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Company Information

Home » Market » Company Information

Bajaj Auto Ltd.

May 30, 12:41
2842.00 +7.60 (+ 0.27 %)
 
VOLUME : 4737
Prev. Close 2834.40
Open Price 2847.10
TODAY'S LOW / HIGH
2820.00
 
 
 
2850.00
Bid PRICE (QTY.) 2842.00 (128)
Offer PRICE (Qty.) 2844.45 (24)
52 WK LOW / HIGH
2510.00
 
 
 
3122.00
May 30, 12:29
2846.15 +8.20 (+ 0.29 %)
 
VOLUME : 47164
Prev. Close 2837.95
Open Price 2837.00
TODAY'S LOW / HIGH
2822.00
 
 
 
2854.95
Bid PRICE (QTY.) 2845.65 (3)
Offer PRICE (Qty.) 2846.15 (7)
52 WK LOW / HIGH
2510.00
 
 
 
3120.00
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Market Cap. ( ₹ ) 82358.19 Cr. P/BV 4.81 Book Value ( ₹ ) 591.81
52 Week High/Low ( ₹ ) 3120/2510 FV/ML 10/1 P/E(X) 20.19
Bookclosure 27/07/2016 EPS ( ₹ ) 140.98 Div Yield (%) 1.93
NOTES TO ACCOUNTS
You can view the entire text of Notes to accounts of the company for the latest year
Year End :2016-03 a. Of the above

i. 144,683,510 equity shares were allotted as fully paid bonus shares by capitalisation of General reserve by the Company on 13 September 2010.

ii. 1,805,071 equity shares thereof (excluding 1,805,071 equity shares allotted as bonus shares thereon) are deemed to be issued by way of Euro Equity Issue represented by Global Depository Receipts (GDR) evidencing Global Depository Shares outstanding on the record date. Outstanding GDRs at the close of the year were 52,844 (60,044)

b. Terms/rights attached to equity shares

The Company has only one class of equity shares having a par value of Rs. 10 per share. Each holder of equity shares is entitled to one vote per share. The interim dividend declared by the Board of Directors and the dividend proposed by the Board of Directors and approved by the shareholders in the annual general meeting is paid in Indian rupees. In the event of liquidation of the Company, the holders of equity shares will be entitled to receive 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.

1. Derivative hedging instruments

The Company has adopted the accounting treatment and disclosures in accordance with the principles laid down in Accounting Standard 30 and Accounting Standard 32 on foreign currency derivative contracts.

The Company holds foreign currency derivative to hedge its foreign currency exposure. Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re-measured at their fair value. The Company designates foreign currency derivatives as hedges of foreign currency risk associated with a highly probable forecast transaction (cash flow hedge).

The Company has entered into simple forward contracts and par forward contracts to hedge highly probable forecast export transactions. These instruments meet the Management's foreign exchange risk management objectives and also qualify for hedge accounting as per the principles of hedge accounting. The market value of instruments outstanding at the close of the year is a gain of Rs.9.38 crore as against a gain of Rs. 2.92 crore in the previous year.

The Company has also entered into range forward contracts to hedge highly probable forecast transactions, where the export realisations of the Company are protected below a minimum pre-determined foreign exchange rate whereas the realisation advantages are available to the Company there from up to a higher pre-determined foreign exchange rate. The Company does not benefit by rupee depreciating beyond the pre-determined foreign exchange rate. These instruments meet the Management's foreign exchange risk management objectives and also qualify for hedge accounting as per the principles of hedge accounting. MTM gains/losses in respect of effective hedges is carried to the Hedge reserve and ineffectiveness, if any, including the time value of option contracts is recognised in the results, as per the principles of Accounting Standard 30. The market value of instruments outstanding at the close of the year indicate a gain aggregating to Rs.3.50 crore as against a gain of Rs. 53.22 crore in the previous year.

The time value of option contracts from the current year aggregating a net gain of Rs. 105.49 crore after reversals, has been recognised as 'Other income' being recurring in nature, against a net loss of Rs. 50.22 crore in the previous year recognised as 'Other expenses'.

Risk Management Policy and other disclosures

The exports of the Company, presently constituting substantial portion of the turnover, are at prices predetermined for each product in each region. These prices are fixed in USD based on an assumed USD/INR rate. (Budgeted rate of realisation). Exports are then effected at such price and hence it is desirable for the Company to shield itself from adverse movements in forex rates at a future date.

The Company also imports raw materials and components for its motorcycles etc. However, the value of such imports is not material as compared to the value of exports. Nevertheless, the Company may wish to secure its procurement prices in terms of INR to be able to forecast its pricing and profitability. Consequently, the Company may wish to hedge such exposures, future and current, to achieve the aforesaid objective.

The exchange rate between the Indian rupee and foreign currencies has changed substantially in recent periods and may continue to fluctuate substantially in the future. Consequently, the Company uses derivative financial instruments, such as foreign exchange forward and option contracts, to mitigate the risk of changes in foreign currency exchange rates in respect of its forecasted cash flows and trade receivables.

The details in respect of the outstanding foreign exchange forward contracts including range forward and par forward contracts are given below. These contracts are due for maturity between one to twelve months. The table below summarises the notional amounts (amounts of contracts booked and outstanding) of foreign currency forward contracts into relevant maturity groupings based on the remaining period as at the 31 March 2016:

In respect of foreign currency derivative contracts designated as cash flow hedges for par forward contracts, the Company has recorded a net gain of Rs. 9.38 crore and Rs.2.92 crore, as a component of equity (Hedge reserve) as at 31 March 2016 and 2015 respectively and a net gain of Rs. 2.33 crore and a net gain of Rs.8.40 crore as part of revenue during the year ended 31 March 2016, and 2015 respectively.

In respect of foreign currency derivative contracts designated as cash flow hedges for range forward contracts, the Company has recorded a net gain of Rs. 27.12 crore and Rs. 182.32 crore, as a component of equity (Hedge reserve) as at 31 March 2016 and 2015 respectively and a net gain of Rs. 19.18 crore and a net gain of Rs. 85.10 crore as part of revenue during the year ended 31 March 2016 and 2015 respectively and a gain of Rs. 0.13 crore (previous year Rs.Nil) to the Statement of Profit and Loss on a break in the designation of the hedge.

Amount that was removed from appropriate equity account (Hedge reserve account) during the year ended 2016 and 2015 in respect of forecast transaction for which hedge accounting had previously been used, but which is no longer expected to occur is a gain of Rs.0.13 crore and previous year Rs.Nil respectively.

Amount that was removed from appropriate equity account (Hedge reserve account) during the period and included in the initial cost or other carrying amount of a non-financial asset or non-financial liability whose acquisition or incurrence was a hedged highly probable forecast transaction is Rs. Nil.

Amount in respect of the ineffectiveness which relates to time value of option contracts recognised in the Statement of Profit and Loss that arises from cash flow hedges is a loss of Rs. 23.62 crore as on 31 March 2016.

In respect of the Company's foreign currency derivative contracts outstanding as on 31 March 2016, a 10% increase in the exchange rates of the currency, underlying such contracts, as given by the banks would have resulted in an adverse movement by approximately Rs.360.32 crore in the fair value of outstanding contracts.

In respect of the Company's foreign currency derivative contracts outstanding as on 31 March 2016, a 10% decrease in the exchange rates of the currency, underlying such contracts, as given by the banks would have resulted in a positive movement by approximately Rs. 560.58 crore in the fair value of outstanding contracts.

Counter-party risk

Counter-party risk encompasses settlement risk on foreign currency derivative contracts. Exposure to these risks is closely monitored and kept within predetermined parameters. The Company does not expect any losses from non-performance by these counter-parties.

The Company's policy is to transact with creditworthy banks, which are reviewed on an on-going basis. The following table depicts that the majority of the foreign currency derivatives are placed in highly rated banks:

2. Considering the Company has been extended credit period upto 45 days by its vendors and payments being released on a timely basis, there is no liability towards interest on delayed payments under 'The Micro, Small and Medium Enterprises Development Act 2006' during the year. There is also no amount of outstanding interest in this regard, brought forward from previous years. Information in this regard is on basis of intimation received, on requests made by the Company, with regards to registration of vendors under the said Act.

3. The consolidated financial statements of the Company along with its subsidiaries are attached to these standalone financial statements. The details of the group regarding the nature of relationship and the basis of consolidation can be referred to in note 1 to the said consolidated financial statements.

4. Previous year figures

Previous year figures have been regrouped wherever necessary to make them comparable with those of the current year.

5. Miscellaneous

a. Rs. 1 crore is equal to Rs. 10 million.

b. Amounts less than Rs. 50,000 have been shown at actual against respective line items statutorily required to be disclosed