Corporate governance is about promoting fairness, transparency, accountability, commitment to values, ethical business conduct and considering the interest of all stakeholders while conducting business.

In accordance with the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and amendments thereto (‘the Listing Regulations, 2015’), given below are the corporate governance policies and practices of Bajaj Auto Ltd. (‘the Company’, ‘Bajaj Auto’ or ‘BAL’) for the year 2022-23 (or ‘FY2023’).

This report states compliance as per requirements of the Companies Act, 2013 (‘the Act’) and the Listing Regulations, 2015 as applicable to the Company. As will be seen, Bajaj Auto’s corporate governance practices and disclosures have gone well beyond complying with the statutory and regulatory requirements stipulated in the applicable laws, including the Listing Regulations, 2015.

Philosophy

For us, corporate governance is a reflection of principles entrenched in our values and policies and also embedded in our day-to-day business practices, leading to value-driven growth. The commitment of the Bajaj group to the highest standards of good governance practices predates SEBI and the provisions of the Listing Regulations, 2015. Ethical dealings, transparency, fairness, disclosure and accountability are fundamental canons of the Bajaj group. Bajaj Auto Ltd. maintains the same tradition and commitment.

Key elements of Bajaj Auto’s corporate governance

•	Number of Board meetings exceed the statutory requirement, including meetings dedicated to discussing operating plans, strategies, new products development, brands in domestic and international businesses and managing the internal and external risks.
•	The Company’s Board comprises directors from diverse backgrounds and substantial experience, who are able to provide appropriate guidance to the executive management as required.
•	The Board comprises independent directors with outstanding track record and reputation.
•	All Board members are invited and encouraged to be present at committee meetings, even if they are not members.
•	There are pre-audit committee meetings of the chairman of the audit committee with the statutory auditors, the internal auditor and such members of executive management who are process owners.
•	There are separate meetings of independent directors without presence of non-independent directors or executive management.
•	There is a confidential Board evaluation process where each Board member evaluates the performance of every other director, committees of the Board, the Chairman of the Board and the Board itself.
•	Presentations by key senior management team members of the Company and its subsidiaries are regularly made to familiarise directors with key elements of each business.
•	Complete and detailed information are provided in advance to Board members.
•	Key governance policies are placed on the Company’s website.
•	A half-yearly letter from the management is sent to all shareholders of the Company.
•	The Company monitors its governance through a dedicated governance team.
•	Adoption of key governance policies and codes by the Board in line with best practices, which are made available to stakeholders for downloading/viewing from the Company’s website. These include:
	–	Whistle blower policy/vigil mechanism;
	–	Policy on materiality of and dealing with related party transactions;
	–	Code of conduct;
	–	Dividend distribution policy;
	–	Policy on prevention of sexual harassment at workplace;
	–	Fair practices code;
	–	Policy on human rights;
	–	Equal employment opportunity and non-discrimination policy.
•	The weblinks of key policies are given as an annexure to this report.

Further details of these principles are highlighted in the appropriate sections in this Report.

Board of Directors

The Company’s policy is to have an appropriate blend of executive, independent and non-independent directors to maintain independence of the Board and to separate the Board functions of governance from that of management.

Composition

As per regulation 17(1)(b) of the Listing Regulations, 2015, where the Chairman is non-executive director or a promoter, at least half of the Board of a Company should consist of independent directors. As Table 1 shows, this provision is met at BAL.

As on 31 March 2023, the Board consisted of twelve directors, of whom three were executive (including the managing director), six were non-executive as well as independent (including one woman independent director) and three were non-executive and non-independent. The Board has no institutional nominee director.

Further particulars about the directors are mentioned in the Board’s Report.

Number of meetings of the Board

During FY2023, the Board met seven times: 27 April 2022, 14 June 2022, 27 June 2022, 26 July 2022, 14 October 2022, 25 January 2023 and 14 March 2023. The gap between any two meetings has been less than 120 days.

As per the relaxation given by MCA due to the Covid-19 pandemic, all the Board and committees meetings of the Company during the year under review were held in hybrid mode (Physical meeting plus through video conferencing).

Attendance record of directors

Table 1: Composition of the Board and attendance record of directors for FY2023

Name of director		Category		Relationship with other directors		No. of shares held by director		No. of Board Meetings attended		Whether attended last AGM
Niraj Bajaj		Chairman, non-executive, non-independent		Brother of Madhur Bajaj		719,022*		7/7		Yes
Madhur Bajaj		Vice Chairman, non-executive, non-independent		Brother of Niraj Bajaj		1,002,552*		7/7		Yes
Rajiv Bajaj		Managing Director and CEO, executive		Brother of Sanjiv Bajaj		756,200*		7/7		Yes
Sanjiv Bajaj		Non-executive, non-independent		Brother of Rajiv Bajaj		1,818,020**		7/7		Yes
D J Balaji Rao		Non-executive, independent		–		–		7/7		Yes
Pradeep Shrivastava		Executive Director		–		75		7/7		Yes
Dr. Naushad Forbes		Non-executive, independent		–		3,500		6/7		Yes
Anami N. Roy		Non-executive, independent		–		_		6/7		Yes
Rakesh Sharma		Executive Director		–		6,246		7/7		Yes
Ms. Lila Poonawalla		Non-executive, independent		–		–		7/7		Yes
Pradip Shah		Non-executive, independent		–		4,000		7/7		Yes
Abhinav Bindra		Non-executive, independent		–		–		7/7		Yes

Notes:

1.	Dr. Gita Piramal resigned as an independent director of the Company w.e.f. closing hours of 30 April 2022.
2.	Shekhar Bajaj resigned as non-executive, non-independent director of the Company w.e.f. closing hours of 30 June 2022.
3.	*The equity shares also includes shares held in the capacity of trustee of private family trusts.
4.	**Sanjiv Bajaj holds 1,048,796 shares as executor for the Estate of Late Rahul Bajaj.

Board diversity

In compliance with the provisions of the Listing Regulations, 2015, the Board through nomination and remuneration committee has devised a policy on Board diversity. The Board comprises adequate number of members with diverse experience and skills, such that it best serves the governance and strategic needs of the Company. The directors are persons of eminence in areas such as business, industry, finance, law, administration, economics etc. and bring with them experience and skills which add value to the performance of the Board. The directors are selected purely on the basis of merit with no discrimination on race, colour, religion, gender or nationality. The Board composition as at present meets with the above objective.

A brief profile of the directors is available on the website of the Company at https://www.bajajauto.com/about-us/bajaj-team

Opinion of the Board

The Board confirms that, in its opinion, the independent directors on the Board fulfil the conditions specified in the Listing Regulations, 2015 and the Act and are independent of the management.

Non-executive directors’ compensation

The shareholders of the Company through a special resolution passed at the annual general meeting of the Company held on 22 July 2021 have, by way of an enabling provision, approved payment of commission up to a sum not exceeding one percent of the net profits of the Company, calculated in accordance with the provisions of section 197 and 198 of the Act, to the non-executive directors, in the manner as may be decided by the Board of directors from time to time during the five year term up to 31 March 2026.

Consistent with this approval from the shareholders, the Company pays sitting fee of ₹ 100,000 per meeting to its non-executive directors for attending meetings of the Board and meetings of committees of the Board (except Duplicate Share Certificate Issuance Committee) as member. The Company also pays commission to the non-executive directors within the ceiling of one percent of the net profits of the Company as computed under the applicable provisions of the Act. The said commission is decided by the Board of directors on the recommendation of the nomination and remuneration committee and distributed amongst the non-executive directors. With effect from 1 April 2023, the commission payable has been enhanced from ₹ 250,000 to ₹ 315,000 per meeting of the Board and/or committees.

Compensation to the non-executive (including independent) directors reflects the time, effort, attendance and participation of such directors in Board and committee meetings. Payment to them is linked to their attendance.

The Company has adopted the Bajaj Auto Employee Stock Option Scheme 2019 for the benefit of the permanent employees and/or directors of the Company and/or its holding (if any, in future) and subsidiary company(ies), but excluding independent directors and any employee who is a promoter or belonging to the promoter group.

Information supplied to the Board

In advance of each meeting, the Board is presented with relevant information on various matters related to the working of the Company, especially those which require deliberation at the highest level. Presentations are also made to the Board by different functional heads on important matters from time to time. Directors have separate and independent access to the officers of the Company. In addition to such items as required to be placed before the Board for its noting and/or approval, information is provided on various other significant items as well.

In terms of quality and importance, the information supplied by the management to the Board of the Company exceeds the list mandated under regulation 17(7) read with Part A of Schedule II to the Listing Regulations, 2015.

The independent directors of the Company at their meeting held on 14 March 2023 have expressed satisfaction on the quality, quantity and timeliness of flow of information between the Company’s management and the Board and have confirmed that these significantly aid the Board to effectively and reasonably perform its duties.

Pursuant to various regulatory requirements, and in compliance with applicable laws, and keeping in view the business requirements, the Board is, inter alia, apprised on the following:

•	Business plans, forecast and strategic initiatives.
•	Capital expenditure and updates.
•	Internal financial controls.
•	Succession planning and organisation structure.
•	Details of incidence of frauds and corrective action taken thereon.
•	Performance of subsidiaries.
•	Status of compliances with Companies Act, 2013, SEBI regulations and shareholder related matters.
•	Various policies framed by Company from time to time.
•	Risk management system, risk management policy and strategy followed.
•	Compliance with corporate governance standards.
•	Minutes of meetings of risk management and other Board Committees.
•	Compliance with fair practices code.
•	Changes in regulatory landscape.

To leverage technology and move towards paperless systems, the Company has, since several years, adopted a web-based application for transmitting Board/committee meetings papers. Directors of the Company receive Board papers in electronic form through this application. This application meets high standards of security and integrity required for storage and transmission of Board/committee papers in electronic form.

Directors and officers liability insurance (D&O policy)

The Company has in place a D&O policy which is renewed every year. It covers directors (including independent directors) and officers of the Company and its subsidiaries. The Board is of the opinion that the quantum and risks presently covered are adequate.

Orderly succession to Board and senior management

One of the key functions of the Board of directors is selecting, compensating, monitoring, and when necessary, replacing the members of the Board of Directors and the senior managerial personnel including the KMPs and overseeing their succession planning.

Pursuant to regulation 17(4) of the Listing Regulations, 2015, the framework of succession planning for the Board and senior management was placed before the Board for its review. During the year under review, the Board of the Company has satisfied itself that the plans are in place for orderly succession of such appointments.

Directorships and memberships of Board committees

Table 2: Number of directorships/committee positions of directors as on 31 March 2023 (including the Company)
		Directorships						Committee positions in listed and unlisted public limited companies
Name of the director		In equity listed companies		In unlisted public limited companies		In private limited companies		As member (including as chairman)		As chairman
Niraj Bajaj		3		4		6		1		–
Madhur Bajaj		4		–		3		–		–
Rajiv Bajaj		5		2		4		–		–
Sanjiv Bajaj		5		5		8		8		–
D J Balaji Rao		4		–		–		4		2
Pradeep Shrivastava		1		–		–		–		–
Dr. Naushad Forbes		5		1		8		7		2
Anami N. Roy		6		3		1		8		4
Rakesh Sharma		1		2		–		–		–
Ms. Lila Poonawalla		2		4		1		6		3
Pradip Shah		7		1		7		8		3
Abhinav Bindra		1		1		5		–		–

Notes: None of the directors hold office as a director, including as an alternate director, in more than twenty companies at the same time. None of them has directorships in more than ten public companies. For reckoning the limit of public companies, directorships of private companies that are either holding or subsidiary company of a public company are included; for reckoning the limit of private and public companies, directorships in dormant companies and companies under section 8 of the Act are excluded.

As per the declarations received, none of the directors serves as an independent director in more than seven equity listed companies or in more than three equity listed companies in case he or she is a whole-time director / managing director in any listed company. Further, the managing director of Bajaj Auto does not serve as an independent director in any equity listed company.

For the purpose of considering the limit of the committees in which a director can serve, all public limited companies, whether listed or not, have been included and all other companies including private limited companies, foreign companies and companies under section 8 of the Act have been excluded.

None of the directors was a member in more than ten committees, nor a chairperson in more than five committees across all companies in which he/she was a director. Only audit committees and stakeholders’ relationship committees are considered for the purpose of reckoning committee positions.

Notwithstanding the number of directorships, as has been highlighted herein, the outstanding attendance record and participation of the directors in Board and committee meetings indicate their commitment and ability to devote adequate time to their responsibilities as the Company’s fiduciaries.

Directorships held by directors in equity listed companies

Table 3: Name of listed entities (including debt listed companies) where directors of the Company held directorships as on 31 March 2023 (including the Company)

Name of director		Name of listed entities			Category
Niraj Bajaj		a)	Bajaj Auto Ltd.		Chairman, non-executive
		b)	Mukand Ltd.		Chairman and Managing Director, executive
		c)	Bajaj Holdings & Investment Ltd.		Vice Chairman, non-executive
Madhur Bajaj		a)	Bajaj Auto Ltd.		Vice Chairman, non-executive
		b)	Bajaj Finserv Ltd.		Non-executive
		c)	Bajaj Holdings & Investment Ltd.		Non-executive
		d)	Bajaj Electricals Ltd.		Non-executive
Rajiv Bajaj		a)	Bajaj Auto Ltd.		Managing Director and CEO, executive
		b)	Bajaj Finserv Ltd.		Non-executive
		c)	Bajaj Finance Ltd.		Non-executive
		d)	Bajaj Holdings & Investment Ltd.		Non-executive
		e)	Bajaj Electricals Ltd.		Non-executive
Sanjiv Bajaj		a)	Bajaj Auto Ltd.		Non-executive
		b)	Bajaj Finance Ltd.		Chairman, non-executive
		c)	Bajaj Finserv Ltd.		Chairman and Managing Director, executive
		d)	Bajaj Holdings & Investment Ltd.		Managing Director and CEO, executive
		e)	Maharashtra Scooters Ltd.		Chairman, non-executive
		f)	Bajaj Housing Finance Ltd. (high value debt listed)		Chairman, non-executive
D J Balaji Rao		a)	Bajaj Auto Ltd.		Non-executive, independent
		b)	Bajaj Finserv Ltd.		Non-executive, independent
		c)	Bajaj Finance Ltd.		Non-executive, independent
		d)	Bajaj Holdings & Investment Ltd.		Non-executive, independent
Pradeep Shrivastava		a)	Bajaj Auto Ltd.		Executive
Dr. Naushad Forbes		a)	Bajaj Auto Ltd.		Non-executive, independent
		b)	Bajaj Finserv Ltd.		Non-executive, independent
		c)	Bajaj Holdings & Investment Ltd.		Non-executive, independent
		d)	Bajaj Finance Ltd.		Non-executive, independent
		e)	Zodiac Clothing Company Ltd.		Non-executive, independent
Anami N. Roy		a)	Bajaj Auto Ltd.		Non-executive, independent
		b)	Bajaj Finserv Ltd.		Non-executive, independent
		c)	Bajaj Holdings & Investment Ltd.		Non-executive, independent
		d)	Bajaj Finance Ltd.		Non-executive, independent
		e)	Glaxosmithkline Pharmaceuticals Ltd.		Non-executive, independent
		f)	Finolex Industries Ltd.		Non-executive, independent
		g)	Bajaj Housing Finance Ltd. (high value debt listed)		Non-executive, independent
Rakesh Sharma		a)	Bajaj Auto Ltd.		Executive
Ms. Lila Poonawalla		a)	Bajaj Auto Ltd.		Non-executive, independent
		b)	Maharashtra Scooters Ltd.		Non-executive, independent
Pradip Shah		a)	Bajaj Auto Ltd.		Non-executive, independent
		b)	Kansai Nerolac Paints Ltd.		Chairman, non-executive, independent
		c)	Pfizer Ltd.		Chairman, non-executive, independent
		d)	KSB Ltd.		Non-executive, independent
		e)	BASF India Ltd.		Chairman, non-executive, independent
		f)	Sonata Software Ltd.		Chairman, non-executive, independent
		g)	Bajaj Holdings & Investment Ltd.		Non-executive, independent
Abhinav Bindra		a)	Bajaj Auto Ltd.		Non-executive, independent

Certificate from practising Company Secretary

The Company has received a certificate from Mr. Shyamprasad D Limaye, practising Company Secretary to the effect that none of the directors on the Board of the Company has been debarred or disqualified from being appointed or continuing as directors of the Company by the Ministry of Corporate Affairs or any other statutory authority. This certificate forms part of this Report.

Review of legal compliance reports

The Board periodically reviews compliance reports with respect to the various laws applicable to the Company, as prepared and placed before it by the management.

Code of Conduct

Regulation 17(5) of the Listing Regulations, 2015, requires listed companies to lay down a code of conduct for its directors and senior management, incorporating duties of directors as laid down in the Act.

The Company has a Board approved Code of Conduct for Board members and senior management of the Company. Based on the review, the Code of Conduct was revised in line with applicable regulations and approved by the Board at its meeting held on 25 April 2023. The updated Code of Conduct has been placed on the Company’s website at https://www.bajajauto.com/investors/policies-codes

All directors and senior management personnel have affirmed compliance with the code for FY2023. A declaration to this effect signed by the managing director and CEO is given in this Annual Report.

Maximum tenure of independent directors

The maximum tenure of independent directors is in accordance with the Act and regulation 25(2) of the Listing Regulations, 2015.

Formal letter of appointment to independent directors

The Company issues a formal letter of appointment to independent directors in the manner as provided in the Act. As per regulation 46(2) of the Listing Regulations, 2015, the terms and conditions of appointment/re-appointment of independent directors are on the Company’s website at https://www.bajajauto.com/investors/miscellaneous

Performance evaluation of the Board, its committees, the chairman and the directors

Pursuant to the provisions of the Act and the Listing Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, and that of its committees, chairman and individual directors.

The manner in which formal annual evaluation of performance was made by the Board is given below:

•	The evaluation criteria have been duly approved by the nomination and remuneration committee and the Board. During the year under review, the criteria and the process followed by the Company were reviewed by the nomination and remuneration committee and the Board and were found to be in order. This is available on the website of the Company at https://www.bajajauto.com/investors/policies-codes
•	Based on the said criteria, a questionnaire-cum-rating sheet was uploaded on an online IT tool for seeking evaluation rating and feedback of the directors in the most confidential manner with regards to the performance of the Board, its committees, the chairman and individual directors.
•	From the individual ratings received from the directors, a report on summary of the ratings in respect of performance evaluation of the Board, its committees, the chairman and directors and a consolidated report thereof for FY2023 were arrived at.
•	The report of performance evaluation so arrived at was then discussed and noted by the Board at its meeting held on 14 March 2023.
•	The nomination and remuneration committee has reviewed the implementation and compliance process of the performance evaluation at its meeting held on 14 March 2023.
•	Based on the report of performance evaluation, the Board and nomination and remuneration committee at their meetings held on 14 March 2023, determined as required under law that the appointment of independent directors may continue.
•	Details on the evaluation of Board, non-independent directors and chairman of the Company as carried out by the independent directors at their meeting held on 14 March 2023 have been furnished in a separate para elsewhere in this Report.

Remuneration policy

On the recommendation of the nomination and remuneration committee, the Board has framed a remuneration policy. This policy, inter alia, provides (a) the criteria for determining qualifications, positive attributes and independence of directors (b) a policy on remuneration for directors, key managerial personnel and other employees and (c) details of the employee stock option scheme. 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 remuneration policy is placed on the Company’s website at https://www.bajajauto.com/investors/policies-codes

Familiarisation programme

To familiarise independent directors with the Company’s operations, as required under regulation 25(7) of the Listing Regulations, 2015, the Company has held various programmes/presentations for the independent directors throughout the year on an ongoing and continuous basis. Details of these are placed on https://www.bajajauto.com/investors/policies-codes

During FY2023, the directors were updated extensively on the following through presentations at Board meetings:

•	Risk management framework including Business and Operational risks, Financial risks, and Information risks (including cyber security).
•	Updates on domestic motorcycle business, domestic three-wheeler and Qute business, export business, budget and volume opportunities for KTM, Husqvarna and EV Markets.
•	Operating plans and business updates of its subsidiaries

Whistle blower policy/Vigil mechanism

The Company has a whistle blower policy encompassing vigil mechanism pursuant to the requirements of the section 177(9) of the Act and regulation 22 of the Listing Regulations, 2015.

The whistle blower policy/vigil mechanism provides a route for directors/employees to report, without fear of victimisation, any unethical behaviour, suspected or actual fraud, violation of the Company’s code of conduct and instances of leak of unpublished price sensitive information, which are detrimental to the organisation’s interest. The mechanism protects whistle blower from any kind of discrimination, harassment, victimisation or any other unfair employment practice.

The said policy has been appropriately communicated to the employees within the organisation and also has been placed on the Company’s website at https://www.bajajauto.com/investors/policies-codes

The directors in all cases and employees in appropriate cases have direct access to the chairman of the audit committee. The Company affirms that no employee has been denied access to the audit committee, which is charged with overseeing this policy.

During the year, four complaints have been received under the above mechanism. The cases investigated were mainly of the nature of fraud, misbehaviour, misuse of company’s vehicle etc. Appropriate actions have been taken where the case is proved. The financial impact of these cases was insignificant and caused no material damages to the Company.

Dividend distribution policy

The Company has adopted a dividend distribution policy. More particulars are given in the Directors’ Report.

Subsidiary companies

The Company has five overseas subsidiaries, viz. PT Bajaj Auto Indonesia, Bajaj Auto International Holdings BV, Netherlands, Bajaj Auto (Thailand) Ltd., Bajaj Auto Spain S.L.U. and Bajaj Do Brasil Comercio De Motocicletas Ltda and two Indian subsidiaries viz. Chetak Technology Ltd. and Bajaj Auto Consumer Finance Ltd. None of these are ‘material subsidiaries’ as defined under regulation 16(1)(c) of the Listing Regulations, 2015.

The Company’s policy for determination of material subsidiary in terms of regulation 16(1)(c) of the Listing Regulations, 2015 is placed on the Company’s website at https://www.bajajauto.com/investors/policies-codes

Provisions to the extent applicable and as required under regulation 24 of the Listing Regulations, 2015 with reference to subsidiary companies were duly complied with.

During the year, the audit committee reviewed the financial statements (in particular, the investments made) of its unlisted subsidiary companies, to the extent applicable. Minutes of the Board meetings of the subsidiary companies as well as a statement of significant transactions and arrangements entered into by the subsidiaries, as applicable, were regularly placed before the Board of the Company.

During FY2023, no company became or ceased to be our subsidiary or joint venture company.

Related party transactions

All related party transactions (RPTs) which were entered into by the Company during the year under review, were on arms’ length basis and in the ordinary course of business, did not attract provisions of section 188 of the Act and were also not material RPTs as per regulation 23 of the Listing Regulations, 2015.

All RPTs during FY2023 were entered into with the approval of the audit committee. On a quarterly basis, details of such transactions were placed before the audit committee for noting/review.

A statement showing the disclosure of transactions with related parties as required under Indian Accounting Standard 24 (Ind AS-24) is set out separately in this Annual Report. Disclosures relating to RPTs on a half-yearly basis are filed with the stock exchanges.

During the year under review, there were no material transactions entered into with related parties, which may have had any potential conflict with the interests of the Company. However, during the year, prior approval of shareholders was obtained for the material transactions with KTM Sportmotorcycle GmbH (Associate of Bajaj Auto Limited’s 100% subsidiary, Bajaj Auto International Holdings BV, based in Netherlands) vide ordinary resolution through postal ballot on 21 November 2022 as it was estimated that the transaction value would cross the applicable materiality thresholds under the amended the Listing Regulations, 2015 (i.e. ₹ 1,000 crore, or 10% of the annual consolidated turnover as per the last audited financial statements of the listed entity, whichever is lower).

The policy on materiality of RPTs stipulating threshold limits and also on dealing with RPTs including material modifications definitions which was approved by the Board pursuant to the amended Listing Regulations, 2015, has been placed on the Company’s website at https://www.bajajauto.com/investors/policies-codes

During the year under review, several amendments made by SEBI in the matter relating to RPTs came into effect. All the requirements, including the additional disclosure requirements with regard to loans and advances to subsidiaries, associates and firms/companies in which directors are interested have been duly complied.

Disclosures

Suitable disclosures have been made in the financial statements, together with the management’s explanation in the event of any treatment being different from that prescribed in the Ind AS.

Core skills/Expertise/Competencies

As stipulated under Schedule V of the Listing Regulations, 2015, core skills/expertise/competencies, as required in the context of the business and sector for it to function effectively and those actually available with the Board have been identified by the Board of directors.

As a green initiative, the Chart/matrix of such core skills/expertise/competence along with the names of directors who possess such skills has been placed on the Company’s website https://www.bajajauto.com/investors/policies-codes

Audit Committee

The Company has constituted an audit committee. The Board reviews the working of the Committee from time to time to bring about greater effectiveness in order to comply with the various requirements under the Act and the Listing Regulations, 2015.

In compliance with the provisions of the Act and the Listing Regulations, 2015, all members of the audit committee are independent, non–executive directors, are financially literate and have accounting or related financial management expertise.

The terms of reference of the committee are in accordance with the Act and the Listing Regulations, 2015. The detailed terms of reference of the committee can be accessed at https://www.bajajauto.com/investors/policies-codes

Meetings and attendance

During FY2023, the audit committee met five times: 27 April 2022, 26 July 2022, 14 October 2022, 25 January 2023 and 14 March 2023. These meetings were scheduled well in advance and not more than one hundred and twenty days elapsed between any two such meetings.

In addition to members of the audit committee, these meetings were attended by the heads of finance and internal audit functions and the statutory auditor of the Company and such executives who were considered necessary for providing inputs to the committee.

The company secretary acted as the secretary to the audit committee.

Table 4: Composition of the audit committee and attendance of members for FY2023
Name of director		Category		No. of meetings attended
Anami N. Roy		Chairman, non-executive, independent		5/5
D J Balaji Rao		Non-executive, independent		5/5
Dr. Naushad Forbes		Non-executive, independent		5/5
Pradip Shah*		Non-executive, independent		4/4

*Subsequent to resignation of Dr. Gita Piramal on 30 April 2022 (with effect from close of business hours), the Board of Directors appointed Pradip Shah as a member of the committee with effect from 14 June 2022 in her place.

The audit committee, inter alia, discussed and deliberated on the financial results, appointment/re-appointment of statutory auditors, review of internal audit functions, review and approval of RPTs including granting of omnibus approval for the proposed transactions, review of investment-related reports of the Company, utilisation of loans and/or advances from/investment by the Company in subsidiaries, etc.

Anami N. Roy, chairman of the audit committee, was present at the Company’s annual general meeting held on 26 July 2022.

During FY2023, the Board accepted all recommendations of the committee.

Nomination and remuneration committee

The Company has constituted a nomination and remuneration committee. The terms of reference of the committee are in accordance with the Act and the Listing Regulations, 2015. The committee also acts as a compensation committee for implementation of the Bajaj Auto Employee Stock Option Scheme 2019.

The detailed terms of reference of the committee have been placed on the Company’s website at https://www.bajajauto.com/investors/policies-codes

During FY2023, the committee met three times: 27 April 2022, 14 October 2022 and 14 March 2023.

Table 5: Composition of nomination and remuneration committee and attendance of its members for FY2023
Name of director		Category		No. of meetings attended
D J Balaji Rao		Chairman, non-executive, independent		3/3
Dr. Naushad Forbes		Non-executive, independent		3/3
Niraj Bajaj		Non-executive, non-independent		3/3
Abhinav Bindra*		Non-executive, independent		2/2

* Subsequent to resignation of Dr. Gita Piramal on 30 April 2022 (with effect from close of business hours), the Board of Directors appointed Abhinav Bindra as a member of the committee with effect from 14 June 2022 in her place.

The company secretary acted as the secretary to this committee.

As provided under the terms of reference of the nomination and remuneration committee, the members, inter alia, discussed and deliberated on re-appointment of independent directors, remuneration payable to senior management, directors and key managerial personnel, review of performance evaluation process and criteria, grant of stock options etc.

D J Balaji Rao, chairman of the nomination and remuneration committee, was present at the annual general meeting of the Company held on 26 July 2022.

During FY2023, the Board accepted all recommendations of the committee.

Bajaj Auto Employee Stock Option Scheme 2019 (BAL-ESOS 2019)

BAL-ESOS 2019 has been formulated by the nomination and remuneration committee of the Board to provide competitive remuneration opportunities to employees of the Company, through annual and long-term incentive plans. It was approved by the Board at its meeting held on 30 January 2019, and by members of the Company by a special resolution through postal ballot on 13 March 2019.

Risk management committee

The Company has a risk management committee. The terms of reference of the committee are in accordance with the Act and the Listing Regulations, 2015. The detailed terms of reference of the committee have been placed on the Company’s website and can be accessed at https://www.bajajauto.com/investors/policies-codes

The Company has a Board-approved risk management framework. The committee and the Board periodically review the company’s risk assessment and minimisation procedures to ensure that management identifies, controls and mitigate various risks through a properly defined framework.

During FY2023, the Company neither traded in nor had any exposure in commodities markets.

During FY2023, the committee met three times: 26 July 2022, 14 October 2022 and 14 March 2023.

The frequency of the meetings has been maintained to have a closer oversight of the risk management practices and to meet the amended the Listing Regulations, 2015.

Table 6: Composition of the risk management committee and attendance record of its members for FY2023
Name of director		Category		No. of meetings attended
Anami N. Roy		Chairman, non-executive, independent		3/3
D J Balaji Rao		Non-executive, independent		3/3
Rakesh Sharma		Executive		3/3

During FY2023, the Board accepted all recommendations of the committee.

Stakeholders’ relationship committee

The Company has a stakeholders’ relationship committee to specifically oversee shareholders’ and investors’ complaints on matters relating to transfer of shares, non-receipt of annual report, non-receipt of dividend, payment of unclaimed dividends etc. The terms of reference of the committee are in accordance with the Act and the Listing Regulations, 2015. The detailed terms of reference of the Committee have been placed on the Company’s website and can be accessed at https://www.bajajauto.com/investors/policies-codes

During FY2023, the committee met on 25 January 2023 to review the status of investors’ services rendered. At the meeting, the committee also discussed on matters that can facilitate better investor services and relations. The Board was apprised of all the major developments on investors’ issues through various reports and statements furnished to the Board from time to time throughout the year.

Table 7: Composition of stakeholders’ relationship committee and attendance record of members for FY2023
Name of director		Category		Attendance at the meeting held on 25 January 2023
D J Balaji Rao		Chairman, non-executive, independent		Yes
Niraj Bajaj		Non-executive, non-independent		Yes
Ms. Lila Poonawalla*		Non-executive, independent		Yes

* Subsequent to resignation of Dr. Gita Piramal on 30 April 2022 (with effect from close of business hours), the Board of Directors appointed Ms. Lila Poonawalla as a member of the committee with effect from 14 June 2022 in her place.

The company secretary acts as the compliance officer and as the secretary to the committee.

The secretarial auditor was also present at the meeting.

The committee expressed its satisfaction on the overall status of compliance and actions taken on various investor-related matters.

D J Balaji Rao, chairman of the stakeholders’ relationship committee, was present at the annual general meeting of the Company held on 26 July 2022.

Table 8: Investors’ complaints attended and resolved during FY2023
Investors’ complaints		Attended/resolved during the year
Pending at the beginning of the year		–
Received during the year		14
Disposed of during the year		14
Pending at the end of the year		–

More details on this subject and on shareholders’ related matters including unclaimed suspense account have been furnished in General Shareholder Information.

Duplicate share certificate issuance committee

To meet the requirement of section 46 of the Act, read with rule 6 of the Companies (Share Capital and Debentures) Rules, 2014 and regulation 39 of the Listing Regulations, 2015, the Company has duplicate share certificate issuance committee to approve issuing of duplicate share certificate(s) in lieu of original share certificate(s) that were lost or misplaced, the composition of which is given in Table 9 below.

As a measure to enhance ease of dealing in securities market by the investors, SEBI through its circular dated 25 January 2022 has mandated listed entities to issue of securities in dematerialised form only while processing any service request including issue of duplicate share certificate.

Table 9: Composition of the duplicate share certificate issuance committee and attendance record of its members for FY2023
Name of director		Category		Attendance at the meeting held on 25 January 2023
Rajiv Bajaj		Managing Director and CEO, executive		Yes
Pradeep Shrivastava		Whole-time Director, executive		Yes
Rakesh Sharma		Whole-time Director, executive		Yes

Independent directors’ meeting

In compliance with Schedule IV to the Act and regulation 25(3) of the Listing Regulations, 2015, the independent directors held their separate meeting on 14 March 2023, without the attendance of non-independent directors and members of management.

All independent directors were present at the meeting.

The independent directors present elected D J Balaji Rao as Chairman for the meeting.

The independent directors inter alia discussed on report of performance evaluation of Board, its committees and chairman, changes in the Board, assessment of quality, quantity and timeliness of flow of information between the Company’s management and the Board etc. and expressed their satisfaction on each of the matters.

In addition, the independent directors had a separate meeting with senior management regarding its views and strategies pertaining to the business and functions.

Remuneration of directors

Pecuniary relationship/transaction with non-executive directors

During FY2023, there was no pecuniary relationship or transaction with any non-executive director of the Company, apart from their remuneration as directors.

The register of contracts is maintained by the Company pursuant to section 189 of the Act. This is signed by all the directors present at respective Board meetings.

During FY2023, the Company did not advance any loans to any of the non-executive directors and/or the managing director.

Criteria of making payments to non-executive directors

As stated earlier, the remuneration policy disclosing the criteria of making payments to directors, key managerial personnel and employees is placed on the Company’s website at https://www.bajajauto.com/investors/policies-codes

Details of remuneration to directors

Non-executive directors

As stated earlier in this report, non-executive directors are paid sitting fees and commission.

Details of remuneration paid or payable to non-executive directors during FY2023 are given in Table 10. The same are also provided in the Form MGT-7, i.e. the annual return which can be accessed at https://www.bajajauto.com/investors/financial-and-operational-performance

Executive directors

During the year, the Company paid remuneration to Rajiv Bajaj, Managing Director and CEO (‘MD’) and Pradeep Shrivastava and Rakesh Sharma, executive directors (‘EDs’) of the Company as given in Table 10 and also provided in detail in Form MGT-7, i.e. the annual return. The same can be accessed at

https://www.bajajauto.com/investors/financial-and-operational-performance

The tenure of MD and EDs is of five years each. MD and EDs are also entitled to other perquisites and benefits mentioned in the agreement entered into by them with the Company.

Executive directors are entitled to superannuation benefits payable in the form of an annuity from an approved life insurance company, which form part of the perquisites allowed to them.

During the year, none of the directors was paid any performance-linked incentive, apart from Pradeep Shrivastava and Rakesh Sharma, who are executive directors.

As stated elsewhere in this report, the Company has adopted the Bajaj Auto Employee Stock Option Scheme 2019 for the benefit of the permanent employees and/or directors of the Company and/or its holding (if any, in future) and subsidiary Company(ies), but excluding independent directors and any employee who is a promoter or belongs to the promoter group.

During the year, 23,880 options each were granted to the EDs at a grant price of ₹ 3,892.10, being the closing market price on the NSE on the day preceding the day of grant. These grants will vest over a period of four years (25% every year) after a period of one year from the date of grant. No pension is paid by the Company.

Table 10: Remuneration paid/payable to directors for FY2023
(Amount in ₹ )
Name of director		Category		Sitting fees		Salary and perquisites		Commission		Total
Niraj Bajaj		Chairman, non-executive, non-independent		1,100,000		–		2,750,000		3,850,000
Madhur Bajaj		Vice Chairman, non-executive, non-independent		700,000		–		1,750,000		2,450,000
Shekhar Bajaj*		Non-executive, non-independent		300,000		–		750,000		1,050,000
Rajiv Bajaj		Managing Director and CEO, executive		–		181,235,386		294,498,000		475,733,386
Sanjiv Bajaj		Non-executive, non-independent		700,000		–		1,750,000		2,450,000
D J Balaji Rao		Non-executive, independent		1,900,000		–		4,750,000		6,650,000
Pradeep Shrivastava		Whole-time Director, executive		–		101,172,173		–		101,172,173
Dr. Naushad Forbes		Non-executive, independent		1,400,000		–		3,500,000		4,900,000
Anami N. Roy		Non-executive, independent		1,400,000		–		3,500,000		4,900,000
Rakesh Sharma		Whole-time Director, executive		–		103,720,392		–		103,720,392
Ms. Lila Poonawalla		Non-executive, independent		800,000		–		2,000,000		2,800,000
Pradip Shah		Non-executive, independent		1,100,000		–		2,750,000		3,850,000
Abhinav Bindra		Non-executive, independent		900,000		–		2,250,000		3,150,000

* Shekhar Bajaj resigned as non-executive, non-independent director of the Company w.e.f. closing hours of 30 June 2022.

Management

Management discussion and analysis

This is given as separate chapter in the Annual Report.

Disclosure of material transactions

Pursuant to regulation 26(5) of the Listing Regulations, 2015, senior management has made periodical disclosures to the Board relating to all material financial and commercial transactions, where they had (or were deemed to have had) personal interest that might have been in potential conflict with the interest of the Company. There was only one case involving a member of the senior management. In this instance, the disclosure was discussed, reviewed and found in order by the Board.

Compliances regarding insider trading

Pursuant to SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended, (‘SEBI PIT Regulations’) the Company has a Board approved code of conduct to regulate, monitor and report trading by insiders (‘Code of Conduct’) and a code of practices and procedures for fair disclosure of unpublished price sensitive information (‘Code of Fair Disclosure’).

Wherever non-compliance by an employee concerned was observed, penalty was levied and the amount was remitted to the stipulated fund.

By frequent communication, the Company makes designated employees conversant of the obligations under the insider trading regulations.

The audit committee and the Board at its meeting held on 14 March 2023 had reviewed the compliance in terms regulation 9A(4) of the SEBI PIT Regulations and confirmed that the systems for internal control with respect to the SEBI PIT Regulations are adequate and are operating effectively.

Means of communication

Quarterly, half-yearly and annual financial results and other public notices issued for the shareholders are published in numerous leading dailies, such as Financial Express, Business Standard, Kesari, Mint and Hindu Business Line. An official press release is also issued.

The Company also sends its half-yearly financial results along with a detailed write-up to shareholders.

The Company website, www.bajajauto.com, contains all important public domain information including presentations, if any, made to the media, analysts and institutional investors. It contains information as prescribed under the Act and the Listing Regulations, 2015, including details of the corporate contact persons and share transfer agent of the Company, shareholding pattern etc.

Section 20 and 136 of the Act, read with Companies (Accounts) Rules, 2014 permit companies to service delivery of documents electronically at the registered members’/shareholders’ email addresses.

During the year under review, the Company sent documents, such as notice calling the general meeting, audited financial statements, directors’ report, auditors’ report, credit of dividend intimation letters, etc. in electronic form at the email addresses provided by the shareholders and made available by them to the Company through the depositories. Shareholders desiring to receive the said documents in physical form continued to get these physically upon request.

All financial and other vital official news releases and documents under the Listing Regulations, 2015 are also communicated to the concerned stock exchanges, besides being placed on the Company’s website.

Information on general body meetings and special resolution(s) passed

During the previous three years, the annual general meetings (AGM) of the Company were held at the registered office at Mumbai-Pune Road, Akurdi, Pune 411 035 on the following dates and time. In these, the following special resolutions were passed:

Details of AGM		Date and time of AGM		Details of special resolution(s) passed at the AGM, if any
13th AGM (e-AGM)		22 July 2020 at 12.15 p.m.		1.	Re-appointment of Rajivnayan Rahulkumar Bajaj as Managing Director and Chief Executive Officer of the Company for a period of five years with effect from 1 April 2020
				2.	Re-appointment of Dr. Gita Piramal as an Independent Director of the Company for a second term of five consecutive years with effect from 1 April 2020
14th AGM (e-AGM)		22 July 2021 at 12.15 p.m.		1.	Re-appointment of Pradeep Shrivastava as Whole-time Director of the Company for a period of five years with effect from 1 April 2021
				2.	Approval for payment of commission to Non-executive Directors for a period of five years commencing from 1 April 2021
15th AGM (e-AGM)		26 July 2022 at 02:00 p.m.		1.	Re-appointment of Dr. Naushad Forbes as an Independent Director of the Company for a second term of five consecutive years with effect from 18 May 2022
				2.	Re-appointment of Anami N. Roy as an Independent Director of the Company for a second term of five consecutive years with effect from 14 September 2022

All resolutions proposed by the Board have been passed with requisite majority by the shareholders.

Postal ballot

During FY2023, the Company had sought approval of the members through postal ballot (ordinary resolution) and the details of the same are given below:

Particulars		Votes (No. of shares and %)				Date of passing the resolution
		In favour		Against
Approval of related party transaction with KTM Sportmotorcycle GmbH.		73,354,532 (99.93%)		911 (0.00%)		21 November 2022

The Company had appointed Shyamprasad D Limaye, practising Company Secretary (FCS No. 1587, CP No. 572) as scrutiniser for conducting the postal ballot including remote e-voting process in a fair and transparent manner.

Procedure for postal ballot

Pursuant to the provisions of the Act and the Listing Regulations, 2015, the Company provides facility to the members to exercise votes through electronic voting system (‘remote e-voting’), in addition to physical ballot. Postal ballot notices and forms are dispatched along with the postage pre-paid business reply envelope to members/beneficial owners through email at their registered email IDs and through physical copy to the members who have not registered their email IDs.

The Company also publishes notice in the newspapers for the information of the members. Voting rights are reckoned on the equity shares held by the members as on the cut-off date.

Pursuant to the provisions of the Act, the Company appoints a scrutiniser for conducting the postal ballot process in a fair and transparent manner. The scrutiniser submits his consolidated report to the Chairman and the voting results are announced by the Chairman by placing the same along with the scrutiniser’s report on the Company’s website, besides being communicated to the stock exchanges.

In view of the relaxation granted by MCA, postal ballot notice was sent through email only, to all those members who had registered their email IDs with the Company/depositories. Arrangements were also made for other members to register their email IDs to receive the postal ballot notice and cast their vote online.

Details of capital market non-compliance, if any

There was no non-compliance of any legal requirements; nor has there been any penalty or structure imposed on the Company by any stock exchange, SEBI or any statutory authority on any matter related to capital markets during the last three years.

Disclosure under Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

This disclosure is given in the Directors’ Report.

Compliance certificate

The Managing Director and CEO and the CFO have certified to the Board regarding the financial statements and other such matters as required under regulation 17(8) read with Part B of Schedule II to the Listing Regulations, 2015.

Report on corporate governance

This chapter, read together with the information given in the Directors’ Report and the chapters on Management Discussion and Analysis and General Shareholder Information, constitute the compliance report on corporate governance during FY2023. The Company has been regularly forwarding the quarterly compliance report to the stock exchanges as required under regulation 27(2) of the Listing Regulations, 2015.

Statutory auditors

S R B C & CO LLP are the statutory auditors of the Company. Total fees paid by the Company and its subsidiaries, on a consolidated basis to the auditors including all entities in their network firm/entity of which they are a part is given below:

(₹ In Crore)
Sr. No.		Particulars		Statutory Audit Fee		Other Services
1		Bajaj Auto Ltd.		1.80		2.15
2		PT. Bajaj Auto Indonesia		–		–
3		Bajaj Auto International Holdings BV, Netherlands		–		–
4		Bajaj Auto (Thailand) Ltd.		0.06		–
5		Chetak Technology Ltd.		0.02		–
6		Bajaj Auto Spain S.L.U.		–		–
7		Bajaj Do Brasil Comercio De Motocicletas Ltda		–		–

Auditors’ certificate on corporate governance

The Company has obtained the certificate from its statutory auditors regarding compliance with the provisions relating to corporate governance laid down in Part E of Schedule V to the Listing Regulations, 2015. This is annexed to the Directors’ Report and will be sent to the stock exchanges, along with the Annual Report to be filed by the Company.

Compliance of mandatory and discretionary requirements

Mandatory

The Company has complied with all the mandatory requirements of the Listing Regulations, 2015.

Discretionary

The Company has also complied with the discretionary requirements as under:

1.	The Board
	A Chairman’s office has been made available for the non-executive Chairman. He is allowed reimbursement of expenses incurred in performance of his duties.
2.	Shareholder rights
	A half-yearly declaration of financial performance including summary of significant events in the preceding six months is sent to each household of shareholders.
3.	Modified opinion(s) in audit report
	The Company confirms that its financial statements are with unmodified audit opinion.
4.	Separate posts of Chairperson and the Managing Director
	The positions of Chairperson and Managing Director are held by two different persons who are not related to each other.
5.	Reporting of the Internal Auditor
	The internal auditor reports directly to the audit committee.

Declaration by Chief Executive Officer (MD)

[Regulation 34(3) read with Schedule V (Part D) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015]

I, Rajiv Bajaj, Managing Director and CEO of Bajaj Auto Ltd. hereby declare that all the members of Board of Directors and Senior Management have affirmed compliance with the Code of Conduct of Board of Directors and Senior Management of the Company for the year ended 31 March 2023.

Rajiv Bajaj

Managing Director and CEO

Pune: 25 April 2023

List of key policies of Bajaj Auto Ltd.

Information on the Company’s website, regarding key policies, codes and charters, adopted by the Company:

Sr. No.		Name of Policy		Website Link
1		Whistle Blower Policy		https://www.bajajauto.com/-/media/bajajauto/Investors/code-policy/Whistle-Blower-Policy.ashx
2		Remuneration Policy		https://www.bajajauto.com/-/media/bajaj-auto/Investors/Codes-Policies/Corporate-Governance/BAL—Revised-Remuneration-Policy-25-Apr-2023.ashx
3		Policy of materiality and dealing with related party transactions		https://www.bajajauto.com/-/media/bajaj-auto/Investors/Codes-Policies/Corporate-Governance/revised-rpt-policy-15-march-2022.ashx
4		Policy for determining Material Subsidiaries		https://www.bajajauto.com/-/media/bajaj-auto/Investors/Codes-Policies/Corporate-Governance/bal-policy-for-determining-material-subsidiries.ashx
5		Policy on determination of materiality for disclosure of events or information		https://www.bajajauto.com/-/media/bajaj-auto/Investors/Codes-Policies/Corporate-Governance/bal-policy-on-determination-of-materiality.ashx
6		Performance Evaluation Criteria for Board, Committees of Board, Chairperson and Directors		https://www.bajajauto.com/-/media/bajaj-auto/Investors/Codes-Policies/Corporate-Governance/final-evaluation-criteria-for-ids.ashx
7		Dividend Distribution Policy		https://www.bajajauto.com/-/media/bajajauto/Investors/code-policy/Revised-Dividend-Distribution-Policy-17-March-2021.ashx
8		Corporate Social Responsibility Policy		https://www.bajajauto.com/-/media/bajajauto/Investors/code-policy/BAL-Revised-CSR-Policy-29-April-2021.ashx
9		Fair Disclosure Code		https://www.bajajauto.com/-/media/bajaj-auto/Investors/Codes-Policies/Corporate-Governance/Code-of-fair-disclosure.ashx
10		Code of Conduct for Directors and Members of Senior Management.		https://www.bajajauto.com/-/media/bajaj-auto/Investors/Codes-Policies/Corporate-Governance/BAL—Amended-Code-of-Conduct-25-Apr-2023.ashx
11		Archival Policy		https://www.bajajauto.com/-/media/bajaj-auto/Investors/Codes-Policies/Corporate-Governance/bal-policy-on-archival-of-disclosures.ashx
12		Human Rights Policy		https://www.bajajauto.com/-/media/bajajauto/Investors/code-policy/Human-Rights-Policy.ashx
13		Supplier Code of Conduct		https://www.bajajauto.com/-/media/bajajauto/Investors/code-policy/Supplier-Code-of-Conduct-SCoC-BAL.ashx
14		Sustainability Policy		https://www.bajajauto.com/-/media/bajaj-auto/Investors/Codes-Policies/Plants-Operations/Bajaj-Sustainability-Policy.ashx
15		Quality Policy		https://www.bajajauto.com/-/media/bajaj-auto/Investors/Codes-Policies/Plants-Operations/Bajaj-Quality-Policy.ashx
16		Safety, Occupational Health and Environmental (SHE) Policy		https://www.bajajauto.com/-/media/bajaj-auto/Investors/Codes-Policies/Plants-Operations/Bajaj-Policy-SHE-Eng.ashx
17		The Prime Mover Policy		https://www.bajajauto.com/-/media/bajaj-auto/Investors/Codes-Policies/Plants-Operations/Bajaj-TPM-Policy.ashx