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Crompton Greaves
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Directors Report Year End : Mar '15    « Mar 14
To The Members,
 
 The Directors are pleased to present their Seventy Eighth Annual
 Report on the business and operations of the Company (or CG) and
 the accounts for the financial year ended 31 March 2015.
 
 THE YEAR IN RETROSPECT
 
 The consolidated net revenue of the Company during 2014-2015 grew by
 2.8% at Rs.14,013 crore, as compared with Rs.13,632 crore last year.
 The Company has achieved a stand- alone net turnover of Rs.7,837 crore,
 during the year under review, as compared with Rs.7,571 crore during
 the previous year, a rise of 3.5%.
 
 Consolidated profit before tax decreased to Rs.428 crore, as compared
 with Rs.495 crore in the previous year, a decrease of 13.4% over last
 year. Stand-alone profit before tax increased from Rs.713 crore to
 Rs.899 crore, an increase of 26.3%.
 
 Consolidated profit after tax is Rs. 209 crore as compared with
 consolidated profit after tax of Rs.244 crore in the previous year, a
 decrease of 14.3%. The Company recorded a stand-alone profit after tax
 of Rs.731 crore, an increase of 40.3% from Rs.521 crore last year.
 
 The Sales and Profit Before Interest and Tax (PBIT) of the respective
 Business Groups, compared with last year is given in Table 1.
 
 A detailed review of the operations and performance of the Company and
 each Business Group as well as the Company''s International operations
 is contained in the Management Discussion and Analysis Report, which is
 given as a separate chapter in the Annual Report.
 
 AMALGAMATION
 
 The Board of Directors, at their meeting held on 29 January 2014,
 approved the amalgamation of CG-ZIV Power Automation Solutions Limited
 (CG-ZIV) and CG Energy Management Limited (CGEM), wholly owned
 subsidiaries of the Company, with the Company, for simplification of
 the shareholding structure and operational synergies, as reported in
 the previous year''s Directors'' Report.
 
 A Scheme of Amalgamation filed with the Hon''ble High Court of Bombay
 was duly approved by the High Court and the said Scheme became
 effective on 25 March 2015, with 1 April 2014, as the appointed date.
 
 The Amalgamation of CG -ZIV and CGEM with the Company has resulted in
 an increase in the Authorised Share Capital of the Company by Rs.46.60
 crore.
 
 Being wholly owned subsidiaries of the Company, the entire paid-up
 share capital of CG-ZIV and CGEM would be cancelled and both the
 companies would stand dissolved without winding up.
 
 DEMERGER
 
 The Company operates in two business domains - B2B comprising Power,
 Industrial and Automation businesses and B2C which comprises the
 Consumer Products
 
 Business. With a view to create better growth opportunities for its two
 large but significantly different businesses, the Board of Directors
 have considered it prudent to demerge the B2B business and B2C business
 by transfer of the entire Consumer Products Business of the Company
 into a separate Company under a Scheme of Demerger. The Board believes
 that the demerger will create greater independence and flexibility in
 pursuing growth opportunities for the B2B and B2C businesses under two
 stronger and independent entities and thereby unlocking shareholder
 value.
 
 After considering the comments from stakeholders and regulatory
 authorities, the Board approved a Scheme of Arrangement (Scheme) for
 the demerger at its meeting held on 3 March 2015, under which, the
 Consumer Products Business of the Company will be transferred into,
 Crompton Greaves
 
 Consumer Electricals Limited (CGCEL), which, upon demerger, shall be
 listed on the Stock Exchanges, subject to receiving regulatory and
 statutory approvals. The Scheme approved by the Board, proposes that
 upon sanction of the Scheme by the Hon''ble High Court of Bombay, the
 shareholders of the Company will be allotted one equity share of CGCEL
 for every equity share held in the Company. The Scheme has been filed
 in the High Court of Bombay for directions for convening meeting of
 shareholders of the Company for approval of the Scheme.
 
 The Company has received an intimation from Avantha Holdings Limited,
 one of the entities of the promoter group of the Company, addressed to
 the Stock Exchanges announcing its intention to divest its 34.37%
 proposed shareholding in CGCEL to be allotted consequent to the
 sanction of the Scheme of Demerger, to one or more special purpose
 vehicles managed by Advent International Corporation, USA and a wholly
 owned subsidiary of Temasek Holdings (Private) Limited for an aggregate
 consideration of Rs 2000 crore, subject to requisite consents and
 approvals.
 
 DIVIDEND
 
 The Company declared two interim dividends during the year :
 
 - Rs.0.40 per equity share (20%) aggregating to a total dividend
 payout of Rs. 30.06 crore (including dividend tax) declared on
 
 16 October 2014; the Record Date for this purpose was 27 October 2014;
 and the Interim Dividend was paid on 5 November 2014.
 
 - Rs.0.40 per equity share (20%) aggregating to a total dividend
 payout of Rs.30.08 crore (including dividend tax) declared on
 03 February 2015; the Record Date for this purpose was 09 February
 2015; and the Interim Dividend was paid on 18 February 2015.
 
 - The total dividend payout (including dividend tax) for the
 financial year 2014-15, as a percentage of the share capital works out
 to 48.00%
 
 RESERVES
 
 The Reserves, on stand-alone basis, at the beginning of the year were
 Rs.3,231 crore. The Reserves at the end of the year are Rs.3,884 crore.
 
 DIRECTORATE
 
 The appointment and remuneration of Directors is governed by the
 Remuneration
 
 Policy of the Company which also contains the criteria for determining
 qualifications, positive attributes and independence of Directors. The
 Policy along with the CG Board Diversity Policy aims at attracting and
 retaining high calibre personnel from diverse educational fields and
 with varied experience to serve on the Board for guiding the Management
 team to enhanced organizational performance. The detailed Remuneration
 Policy is contained in the Corporate Governance section of the Annual
 Report.
 
 The Company''s Board comprises of nine member Board of Directors. The
 Chairman,
 
 Mr Gautam Thapar is a Non-Executive Director and represents the
 Promoter Group. Mr Laurent Demortier is the CEO and Managing Director.
 Five other Non-Executive Directors - Mr Shirish Apte, Mr Sanjay Labroo,
 
 Dr (Mrs) Colette Lewiner, Ms Meher Pudumjee and Dr Valentin von Massow
 are independent in terms of Clause 49 of the Listing Agreement and
 Companies Act, 2013. Two other Directors - Mr B Hariharan and Dr Omkar
 Goswami are Non- Executive Directors. The Directors are reputed
 professionals with diverse functional expertise, industry experience,
 educational qualifications, ethnicity and gender mix relevant to
 fulfilling the Company''s objectives and strategic goals.
 
 Mr Suresh Prabhu, Independent Director stepped down from his
 directorship of the Company, with effect from 7 November 2014.  The
 Board places on record its gratitude and appreciation for Mr Prabhu''s
 guidance to the Company during his tenure as a Director.
 
 None of the Independent Directors are liable to retire at the
 forthcoming Annual General Meeting. All Independent Directors have
 submitted declarations that they continue to meet the criteria of
 independence as laid down under Section 149(6) of the Companies Act,
 2013, and Clause 49 of the Listing Agreement.
 
 As per the provisions of the Companies Act, 2013, Mr Gautam Thapar
 retires by rotation at the forthcoming Annual General Meeting; and
 being eligible, offers himself for re-appointment to the Board. His
 profile details are contained in the accompanying Notice of the
 forthcoming Annual General Meeting and in the Corporate Governance
 Report.
 
 The Board of Directors met 8 times during financial year 2014-15. The
 details of the meetings and the attendance of the Directors are
 mentioned in the Corporate Governance Report.
 
 The Board has established Committees as a matter of good corporate
 governance
 
 practice and as per the requirements of the Companies Act, 2013. The
 Committees are Risk and Audit Committee, Nomination and Remuneration
 Committee, Corporate Social Responsibility Committee and Stakeholders''
 Relationship Committee. The composition, terms of reference, number of
 meetings held and business transacted by the Committees is given in the
 Corporate Governance Report.
 
 During the year, the Board has carried out the annual evaluation of its
 own performance as well as the evaluation of the working of its
 Committees and individual Directors, including
 Chairman of the Board. This exercise was carried out through a
 structured questionnaire prepared separately for Board, Committee and
 individual Directors. The questionnaire for Board evaluation was
 prepared taking into consideration various aspects of the Board''s
 functioning such as adequacy of the composition and role of the Board,
 Board meeting and reporting process, effectiveness of strategies, risk
 management systems, external relationships, ethics and governance
 framework. Committee performance was evaluated on the basis of its
 composition, effectiveness in carrying out its
 
 mandate, relevance of its recommendations and allocation of adequate
 time to fulfill its mandate.
 
 Individual and peer assessment of Directors based on parameters such as
 knowledge, contribution, level of engagement,
 communication/relationship with Board and Senior Management were
 received by the Chairman for individual feedback. The Board
 acknowledged certain key improvement areas emerging through this
 exercise and action plans to address these are in progress. The
 performance evaluation of the Chairman was carried out by the
 Independent Directors.
 
 FINANCIAL HIGHLIGHTS
 
 PARTICULARS                                    CG STAND-ALONE
                                                2015         2014
 
 Gross Sales                                    1060          988
 
 Less: Excise Duty                                49           52
 
 Net Sales                                      1011          936
 
 Less: Operating Expenses                        928          860
 
 Operating Profit                                 83           76
 
 Add: Dividend and Other Income                   14            9
 
 Profit before Interest, Depreciation,
 Amortisation, Exchange Gain/                     97           85
 
 (Loss), Exceptional items, Prior Period 
 Items and Taxes
 
 Less: Finance costs (net)                        (3)          (3)
 
 Profit before Depreciation, Amortisation,
 
 Exchange Gain/(Loss), Prior Period              100           88
 
 Interest, Exceptional items and Taxes
 
 Less: Depreciation and Amortisation              12           11
 
 Profit before exchange gain /
 (loss), exceptional items , prior                88           77
 
 period items and taxes
 
 Exchange gain / (Loss)                           (6)          11
 
 Exceptional item                                 33            -
 
 Profit Before prior period items and Tax        115           88
 
 Prior period items                                -            -
 
 Profit before tax                               115           88
 
 Less: Provision for Current Year Tax             22           21
 
 Less: Provision for Deferred Tax                 (1)           3
 
 Profit After Tax                                 94           64
 
 Minority Interest                                 -            -
 
 Share of Profit/(loss) of Associate 
 Companies (net)
 
 Profit available for distribution                 94          64
 
 
 Particulars                               CGI BV Consolidated''s
                                              2014      2015
 
 Gross Sales                                   807       768
 
 Less: Excise Duty                               -         -
 
 Net Sales                                     807       768
 
 Less: Operating Expenses                      812       768
 
 Operating Profit                              (5)       (0)
 
 Add: Dividend and Other Income                  7        10
 
 Profit before Interest, Depreciation            2        10
 Amortisation, Exchange Gain/ (Loss), 
 Exceptional items, Prior 
 Period Items and Taxes 
 
 Less: Finance costs (net)                      16        14
 
 Profit before Depreciation,                   (14)       (4)
 Amortisation, Exchange Gain/(Loss), 
 Prior Period Interest, 
 Exceptional items and Taxes
 
 Less: Depreciation and Amortisation            20        21
 
 Profit before exchange gain /                 (34)      (25)
 (loss), exceptional items , 
 prior period items and taxes 
 
 Exchange gain / (Loss)                           -        -
 
 Exceptional item                              (22)        -
 
 Profit Before prior period items and Tax      (56)     (25)
 
 Prior period items                             (2)        -
 
 Profit before tax                             (58)     (25)
 
 Less: Provision for Current Year Tax            3        3       
 
 Less: Provision for Deferred Tax                4        2 
 
 Profit After Tax                             (65)      (30)
 
 Minority Interest                               0        0
 
 Share of Profit/(loss) of Associate            (0)      (2)
 Companies (net)
 
 Profit available for distribution             (65)     (32)
 
 Particulars                                 CG  Consolidated''s
                                              2014      2015
 
 Gross Sales                                  1858      1737
 
 Less: Excise Duty                              49        53
 
 Net Sales                                    1809      1684
 
 Less: Operating Expenses                     1726      1608
 
 Operating Profit                               83        76
 
 Add: Dividend and Other Income                 16        18
 
 Profit before Interest, Depreciation,          99        94
 Amortisation, Exchange Gain/ (Loss), 
 Exceptional items, Prior 
 Period Items and Taxes 
 
 Less: Finance costs (net)                      13        12
 
 Profit before Depreciation,                    86        82
 Amortisation, Exchange Gain/(Loss), 
 Prior Period Interest, 
 Exceptional items and Taxes
 
 Less: Depreciation and Amortisation            34        32
 
 Profit before exchange gain /                  52        50
 (loss), exceptional items , 
 prior period items and taxes 
 
 Exchange gain / (Loss)                        (6)        11
 
 Exceptional item                               12         -
 
 Profit Before prior period items and Tax       58        61
 
 Prior period items                            (2)         -
 
 Profit before tax                              56         -
 
 Less: Provision for Current Year Tax           26        24 
 
 Less: Provision for Deferred Tax                3         5
 
 Profit After Tax                               27        32
 
 Minority Interest                               0         0
 
 Share of Profit/(loss) of Associate             0       (2)
 Companies (net)
 
 Profit available for distribution              27        30
 
 * Consolidated Accounts of CG International BV (CGIBV), the holding
 company for CG''s international operations. ** Includes results of CG
 Stand-alone and Indian subsidiaries, Crompton Greaves Holdings
 Mauritius Limited, CG International Holdings Singapore PTE Ltd, and
 Crompton Greaves Sales Network Malaysia SDN. BHD. PT Crompton Prima
 Switchgear Indonesia and CGIBV Consolidated @ Figures have been
 regrouped for the purpose of consolidation. Note: Average exchange rate
 considered for 1 Euro in 2014-2015 is Rs 77.4865 and in 2013-14 is
 Rs.80.9367
 
 The Directors expressed their satisfaction with the evaluation process
 and its result.
 
 PROMOTER GROUP
 
 The Company is a part of the Avantha Group, one of India''s leading
 diversified conglomerates. Led by Chairman Mr Gautam Thapar, the
 Avantha Group has a global footprint and operates in 90 countries with
 more than 25,000 employees worldwide.
 
 As required by the Listing Agreement with Stock Exchanges, CG
 periodically discloses its promoter group and persons acting in
 concert in the shareholding pattern and other filings with the Stock
 Exchanges.
 
 SUBSIDIARY COMPANIES
 
 The Company has four Indian subsidiaries as on 31 March 2015.
 Additionally, the Company has 32 foreign subsidiaries as on 31 March
 2015. The particulars are mentioned in Annexure 6 to this Report in
 Form No. MGT 9 (Extract of Annual Return).  Pursuant to section 136 of
 the Companies Act, 2013, the audited accounts of each of the Company''s
 subsidiaries are placed on the
 
 website of the Company and not enclosed in the Annual Report. If any
 Member of the Company so desires, the Company will be happy to make
 available the Annual Accounts of the subsidiaries to him/her, on
 request. The physical copies of the aforesaid documents will also be
 available at the Company''s Registered Office for inspection during
 normal business hours on all working days, excluding Saturdays.
 
 BRANCH OFFICE IN POLAND
 
 The Company has a branch office in Poland. The stand-alone financial
 
 FINANCIAL HIGHLIGHTS
 
 PARTICULARS                                       CG STAND-ALONE
                                                   2015      2014
 
 Gross Sales                                       1344      1324
 
 Less: Excise Duty                                   62        70
 
 Net Sales                                         1282      1254
 
 Less: Operating Expenses                          1175      1152
 
 Operating Profit                                   107       102
 
 Add: Dividend and Other Income                      17        12
 
 Profit before Interest,                            124       114
 Depreciation, Amortisation,
 Exchange Gain/ (Loss), Exceptional 
 items, Prior Period Items and Taxes
 
 Less: Finance costs                                 (4)       (4)
 
 Profit before Depreciation,                        128       118
 Amortisation, Exchange Gain/(Loss), 
 Exceptional  items, 
 Prior Period Items and Taxes
 
 Less: Depreciation and Amortisation                 16        15
 
 Profit before exchange gain /                      112       103
 (loss), exceptional items, 
 prior period items and taxes
 
 Exchange gain / (loss)                              (8)       15
 
 Exceptional Items                                   43         -
 
 Profit before prior period                         147       118
 items and Tax
 
 Prior period items                                   -         -
 
 Profit before tax                                  147       118
 
 Less: Provision for Current Year Tax                28        28
 
 Less: Provision for Deferred Tax                    (1)        4
 
 Profit After Tax                                   120        86
 
 Minority Interest                                    -         -
 
 Share of Profit/(Loss) of                            -         -
 Associate Companies (net)
 
 Profit available for distribution                  120        86
 
 
 Particulars                             CGI BV CONSOLIDATED''S
                                           2015        2014  
 
 Gross Sales                               1023        1029
 
 Less: Excise Duty                            -           - 
 
 Net Sales                                 1023        1029
 
 Less: Operating Expenses                  1029        1029
 
 Operating Profit                            (6)         (0)
 
 Add: Dividend and Other Income               9          13
 
 Profit before Interest,                      3          13
 Depreciation, Amortisation, 
 Exchange Gain/ (Loss), 
 Exceptional items, Prior 
 Period Items and Taxes 
 
 Less: Finance costs (net)                   20          19
 
 Profit before Depreciation,                (17)         (6)
 Amortisation, Exchange Gain/(Loss), 
 Prior Period Interest, 
 Exceptional items and Taxes
 
 Less: Depreciation and Amortisation         26          27
 
 Profit before exchange gain /              (43)        (33)
 (loss), exceptional items , 
 prior period items and taxes 
 
 Exchange gain / (Loss)                       -           - 
 
 Exceptional item                           (28)          -
 
 Profit Before prior period                 (71)        (33)
 items and Tax 
 
 Prior period items                          (3)          -
 
 Profit before tax                          (74)        (33)
 
 Less: Provision for Current Year Tax         4           4 
 
 Less: Provision for Deferred Tax             5           3
 
 Profit After Tax                           (83)        (40) 
 
 Minority Interest                            0           0
 
 Share of Profit/(loss) of Associate         (1)         (3)
 Companies (net)
 
 Profit available for distribution          (84)        (43)
 
 
 
 Particulars                               CG  CONSOLIDATED''S
                                           2015        2014  
 
 Gross Sales                               2355        2329
 
 Less: Excise Duty                           62          71
 
 Net Sales                                 2293        2258
 
 Less: Operating Expenses                  2188        2156
 
 Operating Profit                           105         102
 
 Add: Dividend and Other Income              21          24
 
 Profit before Interest,                    126         126
 Depreciation, Amortisation, 
 Exchange Gain/ (Loss), 
 Exceptional items, Prior 
 Period Items and Taxes 
 
 Less: Finance costs (net)                   17          16
 
 Profit before Depreciation,                109         110
 Amortisation, Exchange Gain/(Loss), 
 Prior Period Interest, 
 Exceptional items and Taxes
 
 Less: Depreciation and Amortisation         43          43
 
 Profit before exchange gain /               66          67
 (loss), exceptional items , 
 prior period items and taxes 
 
 Exchange gain / (Loss)                      (8)         15
 
 Exceptional item                            15           -
 
 Profit Before prior period                  73          82
 items and Tax 
 
 Prior period items                          (3)          -
 
 Profit before tax                           70           -
  
 Less: Provision for Current Year Tax        33          32 
 
 Less: Provision for Deferred Tax             3           7
 
 Profit After Tax                            34          43
  
 Minority Interest                            0           0 
 
 Share of Profit/(loss) of Associate          0          (2)
 Companies (net)
 
 Profit available for distribution           34          41
 
 
 * Consolidated Accounts of CG International BV (CGIBV), the holding
 company for CG''s international operations. * ** Includes results of CG
 Stand-alone and Indian subsidiaries, Crompton Greaves Holdings
 Mauritius Limited, CG International Holdings Singapore PTE Ltd, and
 Crompton Greaves Sales Network Malaysia SDN. BHD. PT Crompton Prima
 Switchgear Indonesia and CGIBV Consolidated @ Figures have been 
 regrouped for the purpose of consolidation. Note: Average exchange 
 rate considered for 1 USD in 2014-2015 is Rs. 61.1097 and in 2013-14 
 is Rs.60.3575 statements of the Company includes the financial 
 statements of its Poland branch i.e., Crompton Greaves Ltd SA.
 
 CONSOLIDATION OF ACCOUNTS
 
 As required by Accounting Standards AS- 21 and AS-23 of the Institute
 of Chartered Accountants of India, the financial statements of the
 Company reflect the consolidation of the Accounts of the Company, its
 36 subsidiaries, and 4 Associate Companies. The Associate Companies are
 CG Lucy Switchgear Limited, Pauwels Middle East Trading & Contracting
 Pvt Co. LLC, K.K. El Fi Co Ltd, Japan and Saudi Power Transformers
 Company Ltd.
 
 The performance and financial position of each of the subsidiaries,
 associates and joint venture companies are detailed in ''Statement
 containing salient features of the financial statement of
 subsidiaries/associate companies/ joint ventures'' in form AOC I
 pursuant to section 129 of the Companies Act, 2013.
 
 RELATED PARTY TRANSACTIONS
 
 The Company''s Related Party Policy governs the norms for inter-company
 transaction pricing between the Company and its subsidiaries. Since the
 Company has a network of wholly-owned subsidiaries, manufacturing, as
 well as, engaged in sales of various products comprising the
 different businesses of CG, a substantial quantum of related party
 transactions comprise transactions with subsidiaries for purchase and
 sale of goods and services, in the ordinary course of business.
 
 An omnibus approval has been granted by the Risk and Audit Committee of
 the Board for transactions which are of a foreseen and repetitive
 nature with other related parties.  Such omnibus approvals are
 subjected to review by the Risk and Audit Committee every year and are
 monitored by the Risk and Audit Committee on a quarterly basis. All
 Related Party Transactions are presented to the Risk and Audit
 Committee every quarter.
 
 All related party transactions that were entered into during the
 financial year were on an arm''s length basis and were in the ordinary
 course of business. There are no material related party contracts,
 arrangements or transactions undertaken by the Company during the year
 in terms of its India Related Party Transaction Policy of the Company
 and hence the disclosure of particulars of contracts/ arrangements
 entered into by the Company with related parties referred to in
 sub-section (1) of section 188 of the Companies Act, 2013, in form 
 AOC 2 (Annexure 1 to the Report) is NIL.  The Company''s India Related 
 Party Transactions Policy is uploaded on the website of the Company 
 and the weblink is as follows: http://www.cgglobal.com/pdfs/policies/
 India%20Related%20Party%20 Transactions%20Policy.pdf
 
 PARTICULARS OF LOANS,
 
 GUARANTEES OR INVESTMENTS
 
 Details of Loans, Guarantees and Investments made by the Company
 pursuant to the provisions of Section 186 of the Companies Act, 2013,
 are given in the notes to the Financial Statements.
 
 BUSINESS RISK MANAGEMENT
 
 A risk management policy has been developed and implemented by the
 Company for identification of elements of risk, if any, which
 in the opinion of the Board may threaten the existence of the company.
 The key elements of the company''s risk management framework have been
 captured in the risk management policy which details the process for
 identifying, escalating, prioritizing, mitigating and monitoring key
 risk events and action plans. The assessment of the risks covers
 Strategy, Technology, Financial, Operations & Systems, Legal &
 Regulatory and Human Resources Risks. There are appropriate assurance
 and monitoring mechanisms in place to monitor the effectiveness of the
 risk management framework including the mitigation plans identified by
 the Management for key risks identified through the risk management
 exercise. The effectiveness of the risk management framework and
 systems is also periodically evaluated by the Risk and Audit Committee.
 
 INTERNAL FINANCIAL CONTROLS
 
 CG has in place, adequate systems and procedures for implementation of
 internal financial control across the organization which enables the
 Company to ensure that these controls are operating effectively.
 
 RESEARCH AND DEVELOPMENT
 
 During the year, the R&D activities continued to focus on developing
 intelligent, eco-friendly and energy efficient products, as well as,
 extending the range of existing products.
 
 Power transformers targeted eco-friendly products with focus on the
 efficiency (low loss transformers), low noise, low size and improvement
 of the thermal performances of transformers. The performance
 evaluations of Instrument Transformers (CT & CVT) at extremely cold
 climatic conditions (-55 deg C), is a significant achievement.
 
 In the Automation segment, smart grid solutions developed by the
 Company under ZIV brand received significant recognition when CG was
 awarded a contract by eRDF, France, as one of the six suppliers to the
 Linky project. The Linky project is one of the largest planned AMI roll
 outs, based on PLC technology, in the world. The award is a
 demonstration of CG''s ability to deliver robust and scalable smart
 meters to meet with stringent international security and reliability
 norms.
 
 In the Motors segment, research was carried out to comply with IE3 /
 IE4 efficiency level & NEMA standards for various ranges of motors,
 through improvements in winding
 
 design & process, copper die-cast Induction Machine technology, etc. CG
 developed motors operating on dual voltage frequencies & power
 electronics equipment like power converters & auxiliary converters.
 Development of hybrid drives was undertaken with technology partners.
 
 The Company''s low tension or low voltage rotating machine division
 recently received IECEx and ATEX approvals from the International
 Electro-technical Commission (IEC) System, BASEEFA-UK, for
 certification of standards relating to equipment used in an explosive
 environment. The approvals entitle CG to enter the global flameproof
 motors'' market without any additional country-wise technical
 re-certifications.
 
 Consumer Products focused on improving reliability and durability of
 its products through technologies such as permanent magnet technology,
 Maximum Power Point Tracking (MPPT) and Cutter Technology. Special
 focus was given on thermal insulation improvement using Nano fillers to
 achieve compliance with 5-star energy efficiency norms without
 increasing significant cost. New variants of ceiling fans, table fans &
 wall mounted fans were also introduced during the year.
 
 CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE
 EARNINGS AND OUTGO
 
 As required by the Companies Act, 2013, read with the Companies
 (Accounts) Rules, 2014, the relevant data pertaining to conservation of
 energy, technology absorption and foreign exchange earnings and outgo
 is given in the prescribed format as Annexure 2 to this Report.
 
 ENVIRONMENT, HEALTH & SAFETY (EHS)
 
 CG has articulated its Corporate EHS Policy to confirm its commitment
 to the health and safety of all employees and stakeholders across all
 CG factories and minimize adverse environmental impact from its
 activities. The Policy is updated at regular intervals. During the
 year, the Company has released EHS Guidelines which aim to go beyond
 meeting legal requirement for ensuring safety of its workforce and
 protection of the environment.  The Guidelines elaborate the cardinal
 principles of safety at CG, norms for accident reporting and
 investigation, emergency preparedness, training, audits and key
 assessment indicators for monitoring and measurement.
 
 EHS Audit is conducted twice a year to identify the areas of
 improvements in EHS protection activities. EHS targets assigned to each
 division to reduce consumption of power, paper and water are regularly
 monitored through an EHS scorecard which is reviewed at monthly
 business review meetings. The existing EHS activities are further
 enhanced and strengthened through delivering training programs.
 
 During the year, the existing online accident/incident reporting portal
 was extended to form a single window EHS information data portal with
 corrective action tracking mechanism. Each plant location has
 identified projects and budgeted expenses for EHS improvement
 activities.
 
 All Indian manufacturing units are certified for ISO14001 and
 OSHAS18001 standards.  Regular audits are being conducted by the
 certifying agencies to confirm adherence to procedures prescribed in
 the standards.
 
 CORPORATE SOCIAL RESPONSIBILITY (CSR)
 
 The Company''s undeterred commitment towards CSR initiatives endeavor to
 embrace responsibility for its corporate actions and achieve fruitful
 impact of its business actions not only on its stakeholders, but also
 the society at large. As part of its CSR initiatives, CG has undertaken
 projects in the areas of education, employability and health. CG
 supports Avantha Foundation on programs such as reduction of
 Malnutrition and Hunger and building capacities of stakeholders in
 small towns to ensure better delivery of services to citizens. The
 Annual Report on CSR activities of CG for FY 2014-15 is stated at
 Annexure 3 to the Report.
 
 GREEN INITIATIVES
 
 Electronic copies of the Annual Report and Notice of the 78th Annual
 General Meeting are sent to all members whose email addresses are
 registered with the Company/Depository Participant(s) for communication
 purposes.
 
 For members who have not registered their email addresses, physical
 copies of the Notice and Annual Report are sent in the permitted mode.
 Members requiring physical copies can send a request to the Company.
 The physical copies of the aforesaid documents will also be available
 at the Company''s Registered Office for inspection during normal
 business hours on all working days, excluding Saturdays.
 
 MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE
 COMPANY
 
 There are no material changes and commitments affecting the financial
 position of the Company which has occurred between the end of the
 financial year of the Company i.e., 31 March 2015, and the date of the
 Directors'' report i.e., 28 May 2015.
 
 MATERIAL ORDERS OF REGULATORS/ COURTS/TRIBUNALS
 
 No significant or material orders were passed by the Regulators or
 Courts or Tribunals which impact the going concern status and Company''s
 operations in future.
 
 DIRECTORS'' RESPONSIBILITY STATEMENT
 
 The Directors would like to assure the Members that the financial
 statements for the year under review conform in their entirety to the
 requirements of the Companies Act, 2013.  The Directors confirm that :
 
 - the Annual Accounts have been prepared in conformity with the
 applicable Accounting Standards;
 
 - the Accounting Policies selected and applied on a consistent basis,
 give a true and fair view of the affairs of the Company and of the
 profit for the financial year;
 
 - sufficient care has been taken that adequate accounting records
 have been maintained for safeguarding the assets of the Company; and
 for prevention and detection of fraud and other irregularities;
 
 - the Annual Accounts have been prepared on a going concern basis;
 
 - the internal financial controls laid down in the Company were
 adequate and operating effectively;
 
 - the systems devised to ensure compliance with the provisions of all
 applicable laws were adequate and operating effectively.
 
 SHARE REGISTRAR & TRANSFER AGENT
 
 The Company''s Registrar & Transfer Agents for shares is Datamatics
 Financial Services Ltd (DFSL). DFSL is a SEBI- registered Registrar &
 Transfer Agent. The contact details of DFSL are mentioned in the Report
 on Corporate Governance.
 
 Investors are requested to address their queries, if any to DFSL;
 however, in case of difficulties, as always, they are welcome to
 contact the Company''s
 
 Investor Services Department, the contact particulars of which are
 contained in the Report on Corporate Governance.
 
 FIXED DEPOSITS
 
 The Company has discontinued acceptance of fresh deposits and also
 renewal of existing deposits.
 
 PARTICULARS OF EMPLOYEES
 
 The statement of particulars required pursuant to Section 197 of the
 Companies Act, 2013, read with Rule 5(1) and (2) of The Companies
 (Appointment and Remuneration of Managerial Personnel) Rules, 2014,
 forms a part of this Report and is given at Annexure 4.
 
 COMPLAINTS RELATING TO SEXUAL HARASSMENT
 
 In terms of The Sexual Harassment of Women at Workplace (Prevention,
 Prohibition and Redressal) Act and Rules, 2013, it is mandatory to
 review status of sexual harassment related complaints in the Annual
 Report. There were no incidents of sexual harassment reported in the
 Company. For protection against sexual harassment, CG has formed an
 internal complaints committee to which employees can write in their
 complaints.
 
 The Company has a Prevention of Sexual Harassment Policy which has
 formalised a free and fair enquiry process for dealing with such
 issues, with clear timelines.
 
 VIGIL MECHANISM
 
 The Company has formulated CG Whistle Blower Policy with a view to
 providing a mechanism for CG employees to report violations and assure
 them of the process that will be followed to address the reported
 violation. The Policy also lays down the procedures to be followed by
 Senior
 
 Management for tracking of complaints, giving feedback, conducting
 investigations and taking disciplinary actions. It also provides
 assurances and guidelines on confidentiality of the reporting process
 and protection from reprisal to complainants.
 
 A Management Committee as nominated by CEO and Managing Director is
 formed upon completion of the investigation and requiring action by the
 Committee. Decisions taken by the Management Committee and actions
 taken by the Company or exoneration cases are informed by the Head of
 Internal Audit to the Risk and Audit Committee on a quarterly basis.
 Actions taken by the Management Committee are implemented subject to
 applicable law(s).
 
 AUDITORS
 
 The Company''s Statutory Auditors, Sharp & Tannan, hold office up to the
 conclusion of the forthcoming Annual General Meeting; and, being
 eligible, are recommended for re-appointment on terms to be recommended
 by the Risk and Audit Committee to the Board of Directors. They have
 furnished the requisite certificate to the effect that their
 re-appointment, if effected, will be in accordance with Section
 141(3)(g) of the Companies Act, 2013. The Notes on Financial Statements
 referred to in the Annual Report are self explanatory and do not call
 for any further comments.
 
 The Company had appointed Ashwin Solanki & Associates, Cost
 Accountants, to audit the cost accounts related to the Company''s
 products for 2013-2014. The due date for filing the above cost audit
 reports was 27th September 2014; the actual date of filing was 23rd
 September 2014.
 
 Upon recommendation of the Risk & Audit Committee, the Board had
 appointed Ashwin Solanki & Associates as Cost Auditors, for
 
 the financial year 2015-2016. At the ensuing Annual General Meeting,
 their appointment and remuneration is proposed to be approved and
 ratified by the shareholders.
 
 The Company has appointed Dr K R Chandratre, Practising Company
 Secretary to undertake the Secretarial Audit of the Company. The Report
 of the Secretarial Audit for FY 2014-15 is annexed herewith as Annexure
 5 to the Report.
 
 EXTRACT OF ANNUAL RETURN
 
 The details forming part of the extract of the Annual Return in form
 MGT 9 is annexed herewith as Annexure 6.
 
 ACKNOWLEDGEMENTS
 
 The Directors wish to convey their gratitude and appreciation to all of
 the Company''s employees at all its locations worldwide for their
 tremendous personal efforts as well as their collective dedication and
 contribution to the Company''s performance.
 
 The Directors would also like to thank the employee unions,
 shareholders, customers, dealers, suppliers, bankers, government and
 all other business associates for their continued support extended to
 the Company and the Management.
 
 On behalf of the Board of Directors
 
 G Thapar 
 CHAIRMAN
 Mumbai, 28 May 2015
Source : Dion Global Solutions Limited
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