2.20Provisions, Contingent liabilities and contingent assets

Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Contingent liabilities are disclosed in the standalone financial statements unless possibility of an outflow of resources embodying economic benefit is remote. Contingent assets are disclosed in the standalone financial statements when an inflow of economic benefits is probable.

2.21 Dividend

Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.

Buyback of Equity Shares

The Board, at its meeting held on December 9, 2022, approved the buyback of equity shares, from the open market route through the Indian stock exchanges, amounting to H8,089 lakhs (maximum buyback size, excluding buyback tax and transaction cost) at a price not exceeding H240 per share (maximum buyback price). The buyback was offered to all eligible equity shareholders of the Company (other than the Promoters, the Promoter Group and Persons in Control of the Company) under the open market route through the stock exchange.

During the year, the Company bought back 16,053 fully paid up equity shares. The buyback was concluded on April 13th, 2023. As of the conclusion date of buyback, the Company had bought back 49,14,159 equity shares representing 3.33% of pre buyback paid up capital and 99.99% of the Maximum buyback size. In accordance with Section 69 of the Companies Act, 2013, as at March 31, 2024, the Company has created 'Capital Redemption Reserve' of H 0.16 lakhs equal to the nominal value of the above shares bought back and extinguished as an appropriation from the general reserve. All equity shares bought back have been extinguished.

(iii) Terms/ Rights attached to Equity Shares:

The Company has one class of equity shares having par value of H 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.

36 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.

h) Nature of CSR activities

The Company undertakes its CSR activities through 'Kamatnayan Jamnatat 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.

37 Quarterly statements for working capital are provided to banks where ever the working captiat credit facility are availed. There are no discrepancies between amounts as per books of accounts and statement submitted to banks.

38 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.

39 The Company does not have any charges or satisfaction which is yet to be registered with ROC beyond the statutory period.

40 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.

41 The Company does not have any undisctosed income which is not recorded in the books of accounts that has been surrendered or disclosed as income during the year (previous year) in the tax assessments under the Income Tax Act, 1961.

42 The Company does not have any Benami property, where any proceeding has been initiated or pending against the company for holding any Benami property.

43 No transaction to report against the following disclosure requirements as notified by MCA pursuant to amended Schedule III :

43.1 Crypto Currency or Virtual Currency

43.2 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 tend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the company (Uttimate Beneficiaries) or

45 Dividends paid during the year ended March 31,2024 include an amount of H 5.00 per equity share towards final dividend for the year ended March 31,2023 and an amount of H 3.00 per equity share towards interim dividend for the year ended March 31, 2024. Dividends paid during the year ended March 31, 2023, include an amount of H 4.00 per equity share towards final dividend for the year ended March 31, 2022.

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 H 443.31 lakhs (FY 2022-23 : H 397.35 lakhs) is recognized as an expense and included in "Employee Benefits expense" (refer note 27) in the Statement of Profit and Loss.

46.2Defined 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 Weighted average duration of the defined benefit plan obligation at the end of the reporting period is 6.97 years (For year ended March 31, 2023 6.95 years).

(j) Expected contribution in respect of Gratuity for next year will be H 140.01 lakhs (For the year ended March 31, 2023 H 122.65 lakhs).

Note:

(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 Financial instruments 47.1 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 maximize 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.

47.3Financial 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 minimize 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

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.

47 Financial instruments (Contd..)

(b) Credit Risk

Credit risk is the risk that counterparty wilt 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, 2024, the Company has working capital of H 64,351.44 lacs (current assets of H 77,880.08 lacs including cash and cash equivalents of H 1,533.37 lacs and current investments of H 58,563.62 lacs). The Company has no outstanding bank borrowings at year end. Accordingly, no liquidity risk is perceived.

48 Fair value Measurement

The management assessed that fair value 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 value 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.

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.

The following table provides an analysis of financial instruments that are measured subsequent to initial recognition at fair value, grouped into Level 1 to Level 3 as described below:

49 Disclosures required pursuant to Ind AS 102 - Share Based Payment Employee stock option plan

During the FY 2018-19, the Company 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 H 1 per stock option. Out of 2,53,596 stock options 40,159 were exercised (FY 20-21 : 5,813 nos.; FY 19-20 : 34,346 nos.) and remaining 2,13,437 options were forfeited (FY 20-21 : 1,14,667 nos.; FY 19-20 : 98,770 nos.)

During the FY 2019-20, the Company granted additional 167,803 stock options to Chief Executive Officer on 10th February 2020, at an exercise price of H 1 per stock option. Each option represents 1 equity share in the Company. During the current year, all of the 167,803 stock options have been exercised."

51 Figures have been regrouped/rearranged wherever necessary.

52 The ministry of corporate affairs (MCA) has issued notification (Companies (Accounts) Amendment Rules, 2021) which is effective from 1st April 2023, states that every company which uses accounting software for maintaining its books of accounts shall use only the accounting software where there is a feature of recording audit trail of each and every transaction and further creating an edit log of each change made to books of account along with the date when such changes were made and ensuring that the audit trail cannot be disabled.

The company uses SAP accounting software for maintaining books of account, which has inbuilt audit trail feature.

53 These standalone financial statements for the year ended March 31, 2024 were approved by the Board of Directors on May 08, 2024.

As per our report of even date

For Chopra Vimal & Co. For and on behalf of the Board of Directors

Chartered Accountants

Firm's Registration No.: 006456C Kushagra Bajaj Jaideep Nandi Jagdish Acharya

Chairman Managing Director Director

Vimal Chopra DIN 00017575 DIN 06938480 DIN 03282266

Partner

Membership. No. 074056 Anupam Dutta D.K. Maloo Vivek Mishra

Director Chief Financial Officer Company Secretary

DIN 01626554 M.No. A21901

Place : Mumbai Place : Mumbai

Date : May 08, 2024 Date : May 08, 2024