bajaj Beyond' is the Group's new identity for all its CSR and charitable programmes
with focus on youth skilling. The initiatives will benefit the youth and enable them to
take advantage of employment and entrepreneurial opportunities offered by India's growing
economy in the years to come.
The Committee comprises of three directors viz., Dr. Naushad Forbes (DIN: 00630825),
Chairman, Sanjiv Bajaj (DIN: 00014615) and Anami N Roy (DIN: 01361110).
During FY2024, 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 FY2024 was ~ ' 0.61 crore. As on 31 March 2024,
total amount spent on CSR activities by Company was Rs' 0.99 crore.
Pursuant to Rule 8(1) of the 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/csr-policypdf-1?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 FY2024.
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 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 2023-24 is given below:
• The NRC at its meeting held on 15 March 2023, reviewed the criteria for
performance evaluation. The said criteria are available on the website of the Company at
https://cms-assets.bajajfinserv.in/is/content/
bajajfinance/board-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. As
advised by the NRC and Board, an option for qualitative feedback, was introduced.
• 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 2023-24 and a consolidated report thereof were arrived
at.
• Other than Chairman of the Board and NRC, no other director has access to the
individual ratings given by directors.
• The report of performance evaluation so arrived at was then discussed and noted
by the Board at its meeting held on 21 March 2024.
Based on the report and evaluation, the Board and NRC at their respective meetings held
on 21 March 2024, 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 21
March 2024, have been furnished in a separate paragraph elsewhere in this Report.
The process followed by the Company was reviewed by the NRC at its meeting held on 21
March 2024 which opined it to be compliant with applicable provisions. Further the Board,
at its meeting held on 21 March 2024, advised the management to benchmark the processes
and criteria with best practices.
Significant and material orders
During FY2024, 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 financial year without the presence of non-independent directors
and members of the management.
Accordingly, independent directors of the Company met on 21 March 2024 and:
• noted the report of performance evaluation for the year 2023-24;
• 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; and
• 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.
The independent directors present elected Dr. Naushad Forbes as the Chairman 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 an Enforcement Committee
comprising senior management representatives from within the organisation. Pursuant to the
Whistle-Blower Policy, a 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-policypdf-1?scl=1
&fmt=pdf
Investor Education and Protection Fund ('IEPF')
The details pertaining to the transfer of unclaimed dividend amount and shares to the
IEPF have been provided in General Shareholder Information, which forms part of this
Annual Report.
Uma Shende, Company Secretary is the Nodal Officer of the Company, appointed pursuant
to rule 7(2A) of the Investor Education and Protection Fund Authority (Accounting, Audit,
Transfer and Refund) Rules, 2016, the details of which are available on the website of the
Company at https://www.aboutbajajfinserv.com/
investor-relations-shareholders-information-listing-on-stock-exchange.
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')
SEBI vide its Master circular dated 11 July 2023 had prescribed the Business
Responsibility and Sustainability Reporting (BRSR).
Further, SEBI vide its circular dated 12 July 2023 introduced BRSR Core. The BRSR Core
is a sub-set of the BRSR, consisting of a set of Key Performance Indicators (KPIs) under 9
ESG attributes of the Company.
DNV Business Assurance India Pvt. Ltd. has provided reasonable assurance for BRSR Core
and limited assurance on rest of the BRSR, in line with SEBI's circular of 12 July 2023.
The BRSR in the format prescribed by SEBI is annexed to the Annual Report.
Also, the Company has adopted a Policy for Responsible and Sustainable Business
Conduct. A detailed ESG report describing various initiatives, actions and processes of
the Company towards the ESG has been hosted on Company's website and can be accessed at
https://www.aboutbajajfinserv.com/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 FY2024.
Secretarial standards of ICSI
The Company has complied with the requirements prescribed under the Secretarial
Standards on meetings of the Board of Directors (SS-1) and General Meetings (SS-2), as
amended, 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, 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.
The Audit Committee periodically reviews the adequacy of the internal audit structure.
Auditors Statutory Auditor
KKC & Associates LLP (FRN 105146W/ W100621) continue to be the Statutory Auditor 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 FY2024, 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 reports of BHFL (Debt listed), BALIC
and BAGIC for the FY2024 are annexed to this Report and also placed on Company's website
at https://www.aboutbajajfinserv.com/investor-relations-annual-reports.
Pursuant to regulation 24A(2) of the SEBI Listing Regulations, a report on secretarial
compliance for FY2024 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 FY2024, 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 FY2025 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 of AGM.
The cost audit report for FY2023, is unmodified i.e., it does not contain any
qualification, reservation or adverse
remark or disclaimer.
Other Statutory Disclosures
• In this report, any reference to the statutory or regulatory guidelines, acts,
circulars, regulations, notifications and directions, unless the context otherwise
requires, be construed to include any amendments, modifications, updations or re-enactment
thereof as the case may be.
• The financial statements of the Company and its subsidiaries are placed on the
Company's website at https://
www.aboutbajajfinserv.com/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 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 lakh)
Sr. |
Sitting Fees |
|
Commission |
|
No. Particulars |
FY2024 |
FY2023 |
FY2024* |
FY2023 |
1. BFL |
26.00 |
23.00 |
404.00 |
60.50 |
2. BHFL |
13.00 |
14.00 |
26.00 |
6.75 |
*will be payable post adoption of financial statements for FY2024.
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 Company has a policy on prevention of sexual harassment at the workplace.
The policy is 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.
Details of the composition of the Committee is given in the said policy. The number of
complaints received, disposed of and pending during FY2024 is given in the Corporate
Governance Report. The policy can be accessed at
https://cms-assets.bajajfinserv.in/is/content/bajajfinance/prevention-of-sexual-harrassement-
at-workplace-v?pdf?scl=1&fmt=pdf
• There is no change in the nature of business of the Company during FY2024.
• The Company has completed all corporate actions within the specified time
limits. The securities were not suspended from trading during the year due to corporate
actions or otherwise.
• Neither any application was made, nor any proceeding is pending under the
Insolvency and Bankruptcy Code, 2016 during FY2024 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.
• The voting rights are exercised directly by the employees in respect of shares
allotted under the Employee Stock Option Scheme of the Company. Thus, the disclosure
requirements pursuant to Rule 16(4) of the Companies (Share Capital and Debentures) Rules,
2014 is not applicable.
• The Company has in place various Board approved policies pursuant to Companies
Act, 2013 and SEBI Regulations. These policies are reviewed from time to time keeping in
view the operational requirements and the extant regulations. The Report on Corporate
governance contains web-links of major policies hosted
on website.
• During FY2024, there was no instance of one-time settlement with Banks or
Financial Institutions. Therefore, as per rule 8(5) (xii) of Companies (Accounts) Rules,
2014, reasons of difference in the valuation at the time of one-time settlement and
valuation done while taking loan from the Banks or Financial Institutions are
not reported.
Acknowledgement
The Board places its gratitude and appreciation for the support and co-operation from
its members and 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 another excellent year of
performance.
On behalf of the Board of Directors Sanjiv Bajaj
Chairman & Managing Director DIN: 00014615 Pune: 26 April 2024
|