TO
THE MEMBERS
Your Directors are pleased to present their Eighty-Sixth Annual Report
on the business and operations of your Company along with the audited financial
statements, both standalone and consolidated, for the financial year ended 31 March 2023.
COMPANY PERFORMANCE
Your Company's standalone turnover from operations was ' 6,580 Crore
during the year under review, as compared to ' 5,159 Crore in the previous year,
representing a YoY growth of 28%, and the consolidated turnover was ' 6,973 Crore as
compared to ' 5,484 Crore in the previous year, representing a YoY growth of 27% over the
previous year.
Your Company's financial performance for the year ended 31 March 2023
as compared to the previous year is given in the Table below.
COMPANY FINANCIAL HIGHLIGHTS (in ' Crore)
|
Standalone |
Consolidated |
2022-23 |
2021-22 |
2022-23 |
2021-22 |
Net
Sales and Services |
6,580 |
5,159 |
6,973 |
5,484 |
EBIDTA |
1,016 |
642 |
1,061 |
671 |
Less:
Finance costs |
14 |
66 |
16 |
68 |
Less:
Depreciation and amortisation expenses |
75 |
74 |
95 |
99 |
Profit
before exceptional items |
927 |
502 |
950 |
504 |
Exceptional
items (net) |
56 |
240 |
52 |
248 |
Profit
before tax |
983 |
742 |
1,002 |
752 |
Less:
Tax Expense |
198 |
115 |
206 |
122 |
Profit
from continuing operations |
785 |
627 |
796 |
630 |
Less:
Minority Interest |
NA |
NA |
0 |
(1) |
Add:
Profit from discontinued operations |
- |
- |
167 |
284 |
Profit
for the year |
785 |
627 |
963 |
913 |
The Company recorded robust performance during the year under review
resulting in growth in revenue and EBITDA.
A detailed review of the operations and financial performance of your
Company and each of its business segments is contained in the 'Management Discussion and
Analysis' section of this Annual Report.
BUSINESS SEGMENTS:
a) Industrial Systems:
The Industrial Systems recorded revenue of ' 4,934 Crore as compared to
' 3,953 Crore during the year 2021-22, registering a growth of 25% as compared to previous
year. The operating profit before interest and tax of Industrial Systems stood at ' 787
Crore as compared to ' 482 Crore during the previous year, registering a growth of 63%.
b) Power Systems:
The Power Systems recorded revenue of ' 2,023 Crore as compared to '
1,516 Crore during the year 2021-22, registering a growth of 33% as compared to previous
year. The operating profit before interest and tax of Power Systems stood at ' 225 Crore
as compared to ' 138 Crore during the previous year, registering a growth of 63%.
EXPANSION:
In order to meet the expected increase in demand for the products of
the Company, the Board has approved the following expansion projects during the year:
A. Expansion of manufacturing capacity of Motors at the Company's plant
at Ahmednagar and Goa at an investment of ' 230 Crore. The said expansion would increase
the manufacturing capacity of Low Tension Motors ("LT Motors") upto 19.92 lakhs
nos. per annum, from the existing capacity of 9.93 lakhs nos. per annum.
B. Expansion of manufacturing capacity of Power Transformers and
Distribution Transformers units of the Company at its plants at Malanpur and Bhopal at an
investment of ' 126 Crore. The said expansion would increase the capacity from 17,000 MVA
to 25,000 MVA for Power Transformer and from 6,900 MVA to 9,900 MVA for Distribution
Transformers.
SCHEME OF ARRANGEMENT:
The Board of Directors of the Company, at its Meeting held on 19
October 2022 has approved a draft Scheme of Arrangement ("Scheme") under Section
230 and other applicable provisions of the Companies Act, 2013 ("Act"). The
Scheme inter-alia provides for capital reorganization of the Company, whereby it is
proposed to transfer '400 Crore from the General Reserves to the Retained Earnings of the
Company with effect from the Appointed Date i.e. the effective date of the Scheme. The
Scheme is subject to receipt of regulatory approvals/ clearances from the Hon'ble National
Company Law Tribunal, Mumbai Bench ("NCLT"), Securities and Exchange Board of
India ("SEBI"), BSE Limited and National Stock Exchange of India Limited and
such other approval/clearances, as may be applicable. BSE is appointed as the Designated
Stock Exchange by the Company to obtain the No Objection Certificate ( NOC) from SEBI under Regulation 37 of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 and the said NOC is awaited. On receipt of the
NOC, the Scheme shall be presented to the NCLT for its approval.
Redemption of Non-convertible Debentures
The Company had on 5 December 2022 redeemed its 20,000 Unlisted,
Unsecured, Unrated, Redeemable, Non-Convertible Debentures of face value ' 1,00,000/- each
aggregating to ' 200 Crore, which were issued on 4 December 2020 pursuant to the terms and
conditions of the Master Implementation cum Compromise Settlement Agreement and
Debenture Trust Deed dated 20 November 2020. The said debentures were
redeemed by the Company by exercising the right of early redemption on completion of two
years from the date of allotment.
Divestment
As stated in the Annual Reports of the Company for previous years, due
to financial stress and unviable operations, decisions were taken from time to time to
prune / close down certain subsidiaries of the Company. In furtherance of the same, during
the year under review, the liquidation process of the Company's Step-Down Subsidiary - CG
Power & Industrial Solutions Middle East FZCO, Dubai UAE was completed.
General
During the year under review, the Company repaid all its long-term
debts to the lending banks. The Company has received an improved Credit Rating of 'IND AA ' from India Ratings & Research as
against the earlier rating of 'IND AA-'.
Company has settled all the guarantee obligations to its lenders
(Standard Chartered Bank, Barclays Bank and Exim Bank) towards loans availed by the
erstwhile Subsidiaries in Belgium.
Company has received approval of BMC for renewal of the lease of land
where the CG House is located.
DIVIDEND
The Board of Directors at their Meeting held on 2 March 2023, declared
an interim dividend of ' 1.50 (Rupees One and Paise Fifty only) (75%) per equity share of
' 2/- (Rupees Two only) each. The interim dividend was paid to the shareholders on 29
March 2023. The total outflow on account of said dividend was ' 229.07 Crore. Your Board
does not recommend any further dividend for the financial year 2022-23.
The dividend declared is in accordance with the Dividend Distribution
Policy of the Company. The Dividend Distribution Policy, in terms of Regulation 43A of the
Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015 is available on the Company's website at -
https://www.cgglobal.com/admin/ uploads new/Dividend Distribution Policy.pdf
TRANSFER TO RESERVES
Your Directors do not propose to transfer any amount to the reserves.
SUBSIDIARIES
Details of subsidiaries as on 31 March 2023 : There are 3 Indian and 18
foreign subsidiaries (including 2
subsidiaries in Belgium along with their subsidiaries declared as
bankrupt; 5 subsidiaries under voluntary liquidation and 1 subsidiary declared insolvent).
During the year under review, your Company has not incorporated or acquired any company.
The Corporate Insolvency Proceedings initiated under the Insolvency and
Bankruptcy Code, 2016 during the financial year 2021-22, by the Company against its Wholly
Owned Subsidiary - CG Power Solutions Limited, is pending before the Hon'ble National
Company Law Tribunal, Mumbai Bench.
Pursuant to Section 136 of the Companies Act, 2013 ("the
Act"), the audited financial statements, including the consolidated financial
statements and related information of your Company and audited/ unaudited annual accounts
of each of its subsidiaries are placed on the website of your Company.
Highlight of performance of subsidiaries of the Company is given below:
1. CG Adhesive Products Limited (formerly known as CG-PPI Adhesive
Products Limited):
CG Adhesive Products Limited ( CGAPL)
is the Company's subsidiary in Goa. Your Company holds 82.76% of CGAPL's equity share
capital. CGAPL manufactures and deals in specialty adhesive tapes and labels.
During the year under review, CGAPL recorded revenue of ' 23.60 Crore
(previous year: ' 23.24 Crore) and registered profit before tax of ' 2.90 Crore (previous
year: ' 3.78 Crore).
2. QEI, LLC:
QEI, LLC is the subsidiary of CG Power Americas, LLC, and a wholly
owned step-down subsidiary of your Company in US, operating in multiple markets and
business sectors within and relating to distribution control, load management control,
supervisory control and data acquisition systems.
During the year under review, QEI, LLC recorded revenue of $ 11.46 Mn
i.e. equivalent to ' 94.23 Crore (previous year: $10.33 Mn i.e. equivalent to ' 77.87
Crore). It registered profit before tax of $ 1.41 Mn i.e. equivalent to ' 11.62 Crore
(previous year: $ 3.18 Mn i.e. equivalent to ' 23.96 Crore).
3. CG Drives & Automation Sweden AB:
CG Drives & Automation Sweden AB is a subsidiary of CG Industrial
Holdings Sweden AB and a wholly owned step-down subsidiary
of your Company in Sweden. It is a technology partner for energy
efficient products and solutions. It develops, manufactures and markets the equipment for
control and protection of industrial processes.
During the year under review, CG Drives & Automation Sweden AB
recorded revenue of SEK 299.85 Mn i.e. equivalent to ' 236.57 Crore (previous year: SEK
258.69 Mn i.e. equivalent to ' 208.19 Crore) and registered profit before tax of SEK 21.84
Mn i.e. equivalent to ' 17.23 Crore (previous year: SEK 7.11 Mn i.e. equivalent to ' 5.72
Crore).
4. CG Drives & Automation Germany GmbH:
CG Drives & Automation Germany GmbH is a subsidiary of CG
International BV, Netherlands, and a wholly owned step-down subsidiary of your Company in
Germany. It is into manufacture, sale, maintenance and repair of electronic devices and
facilities in the area of drive technology.
During the year under review, CG Drives & Automation Germany GmbH
recorded revenue of 22.24
Mn i.e. equivalent to ' 196.20 Crore (previous year: 19.67 Mn i.e. equivalent to ' 165.78 Crore). It registered profit
before tax of 1.52 Mn i.e.
equivalent to ' 13.40 Crore (previous year: 0.80 Mn i.e. equivalent to ' 6.75 Crore).
5. CG Drives & Automation Netherlands BV:
CG Drives & Automation Netherlands BV is a subsidiary of CG
International BV, Netherlands, and a wholly owned step-down subsidiary of your Company in
Netherlands. It is into development, production and marketing of inverter products
including electrical motor drives, and trading of related products.
During the year under review, CG Drives & Automation Netherlands BV
recorded revenue of 8.09
Mn i.e. equivalent to ' 71.32 Crore (previous year: 6.34 Mn i.e. equivalent to ' 53.42 Crore) and registered profit
before tax of 0.58 Mn i.e.
equivalent to ' 5.14 Crore (previous year: 0.59 Mn i.e. equivalent to ' 4.99 Crore).
Other than above, the remaining subsidiaries of the Company do not have
any business operations. In terms of Section 129 of the Act, statement containing salient
features of the financial statements of your Company's subsidiaries/ associates/ joint
ventures companies in Form AOC-1 is given in the notes to the financial statements in this
Annual Report.
Pursuant to Regulation 16 of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 ( SEBI LODR), a policy for determining material subsidiary of your Company as approved by
the Board of Directors is made available on the website under: https://www.cgglobal.com/
admin/uploads new/Policy determining Mat Subsidiaries.pdf
MATERIAL ORDERS OF REGULATORS / COURTS / TRIBUNALS
There are no significant and material orders passed by the regulators
or courts or tribunals impacting the going concern status and the Company's operations in
future.
UPDATE ON INVESTIGATIONS INITIATED IN THE PREVIOUS YEARS
The investigations by Central Bureau of Investigation (CBI), Serious
Fraud Investigation Office (SFIO) and Enforcement Directorate (ED) into the affairs of
your Company and its subsidiaries pertaining to the past period and against the erstwhile
promoters/directors of the Company relating to transactions that took place when the
Company was under the control of the previous management / promoters, details of which
have already been reported to the stock exchanges / in the previous Annual Reports of the
Company, are in progress. Your Company is extending full co-operation to these agencies
and information and documents as sought by them are being promptly provided by the
Company.
AUDITORS AND AUDIT REPORTS STATUTORY AUDITORS
M/s. S R B C & CO LLP, Chartered Accountants (ICAI Firm
Registration Number 324982E/E300003) were appointed as Statutory Auditor of the Company at
the 81st Annual General Meeting ("AGM") held on 28 September 2018 to hold office
from the conclusion of the said meeting till the conclusion of the 86th AGM. Accordingly,
the term of office of M/s. S R B C & CO LLP, as Statutory Auditors of the Company will
conclude at the close of the forthcoming AGM of the Company.
The Board of Directors of the Company, based on the recommendation of
the Audit Committee, at its Meeting held on 8 May 2023, has proposed to the shareholders
of the Company for their approval at the ensuing AGM, the re-appointment of M/s. S R B C
& CO LLP, Chartered Accountants (ICAI Firm Registration Number 324982E/E300003) as the
Statutory Auditor of the Company to hold office for a second term of five consecutive
years from
the conclusion of the 86th AGM till the conclusion of the 91st AGM to
be held in the year 2028. The Notice convening the 86th AGM to be held on 27 July 2023
sets out the details in this regard.
M/s. S R B C & CO LLP have confirmed that they satisfy the
independence criteria required under the Act.
The Auditor's Report on the financial statements of the Company for the
year ended 31 March 2023, which forms part of the Annual Report of the Company, does not
contain any qualification, reservation or adverse remark.
COST AUDITOR
As per the requirement of Section 148(1) of the Act read with rules
made thereunder, your Company is required to maintain cost accounts and records.
Accordingly, your Company has maintained cost accounts and records for financial year
2022-23 as applicable for its product range.
During the year under review, the Company filed the Cost Audit Report
for the financial year 2021-22 with the Registrar of Companies, Mumbai, within the
prescribed statutory timelines.
Upon recommendation of the Audit Committee, the Board has re-appointed
M/s. R. Nanabhoy & Co., Cost Accountants as Cost Auditor of your Company for financial
year 2023-24 at a remuneration of ' 8,30,000/- (Rupees Eight Lakh Thirty Thousand only)
per annum plus out-of-pocket expenses and taxes, as applicable. The Act mandates that the
remuneration payable to the Cost Auditor is ratified by the shareholders. Accordingly, a
Resolution seeking the Shareholders' ratification of the remuneration payable to the Cost
Auditors for the financial year 2023-24 is included in the Notice convening the ensuing
Annual General Meeting.
SECRETARIAL AUDITOR
Your Company had appointed M/s. Parikh & Associates, Practicing
Company Secretaries, Mumbai (Firm Registration Number: P1988MH009800), to undertake the
Secretarial Audit of the Company for financial year 2022-23.
Your Company has generally complied with the Secretarial Standards and
the Secretarial Audit Report is annexed in Form MR-3 for financial year 2022-23 as
Annexure 4 to this Report. The Secretarial Audit Report does not contain any
qualification, reservation or adverse remark.
INTERNAL FINANCIAL CONTROLS
The Company emphasizes the importance of robust internal control system
which lays down the foundation of strong governance structure and promote a culture of
integrity, transparency, and accountability in the business. Given the nature of business
and size of its operations, the Company has designed and instituted a strong internal
control system that comprises well-defined organization structure, roles and
responsibilities, documented policies and procedures to reduce business risks through a
framework of process controls. A detailed note on Internal Financial Controls is included
in the Management Discussion and Analysis.
DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)
BOARD OF DIRECTORS
Composition
Your Company's Board of Directors consists of eight Directors
comprising (i) Three Non-Executive Non-Independent Directors which includes the
Non-Executive Chairman of the Board (ii) Four NonExecutive Independent Directors, and
(iii) a Managing Director.
Mr. Vellayan Subbiah, Non-Executive Director, is the Chairman of your
Board. Mr. P S Jayakumar, Ms. Sasikala Varadachari, Mr. Sriram Sivaram and Mrs.
Vijayalakshmi R Iyer are Independent Directors in terms of Regulation 16 of the SEBI LODR
and Section 149 of the Act. Mr. M A M Arunachalam and Mr. Kalyan Kumar Paul are
Non-Executive NonIndependent Directors on your Board.
Mr. Natarajan Srinivasan is the Managing Director on your Board.
Your Board consists of professionals with diverse functional expertise,
industry experience, educational qualifications and gender mix relevant to fulfilling your
Company's objectives and strategic goals.
Appointment/ Retirement of Directors during the year
During the year under review, based on the recommendations of the
Nomination and Remuneration Committee, your Board had appointed Mrs. Vijayalakshmi R Iyer
as an Additional Director in the capacity of Non-Executive Independent Director of the
Company with effect from 24 September 2022. Her appointment was approved by the Members
through Postal Ballot on 14 December 2022.
Mr. Shailendra Roy completed his tenure as an Independent Director of
the Company and ceased to be a director on 18 September 2022. The Board places on record
its appreciation of the contribution made by Mr. Shailendra Roy during his tenure as an
Independent Director of the Company.
Mr. Natarajan Srinivasan was re-appointed as Managing Director for a
further period of one year from 26 November 2022 to 25 November 2023 and the said
re-appointment was approved by the Members through Postal Ballot on 14 December 2022.
The Board has recommended to the shareholders the re-appointment of Mr.
Natarajan Srinivasan as Managing Director of the Company with effect from 26 November 2023
upto 30 April 2025 (both days inclusive) The Notice calling the 86th AGM contains details
in this regard.
Retirement by rotation
In terms of the provisions of Section 152 of the Act and the Rules made
thereunder and Article 114 of the Articles of Association of the Company, Mr. Kalyan Kumar
Paul retires by rotation at the ensuing Annual General Meeting of the Company and is
eligible for re-appointment.
As per Regulation 36 of the SEBI LODR and Secretarial Standard-2 on
General Meetings issued by the Institute of Company Secretaries of India (SS-2), a brief
profile and other relevant details regarding re-appointment of Mr. Kalyan Kumar Paul are
contained in the Annexure accompanying the explanatory statement to the Notice of the
ensuing Annual General Meeting.
INDEPENDENT DIRECTORS ' DECLARATION
Your Company has received declarations from all its Independent
Directors confirming that they meet the criteria of independence as laid down under
Section 149 of the Act and Regulation 16 of the SEBI LODR.
In the opinion of the Board, all the Independent Directors of your
Company fulfill the conditions of independence as specified in the Act and SEBI LODR and
are independent of the management and have the integrity, expertise and experience
including the proficiency as required for effectively discharging their roles and
responsibilities in directing and guiding the affairs of the Company.
The Company has received a certificate from M/s. Parikh &
Associates, Practicing Company Secretaries, confirming that none of the Directors on the
Board of the Company have been debarred or disqualified from being appointed or continuing
as Directors of companies by the SEBI, Ministry of Corporate Affairs,
or any such other statutory authority.
BOARD MEETINGS
During the financial year 2022-23, your Board of Directors met 5 times,
in accordance with the provisions of the Act, SEBI LODR and other statutory provisions.
Details of Board Meetings held and the attendance of Directors are
given in the Section titled E="2">Report
on Corporate Governance,
which forms part of this Annual Report.
COMMITTEES OF THE BOARD
Your Board has established following committees in compliance with the
requirements of the Act and SEBI LODR: (i) Audit Committee, (ii) Nomination and
Remuneration Committee, (iii) Corporate Social Responsibility Committee, (iv) Risk
Management Committee, and (v) Stakeholders' Relationship Committee.
Details of composition of the statutory committees, number of meetings
held and attendance of Committee Members thereof during the financial year, are given in
the Section titled Report
on Corporate Governance
forming part of this Annual Report.
All recommendations of the Audit Committee have been accepted by the
Board.
Your Board has constituted a Finance Committee comprising of Mr.
Vellayan Subbiah, Chairman of the Board and Mr. Natarajan Srinivasan, Managing Director,
to inter-alia take decisions relating to borrowings, investments and lending from time to
time within such limits / sub-limits as may be decided by the Board.
KEY MANAGERIAL PERSONNEL ("KMP")
Pursuant to Section 203 of the Act, the Key Managerial Personnel of the
Company as at the end of the financial year were:
Mr. Natarajan Srinivasan, Managing Director
Mr. Susheel Todi, Chief Financial Officer
Mr. P Varadarajan, Company Secretary
REMUNERATION POLICY AND CRITERIA FOR DETERMINING THE ATTRIBUTES,
QUALIFICATION, INDEPENDENCE AND APPOINTMENT OF DIRECTORS
Your Company has formulated a Remuneration Policy governing the
appointment and remuneration
of Directors, KMP Senior Management and other employees. The
Remuneration Policy of the Company provides a performance driven and market-oriented
framework to ensure that the Company attracts, retains and motivates high quality
executives who can achieve the Company's goals, while aligning the interests of employees,
shareholders and all stakeholders in accordance with the Murugappa Group's values and
beliefs. The terms of reference of the Nomination and Remuneration Committee includes
formulation of criteria for determining qualifications, positive attributes and
independence of Directors.
The Company's Remuneration Policy is available on the website of the
Company under: https://www. cgglobal.com/assets/pdf ffles/CG Remuneration Policy 21 22.pdf
Your Company has adopted a Board Diversity Policy to reap the benefits
of a broader experience in decision making.
PERFORMANCE EVALUATION OF THE BOARD OF DIRECTORS
In line with the requirements of the Act and the SEBI LODR, an annual
evaluation of performance of the Board, its Committees and individual Directors was
carried out during the year under review. Pursuant to the provisions of Schedule IV of the
Act and Regulation 25 of the SEBI LODR, the Independent Directors of your Company, at
their Meeting held on 1 March 2023, evaluated the performance of Non-Independent
Directors, the Board as a whole, performance of the Chairman; and also assessed the
quality, quantity and timeliness of flow of information between the Management and the
Board.
FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS
Pursuant to Regulation 25 of the SEBI LODR, your Company familiarizes
its Independent Directors with their roles, rights, responsibilities as well as the
Company's business and operations. Moreover, Directors are regularly updated on the
business strategies and performance, management structure and key initiatives of
businesses at every Board Meeting. Details of the programme can be viewed under the
following link available on the Company's website:https://www.cgglobal.com/assets/pdf
files/ Familiarisation Programme for Independent Directors.pdf
RELATED PARTY TRANSACTIONS
All related party transactions that were entered into during the
financial year under review were on arm's length basis and were in the ordinary
course of business. Hence, disclosure of particulars of
contracts/arrangements entered into by your Company with related parties in Form AOC-2 is
not applicable for the year under review. There were no materially significant related
party transactions during the year which may have a potential conflict with the interest
of the Company at large. The Audit Committee grants omnibus approval for transactions
which are of repetitive nature with related parties.
Related party transactions entered into during the year under review
are disclosed in the notes to the Financial Statements. None of the Directors had any
pecuniary relationship or transactions with the Company, except the payments made to them
in the form of remuneration / sitting fee.
The Company's Related Party Transactions Policy is made available on
the website of the Company under: https://www.cgglobal.com/assets/pdf files/ Related Party
Transaction Policy 1 Apr 2022.pdf
PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS
Pursuant to the provisions of Section 186 of the Act and Schedule V of
the SEBI LODR, particulars of loans, guarantees given and investments made by your Company
during financial year 2022-23 are given in the notes to the Financial Statements.
BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT
In terms of Regulation 34 of the SEBI LODR read with relevant SEBI
Circulars, new reporting requirements on ESG parameters were prescribed under Business Responsibility and
Sustainability Report
("BRSR"). The BRSR seeks disclosure on the performance of the Company against
nine principles of the National
Guidelines on Responsible Business Conduct" ("NGRBCs"). As per the SEBI
Circulars, effective from the financial year 2022-23, filing of BRSR is mandatory for the
top 1000 listed companies by market capitalization. Accordingly, for the financial year
ended 31 March 2023, your Company has prepared the BRSR. The BRSR is enclosed separately
and forms an integral part of this Annual Report.
ENTERPRISE RISK MANAGEMENT ("ERM") FRAMEWORK
Company's comprehensive Risk Management Framework involves a
three-tiered approach, taking into account the Enterprise Risks, Process Risks and
Compliance Risks.
Enterprise risk identification and mitigation initiatives are handled
through an on-going process for each of the businesses, as well as for the Company as a
whole. The coverage extends to all key business exposures. After getting a measure of each
such enterprise risk, the mitigation actions are tracked.
The Risk Management Committee of the Board reviews the key risks
associated with the businesses of your Company and their mitigation measures. A detailed
note on ERM is given in the Management Discussion and Analysis, forming part of this
report.
RESEARCH AND DEVELOPMENT ("R&D")
During the year under review, your Company's R&D activities
continued to focus on development of indigenous and energy efficient products.
Power Systems
To support the Government of India (GOI) initiative towards
building and reinforcing Railway Infrastructure in the country, Company developed two new
products 21.6/30.24 MVA, 220/27 kV Trackside Transformer and 1288 kVA MEMU Loco
Transformer for Indian Railways.
Developed Inverter duty transformer for Solar application 12.5
MVA 33/0.630*4 kV with 5 winding and successfully conducted Short Circuit Test.
Developed a new 12kV Ring Main Unit ("RMU") family Arista - V with side cable entry feature. Type tested and suitable for both
indoor and outdoor installation. It is compact RMU, fitted with robotically welded,
hermetically sealed SF6 gas tank making it suitable to operate in most extreme
environments. With development of Arista family, Company has increased its product
offering range to the Secondary Distribution networks.
Developing design optimization and compact EHV Instrument
Transformer for Indian utilities, aimed at compliance of stringent Seismic stability
specification of 800kV and 420kV EHV bushing to restrict imports and offer indigenous
solution to customers.
In-house development of Silicon Moulded Arrestor for critical
short circuit duty cycle, electrostatics and mechanical requirements by offering
technologically advanced, light weight and easy to handle solution.
Product upgradation in EHV Switchgear by design upgradation and
optimization.
a) 420kV, 63kA Gas Circuit Breaker suitable for -40 ?C application. This has resulted in
executing an order from Ukraine and opened opportunity for similar application in many
European countries.
b) 245kV, 50kV Gas Circuit Breaker for higher altitude application.
c) 145kV, 2000A Horizontal Double Break banging type Disconnector.
Indigenously developed and successfully conducted type testing
of 66kV-145kV GIS Surge Arrestor (three phase) and 245kV GIS Surge Arrestor (single
phase). This will help customers to reduce their dependence on imports, reduction in
delivery time, and savings on Forex.
Developed Ultra High Frequency Partial Discharge Sensor (UHF PD
Sensor) which were earlier imported. These UHF PD Sensors are used in 145kV GIS as a
Prediction Tool for Failure Detection. This development reduces the dependency on imports
and supports the Make in
India initiative of the
Government of India.
Re-layout of 245kV Hybrid GIS by Design optimization resulting
into reduction in space occupied and reduced site Installation time, for customer.
Industrial Systems Motors
Continued to prioritize the development of innovative and
energy-efficient products, with a focus on indigenous solutions and achieved several
milestones, including:
Development of new VFDs with a rating of 75kW and 90kW, which
are designed to operate at higher ambient temperatures and offer the option of flange
mounting, thus optimizing cabinet design.
Creation of a new range of power stacks for domestic and
overseas customers, offering improved efficiency and reliability.
Introduction of a new Wi-Fi connectivity solution that enables
users to control and monitor the performance of their AC drives
using a smartphone application and wireless connection. The solution
also provides easy commissioning, faster support, and status reporting.
Development of a 250W hub motor controller for e-bikes with
features such as pedal assist and speed accelerators for effortless riding.
Successful certification of the super-premium Non safe area (FLP
IIA, IIB, IIC) AC motor IE4 range from ATEX, PESO, BIS for frames 80 to 160, which will
help to reduce energy consumption and carbon footprint.
Launch of the Entice
series range of AC motors from NS80 to NS132 frame with improved efficiency, aesthetic
appearance and reliability.
Launch of the new SM series alternators for 160 and 180 frames
in line with market demands.
Extension of the 450 frame Alternator range up to 2500 KVA,
catering to a wider range of customer needs.
Development of EV traction and auxiliary motors, with higher
power, meeting superior performance and IP 67 enclosure standards.
Development of Neema D range and Neema premium multi-potential
range motors for overseas customers.
Release of the DC motor 450 and 500 frame, mill-duty motor to
the market.
Implementation of various latest design tools to analyze the
parameters of designed products and achieve cost savings on raw materials.
Provision of retrofitting solutions to customers from our LIM
plant.
Expansion of our range of 10/12 pole large motors in frames 630,
710, and 800, with a specific focus on water sector applications.
Provision of application-driven solutions to the agriculture
sector, such as chaff cutters, areca nut, pulverizers, threshers, etc., through our FHP
plant.
Railways
Indigenously designed and developed 246 kW, 4 Pole, 3 Phase AC
Asynchronous, Axle hung, nose suspended Traction Motor suitable
for IGBT Converter/ Inverter based operation for Main Line Electrical Multiple Unit with On Board propulsion system
(MEMU-OB) application, in
line with the general design and manufacturing guidelines as specified in IEC 60349-2 and
in accordance with the modern traction practices. Special care has been taken to include
features to make the Traction Motor suitable for operating in harsh and tropical climatic
conditions.
Designed, developed and type tested Composite Converter, which
is an integrated product of 6000 HP Traction Converter and 2X500 kVA Hotel Load Converter
for Indian Railways complying to IEC 61287, IEC 61373, and IEC 60571. This will replace
one diesel generator car, which in turn reduces carbon emission.
Indigenously designed, developed and type tested 150 kVA
Auxiliary Power Converter for Main Line Electrical Multiple Unit with On Board propulsion system (MEMU-OB) application complying to IEC 61287, IEC
61373, and IEC 60571. Special care has been taken to reduce Total Harmonic Distortion
(THD) at both input and output supply.
Indigenously designed and developed
ergonomic Driver's Desk/Console and Control Panels for Main Line Electrical Multiple Unit with
On Board propulsion system (MEMU-OB) application considering necessary traction controls, safety controls and
passenger amenity items, positioning of various pneumatic gauges, brake controller etc. in
line with the UIC 651 norms. Special care has been taken to make the Driver's console and
the control panels compliant to fire protection guidelines as specified in EN 45545 and
suitable for excessive shocks and vibration norms as set in IEC 61373.
Indigenously designed and developed 110V DC, 0.44KW DC series
motor with ingress protection IP-67 and AC immunization 400V. This motor is used in drives
of the point mechanism through friction clutch, reduction gears and throw bar when
electric power is supplied.
Indigenously designed and developed external clamp lock assembly
for 60kg Thick Web Switch (TWS) Canted rail and this external locking mechanism is used in
Dedicated
Freight Corridor Corporation (DFCC) and METRO Rail's switching turnout
with 220mm throw point machine application.
CONSERVATION OF ENERGY,
TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
Details, as required under Section 134 of the Act read with the
Companies (Accounts) Rules, 2014, are given in the prescribed format as Annexure 1 to this
Report.
ENVIRONMENT, HEALTH AND SAFETY ("EHS")
A detailed review of the Environment, Health and Safety measures
undertaken by your Company is given in the BRSR Report, which forms part of this Report.
MANAGEMENT DISCUSSION AND ANALYSIS
A detailed review of the operations, performance and future outlook of
your Company and its businesses is given in the section titled Management Discussion and Analysis, which forms part of this Report.
CORPORATE GOVERNANCE
A section on Corporate Governance standards followed by your Company,
as stipulated under Schedule V of SEBI LODR, is enclosed separately.
A certificate from M/s. Parikh & Associates, Practicing Company
Secretaries, regarding compliance with the conditions of Corporate Governance, as
stipulated under SEBI LODR, is annexed to the Report on Corporate Governance.
CORPORATE SOCIAL RESPONSIBILITY
("CSR")
In terms of Section 135 of the Companies Act, 2013 read with CSR Rules,
your Company has during the year 2022-23 spent '69 lakhs being the two percent of the
average net profits of your Company during the three preceding financial years in
accordance with the CSR Policy of the Company.
Annual Report on CSR initiatives as required under the Companies
(Corporate Social Responsibility Policy) Rules, 2014, as amended ( CSR Rules) is annexed as Annexure 2 and forms an integral part of this Report.
Details of the composition of the CSR Committee and CSR Policy of the
Company are also provided in the said Annexure.
REGISTRAR AND SHARE TRANSFER AGENT
Your Company has appointed Datamatics Business Solutions Limited
("DBSL"), an entity which is registered with SEBI, as its Registrar and Share
Transfer Agent. Contact details of DBSL are mentioned in the section titled Report on Corporate Governance of this Annual Report.
PARTICULARS OF EMPLOYEES
Disclosures pertaining to remuneration and other details as required
under Section 197 of the Act, read with Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, are given in Annexure 3 to this Report.
In accordance with the provisions of Section 197(12) of the Act, read with Rule 5(2) of
the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the
names and other particulars of the employees covered under the said rule shall be made
available to any Member on a specific request made in this regard, by him or her in
writing.
EMPLOYEE STOCK OPTION PLAN 2021
The Shareholders of the Company had, through Special Resolution passed
by Postal Ballot on 23 September 2021, approved the introduction and implementation of
Employee Stock Option Plan 2021 ("ESOP 2021" / "Scheme") and
authorized the Board/ Nomination and Remuneration Committee to issue to the eligible
employees, such number of Options under the ESOP 2021, as would be exercisable into, not
exceeding 2,70,00,000 (Two Crore Seventy Lakhs) fully paid-up equity shares of ' 2/- each
in the Company. ESOP 2021 is in compliance with the SEBI (Share Based Employee Benefits
and Sweat Equity) Regulations, 2021.
The Company has granted 22,87,240 Options to employees upto 31 March
2023. 18,34,100 options were granted in the year 2021-22 and 4,53,140 Options were granted
during the year 2022-23.
The disclosures required to be made under SEBI (Share Based Employee
Benefits and Sweat Equity) Regulations, 2021 are made available on the website of the
Company under https://www.cgglobal.com. The certificate under the said regulations shall
be made available for inspection in accordance with statutory requirement.
COMPLAINTS RELATING TO SEXUAL HARASSMENT
Your Company has adopted a Prevention of Sexual Harassment Policy and
has also constituted an Internal Complaint Committee in compliance with the Sexual
Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The
Internal Complaint Committee has been constituted region-wise, and is presided by a woman
employee and is comprising of five to seven Company employees with an external member, to
whom employees can address their complaints.
During the year under review, no incident of sexual harassment was
reported.
VIGIL MECHANISM
Your Company has set up a vigil mechanism, viz. a Whistle Blower
Policy, as per the provisions of Section 177 of the Act and Regulation 22 of the SEBI LODR
to enable its stakeholders to report violations, genuine concerns, unethical behaviour and
irregularities, if any, which could adversely affect the Company's operations. No person
has been denied access to the Chairman of the Audit Committee of the Board.
The Ombudsperson appointed by your Board deals with the complaints
received by or against employees, customers and vendors of the Company and supervises the
investigation, ensures appropriate action and submits a report to the Chairman of the
Audit Committee on a quarterly basis.
PUBLIC DEPOSITS
Your Company has not accepted any deposits from public or its members
under Chapter V of the Act and no deposits were outstanding as on 31 March 2023.
SHARE CAPITAL
During the year under review, your Company has allotted 8,52,88,405
equity shares of ' 2 each, fully paid up, as detailed below:
a) 8,52,33,645 equity shares were allotted to Tube Investments of India
Limited ( TII) on 18 May 2022 pursuant to conversion
of balance 8,52,33,645 warrants by TII into equal number of equity shares, and receipt of
the balance amount due on the warrants so exercised by them. Pursuant to the above
conversion, the aggregate shareholding of TII has increased to 58.05% of the share capital
of the Company from 55.57%.
b) 54,760 shares under ESOP Scheme 2021 - 19,760 equity shares were
allotted on 22 December 2022 and 35,000 equity shares were allotted on 9 March 2023 to the
option grantees who had exercised their options.
As at 31 March 2023, the share capital of the Company is as follows:
The authorized share capital of your Company is '
407,60,00,000/- (Rupees Four Hundred Seven Crore and Sixty Lakh) divided into
203,80,00,000 equity shares of ' 2/- (Rupees two) each.
The subscribed and paid-up share capital of your Company stood
at ' 305,42,62,868/- (Rupees Three Hundred Five Crore Forty Two Lakhs Sixty Two Thousand
Eight Hundred Sixty Eight only) consisting of 152,71,31,434 equity shares of ' 2/- (Rupees
two) each.
Your Company's equity shares are listed and traded on BSE Limited and
National Stock Exchange of India Limited.
ANNUAL RETURN
Pursuant to Sub-Section 3(a) of Section 134 and Sub-Section (3) of
Section 92 of the Act, a copy of the Annual Return of the Company as on 31 March 2023 is
placed on the website of the Company and the same is available on the following link:
https://www.cgglobal.com/financials#annual report
REPORTING OF FRAUDS BY AUDITORS
During the year under review, the Statutory Auditors of the Company had
not reported any matter under Section 143(12) of the Act. Therefore, disclosure is not
applicable in terms of Section 134(3)(ca) of the Act.
OTHER DISCLOSURES / REPORTING
a) Issue of equity shares with differential rights
The Company has not issued any equity shares with differential rights
as to dividend, voting or otherwise.
b) Insolvency and Bankruptcy Code ("IBC")
There are no applications or any proceedings pending under the
Insolvency and Bankruptcy Code, 2016 (31 of 2016) against the Company.
c) Onetime settlement with any bank or financial Institution
During the year under review, the Company has not entered into one-time
settlement with any banks or financial institutions.
d) Material changes and commitments affecting the financial position of
your company
There were no material changes and commitments affecting the financial
position of the Company, between the end of the financial year and the date of this
Report.
DIRECTORS '
RESPONSIBILITY STATEMENT
The Board of Directors confirm that the Company has in place a
framework of internal financial controls and compliance system, which is monitored and
reviewed by the Audit Committee and the Board besides the statutory, internal and
secretarial auditors. To the best of their knowledge and belief and according to the
information and explanations obtained by them, your Directors make the following
statements in terms of Section 134(3)(c) of the Companies Act, 2013:
a) the annual Financial Statements for the year ended 31 March 2023
have been prepared
in conformity with the applicable accounting standards along with
proper explanation relating to material departures, if any;
b) that such accounting policies as mentioned in the Notes to the
Financial Statements have been selected and applied consistently and judgment and
estimates have been made that are reasonable and prudent so as to give a true and fair
view of the state of affairs of the Company as at 31 March 2023 and of the profit of the
Company for the year ended on that date;
c) that proper and sufficient care has been taken for the maintenance
of adequate accounting records in accordance with the provisions of the Companies Act,
2013 for safeguarding the assets of the Company and for preventing and detecting fraud and
other irregularities;
d) that the annual Financial Statements have been prepared on a going
concern basis;
e) that proper internal financial controls to be followed by the
Company have been laid down and that the financial controls are adequate and were
operating effectively;
f) that proper systems have been devised to ensure compliance with the
provisions of all applicable laws and that such systems were adequate and operating
effectively.
ACKNOWLEDGEMENTS
The Board of Directors wishes to convey its gratitude and appreciation
to all employees for their tremendous efforts as well as their exemplary dedication and
contribution to the Company's performance. The Directors would also like to thank the
Central and State Governments, Shareholders, State Bank of India, Ministry of Corporate
Affairs, Customers, Suppliers, Dealers, Employees and Employee Unions and all other
business associates for their continued support extended to your Company.
On behalf of the Board of Directors
Vellayan Subbiah
Chairman (DIN: 01138759)
Mumbai, 8 May 2023
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