One of the major manufacturing locations of the Company is currently in tax holiday period. The Company expects to remain in lower tax bracket than the normal tax. The Company pays and recognise minimum stipulated tax on book profit as per the Income tax laws. Therefore, no deferred tax liabilities/assets are recognised in respect of those temporary differences which will be reversed in tax holiday period. Further, there are no reconciliation items between tax expense and the product of accounting profit multiplied by the applicable tax rate.
(iii) Terms/Rights attached to Equity Shares:
The Company has one class of equity shares having par value of ' 1 per share. Each holder of equity shares is entitled to one vote per share. The Company declares and pays dividends in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting.
In the event of liquidation of the Company the holders of equity shares will be entitled to receive the remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.
(iv) Out of the total equity shares of 1,475.40 lakh, 561.25 lakh shares (i.e. 38.04%) are held by Bajaj Resources Private Limited along with its subsidiaries (KNB Enterprises LLP and SKB Roop Commercials LLP).
Notes to Standalone Financial Statements
for the year ended March 31, 2022
Disclosure under the Micro, Small and Medium Enterprises Development Act, 2006 (“MSMED Act, 2006”):
? in Lakh
|
Particulars
|
As at 1 March 31,2022 1
|
As at March 31,2021
|
|
a)
|
The principal amount and the interest due thereon remaining unpaid to any supplier as at the end of each accounting year;
|
213.83
|
334.52
|
|
bT
|
The amount of interest paid by the buyer in terms of Section 16, along with the amounts of the payment made to the supplier beyond the appointed day during each accounting year;
|
0.33
|
1.46
|
|
c]
|
The amount of interest due and payable for the period of delay in making payment (which have been paid but beyond the appointed day during the year] but without adding the interest specified under this Act;
|
|
|
|
dT
|
The amount of interest accrued and remaining unpaid at the end of each accounting year; and
|
0.04
|
0.17
|
|
e)
|
The amount of further interest remaining due and payable even in the succeeding years, until such date when the interest dues as above are actually paid to the small enterprise, for the purpose of disallowance as a deductible expenditure under Section 23.
|
|
|
The information has been given in respect of such vendors to the extent they could be identified as “Micro and Small Enterprises" enterprises on the basis of information available with the Company.
Trade Payables ageing schedule As at March 31, 2022 and March 31, 2021
Particulars
Outstanding for following periods from due date of payments
Less than 1 years
1-2 years
2-3 years More than 3 years
Totals
|
a) Undisputed dues to MSME
|
213.83
|
-
|
-
|
-
|
213.83
|
| |
(334.52)
|
-
|
-
|
-
|
(334.52)
|
|
b| Undisputed dues to others
|
4,293.26
|
24.79
|
0.66
|
1.66
|
4,320.37
|
| |
(6,514.75)
|
(7.43)
|
(6.99)
|
(10.19)
|
(6,539.36)
|
|
Total trade payable
|
4,507.10
|
24.79
|
0.66
|
1.66
|
4,534.20
|
| |
16,849.27)
|
17.43)
|
16.99)
|
110.19)
|
16,873.88)
|
(Figures in bracket are for previous financial year)
18 Other Financial Liabilities
? in lakh
|
Particulars
|
As at
March 31,2022
|
As at March 31,2021
|
|
a) Security Deposits from C&F and Others
|
51.50
|
59.50
|
|
b) Unclaimed Dividends
|
14.46
|
8.33
|
|
c) Other Outstanding Liabilities
|
5,332.39
|
4,163.70
|
|
d) Payable for Capital Goods
|
75.78
|
5.85
|
|
Total
|
5,474.13
|
4,237.38
|
|
19 Other Current Liabilities
|
|
? in lakh
|
|
Particulars
|
As at
March 31,2022
|
As at March 31,2021
|
|
a) Advances from Customers
|
309.50
|
469.97
|
|
b) Statutory Liabilities
|
768.43
|
922.10
|
|
Total
|
1,077.93
|
1,392.07
|
|
20 Provisions for employee benefit 20.1 Non-Current
|
|
? in lakh
|
|
Particulars
|
As at
March 31,2022
|
As at
, March 31,2021
|
|
Leave Encashment
|
367.26
|
117.85
|
|
Total
|
367.26
|
117.85
|
Notes to Standalone Financial Statements
for the year ended March 31, 2022
|
2k Cost of Material Consumed
|
|
|
? in lakh
|
|
Particulars
|
|
FY 2021-22
|
FY 2020-21
|
|
Inventory as at the beginning of the year
|
|
1,667.67
|
2,479.69
|
|
Add: Purchases
|
|
25,074.63
|
22,499.48
|
|
Less: Inventory at the end of the year
|
|
2,202.83
|
1,667.67
|
|
Cost of Material Consumed
|
|
24,539.47
|
23,311.50
|
|
25 Change in Inventories
|
|
|
? in lakh
|
|
Particulars
|
„ FY 2021-22 1
|
FY 2020-21
|
Changes
|
|
Inventories at the end of the year
|
|
a) Finished Goods
|
2,301.48
|
1,856.45
|
(445.03)
|
|
b| Traded Goods
|
865.19
|
584.25
|
(280.94)
|
|
c| Work-in-Progress
|
123.68
|
105.37
|
(18.31)
|
| |
3,290.35
|
2,546.07
|
(744.28)
|
|
Inventories at the beginning of the year
|
|
a) Finished Goods
|
1,856.45
|
3,059.20
|
1,202.75
|
|
b| Traded Goods
|
584.25
|
379.65
|
(204.60)
|
|
c| Work-in-Progress
|
105.37
|
279.53
|
174.16
|
| |
2,546.07
|
3,718.38
|
1,172.31
|
|
Change in Inventories
|
(744.28)
|
1,172.31
|
|
|
26 Employee Benefits Expense
|
|
|
? in lakh
|
|
Particulars
|
|
FY 2021-22
|
FY 2020-21
|
|
a) Salaries and Wages
|
|
7,610.34
|
7,604.04
|
|
b) Contribution to Provident and Other Funds (refer note no 46)
|
|
410.54
|
379.42
|
|
c) Gratuity expenses (refer note no 46)
|
|
127.99
|
139.38
|
|
d) Leave Encashment
|
|
352.89
|
211.82
|
|
e) Staff Training and Welfare Expenses
|
|
68.02
|
52.63
|
|
f) Share-Based Payment Expenses (refer note no 49)
|
|
82.33
|
(166.85)
|
|
Total
|
|
8,652.11
|
8,220.44
|
|
27 Finance Costs
|
|
|
? in lakh
|
|
Particulars
|
|
FY 2021-22
|
FY 2020-21
|
|
a) Interest Expense
|
|
87.50
|
121.30
|
|
b) Bank Charges
|
|
10.84
|
10.66
|
|
Total
|
|
98.34
|
131.96
|
|
28 Depreciation and Amortisation Expenses
|
|
|
? in lakh
|
|
Particulars
|
|
FY 2021-22
|
FY 2020-21
|
|
a) Depreciation on Property Plant and Eguipment
|
|
371.91
|
424.19
|
|
b) Amortisation of Intangible Assets
|
|
91.48
|
156.02
|
|
Total
|
|
463.39
|
580.21
|
Options granted to Employees under Restricted Stock Unit - Plan 2020 ("RSU 2020") are considered to be potential equity shares. They have been included in the determination of diluted earnings per share to the extent to which they are dilutive. The options have not been included in the determination of basic earnings per share. Details relating to the options are set out in note 49.
34 The Company operates only in one segment, namely "Cosmetics, Toiletries and Other Personal Care products" and there are no reportable segments in accordance with Ind-AS 108 on "Operating Segments".
35 Details of CSR Expenditure
As per Section 135 of the Companies Act, 2013, a company, meeting the applicability threshold, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on corporate social responsibility (CSR) activities. The areas for CSR activities are eradication of hunger and malnutrition, promoting education, art and culture, healthcare, destitute care and rehabilitation, environment sustainability, disaster relief, COVID-19 relief and rural development projects. A CSR committee has been formed by the company as per the Act. The funds are utilized through the year on these activities which are specified in Schedule VII of the Companies Act, 2013.
41 The Company does not have any Benami property, where any proceeding has been initiated or pending against the Company for holding any Benami property.
42 No transaction to report against the following disclosure requirements as notified by MCA pursuant to amended Schedule III:
42.1 Crypto Currency or Virtual Currency
42.2 Relating to borrowed fund
i) The Company has not advanced or loaned or invested funds to any other person(s) or entity(ies), including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries
ii) The Company has not received any fund from any person(s) or entity(ies), including foreign entities (Funding Party) with the understanding (whether recorded in writing or otherwise) that the Company shall:
(a) directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (Ultimate Beneficiaries) or
(b) provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries
h) Nature of CSR activities
The Company undertakes its CSR activities through 'Kamalnayan Jamnalal Bajaj Foundation'. The Foundation with the vision of "Integrated development of the society through participatory approaches" help the rural community to enhance their agriculture income by developing and managing natural resources. the foundation also promotes alternate agro based livelihood opportunities such as dairy farming, organic farming, horticulture and biogas which not only provides additional steady income but allows rural community to get enhanced quality of life.
36 There are quarterly statements submitted to banks wherever the working capital credit facility is availed and there is no discrepancy between books figures and statement submitted to banks.
37 The Company has not entered into any transactions with the companies struck off under section 248 of the Companies Act, 2013 or section 560 of the Companies Act, 1956 and does not have any balance outstanding to or from any such entity.
38 The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.
39 The Company has complied with the number of layers prescribed under clause (87) of Section 2 of the Act read with the Companies (Restriction on number of Layers) Rules, 2017.
40 The Company does not have any undisclosed income which is not recorded in the books of account that has been surrendered or disclosed as income during the year (previous year) in the tax assessments under the Income Tax Act, 1961.
Note:
(i) There is no outstanding balance of current borrowings as at the year ending 31st March 2022.
(ii) There is no long term debt borrowing during current year and previous year. There is no outstanding balance of current borrowings as at the year ending 31st March 2022.
(iii) Profit after Tax is lower by 21.9% and average shareholders equity is higher by 11.1% over previous year
(iv) Sum of cost of materials consumed, purchase of stock in trade, changes in inventories and other expenses is higher by 4.1% and average trade payables is lower by 23.8% over previous year
(v) There is no finance cost pertaining to long term debt. Net profit before Tax is lower by 21.9% and average capital employed is higher by 11.1% over previous year.
44 Dividends paid during the year ended March 31, 2022 include an amount of ' 4.00 per equity share towards final dividend for the year ended March 31,2021 and an amount of ' 4.00 per equity share towards interim dividends for the year ended March 31, 2022. Dividends paid during the year ended March 31, 2021 include an amount of ' 2.00 per equity share towards final dividend for the year ended March 31, 2020 and an amount of ' 6.00 per equity share towards interim dividends for the year ended March 31, 2021.
Dividends declared by the Company are based on profits available for distribution. On May 6, 2022, the Board of Directors of the Company have proposed a final dividend of ' 4.00 per share in respect of the year ended March 31, 2022 subject to the approval of shareholders at the Annual General Meeting, and if approved, would result in a cash outflow of approximately ' 5901.60 lakh.
45 Leases
The Company's significant leasing arrangements are in respect of premises used for business, are accounted as a short-term lease and low value lease. The aggregate lease rentals payable are charged as rent in the statement of profit and loss (Refer note 29). These lease arrangements are cancellable in nature and can be terminated by giving notice for a period, which vary from one months to three months.
46 Benefits to Employees
The following table sets out the disclosure under Ind AS-19 on 'Employee Benefits:
46.1 Defined Contribution Plan
Amount of' 410.54 lakh (FY 2020-21: ' 379.42 lakh) is recognised as an expense and included in “Employee Benefits expense" (refer note 26) in the Statement of Profit and Loss.
46.2 Defined Benefit Plan
The Company has defined benefit gratuity plan (funded with LIC) which is governed by the Payment of Gratuity Act, 1972. Under the act, employee who has completed five years of service is entitled to gratuity benefit. Liability for employee benefits has been determined by an independent actuary, appointed for the purpose, in conformity with the principles set out in the Ind AS-19, the details of which are as hereunder:
These plans typically expose the Company to actuarial risks such as: Investment risk, Market risk (Interest rate), longevity risk, Actuarial risk and Regulatory risk.
A) Investment Risk
For funded plans that rely on insurers for managing the assets, the value of assets certified by the insurer may not be the fair value of instruments backing the liability. In such cases, the present value of the assets is independent of the future discount rate. This can result in wide fluctuations in the net liability or the funded status if there are significant changes in the discount rate during the inter-valuation period.
B) Market Risk (Interest Rate)
Market risk is a collective term for risks that are related to the changes and fluctuations of the financial markets. The discount rate reflects the time value of money. An increase in discount rate leads to decrease in Defined Benefit Obligation of the plan benefits & vice versa. This assumption depends on the yields on the corporate/government bonds and hence the valuation of liability is exposed to fluctuations in the yields as at the valuation date.
c) Longevity Risk
The impact of longevity risk will depend on whether the benefits are paid before retirement age or after. Typically for the benefits paid on or before the retirement age, the longevity risk is not very material.
d) Actuarial Risk
i) Salary Increase Assumption
Actual Salary increase that are higher than the assumed salary escalation, will result in increase to the Obligation at a rate that is higher than expected.
ii) Attrition/Withdrawal Assumption
If actual withdrawal rates are higher than assumed withdrawal rates, the benefits will be paid earlier than expected. Similarly if the actual withdrawal rates are lower than assumed, the benefits will be paid later than expected. The impact of this will depend on the demography of the Company and the financials assumptions.
(i) The cost of the defined benefit gratuity plan and the present value of the gratuity obligation are determined using actuarial valuations. An actuarial valuation involves making various assumptions that may differ from actual developments in the future. These include the determination of the discount rate, future salary increases and mortality rates. Due to the complexities involved in the valuation and its long-term nature, a Defined Benefit Obligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at each reporting date.
(ii) The parameter most subject to change is the discount rate. In determining the appropriate discount rate, the management considers the prevailing market yields of Indian Government Securities as at the Balance Sheet date for the estimated term of the obligation.
(iii) The mortality rate is based on publicly available mortality tables. Those mortality tables tend to change only at interval in response to demographic changes. The estimates of future salary increases, considered in actuarial valuation, take account of the inflation, seniority promotion and other relevant factors.
(iv) The sensitivity analyses shown above have been determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.
47 Initial Public Offer (IPO)
The Company came up with an IPO in August 2010 and listed its securities on NSE & BSE on August 18, 2010. The Company issued 45 lakh fully paid-up equity shares of face value of ' 5 per share each at a premium of ' 655 per share thereby raising a total fund of ' 29,700 Lacs.
48 Financial instruments 48.1 Capital management
For the purpose of the Company's capital management, capital includes issued equity capital, share premium and all other equity reserves attributable to the equity holders of the Company. Primary objective of Company's capital management is to ensure that it maintains an optimum financing structure and healthy returns in order to support its business and maximise shareholder value.
The Company manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants. To maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The Company does not have any long-term debts hence there is no capital gearing ratio. Surplus fund has been invested into risk free highly liquid financial instruments.
48.3 Financial Risk Management Objectives
The Company's activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The Company's primary focus is to foresee the unpredictability of the financial markets and seek to minimise the potential adverse effects on its financial performance.
(a) Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk comprises three types of risk: interest rate risk, currency risk and other price risk, such commodity price risk. Financial instruments affected by market risk includes trade receivables, deposits and current investments.
i) Interest Rate Risk
Interest rate risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company does not have any long-term debt obligation hence not affected by interest rates fluctuations. The Company has invested its surplus funds in fixed income securities. The mark to market valuation of its portfolio is impact by fluctuation of the interest rates.
ii) Foreign Currency Risk
Foreign currency risk is the risk that the fair value of future cash flows of an exposure will fluctuate because of changes in exchange rates. The Company has international business and some part of its sales are in foreign currencies which exposes to changes in foreign exchange rates. Fluctuating rupee can impact the realisation of its receivables. The Company may use various hedging instruments to hedge its foreign currency risk associated with those exposures. The maximum export sales are done on advance payment basis and outstanding export receivables are very insignificant. Hence foreign currency risk have insignificant impact on the Company.
iii) Commodity Price Risk
During the FY 19-20, the Company has granted additional 167,803 stock options to key management employee under "RSU 2020" on February 10, 2020, at an exercise price of ' 1 per stock option. Each option represents 1 equity share in the Company. The vesting period is 4 years from the date of grant and the exercise period is within three years from the date of vesting.
There are no cash settlement alternatives in RSU 2018 and RSU 2020.
The Company is affected by the price volatility of its key raw materials. Its operating activities requires a continuous supply of key material for manufacturing of hair oil and other cosmetic products. The Company's procurement department continuously monitor the fluctuation in price and take necessary action to minimise its price risk exposure.
(b) Credit Risk
Credit risk is the risk that counterparty will not meet its obligations under a financial instrument or customer contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade receivables) and from its treasury operation. The Company majorly sells its goods on advance payment basis and hence not subject to credit risk for its receivables. The Company has invested in high grade corporate bonds which have a strong track record hence the credit risk component of its investment portfolio is neutralised.
(c) Liquidity Risk
As of March 31, 2022, the Company has working capital of ' 63,124.03 lakh (current assets of ' 74,371.49 lakh including cash and cash equivalents of ' 952.37 lakh and current investments of ' 61,163.93 lakh). The Company has no outstanding bank borrowings at year end. Accordingly no liquidity risk is perceived.
48.4 Fair value Measurement
The management assessed that fair values of loans, cash and cash equivalents, trade receivables, trade payables and other current liabilities approximate to their carrying amounts largely due to the short-term maturities of these instruments.
The fair value of the financial assets and liabilities is included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and assumptions were used to estimate the fair values.
i) The fair values of unquoted instruments are evaluated by the Company based on parameters such as interest rates and its investments ratting.
ii) The fair values of the quoted instruments are based on price quotations at the reporting date.
Fair value
The fair value of the share options is estimated at the grant date using Black Sholes Option Pricing Model, which takes into account the exercise price, terms and conditions of the options, the share price at grant date, expected price volatility of the underlying shares, the expected dividend yield and risk free interest rate.
The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique.
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either directly or indirectly.
Level 3: techniques which use inputs which have a significant effect on the recorded fair value that are not based on observable market data.
49 Disclosures required pursuant to Ind AS 102 - Share-Based Payment Employee Stock Option Plan
During the FY 18-19, the Company has implemented the Bajaj Corp Employee Restricted Stock Unit Plan 2018 (”RSU 2018") which was approved by the shareholders of the Company at the Annual General Meeting held on July 23, 2018 enabling the grant of 7,37,500 stock options to the some of the key management employees. Pursuant to the said approval, on August 14, 2018 the Company had granted 2,53,596 stock options to some key management employees of the Company at an exercise price of ' 1 per stock option. Out of 2,53,596 stock options 40,159 have been exercised (FY 20-21: 5,813 nos.; FY 19-20: 34,346 nos.) and remaining 2,13,437 options have been forfeited (FY 20-21: 1,14,667 nos.; FY 19-20: 98,770 nos.)
51 Fig ures have been regrouped/rearranged wherever necessary.
52 This Standalone Financial Statements for the year ended March 31, 2022 were approved by the Board of Directors on May 6, 2022.
|