The directors present their fifth annual report and the audited
statements of accounts for the year ended 31 March 2012.
The highlights are as under:
Units in Numbers 2012 2011
Two wheelers 3,834,405 3,387,070
Three wheelers 515,155 436,884
Total 4,349,560 3,823,954
Of Which Exports 1,579,824 1,203,718
(Rs. In Crore)
Net sales and other income 20,137.02 16,974.74
Gross profit before exceptional items,
interest and depreciation 4,328.03 3,747.73
Interest 22.24 1.69
Depreciation 145.62 122.84
Gross Profit before exceptional items 4,160.17 3,623.20
Exceptional items (134.00) 724.55
Profit before tax 4,026.17 4,347.75
Tax expense 1,022.12 1,008.02
Profit for the year 3,004.05 3,339.73
Add: Balance brought forward from
previous year 2,515.48 854.99
Profit available for Appropriation 5,519.53 4,194.72
Transfer to General Reserve 301.00 334.00
Proposed dividend (inclusive of
dividend tax) 1,513.39 1,345.24
Balance carried to Balance Sheet 3,705.14 2,515.48
Earnings per share (Rs.) 103.8 115.4
The directors recommend for consideration of the shareholders at the
ensuing annual general meeting, payment of a dividend of Rs. 45 per
share, (450 per cent) for the year ended 31 March 2012. The amount of
dividend and the tax thereon aggregate to Rs. 1,513.39 crore.
Dividend paid for the year ended 31 March 2011 wasRs. 40 per share (400
per cent). The amount of dividend and the tax thereon aggregated to Rs.
The operations of the Company are elaborated in the annexed Management
Discussion and Analysis Report.
Capacity expansion and new projects
The company's current installed capacity is 5.1 million units per
annum. The company plans to increase the installed capacity to 6.36
million units per annum by March 2013.
Commercial launch of the four-wheeler RE 60 show-cased in the Delhi
Auto Expo in Jan 2012, is scheduled for second half of 2012-13. RE 60
will be produced from the Company's Waluj plant.
The 4 Wheeler plant was earlier being planned in the Company's site at
Chakan MIDC Phase III. To benefit from the synergies with the 3
Wheeler facilities at Waluj, the 4 Wheeler project is now being
implemented at Waluj. The Chakan site will be used for expansion of the
2 Wheeler capacity.
Research and Development and technology absorption
A) Products Pulsar 200 NS
A new platform of engine and vehicle was designed to carry forward the
legacy of the Company's most successful brand - Pulsar, into the
future. This vehicle is designed to further enhance and sharpen the
street sports image of the Pulsar brand. The vehicle is powered by a
high performance 4 valve liquid cooled engine with triple spark
ignition, delivering 23.5 Ps, with a 6 speed gear box. This provides
the vehicle with excellent and thrilling performance as well as
efficiency. The vehicle is equipped with state-of-the-art features like
perimeter frame with high lateral rigidity, low slung central muffler,
nitrox mono shock rear suspension, all adding up to providing excellent
handling and riding pleasure.
This model extends the new platform of engine and vehicle co-designed
by Bajaj and KTM from 125cc into a 200cc. Unlike KTM125, this product
is aimed for Indian as well as European markets. The vehicle is powered
by a high performance 4V liquid cooled engine delivering 25 Ps, with a
6 speed gear box suitably mated to the power characteristics of the
engine. The engine has electronic fuel injection. The vehicle is
equipped with state-of-the-art features like radial calipers for front
disc brakes, inverted front forks, cast aluminum swing arm and radial
tyres at both front and back.
The BM-150 moves the highly successful BM-100, the number one bike in
Africa, to the next level. This product brings the power of 150cc to
the utility segment of the market. It has a sturdy frame designed to do
duty under demanding usage and terrain conditions and wide tyres to
complement. The BM-150 has been well received in the export markets.
The BM-100 complements the BM-150 to bring in features like electric
start in order to enhance the utility of the product. The strong frame
and modern engine make it very robust. The BM-100 and BM-150 together
address competitors from the 100 to 150 cc segments.
R&D has been working on improving its operations in a number of areas
as listed below:
- Manpower: R&D has been expanding its team size in areas of design,
analysis and validation in order to keep up with the rapidly expanding
aspirations of the Company. This year, R&D expanded its manpower
strength by about 12%.
- Facilities: R&D continued to enhance its design, computing and
validation facilities. The efforts on the establishment of validation
facilities have enabled R&D to develop durable and refined products
like the new Pulsar 200 NS.
- Total Productivity Management (TPM): R&D continues to vigorously
pursue the TPM way of thinking and working. This has yielded excellent
results in quality management of design and validation process. The TPM
approach has also been effective in the lead time reduction on the
various critical processes in R&D by elimination of waste.
The expenditure on research and development during 2011-12 and in the
previous year was:
(Rs. In Crore)
Particulars 2012 2011
i. Capital (Including technical know-how) 42.22 11.65
ii. Recurring 113.70 112.95
TOTAL 155.92 124.60
iii. Total research and development expenditure
as a percentage of sales, net of excise
duty 0.83% 0.78%
Conservation of energy
Company has always been a forerunner in conservation of energy and
natural resources. All manufacturing processes and products are
designed for minimising the carbon footprints and are being
continuously upgraded to consistently achieve this goal. Company has a
distinction of having all its plants certified for ISO 14000 and 18000.
Company not only follows Standard Operating Procedures for environment
protection and conservation of resources in all its plants, but also
propagates these initiatives throughout its vendor partners under the
initiative of 'Green Supply Chain'.
Given below are some of the key initiatives taken during 2011-12
towards Energy and Natural resource conservation. Apart from technology
adoptions, the energy conservation drive is guided by the principle of
5Rs (Reuse, Reduce, Recycle, Remove, Recover).
- Electrical energy saving was achieved by replacing reciprocating
compressor with screw air compressors at Waluj; reducing central grid
pressure of compressed air from 4.89 Bar to 4.68 Bar at Waluj;
installation of Air flow control unit in compressed air line at
Pantnagar; installation of Breeze Air coolers in place of ARP at Waluj;
use of LPG heaters in place of Electrical heaters at CGC furnace in
heat treatment; re-using waste energy from dynamometer to generate
electricity, at Pantnagar; use of LED/CFLs for Office/Street lighting;
- Water saving was achieved by rationalisation of pumping hours of main
pump and regulating pump on-off timing through timers; use of air
cooled compressors in place of water cooled compressors; use of treated
water for horticulture and non-critical processes;
- Liquified Petroleum Gas (LPG)/propane saving was achieved by
installation of waste heat recovery system for paint shops at Waluj;
implementation of 'Tactalis' pre-treatment process; reduction in weight
of paint line jigs and heat treatment fixtures; increasing conveyor
speed in paint shop;
- Major initiatives in utilisation of renewable energy were taken by
use of solar water heating system for process shops/canteen, at Waluj
and Chakan; installation of natural air exhaust (turbo ventilators) in
shops at Waluj and Chakan; use of wind mill energy for street lights at
Bajaj Auto maintained its stellar growth in exports and continued to be
India's largest exporter of two and three-wheelers. During the year
under review, the Company exported 1,579,824 vehicles, achieving a
growth of 31% over the previous year, while total exports amounted to Rs.
6,604 crore as against Rs. 4,552 crore in the previous year.
More details of International Business are set out in the annexed
Management Discussion and Analysis report.
Foreign exchange earning and outgo
The company continued to be a net foreign exchange earner during the
Total foreign exchange earned by the Company during the year under
review was Rs. 6,626.30 crore, compared to Rs. 4,564.78 crore during the
Total foreign exchange outflow during the year under review was Rs.
1,023.38 crore as against Rs. 844.50 crore during the previous year.
The above outflow includes an investment of Rs. 68.14 crore (Previous
Year: Rs. 210.08 crore) made in its 100% subsidiary, Bajaj Auto
International Holdings BV, Netherlands for increasing its stake in KTM
Power Sports AC from 39.26% to 40.87%.
Industrial Relations with staff and workmen across the plants at
Akurdi, Waluj, Chakan and Pantnagar continued to be cordial.
PT. Bajaj Auto Indonesia (PTBAI) is a majority shareholding (98.94%)
subsidiary of Bajaj Auto Limited. The subsidiary assembles and markets
Pulsars in Indonesia. PTBAI has achieved a billing of 23,337 units in
2011-12 as against 21,586 units in 2010-11, an increase of 8%. Existing
models Pulsar 135, Pulsar 180 and Pulsar 220 have contributed to this
steady growth rate.
Sales and service network have been considerably strengthened in
2011-12 across entire Indonesia with number of showroom/outlets now at
152 compared to 84, in March 2011. The year has seen a considerable
improvement in availability of finance, as the Company has tied up
financing arrangements with a few more finance companies. Network
expansion, easy availability of finance and scheduled new product
launches would be the key drivers for growth in 2012-13.
More details are given separately in this annual report.
Bajaj Auto International Holdings BV, Netherlands (BAIHBV)
During the year under review, BAIHBV invested further _ 10.3 million to
increase its stake in KTM Power Sports AG (KTM) to 40.87%.
With further investment of _ 25.9 million during April 2012, BAIHBV's
shareholding in KTM currently stands at 47.18%. In its recently held
AGM, KTM Power Sports AG has changed its corporate name to KTM AG.
The co-operation with KTM is progressing well. KTM Duke 125 has become
the leader in its category in Europe. KTM Duke 200 has been launched in
India in February 2012 and has become an instant hit with bike
enthusiasts. These products will be taken to further markets in the
Further, during 2011, KTM has made good progress, improved its market
share and has reported a healthy set of numbers.
Signing for anti-corruption initiative of World Economic Forum (WEF)
In support of the initiative taken by WEF, with a view to strengthening
the efforts to counter bribery and corruption, your company is a
signatory to the "Commitment to anti-corruption" and is supporting the
"Partnering Against Corruption - Principles for Countering Bribery"
derived from Transparency International's Business Principles. This
calls for a commitment to two fundamental actions viz. a zero-tolerance
policy towards bribery and development of practical and effective
Corporate Social Responsibility
During the year 2011-12, Bajaj Auto continued its Affirmative Action
Plan and Corporate Social Responsibility initiatives in various fields.
Activities in this area are set out in greater detail in the annexed
D S Mehta, Kantikumar R Podar, Shekhar Bajaj and D J Balaji Rao retire
from the Board by rotation this year and being eligible, offer
themselves for re-appointment.
Sanjiv Bajaj, in view of his appointment as Managing Director in Bajaj
Holdings & Investment Ltd., has resigned as Executive director of the
Company with effect from 1 April 2012. He will however continue on the
Board as a non-executive director. The Board places on record its
sincere appreciation of the valuable services rendered by Sanjiv Bajaj
during his tenure as Executive Director of the Company.
Directors' responsibility statement
As required by Sub-section (2AA) of Section 217 of the Companies Act,
1956, directors state:
- that in the preparation of annual accounts, the applicable accounting
standards have been followed alongwith proper explanation relating to
- that the directors 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 profit of
the Company for that period
- that the directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956 for safeguarding the assets of
the Company and for preventing and detecting fraud and other
- that the annual accounts have been prepared on a going concern basis
Presentation of financial results
Pursuant to Notification dated 28 February 2011 issued by the Ministry
of Corporate Affairs, the format for disclosure of financial statement
prescribed under Schedule VI to the Companies Act, 1956 has been
substantially revised. The financial results of the Company for the
year ended 31 March 2012 have, therefore, been disclosed as per the
revised Schedule VI. Previous year's figures have also been restated to
conform with the current year's presentation.
Consolidated financial statements
The directors also present the audited consolidated financial
statements incorporating the duly audited financial statements of the
subsidiaries, viz. PT. Bajaj Auto Indonesia and Bajaj Auto
International Holdings BV, Netherlands and as prepared in compliance
with the accounting standards and listing agreement as prescribed by
Information in aggregate for each subsidiary company is disclosed
separately in the consolidated balance sheet.
Ministry of Corporate Affairs (MCA) vide Circular No. 51/12/2007-CL-lll
dated 8 February 2011 has given general exemption with regard to
attaching of the balance sheet, profit and loss account and other
documents of its subsidiary companies subject to fulfillment of
conditions mentioned therein. The company has fulfilled all the
necessary conditions in this regard. The summary of the key financials
of the Company's subsidiaries is included in this annual report.
The annual accounts of the subsidiary companies and the related
detailed information will be made available to the members of the
Company and its subsidiary companies, seeking such information at any
point of time. The annual accounts of the subsidiary companies will be
kept for inspection by any member of the Company at its registered
office and also at the registered office of the concerned subsidiary
As required under the provisions of Sub-section (2A) of Section 217 of
the Companies Act, 1956 read with the Companies (Particulars of
Employees) Rules 1975 as amended, particulars of the employees are set
out in an Annexure to the directors report. As per provisions of
Section 219 (l)(b)(iv) of the said Act, these particulars will be made
available to any shareholder on request.
Particulars regarding technology absorption, conservation of energy and
foreign exchange earnings and outgo required under Section 217(l)(e) of
the Companies Act, 1956 and Companies (Disclosure of Particulars in the
report of Board of Directors) Rules, 1988 have been given in preceding
Directors' Responsibility Statement as required by Section 217(2AA) of
the Companies Act, 1956 appears in a preceding paragraph.
Certificate from auditors of the Company regarding compliance of
conditions of corporate governance is annexed to this report as
A cash flow statement for the year 2011-12 is attached to the balance
Pursuant to clause 49 of the listing agreement with stock exchanges, a
separate section titled 'Corporate Governance' has been included in
this annual report, alongwith the reports on Management Discussion and
Analysis and General Shareholder Information.
All Board members and senior management personnel have affirmed
compliance with the code of conduct for the year 2011-12. A declaration
to this effect signed by the Chief Executive Officer (CEO) of the
Company is contained in this annual report.
The CEO and Chief Financial Officer (CFO) have certified to the Board
with regard to the financial statements and other matters as specified
in clause 49 of the listing agreement and the said certificate is
contained in this annual report.
Secretarial standards of ICSI
Secretarial standards issued by the Institute of Company Secretaries of
India (ICSI) from time to time are currently recommendatory in nature.
Your company is, however, complying with the same.
Pursuant to an intimation from the promoters, the names of the
promoters and entities comprising "Group" as defined under the
erstwhile Monopolies and Restrictive Trade Practices ("MRTP") Act, 1969
are disclosed in the annual report in terms of Regulation 3(l)(e) of
the erstwhile SEBI (Substantial Acquisition of Shares and Takeovers)
The observations made in the Auditors' Report, read together with the
relevant notes thereon are self-explanatory and hence, do not call for
any comments under Section 217 of the Companies Act, 1956.
The members are requested to appoint Messers Dalai and Shah, Chartered
Accountants, as auditors for the period from the conclusion of the
ensuing annual general meeting till the conclusion of the next annual
general meeting and to fix their remuneration.
In conformity with the directives of the Central Government, the
Company has appointed A P Raman, cost accountant, ICWA Membership No.
837, with address at Golok, Plot No.13, Sector No.28, Pradhikaran,
Nigdi, Pune - 411 044, as the cost auditor under Section 233B of the
Companies Act, 1956 to conduct the cost audit of Bajaj Auto Ltd. for
the year 2012-13. For the year ended 31 March 2011, the due date of
filing the cost audit report was 30 September 2011, and the actual date
of filing the cost audit report was 8 August 2011.
On behalf of the Board of Directors,
Chairman 17 May 2012