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Crompton Greaves Consumer Electrical Ltd.

BSE: 539876 | NSE: CROMPTON |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE299U01018 | SECTOR: Electricals

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Annual Report

For Year :
2019 2018 2017 2016

Director’s Report

Dear Shareholders,

The Directors are pleased to present the Fourth Annual Report on the business and operations of the Company and the accounts for the Financial Year ended 31st March, 2018.

FINANCIALS:

The table below depicts the financial performance of your Company for the year ended 31st March, 2018.

(Rs. crore)

Particulars

Year ended 31st March, 2018

Year ended 31st March, 2017

Revenue from operations

4,105.12

4,016.67

Total income

4,135.87

4,036.16

Profit before Exceptional Items and Tax

485.44

427.56

Exceptional Items

-

2.52

Profit before Tax

485.44

425.04

Tax expenses (including deferred Tax)

161.65

141.87

Profit after Tax

323.79

283.17

COMPARABLE REVENUE

Your Company adopted Indian Accounting Standards (Ind AS) with effect from 1st April, 2017, as part of the 2nd wave of companies required to transition to the new standards. While details of the changes due to transition are given in the notes to accounts, this necessitated the restatement of the financials for the previous year (2016-17) and accordingly the 2016-17 numbers as given above are the restated numbers.

With effect from 1st July, 2017, the country moved to the GST regime wherein several taxes were subsumed into GST. This necessitated adjustment of prices for many of the Company’s products but without any increase in prices in the hands of the consumer. Under the prevailing revenue reporting requirements, the income from Sales/operations got reduced with commensurate reduction in cost of purchases. In order to make the numbers comparable with the previous year, suitable adjustments have been made while commenting on sales growth numbers in this report.

OVERVIEW OF COMPANY’S FINANCIAL PERFORMANCE: Comparable Revenue grew 8.4% to Rs.4,105.12 crore. Profit Before Tax (PBT) at Rs.485.44 crore was up by 14.2% versus last year.

Finance costs of Rs.63.74 crore represent the interest cost on the Non Convertible Debentures of Rs.650 crore.

Profit Before Tax “PBT” was Rs.485.44 crore and Profit After Tax “PAT” was Rs.323.79 crore. PBT margin was 11.7% and PAT margin was 7.9%.

INCREASE IN SHARE CAPITAL - Exercise of Stock Options During the year under review, your Company has made following allotments pursuant to exercise of options by eligible employees under the Crompton Employee Stock Option Scheme- 2016:

Date of Allotment

No. of Shares

Remarks

6* December, 2017

16,275

Allotment of shares arising out of exercise of options

2nd February, 2018

22,688

Allotment of shares arising out of exercise of options

Accordingly, the paid-up share capital of the Company as on the date of this Report is Rs.1,25,35,70,210 divided into 62,67,85,105 equity shares of Rs.2/- each.

The applicable disclosures as stipulated under SEBI (Share Based Employee Benefits) Regulations, 2014 are provided in Annexure 1 to this report.

DIVIDEND:

Your Directors are pleased to recommend a dividend of Rs.1.75 per Ordinary (Equity) Share of the face value of Rs.2 each, payable to those Shareholders whose names appear in the Register of Members as on the Book Closure Date. The dividend outgo, inclusive of tax on distributed profits would absorb a sum of Rs.132.23 crore.

In terms of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“the Listing Regulations”), the Company has adopted a Dividend Distribution Policy which is available on the Company’s website.

RESERVES:

Under the Companies Act, 2013, there is no requirement to transfer any sum to General Reserve in relation to the payment of dividend. Accordingly, the entire undistributed Profit after Tax is carried forward in the Statement of Profit and Loss.

REVISION IN CREDIT RATING

CRISIL has, as part of its annual review of the Company’s credit rating, revised its outlook to ‘Positive’ from ‘Stable’ and reaffirmed the ratings at ‘CRISIL AA’. This rating is for the Company’s long term facilities and Non-convertible Debentures. The short-term rating remains at CRISIL A1 .

INDIAN CORPORATE GOVERNANCE SCORECARD:

BSE Ltd. jointly with International Finance Corporation (IFC) and institutional investor Advisory Services (iiAS) with the financial support of the Government of Japan has developed the Indian Corporate Governance Scorecard which is a fair assessment of corporate governance practices at the corporate level. The Scorecard is based on the G20/OECD Principles of Corporate Governance. Your Company has featured in top 10 companies amongst S&P BSE 100 (BSE 100) companies evaluated basis this Scorecard.

HUMAN RESOURCES & EMPLOYEE RELATIONS:

Employee Relations

Employee relations in your Company, over the last few years, have been excellent. 201 7-1 8 was a landmark year with two long-term settlements signed for a 5 year term, with the employee unions at Bethora and Kundaim units. These settlements are unique not only for their duration, and other work practice changes, but also for the high-degree of transparency and good spirit demonstrated.

Talent Management

Driving a performance-based culture and employee development have been two key priorities of your Company. Key leadership gaps were filled in and the complete leadership team is now in place. A 360 degree feedback initiative was done for select employees. The process of goal setting, midyear appraisals and annual performance assessment was made time bound and transparent.

Capability & Leadership Development Capability building is one of the five strategic levers on which the organisation strategy is built. In this context various initiatives were launched to build process and people capability. The most significant of those included induction of best-in-class talent in the strategic areas of Go-to-Market and Product Supply, Leadership development and functional capability enhancement.

Employee Engagement & Communication

Various initiatives were undertaken to drive transparency and communication in the organisation. This includes frequent town-halls and small group interactions between leadership of the organisation (including the CEO), and employees. A comprehensive employee recognition program was rolled out during the year.

As of 31st March, 2018 the permanent employee strength was 1,615.

DIRECTORATE & KEY MANAGERIAL PERSONNEL:

The appointment and remuneration of Directors is governed by the Nomination and Remuneration Policy of your Company which also contains the criteria for determining qualifications, positive attributes and independence of Directors. The detailed Nomination and Remuneration Policy is contained in the Corporate Governance section of the Annual Report.

Your Company’s Board comprises seven members. The Chairman, Mr. H. M. Nerurkar is an Independent Director.

Mr. Shantanu Khosla is the Managing Director. Mr. D. Sundaram and Mr. P. M. Murty are Independent Directors. Ms. Shweta Jalan, Mr. Sahil Dalal, and Mr. Promeet Ghosh are Non-Executive Directors.

Mr. Ravi Narain resigned from the Board w.e.f 5th March, 2018. The Board places on record their appreciation of the valuable advice and guidance given by Mr. Ravi Narain while he was a Director of the Company.

Ms. Shweta Jalan, Director, is liable to retire by rotation and being eligible for re-appointment at the ensuing Annual General Meeting (AGM) of your Company has offered herself for reappointment.

Her details as required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are contained in the accompanying Notice convening the ensuing Annual General Meeting (AGM) of your Company.

Appropriate resolution seeking your approval to her reappointment as Director is included in the Notice.

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 read with the rules thereof.

Mr. Shantanu Khosla, Managing Director, Mr. Mathew Job, Chief Executive Officer, Mr. Sandeep Batra, Chief Financial Officer and Ms. Pragya Kaul, Company Secretary are Key Managerial Personnel of the Company in accordance with the provisions of section 2(51) and section 203 of the Companies Act, 2013 read with the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 (including any statutory modification(s) or re-enactment(s) thereof for the time being in force).

The Board of Directors met six (06) times during the year 2017-18. 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 Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Stakeholders’ Relationship & Share Transfer Committee and Allotment Committee. The composition, terms of reference, number of meetings held and business transacted by the Committees is given in the Corporate Governance Report.

BOARD EVALUATION:

In terms of requirements of the Companies Act, 2013 read with the Rules issued thereunder and SEBI (Listing Obligations and Disclosure Requirements) 2015, the Board carried out the annual performance evaluation of the Board as a whole, Board Committees and individual Directors.

Considering the Guidance Note on Performance Evaluation of Board dated 5th January, 2017 published by SEBI, structured assessment sheets were finalized in consultation with the Board Members to evaluate the performance of the Board, Committees of the Board and individual performance of each Director including the Chairman. The evaluation process was facilitated by the Chairman of the Board and the Chairman of the Nomination and Remuneration Committee.

The parameters for performance evaluation of Board include composition of the Board, process of appointment to the Board of Directors, common understanding that the different Board members have of the roles and responsibilities of the Board, timeliness for circulating the board papers, content and the quality of information provided to the Board, attention to the company’s long term strategic issues, evaluating strategic risks, overseeing and guiding major plans of action, acquisitions, divestment, etc.

Some of the performance indicators for the Committees include understanding of the terms of reference, effectiveness of the discussions at the Committee meetings, information provided to the Committee to discharge its duties and performance of the Committee vis-a-vis its responsibilities.

Performance of individual Directors was evaluated based on parameters such as meeting attendance, contribution to Board deliberations, engagement with colleagues on the Board, ability to guide the Company in key matters, knowledge and understanding of relevant areas and responsibility towards stakeholders. All the Directors were subject to peer evaluation. The performance of the Independent Directors was evaluated taking into account the above factors as well as independent decision making and non-conflict of interest.

The results of the evaluation were shared with the Board and individual Directors and thereafter the Board and Committees have agreed on actions to further improve the effectiveness and functioning of the Board and Committees.

The Board also reviewed the process of and noted the actions identified in the last year’s evaluation.

FAMILIARIZATION PROGRAMME:

Your Company has in place a structured induction and familiarization program for its Directors. Upon appointment, Directors receive a Letter of Appointment setting out in detail, the terms of appointment, duties, responsibilities, obligations, Code of Conduct for Prevention of Insider Trading and Code of Conduct applicable to Directors and Senior Management personnel. They are also updated on all business related issues and new initiatives.

Regular presentations and updates on relevant statutory changes encompassing important laws are made and circulated to the Directors.

The Directors appointed as members on the CSR Committee are also involved and briefed about CSR initiatives of the Company. The Senior executives of the Company make presentations to the members of the Board on the performance of the Company and strategic initiatives.

Brief details of the familiarization program are uploaded and can be accessed on the Company’s website (www.crompton. co.in).

SUBSIDIARY COMPANIES, ASSOCIATES & JOINT VENTURES:

Your Company has no subsidiaries, associates and joint ventures.

RELATED PARTY TRANSACTIONS:

All contracts or arrangements or transactions with related parties were at arms’ length basis. There were no material contracts or arrangements or transactions with related parties, therefore Form AOC-2 does not form part of this report.

Policy on Materiality of and dealing with Related Party Transaction of the Company is available on the website of the Company and can be accessed at the web link: www.crompton. co.in.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

There were no Loans, Guarantees and Investments made by the Company under Section 186 of the Companies Act, 2013.

RISK MANAGEMENT:

Your Company recognises that risk is an integral part of business and is committed to managing the risks in a proactive and efficient manner. Your Company periodically assesses risks, in the internal and external environment and incorporates risk mitigation plans in its strategy and business/operational plans. Your Company has a well-defined risk management framework in place. The risk management framework works at various levels across the enterprise. These levels form the strategic defence cover of the Company’s risk management. The Company has a robust structure for managing and reporting on risks.

Your Company’s Audit Committee monitors and reviews the risk mitigation plan.

The key business risks facing the Company are detailed below.

1. “Go to Market” - The ability to manage business continuity while establishing the new distribution model. Your Company is looking at IT enablement and realigning roles and rewards to new way of working.

2. Operational excellence - The ability to improve and sustain quality and drive down costs at the same time. Your Company has initiated vendor rationalization, emphasis on in-house manufacturing and scorecard evaluation of vendors.

3. Branding/Innovation - The ability to continue to “out innovate” competition. Your Company is strengthening its consumer insight process and filing up the competency gaps in the concerned team.

4. Ability to succeed in the new business model (ESCO), in lighting, where the customer does not pay for the fixtures but instead asks the supplier to share the gains from the savings generated. Correct estimation and assessment of the contractual risks and obligations in such models becomes very important. Your Company is looking at standardizing the framework for assessing the tenders/ business opportunities.

5. Organization Excellence - Ability to attract and retain the right talent may lead to your Company’s inability to achieve organisation’s goals.

Your Company is taking steps to mitigate and reduce the impact of these risks to the operations of the Company.

INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY:

Your Company has in place a robust internal audit framework to monitor the efficacy of internal controls with the objective of providing to the Audit Committee and the Board of Directors, an independent and reasonable assurance on the adequacy and effectiveness of the organization’s risk management, control and governance processes. The framework is commensurate with the nature of the business, size, scale and complexity of its operations.

Your Company has appointed Internal Auditors who periodically audit the adequacy and effectiveness of the internal controls laid down by the management and suggest improvements.

The audit plan is approved by the Audit Committee, which regularly reviews the compliance to the plan.

Findings along with management response are periodically shared with the Audit Committee. Status of action plans are also shared with the Audit Committee. The Audit Committee also reviews the steps taken by the management to ensure that there are adequate internal financial controls in design and operation.

Ongoing monitoring is performed as an integral part of the day to day supervision, review and measurement of internal audit activity.

Your Company has deployed controls through its policies and procedures. These policies and procedures are periodically revisited to ensure that they remain updated to changes in the environment. There is a well laid out process for making amendments to processes in the Company and implications of changes are well thought through and all stakeholders are consulted so that implementation is smooth.

Your Company continues to invest in IT tools to automate controls to the extent possible so as to minimise errors and lapses. Controls with respect to authorisation in underlying IT systems are reviewed periodically to ensure that users have access to only those transactions that their roles require. Various functions run periodic reports which are focussed on identifying exceptions through data analysis as part of their routine monitoring activities. Corrective actions, if any, are taken promptly by the respective functions.

Your Company has also invested in an IT tool which helps track statutory compliances as close as possible to the actual due date. Any deviations are highlighted for prompt corrective action. Functional owners take responsibility for putting in preventive steps.

This web based compliance management system not only helps adhere to the regulatory requirements but also develops a culture of self-regulation and accountability within the organisation. In the present times when governance is looked upon as a critical aspect of sustainability, we believe, our compliance management system plays a significant role in ensuring good corporate governance.

RESEARCH AND DEVELOPMENT:

Your Company has strong focus on in-house research and development and promotes a culture for Innovation. Company’s team focuses on continuous and sustainable product innovations, working across the product lifecycle aspects including design, development, manufacturing and use phases. Your Company conducts consumer research with a view to identify unmet consumer needs. The Anti Dust range of fans launched in FY 2016-17 was an outcome of such extensive consumer research. This range has been very successful and is now a category leader.

Your Company has recently launched the AIR 360 fan which delivers air over more than 50% of the area as compared to other fans. Its unique elevated blade design coupled with antidrag technology and a powerful motor helps it to provide the enhanced coverage.

Research and Development efforts in pumps were focused on developing energy efficient pumps for a variety of applications to enhance ease and convenience of use and conserve water. Some of the products introduced in the year were:

- Open well dry winding Pumps (OWVD) series coated with antirust CED coating which increases efficiency, ensures trouble free operation, lowers power consumption and long life.

- High pressure washing pump “CPW” series with enhanced pressure upto 150 Bar was launched with induction motor for long life and reliability. CPW induction motor pumps can be used at commercial establishments like malls, hotels, airports and railway stations where continuous cleaning activity is going on.

- High quality alloy impeller “CDW” series was introduced for construction sites, mining and flood control. This pump is robust for rugged applications.

The lighting segment has seen massive disruption with the adoption of LED technology. This ever evolving technology has helped drastically reduce energy usage and now provides a platform to add on features like connectivity etc. While your Company continues to innovate in this area, we have also tied up with leading technology solution providers from around the world to bring latest designs and offerings to the Indian consumer.

India’s first, “Signature Series”- range of new Architectural/ Decorative Low glare Office lighting Troffers incorporating ambience, visual comfort and performance needs of the commercial office space market requirements, was launched during the year.

Low glare high efficacy indoor lighting recessed luminaires were introduced using state of the art design tools.

An integrated sleek LED tube light fixture “Smart Ray” with a unique feature such that it can be mounted on a wall without a batten or fixture was also introduced last year. The LED lamp portfolio was extended to incorporate high wattage LED bulbs and other variants of LED surface lights and LED linear and spot lights in consumer LED Lighting space.

Innovatively engineered, aesthetically designed, “Supra Series”, high performance and highly energy efficient range of High bay/ Well glass and Floodlights were introduced in Industrial and Infrastructure segment.

The efforts on introduction of cost competitive products and continuous value engineering in LED portfolio substantially contributed towards meeting the challenges of market and achieving cost leadership.

R & D efforts also helped the Company in providing the best in industry solutions to customers for various projects of national significance and in bagging major orders in EESL, Tata Steel, GMR, Dholera smart city, Inkel, Kolkata Metro Rail, HIDCO, KMRCL, NBCC to name a few.

In Appliances your Company has recently launched the TRICOOL Air cooler. TRICOOL, unlike other conventional coolers draws fresh air from outside the room which results in better cooling as well as ventilation. Its unique honeycomb design and superior fan provides best in class cooling comfort. Further being window mounted, TRICOOL eliminates the hassle of looking for space to keep the cooler post the summer months.

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):

Your Company has always been aware of its responsibilities towards Health, Safety and Environment Management and is in the process of further strengthening its current resources. A Policy on Occupational Health, Safety and Environment is already in place. During the year your Company complied and excelled with EMS 14001 and OHSAS 18001 standards and is moving towards upgradation with ISO 45001. Single IMS (Integrated Management System) is in place which is the foundation of the overall health, safety and environment framework at your Company. Internal & External EHS and OHSAS audits were carried out to check the level of compliance and any deviations from laid down policies and procedures tracked and reviewed through this audit system. As part of Plant Do Check Act (PDCA), ensured closure through Corrective Action and Preventive Action (CAPA) within a reasonable time frame.

A comprehensive EHS manual titled “KAVACH” comprising the policies, procedures and work instructions has been prepared. Deployment of “KAVACH” has been ensured across the organization through rigorous trainings, defining dedicated EHS structure in line with required competencies and performance reviews through periodic assessments.

To ensure focused delivery on EHS activities, each plant carried out Aspect impact and HIRA (Hazard Identification and Risk Assessment) study for various activities and identified Controllable/Uncontrollable and Normal / Abnormal /Emergency scenarios in each operation.

A comprehensive EHS performance scorecard has been deployed and is monitored on monthly basis. Regular cross functional quarterly EHS meets are conducted at various manufacturing units with the agenda of natural resource conservation, electricity consumption reduction, industrial effluent reduction, water conservation, air emissions, waste generation and disposal. EHS improvement plans, scorecard discussions and benchmarking practices are deployed at plant level. All improvement suggestions are implemented within time frame as decided.

A brief on Environmental, Health and Safety (EHS) programs of the Company is as under.

Environment

In addition to the focus on conserving finite resources together with reducing harmful emissions, sustainable management at all stages of the value chain and throughout the entire life cycles of our products is now an essential part of our philosophy.

Your Company is committed to achieve its target by implementing best technology and management programs through a combination of energy conservation, water conservation, minimized air emissions, rainwater harvesting and solid waste recycling. All units are complying with zero liquid discharge system, minimized usage of petroleum products by modifying boilers into bio-fuels boilers along with drastic reduction in air emissions.

Towards other environmental focus areas, your Company has greatly reduced raw water consumption, effluent generation, solid-waste generation, hazardous waste generation, reduction in GHG emissions (Green House Gases) to reduce the overall impact on our natural resources and environment. Beside this all the manufacturing units have complied and are being online monitored for all EHS related legal-statutory requirements laid by Government from time to time.

During the year substantial investment was made at the units to meet the different new government regulations and the drive to achieve best Environmental pollution control measures on 3R’s (Reduce, Reuse & Recycle) philosophy was strengthened.

Ground water is one of the major sources of water for your Company. Therefore, we remain committed to significantly conserving it by installing water efficient technology together with effluent treatment system like Reverse Osmosis (RO) plants to reutilize treated water into the system.

Rainwater harvesting systems are installed at our Baroda, Ahmednagar and Goa Plants and around 1 00 Lakh Litres of water was recharged in 2017-18. RO waste water is being reused because of which 67.5KL of water was saved.

Installation of transparent sheets on the roof of the Baroda and Goa units allow sunlight to enter and reduce the usage of artificial light and thus save energy. The green belt area in Goa unit was increased by plantation of 156 trees.

All units of your Company are complying with CPCB/ MOEF (Ministry of Environment and Forest) guidelines specially on waste water treatment. All Trade and Domestic effluents have been segregated through independent treatment system. 100% STP and ETP treated water is being used for gardening in all plants. New STP of capacity 20 KLD installed at Kundaim, Goa plant for recycling of waste water.

Aspect Impact and Hazard Identification and Risk analysis are conducted for our manufacturing operations. We have received authorization of E-waste from CPCB. Our FTL and CFL Products are RoHS compliant and, we have converted two of the three FTL lines into Pill Dozing from Liquid dozing to reduce the risk of Mercury (Hg) exposure in environment.

Safety:

Towards Fire-Safety, your Company has ensured to achieve and maintain globally approved Fire-Safety Standards. All units are in process to install best fire/smoke detection technology to get the information in time in case of any fire incident. To mitigate such incident all units are 100% equipped 24x7 with dedicated firefighting team members. EHS team identified all available fire hazards by conducting third party Fire-Safety audits/HAZOP study/Risk Assessment studies and made action plan to close all findings. Your Company is committed to building safety culture within by Implementing Behavior Based Safety through trainings and workshops, recording workplace hazards, conducting scheduled Fire-Safety Audits (in-house), adopting on-line Work Permit System (WPS), Daily Tool-box talks. Safety committee meetings and interaction with all associates, Fire-safety Drills, Safety Week celebration and continuous safety trainings to all concerns starts with Induction. All actions and recommendations are being recorded and evaluated by respective EHS leaders. This monitoring has a major role in reducing work place hazards/incidents and becoming an incident free organization.

Your organization has identified scenario-based emergency preparedness plans to counter specific emergency situations. On regular basis mock tests are planned and executed to ensure ERT (Emergency Response Team) members responsiveness and effectiveness.

Degree of prevention is being monitored through focusing on appropriate safety control selection such as elimination of unsafe activities, providing better substitute methods and installation of engineering full proof solutions (Poka-Yoke).

Key Safety programs carried out during the year were:

- Conducted third party Safety audits IS:14489-1998 at all plant locations and ensured closure of all improvement plans as per time lines.

- 100% new joiners have been covered with behavioral, based and technical safety at all plant locations. Refresher safety trainings were conducted for all ERT and new safety committee members.

- New Safety PPE’s introduced viz. breathing apparatus, automatic fire nozzles, mobile scaff old tower with stairway for safe height work, flammable chemicals storage cans, Fire cabinets for lab storage etc.

- Installed Fire alarm & detection system at all plant locations

- Safety signs visual displays have been standardized and displayed at all appropriate places.

- Daily and weekly safety review meetings are being conducted at shop and at plant management level to check EHS progress.

- Electronic display boards are provided which show contact information and daily availability of ERT and OHC team members for quick response to incidences.

- Poka-yoke’s (Mistake-Proofing) were installed at various equipment’s/machines to ensure human safety and to eliminate risk at hazard prone areas.

- LOTO (Lock-out Tag-Out) concept deployed across all plants.

- Periodic Mock drill and fire drills were conducted at all plants to ensure readiness and responsiveness of system.

Health:

An individual’s health and well being is shaped by several social, economic and environmental determinants. A range of workplace (e.g. physical environment, culture) and nonworkplace issues (e.g. lifestyle choices, living conditions) can impact the health of an employee. For better health of employee, all three aspects such as body, mind and soul needs to be nurtured carefully and hence structured initiatives have been introduced in steps.

Following key health programs were carried out during the year to promote healthy lifestyle and to enhance motivation:

- Health education awareness trainings and motivational speeches.

- Initiated daily warm up exercises at shift start.

- Revisited employee health insurance coverage for appropriate preventive screenings.

- Executed medical surveillance plans and periodic medical checkups.

- Periodic workplace monitoring such as noise & lux level.

- Ergonomics study through expert medical practitioners to identify short-term and long-term health injuries.

- A healthy work environment created through actions such as making healthy food available.

- Annual sports events being planned across organization and contestants being awarded subsequently. This brings sportsmanship spirit, team collaboration and caring of buddy employee at workplace.

CORPORATE SOCIAL RESPONSIBILITY(CSR):

FRAMEWORK & VISION

Our CSR strategy framework is based on the principles of ‘Responsible Business’ and ‘Shared Value’. Our vision is to contribute significantly to the development of marginalised youth by providing them with employable vocational and life management skills and for contributing to water neutrality by participating in water conservation initiatives.

The CSR program framework is both in line with the company’s long-term commitment to build positive value for the communities (including key stakeholders) as well as address key developmental priorities as identified by the Schedule VII of the Companies Act 2013.

As decided by the CSR Committee, initiatives primarily focus on the following key areas:-

- Vocational & skills training

- Projects that address environmental issues such as water and waste management

- Projects that impact lives of people who live near the manufacturing/processing facilities

- Engaging employees actively through corporate social responsibility

Your Company believes in partnering with dedicated and committed organizations to deliver its CSR objectives. During the year under review, after extensive research and due diligence, two partners were on boarded for carrying out skill development programs.

In 2017-18, 292 youth were imparted training in electrical, plumbing trades and data entry operation across three training centres. The training centres provide residential facilities and duration of each batch is about 2 months. Besides the domain training of Multi skill electrical trade, the trainees are also trained in soft skills, personality development, english language skill, computer skill etc. Focus is on ensuring placement of the majority of the youth and is part of the commitment of the NGO imparting the training.

In Kapadvanj, Gujarat we have partnered with Don Bosco Technical Society and in Baddi, Haryana and Ahmednagar, Maharashtra, with Asmacs Skill Development Limited (ASMACS). Highlights of the skill development program run in Kapadvanj, Gujarat are:

- No. of Beneficiaries: 112

- Project Period: June 2017- May 2018

- Location: Don Bosco Tech- Kapadvanj, Kheda District, Gujarat

- Courses: Domestic Electrician Solution and Data Entry Operator

- Employment will be offered to minimum 70 percent of beneficiaries

Highlights of the skill development program run in Baddi, Himachal Pradesh are:

- No. of Beneficiaries: 120

- Location: Baddi University, Baddi, Himachal Pradesh

- Courses: Electrician and Multi Skilled Technician (Electrical)

- From the 1st Batch 24, from the 2nd Batch 27 and from the 3rd Batch 7 have been placed. Training for 4th batch of 30 youth is under progress.

Highlights of the skill development program run in Ahmednagar are:

- No. of Beneficiaries: 60

- Location: Raisoni Institute of Technology at Ahmednagar, Maharashtra

- Courses: Electrician and Multi Skilled Technician (Electrical)

- 1st Batch of 30 have been trained and 100% have been offered jobs

My name is Vishal Singh. I am from Pandoga distt. UNA, H.P, We are 5 members in my family. I have done my 12th from Govt school Pandoga. Financially my family is not that much capable so that they can afford expensive training. I was scared about my future that what I will do for my career. I was not able to find any direction for my future. One day I heard about the Crompton CSR Project running by ASMACS Skills in Baddi. I came to know that its free residential program and easily approachable, so I took admission. The trades available with the course were Multiskill Technician and Helper Electrician both are evergreen trades. I took admission in Helper Electrician. At training center I learned all the technical terms that is helpful for industrial exposure. According to my knowledge and working skill today I am well placed in Sukam Solar Power Solutions. Now I can forward steps towards my future with my hard work and punctuality because Crompton has provided me a good platform to start my career. I am a skilled person now and I approach to any industry for future growth.

Thanks to Crompton & Asmacs Skills.

I am Jasveer Singh from Kotla power house Distt. Ropar, Punjab. I have completed my 10th from Punjab Board of school education, Mohali. My father is a farmer and I have 4 sisters in my family. Since I was an unskilled person I was not getting any job anywhere. But ASMACS Skill Development provided me great opportunity to be a skilled person through there Crompton CSR Project at Baddi. Here I got great exposure to enhance myself theoretically as well as practically in electrical domain. The atmosphere of skill center is very positive & whole staff is very cooperative. Theoretical and practical’s sessions are very well clear guest lectures were given time to time. Asmacs Skill sector provide us industrial visit time to time. They provide us all the facilities as fooding and lodging. After the completion of course, I got job in Chandigarh Electrical Work at Ropar with the salary of Rs.6000. I want to give all the credit to Crompton & Asmacs Skills center team who help to make stable my financial condition.

Your Company’s CSR Policy statement and annual report on the CSR activities undertaken during the financial year ended 31st March, 2018, in accordance with section 135 of the Companies Act, 2013 and Companies (Corporate Social Responsibility Policy) Rules, 2014 are annexed to this report as Annexure 3.

PLANS FOR 2018-19

Your Company will continue the skill development centres currently running at Baddi & Ahmednagar. Additional partners have been identified for other parts of India and we intend to train around 1000 youth in 2018-19.

Several water conservation projects have also been identified and we are at advanced stage to sign MOU’s with NGOs for executing the same.

GREEN INITIATIVES:

Electronic copies of the Annual Report and Notice of the 4th Annual General Meeting will be sent to all members whose email addresses are registered with the Company/Depository Participant(s). For members who have not registered their email addresses, physical copies of the Notice and Annual Report will be 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 your 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 your Company which have occurred between the end of the financial year of the Company i.e. 31st March, 2018 and the date of the Board Report.

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.

SHARE REGISTRAR & TRANSFER AGENT:

M/s. Karvy Computershare Pvt. Ltd. (“Karvy”), a SEBI registered Registrar & Transfer Agent (“RTA”) has been appointed as the Company’s RTA for shares and NCD’s. The contact details of Karvy are mentioned in the Report on Corporate Governance.

PUBLIC DEPOSITS:

No public deposits have been accepted by your Company during the year under review.

AUDITORS:

(a) Statutory Auditors:

M/s. Sharp & Tannan, were appointed as Statutory Auditors of your Company at the Annual General Meeting held on 11th August, 2016 for a term of five consecutive years. The Report given by the Auditors on the financial statements of the Company is part of the Annual Report. There has been no qualification, reservation, adverse remark or disclaimer given by the Auditors in their Report.

(b) Cost Auditors:

M/s. Ashwin Solanki & Associates, Cost Accountants carried out the cost audit during the year. The Board of Directors have appointed M/s. Ashwin Solanki & Associates, Cost Accountants as Cost Auditors for the financial year 2018-19.

(c) Secretarial Auditors:

M/s. Mehta and Mehta, Practicing Company Secretaries carried out the secretarial audit during the year. The Board of Directors have appointed M/s. Mehta and Mehta, Secretarial Auditors for 2018-19. The Secretarial Audit report is annexed herewith as Annexure 4 to the Report. PARTICULARS OF EMPLOYEES:

There are 8 employees who were in receipt of remuneration of not less than Rs.1,02,00,000 if employed for the full year or not less than Rs.8,50,000 per month if employed for any part of the year.

Disclosures with respect to the remuneration of Directors, KMPs and employees as per section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given in Annexure 5 to this Report. Your Directors affirm that the remuneration is as per the remuneration policy of the Company.

Details of employee remuneration as required under provisions of section 197(12) of the Companies Act, 2013 read with Rule 5(2) & 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are available for inspection at the Registered Office of your Company during working hours. Any member interested in obtaining such information may write to the Company Secretary at the Registered Office of the Company.

BUSINESS RESPONSIBILITY REPORT:

A Business Responsibility Report as per Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, detailing the various initiatives taken by your Company on the environmental, social and governance front forms an integral part of this report.

COMPLAINTS RELATING TO SEXUAL HARASSMENT:

Your Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this Policy. The Policy is gender neutral.

During the year under review, no complaint was received.

VIGIL MECHANISM:

Your Company has formulated a Vigil Mechanism and Whistle Blower Policy with a view to providing a mechanism for 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 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. No personnel have been denied access to the Audit Committee.

Any incidents that are reported are investigated and suitable action is taken in line with the Policy.

Whistle-blower Policy of your Company is available on the website of the Company and can be accessed at the web link: www.crompton.co.in.

LISTING:

The equity shares of your Company are listed on BSE Ltd. and National Stock Exchange of India Ltd. The Non-Convertible Debentures of the Company are listed on the Debt Segment of National Stock Exchange of India Ltd. Your Company has paid the Listing fees for both the Stock Exchanges for the F.Y. 201718 and F.Y. 2018-19.

ANNUAL RETURN:

The details forming part of the extract of the Annual Return in Form MGT-9 is annexed hearwith as Annexure 6.

SECRETARIAL STANDARDS:

The Directors state that applicable Secretarial Standards, i.e. SS-1 and SS-2, relating to ‘Meetings of the Board of Directors’ and ‘General Meetings’, respectively, have been duly followed by the Company.

DIRECTORS’ RESPONSIBILITY STATEMENT:

Your 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.

Your 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 2017-18

- 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

GENERAL:

Your Directors state that no disclosure or reporting is required in respect of the following matters as there were no transactions on these items during the year under review:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise;

2. The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefit of employees.

3. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries as the Company has no subsidiaries.

4. No fraud has been reported by the Auditors to the Audit Committee or the Board.

ACKNOWLEDGEMENTS:

Your Directors wish to convey their gratitude and appreciation to all of the Company’s employees at all its locations for their tremendous personal efforts as well as their collective dedication and contribution to the Company’s performance. Your Directors would also like to thank the employee unions, shareholders, customers, dealers, suppliers, bankers, government and all other business associates, consultants and all the stakeholders for their continued support extended to the Company and the Management.

On behalf of the Board of Directors

For Crompton Greaves Consumer Electricals Limited

H. M. Nerurkar

Chairman

DIN: 00265887

Place: Mumbai

Date: 15th May, 2018

Director’s Report