Cummins India Ltd.-இன் இயக்குநர் அறிக்கை
Mar 31, 2023
The Directors take pleasure in presenting the Sixty- second Annual Report together with inter-alia its annexures and audited financial statements (including standalone & consolidated along with respective Auditors Report thereon) for the year ended March 31, 2023. The consolidated performance of the Company and its subsidiaries has been referred to wherever required.
On Standalone basis:-
During the Financial Year 2022-23, revenue from operations was ? 7,744.43 Crores as compared to ? 6,140.40 Crores during the previous year (26% higher). Profit after tax increased to ? 1,129.82 Crores from ? 886.65 Crores recorded for the previous year (27% higher).
On Consolidated basis:-
During the Financial Year 2022-23, revenue from operations was ? 7,772.09 Crores as compared to ? 6,170.92 Crores during the previous year (26% higher). Profit after tax increased to ? 1,228.15 Crores from ? 933.74 Crores recorded for the previous year (32% higher).
Financial Summary
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Standalone |
Consolidated |
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2022-23 (? in Crores) |
2021-22 (? in Crores) |
2022-23 (? in Crores) |
2021-22 (? in Crores) |
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APPROPRIATION OF PROFIT: |
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Profit before taxation |
1,492.07 |
1,159.45 |
1,591.29 |
1,206.98 |
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Net Profit for the year after tax |
1,129.82 |
886.65 |
1,228.15 |
933.74 |
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Dividend |
623.70 |
443.52 |
623.70 |
443.52 |
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* Includes Exceptional Items amounting to f (14.30) Crores (FY 2021-22. mentioned in standalone financial statements note no. 47 and 48. |
⢠f 132.36 Crores). |
Further detai/s are |
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The closing balance of reserves, including retained earnings, of the Company as at March 31,2023 was ? 5,312.54 Crores. During the Financial Year, there was no amount proposed to be transferred to the Reserves.
3. BUSINESS UPDATE AND STATE OF COMPANYâS AFFAIRS:
The information on Companyâs affairs and related aspects is provided under Management Discussion and Analysis Report, which has been prepared, inter-alia, in compliance with Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and forms part of the Annual Report.
The Directors have recommended a final dividend of ? 13 per equity share of ? 2/- each fully paid-up share in their meeting held on May 24, 2023, in addition to the interim dividend of ? 12/- per
equity share of ? 2/- each fully paid-up share declared on February 08, 2023, aggregating to ? 25/-(i.e. 1250%) per equity share of ? 2/- each fully paid-up share for the year ended March 31,2023 (previous year ? 18.50/- per equity share i.e. 925%). The final dividend is subject to approval of the Members at the ensuing Annual General Meeting and shall be subject to deduction of income tax at source.
The paid-up share capital of the Company is ? 554,400,000/- divided into 277,200,000 equity shares of ? 2/- each as on March 31,2023. Your Company has not come out with any issue (public, rights or preferential) during the year. There is no change in the share capital during Financial Year 2022-23.
6. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES:
Your Board is pleased to provide details of the following subsidiary, joint ventures and associates as on March 31,2023 : -
a) Cummins Sales & Service Private Limited (CSSPL):
CSSPL, a wholly-owned subsidiary, of the Company focuses on sales of Cummins engines, parts, accessories and providing service support to engines and generators in parts of Northern India close to the National Capital Region (NCR). CSSPL generated a revenue of ? 145.51 Crores from its operations for the year ended March 31,2023, as compared to ? 101.59 Crore during the previous year (43% higher).
b) Cummins Research and Technology India Private Limited (CRTIPL):
CRTIPL is a 50:50 joint venture between Cummins Inc., USA and your Company, which was formed in 2003 with an intent to provide Information Technology enabled Mechanical Engineering development services primarily to Cummins Inc., USA, its subsidiaries and joint ventures in all parts of the world. Since, April 01,2016, CRTIPL closed its operations and your Board of Directors decided that the activity carried out by CRTIPL for your Company, shall be undertaken in-house by absorbing the appropriate number of employees from CRTIPL in your Company.
The Board of directors of Cummins Research and Technology India Private Limited at its meeting held on March 21, 2016, had decided to cease operations of CRTIPL. Accordingly, it ceased its operations from April 1, 2016. The shareholders of CRTIPL, in their extra-ordinary general meeting held on April 1, 2022, passed a resolution to initiate voluntary winding-up of CRTIPL under the Companies Act, 2013 and Insolvency and Bankruptcy Code, 2016. The liquidator, appointed by the shareholders at the extra-ordinary general meeting, completed all the procedures pertaining to the voluntary winding-up, and has submitted the dissolution application with the Honâble National Company Law Tribunal, Mumbai Bench (âNCLTâ) on May 20, 2023.
c) Valvoline Cummins Private Limited (VCPL):
VCPL, a 50:50 joint venture between Valvoline International Inc., USA, a global leader in lubricants and engine oils, and your Company, VCPL generated a revenue of ? 2,150.25 Crores from its operations for the year ended March 31, 2023, as compared to ? 1,694.88 Crores during the previous year (27% higher).
d) Cummins Generator Technologies India Private Limited (CGTIPL):
Your Company owns 48.54% shareholding in the Associate Company namely CGTIPL which is in the business of design, manufacturing, marketing, sales and service of alternators and related spare parts. CGTIPL generated revenue of ? 1,803.26 Crores from its operations for the year ended March 31, 2023, as compared to ? 1,200.44 Crores during the previous year (50% higher).
The Shareholders of CGTIPL at their Extra-ordinary General Meeting held on March 17, 2022, approved a scheme of reduction of the issued, subscribed and paid-up share capital of the Company (the âSchemeâ) from ? 16,070,010/- consisting of 1,607,001 equity shares of ? 10/- each to ? 15,995,680/- consisting of 1,599,568 equity shares of ? 10/- each by paying off, cancelling and extinguishing, in aggregate, 7,433 equity shares of the Company (âCapital Reductionâ) as recommended by the Board of Directors in their meeting held on February 11, 2022. The Company has filed a petition with Honâble National Company Law Tribunal (âNCLTâ), Mumbai Bench, seeking approval for the said Scheme of Capital Reduction on April 07, 2022. No effect of the scheme has been given in CGTIPL financial statements as at and for the year ended March 31,2023, pending approval from NCLT.
As required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, consolidated financial statements of the Company, its subsidiary, joint ventures and associate companies, prepared in accordance with the applicable Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended, form part of the Annual Report and are reflected in the consolidated financial statements of the Company.
Further, a statement containing the salient features of the financial statement of subsidiaries, associate companies and joint ventures in the prescribed Form AOC-1 is appended as Annexure â1â which forms part of this Report.
The Company will make the said financial statements and related detailed information of CSSPL available upon request by any Member of the Company. These financial statements will also be kept open for inspection by any Member at the Registered Office of the Company and of CSSPL. Pursuant to the provisions of Section 136 of the Companies Act, 2013, the financial statements of the Company, consolidated financial statements along with relevant documents and separate financial statements in respect of CSSPL, are available on the website of the Company.
7. CHANGE IN THE NATURE OF THE BUSINESS:
During the year under review, there was no change in the nature of the business pursuant to inter-alia Section 134 of the Companies Act, 2013 and Companies (Accounts) Rules, 2014.
8. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
No loan or guarantee was given, or investment was made by your Company during the Financial Year 2022-23 pursuant to Section 186 of the Companies Act, 2013.
Your Company has not accepted any Public Deposits under Chapter V of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 during the Financial Year 2022-23.
10. FUND RAISING BY ISSUANCE OF DEBT SECURITIES, IF ANY
Pursuance to SEBI Circular No. SEBI/HO/DDHS/CIR/P/2018/144 dated November 26, 2018, the Directors confirm that the Company is not defined as a âLarge Corporateâ as per the framework provided in the said Circular. Moreover, your Company has not raised any fund by issuance of debt securities.
11. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
During Financial Year 2022-23, no materially significant related party transactions were entered into by the Company, that may have potential conflict with the interests of Company, at large.
Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 in the prescribed Form AOC-2 is appended as Annexure â2â which forms part of this Report.
The Policy on materiality of related party transactions as approved by the Board may be accessed on the Companyâs website at the link: https://www.cummins.com/en/in/investors/india-corporate-governance .
As required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, related party transactions have been disclosed under significant accounting policies and notes forming part of the Financial Statements in accordance with relevant accounting standards.
During the Financial Year 2022-23 your Company has strived to imbibe energy conservation principles and initiatives across all its facilities.
Your Company at its Kothrud location (KEP) has installed Phase III 550 and Phase IV 1058 KWP grid connected PV Solar plant and this commissioning has led to increase in solar energy utilization from 16% to 28% and the installation has resulted in generation of 40.18 lacs units of electricity and INR 427 lacs cost saving for energy. Pirangut Power System Plant has generated 179475 kWh energy from solar. CPG SEZ plant has generated 533960 kWh electricity from their Solar Photovoltaic (PV) Plant in 2022-23.
Your Company has generated total 52.64 lacs units of electricity from onsite solar installation.
The other initiatives taken by the Company for energy conservation are highlighted below -
1. Compressed Air System: Installation of compressed air system for hot air exhaust and IFC controller at one of the plant located at Phaltan which combinedly saved a total 15000 kWh of energy.
2. Lighting - This year also the Company has continued to take its initiatives for replacement of fluorescent tube lights with LED lights.
3. Replacement of Non energy efficient fans and installation of sensors - Your Company has installed occupancy sensors in washrooms and offices and 460 non-energy efficient fans were replaced and both projects resulted into saving of 7.2 lacs units of electricity.
4. Application of CCTV Camera for High Tension Installation 33 KVA for Daily Power Consumption monitoring: Daily power consumption monitoring is required to be done by the Company for calculation of power factor. To enhance the human safety in this process at 33 KVA monitoring of daily power consumption is done through installed CCTV Camera at one of the plant located at Phaltan.
5. Paint Booth Blower replaced with VFD Blower - Your Company has replaced Paint Booth Blower with VFD Blower at one of the plants located at Phaltan which has resulted in savings of Rs. 94,800/- per year and also saved total units of 6000 KWH.
13. RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION:
Your Company is committed to introducing new products and improving existing products to have better performance levels, lower life cycle costs, excellent safety, recyclability characteristics and meet stringent emission norms tailored for the specific needs of the Indian industry.
Your Company continues this endeavour by developing the next generation of systems in collaboration with the parent company - Cummins Inc., USA.
Improved technical productivity, through new methodologies and technologies, is being continuously pursued to reduce the costs associated with new product development and customer support. An example of this is the further enhanced use of analysis-led design through computer models that help minimize hardware testing and therefore accelerate product development cycle times with reduced product testing.
A. New Product Development: -
The following new Products were developed as part of the above initiatives during the year: -
1. Rail engine product families to support the growing Rail Business;
2. Marine engine product families to support the increasing commercial Marine Business;
3. Further enhancements of non-diesel product development capability such as use of alternative fuels are being explored in India;
4. Telematics and Analytics capabilities have been developed to improve uptime and fuel efficiency performance of our products; and
5. To enhance the position of Cummins in the Low kVA segment, your Company has introduced a 40 kVA genset with X2.7 litre engine.
Further, your Company continues to strengthen its channel presence through its GOEM partners who have added 12 additional sales dealers across various geographies.
B. Benefits derived as a result of the above activities are:-
1. Enhanced product and service capabilities through use of electronic tools and simulation software to deliver improved engine performance;
2. Enhanced capability to tailor engine designs to improve value proposition for customers through delivering superior power output, fuel economy, transient response and reduced emissions;
3. Enhanced product and service capabilities through use of electronic tools and simulation software to control the engine performance and combustion process;
4. Enhanced capability to tailor engine designs to improve the value proposition for customers through delivering superior power output, fuel economy, transient response and reduced emissions;
5. Product and component availability to meet the new emission norms ahead of implementation;
6. Safer, recyclable, reliable, durable and performance-efficient products and critical components;
7. Component indigenization capability was improved through enhanced test capability, rig test and flow bench development and availability; and
8. Significant enhancements in measurement capability were made to pursue business opportunities in non-diesel applications to serve both the rural and international communities.
C. Future plans include:-
1. Developing local âfit-for-marketâ solutions to meet upcoming emission regulations and market needs on commercial off-highway and power generation segments;
2. Technological innovation to add value to products in the areas of alternate fuels, fuel cells, power electronics, hybrid engines and recycle / re-use;
3. Continued expansion of the product range to serve the needs of both local and global market;
4. Continued focus on indigenization and partnering with suppliers for waste elimination initiatives; and
5. Focused engine development for the Power Generation segment for the upcoming emissions norms.
D. Your Company continues to draw benefits from Cummins Inc.âs technology, advanced engineering and research. With this support your Company is committed to develop advanced fuel-efficient and emission-compliant products that use a variety of energy sources and comply with future domestic emissions and carbon dioxide targets. These help to reduce greenhouse gas emissions and improve air quality, whilst also enabling the products to deliver superior performance, reliability, durability and recyclability.
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E. Expenditure on Research & Development (R&D):- |
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The total expenditure on R & D was as follows:- |
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Particulars |
2022-23 |
2021-22 |
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(? in Crores) |
(? in Crores) |
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Capital |
7.42 |
20.93 |
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Recurring |
19.05 |
44.51 |
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Total |
26.47 |
65.44 |
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Total R&D expenditure as a percentage of total sales turnover |
0.35% |
1.09% |
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14. FOREIGN EXCHANGE EARNINGS AND OUTGO: |
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Your Company continues to be Net Foreign Exchange Earner. During the year under review, your Company exported 6,904 engines and 9,952 generator sets. Foreign exchange earned in terms of actual inflows during the year 2022-23 and foreign exchange outgo in terms of actual outflows during the year 2022-23 were as follows:- |
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Particulars |
FY 2022-23 |
FY 2021-22 |
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(? in Crores) |
(? in Crores) |
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Foreign exchange earnings* |
2,276.87 |
2,490.11 |
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Foreign exchange outgo* |
1,111.87 |
973.80 |
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Equivalent value of various currencies |
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15. MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE REPORT:
The Management Discussion and Analysis Report and the Corporate Governance Report which forms part of this Report are appended as Annexure â3â and â4â respectively.
The Company has obtained a Certificate from Practicing Company Secretary confirming compliance with conditions of the Code of Corporate Governance as stipulated in Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (including amendments thereof) and the same is appended as Annexure â6â which forms part of this Report.
The Company has received a Certificate from Practicing Company Secretary confirming that none of the Directors on the Board of the Company have been debarred or disqualified by MCA or SEBI or any such statutory authority from being appointed / continuing as Director and the same is appended as Annexure â7â which forms part of this Report.
As per the requirement under Section 92(3) of the Companies Act, 2013, the draft Annual Return for Financial Year 2022-23 is available on the website of the Company at the link: https://www.cummins.com/en/in/investors/india-annual-reports. Since the Annual General Meeting is proposed to be held on August 03, 2023, the Company shall upload a copy of Annual Return for Financial Year 2022-23 as soon it has filed the said Annual Return with Registrar of Companies.
Business Risk Evaluation and Management is an ongoing process within the Organization. The Company has a robust Enterprise Risk Management Framework to identify, monitor and minimize risks. As a process, the risks associated with the business are identified and prioritized based on impact, probability of occurrence, organizationâs risk management capability and velocity of risk. Such risks are reviewed by the Senior Management, Risk Management Committee and the Board on a quarterly basis. The Company has a structured governance mechanism where risks identified under the ERM Framework are categorized based on level of oversight required. Subsequently, Risk Owners and appropriate review forum are identified for each of the risk and metrics are developed for monitoring and reviewing the risk mitigation efforts. The established comprehensive Risk Management Framework ensures that risk areas having a potential impact on Companyâs continued existence as a going concern and to its development are identified and addressed on timely basis.
The Risk Management Committee of the Board of Directors of your Company assists the Board in (a) overseeing and approving the Companyâs enterprise wide risk management framework including the risk management processes, systems and practices of the Company; (b) overseeing that all existing risks and new risks that the organization faces including cyber security risks have been identified and assessed, and (c) overseeing that adequate resources have been allocated to effectively manage those risks. Further details on Risk Management Committee are included in the Corporate Governance Report.
The details and process of Enterprise Risk Management implemented by the Company through Risk Management Policy, are included in the Management Discussion and Analysis, which forms part of Annual Report.
18. INTERNAL FINANCIAL CONTROL:
Your Company has established adequate internal financial controls for ensuring orderly and efficient conduct of its business, including adherence to Companyâs policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and the timely preparation of reliable financial information.
Details of internal financial control and its adequacy are included in the Management Discussion and Analysis Report which is appended as Annexure â3â and forms part of Annual Report.
19. VIGIL MECHANISM/ WHISTLE BLOWER POLICY:
Your Companyâs leadership culture is to inspire and encourage all employees to reach their full potential. A great leadership culture begins with outstanding leaders who create an outstanding place to work, inspiring and encouraging all employees to achieve their full potential. Leaders connect people and their work to the vision, mission, values, brand promise and strategies of the company, motivating them and giving them a higher sense of purpose. Leaders also build trust in our teams and in our organizations and align on key goals and priorities. Leaders foster open communications and offer various opportunities to employees to express their feedback through several ways.
Your Company has a âVigil Mechanism Policyâ which inter-alia provides adequate safeguards against victimization of persons who may blow the whistle. Vigil Mechanism Policy may be accessed on the Companyâs website at the link: https://www.cummins.com/en/in/investors/india-corporate-governance.
In addition, your Company has complied with provisions relating to constitution of an Internal Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and has a stable well governed ethics investigations process. Regular workshops and awareness programmes against sexual harassment are conducted across the organization. During the year under review, one complaint pertaining to sexual harassment of woman employee was reported to the Committee which was resolved. No complaints remained unresolved as on March 31,2023.
The Company is committed to the highest possible standards of openness, integrity and accountability in all its affairs and to providing a workplace conducive to open discussion of its business practices. Your Company has laid out infrastructures and policy through which the employees can voice their concerns about suspected unethical or improper practice, or violation of Cummins Code of Business Conduct or complaints regarding accounting, auditing, internal controls or disclosure practices of the Company. Protected disclosures can be made by a whistle blower through an email or dedicated telephone line or letter to the Managing Director of the Company or Letter to the Chairman of Audit and Compliance Committee or via the Ethics helpline/ Webpage, details of which are available on website www.cumminsindia.com.
20. COMPLIANCE WITH THE CODE OF CONDUCT:
All Directors on the Board and Senior Management have affirmed compliance to the Code of Conduct and Cummins Code of Business Conduct respectively for the Financial Year 2022-23. A declaration signed by the Managing Director affirming compliance with the Companyâs Code of Conduct by the Board of Directors and Senior Management for the Financial Year 2022-23 as required under Regulation 26(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is included in the Corporate Governance Report which is appended as Annexure â4â and forms part of this Report.
21. DIRECTORSâ RESPONSIBILITY STATEMENT:
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and external consultant(s) including audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by Management and the relevant Board Committees, including the Audit and Compliance Committee, the Board is of the opinion that the Companyâs internal financial controls were adequate and effective during the Financial Year 2022-23.
Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:
(i) in the preparation of the annual accounts for the year ended March 31, 2023, the applicable accounting standards have been followed and there was no material departure from the same;
(ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31,2023 and of the profit for the period April 01,2022 to March 31,2023;
(iii) they have taken proper and sufficient care 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;
(iv) they have prepared the annual accounts on a going concern basis;
(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively during the year; and
(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
a) Changes in the composition of the Board of Directors:
Appointments and Re-appointments
Mr. Ashwath Ram as (DIN: 00149501), Executive Director, was re-appointed as the Managing Director of the Company in the 61st Annual General Meeting of the Company held on August
10, 2022, effective August 17, 2022, for a term of three years.
Ms. Rekha (DIN: 08501990) was appointed by the Board as an Additional Director w.e.f. August
11, 2022 and regularized as a Director (Non-Executive and Independent) by way of Postal Ballot on September 20, 2022, to hold office for a period of five (5) consecutive years effective from August 11,2022 to August 10, 2027, not liable to retire by rotation.
Ms. Jennifer Mary Bush (DIN: 09777114) was appointed by the Board as an Additional Director (Non-Executive and Non-Independent) effective November 05, 2022 and regularized as a Director (Non-Executive and Non-Independent) by way of Postal Ballot ended on December 27, 2022, effective November 05, 2022, liable to retire by rotation.
Ms. Bonnie Jean Fetch (DIN: 09791477) was appointed by the Board as an Additional Director (Non-Executive and Non-Independent) effective November 25, 2022 and regularized as a Director (Non-Executive and Non-Independent) by way of Postal Ballot ended on December 27, 2022, effective November 25, 2022, liable to retire by rotation.
Ms. Lira Goswami (DIN: 00114636) was appointed as an Additional (Non-Executive Independent) Director of the Company with effect from May 24, 2023. On recommendation of the Nomination and Remuneration Committee, the Board of Directors have proposed appointment of Ms. Lira Goswami as a Non-Executive and Independent Director, not liable to retire by rotation, for a period of five (5) years from May 24, 2023. The resolution seeking shareholderâs approval for her appointment forms part of the Notice.
In accordance with the Companies Act, 2013 and Articles of Association of the Company, Mr. Steven Chapman (DIN: 00496000), Director (Non-Executive and Non-Independent) of the Company, retires by rotation and being eligible, offer himself for re-appointment. The proposal seeking shareholderâs approval for his re-appointment forms part of the Notice, which is also approved by the Board on the recommendation of the Nomination and Remuneration Committee.
As required under Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard 2, particulars of Directors seeking appointment/re-appointment at this Annual General Meeting are given in the Annexure to the Notice and the Board recommends the respective resolutions to the Members for approval.
Cessation
During the year, Mr. Norbert Nusterer (DIN: 07640359) resigned as Director (Non-Executive and Non- Independent Director) of the Company effective August 26, 2022 to focus on family and personal interests, post his exit from Cummins Group. He had confirmed that there were no other material reasons for his resignation.
Mr. P.S. Dasgupta (DIN: 00012552) resigned as Director (Non-Executive and Independent) of the Company effective from close of business hours of May 24, 2023 on account of professional exigencies. Consequently, he also ceased to be a Chairman of Stakeholders Relationship Committee and Corporate Social Responsibility Committee & Member of Audit and Compliance Committee, Risk Management Committee and Nomination and Remuneration Committee with effect from close of business hours of May 24, 2023. He had confirmed that there were no other material reasons for his resignation.
The Board places on record its appreciation for the outgoing Directorsâ invaluable contribution and guidance during their respective tenure.
The details of Board composition, number of meetings held, details of directorships of Directors etc. are provided in the Corporate Governance Report which is appended as Annexure â4â and forms part of this Report.
b) Committees of the Board:
The Board of Directors have constituted following Committees in order to effectively cater its duties towards diversified role under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015:-
¦ Audit and Compliance Committee;
¦ Stakeholders Relationship Committee;
¦ Nomination and Remuneration Committee;
¦ Corporate Social Responsibility Committee; and
¦ Risk Management Committee
Details of the constitution, broad terms of references of each Committee and number of meetings attended by individual Director etc. are provided in the Corporate Governance Report which is appended as Annexure â4â and forms part of this Report.
c) Policy on Directorâs Appointment and Remuneration:
The Policy of the Company on Directorâs Appointment and Remuneration, including criteria for determining qualifications, positive attributes, independence of the Directors and other matters provided under Section 178 (3) of the Companies Act, 2013, adopted by the Board viz. Nomination and Remuneration Policy, is appended as Annexure â8â which forms part of this Report.
Details of the remuneration paid to the Board of Directors are provided in the Corporate Governance Report. It is affirmed that the remuneration paid to the Directors is as per the terms laid down in the Nomination and Remuneration Policy of the Company.
d) Board Performance Evaluation Mechanism:
Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance evaluation of its own performance and the Directors, Chairman individually, as well as the evaluation of the working of its Committees. Details of the evaluation mechanism is provided in the Corporate Governance Report which is appended as Annexure â4â and forms part of this Report.
e) Inter-se relationships between the Directors:
There are no relationships between the Directors inter-se.
f) Familiarization Programme for Independent Directors:
During the year, various documents, background notes etc. were shared with to Independent Directors to have a better insight in to state of affairs of the Company.
The Chairman and/or the Managing Director also have periodic discussions with the newly appointed Directors to provide them, details of initiatives of the Company for better understanding of the Company, its business and the regulatory framework in which the Company operates and equip him/ her to effectively fulfil his/ her role and responsibilities as a Director of the Company.
The details of familiarization programmes imparted are available at https://www.cummins.com/en/in/investors/india-corporate-governance.
g) Declarations from the Independent Directors:
Pursuant to the provisions of Section 149 of the Companies Act, 2013 read along with Rules framed thereunder and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time, the Independent Directors have submitted inter-alia declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and the SEBI Regulations.
Further, the Independent Directors have also confirmed that there has been no change in the circumstances affecting their status as Independent Directors of the Company. The said Certificates(s) were taken on record by Board after their requisite assessments.
23. NUMBER OF MEETINGS OF THE BOARD:
Six meetings of the Board of Directors were held during the year. The details of the meetings held and attendance there at are provided in the Corporate Governance Report which is appended as Annexure â4â and forms part of this Report. The maximum interval between any two meetings did not exceed 120 days, as prescribed by the Companies Act, 2013.
There were no changes in the Key Managerial Personnel(s) during the Financial Year 2022-23.
The details in accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016, is appended as Annexure â10â which forms part of this Report. Any shareholder interested in obtaining a copy of the statement, may write to the Company Secretary at the Registered Office of the Company.
Industrial relations at all the plants of the Company continue to be cordial. Multiple initiatives have been rolled out for our shop, office and field technician employees under âAdvancing our workforce Strategyâ (AWS) at all sites across the globe. Key purpose of AWS is to inspire and encourage âAll Employeesâ to reach their full potential by implementing similar talent management policies and processes for all the shop, office and field technician employees like those implemented for our managerial employees. The Company has introduced a performance management system for our shop, office & technician employees. It will help in rewarding better performance, help employees to create Individual Development Plans which will help them to grow in the organization. The Company also enhances right environment by creating right spans of control so that it helps manager to spend quality time on employeesâ developmental needs. The Company also taking right steps to provide them access to technology with which employees can leverage our online systems. Additionally, the Company has also introduced an internal job posting system for all new positions across organization which helps us to grow talent from non-exempt category. The Company has revised Domestic Relocation Policy in the FY 2021-22 thus enabling seamless movement of talent across all categories encouraging them to take more learning opportunities. All these are steps in the right direction in our journey to help employees reach their full potential. The unionized employees in Kothrud Engine Plant Pune have completed one cycle of performance management process. HR & Line Managers are putting all the right efforts in implementation. Voluntary Retirement Scheme which was launched at Companyâs Kothrud Engine Plant, Pune on May 16, 2022 has concluded on June 15, 2022. Employees also participated in a grand âFamily Dayâ function at the Kothrud Engine Plant which was very well appreciated by the employees & their family members. Employee participation in various Corporate Responsibility projects has been commendable during the Financial Year. They joined hands with Company to drive some critical social impact projects.
STATUTORY AUDITORS:
At the 60th Annual General Meeting held on August 12, 2021, M/s. Price Waterhouse & Co, Chartered Accountants LLP, Chartered Accountants (Firm Registration No.: 304026E/E-300009) (âPWCâ), was appointed as Statutory Auditor of the Company to hold office till the conclusion of 65th Annual General Meeting.
Accordingly, PWC completed audit for Financial Year 2022-23 and issued Auditorâs Report. There are no qualifications, reservations, adverse remarks or disclaimers made by the auditors in the Audit Report for the Financial Year 2022-23.
In terms of the Section 139(1) of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, the appointment of Statutory Auditors does not require ratification by the shareholders in Annual General Meeting. Accordingly, the Board noted the continued appointment of PWC as the Statutory Auditors of the Company for the Financial Year 2023-24 in its meeting held on May 24, 2023. PWC have informed the Company that their appointment is within the limits prescribed under Section 141 of the Companies Act, 2013.
SECRETARIAL AUDITOR:
M/s Pramod Shah & Associates, (FCS 334), was appointed to conduct the secretarial audit of the Company for the Financial Year 2022-23, as required under Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Secretarial Audit Report in Form MR-3 and Secretarial Audit Report pursuant to Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for Financial Year 2022-23 is appended as Annexure â5â which forms part of this Report. Both the reports do not contain any qualification, reservation or adverse remark.
The Annual Secretarial Compliance Report has been submitted to the Stock Exchanges as required under Regulation 24A of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.
The Board on the recommendation of the Audit and Compliance Committee has re-appointed M/s Pramod Shah & Associates to conduct the secretarial audit of the Company for the Financial Year 2023-24 in its meeting held on May 24, 2023.
Further, during the Financial Year 2022-23 and two previous financial years, no penalties, strictures were imposed on the Company by Stock Exchange(s) or SEBI or any statutory authority, on any matter related to capital markets.
COST AUDITORS:
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, as amended from time to time, the cost audit records maintained by the Company in respect of its manufacturing activity is required to be audited. The Directors, on the recommendation of the Audit and Compliance Committee, had appointed M/s. C S Adawadkar & Co., Cost Accountants (Firm Registration Number: 100401), to audit the cost accounts of the Company for the Financial Year 2022-23 at a remuneration of ? 950,000/- plus taxes as applicable and re-imbursement of out of pocket expenses. The remuneration was ratified by shareholders in the 61st Annual General Meeting held on August 10, 2022.
Pursuant to recommendation of the Audit and Compliance Committee, the Board in its meeting held on May 24, 2023 has appointed M/s C S Adawadkar & Co. (Firm Registration No.: 100401), to audit the cost accounts of the Company for the Financial Year 2023-24 at a remuneration of ? 950,000/- plus taxes as applicable and re-imbursement of out of pocket expenses. As required under the Companies Act, 2013, the shareholders ratification for the remuneration payable to M/s. C S Adawadkar & Co, Cost Auditors, is being sought at the ensuing Annual General Meeting.
M/s. C S Adawadkar & Co, Cost Auditors, under Section 139(1) of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, have furnished a certificate of their eligibility and consent for appointment.
28. CORPORATE SOCIAL RESPONSIBILITY POLICY AND ITS REPORT:
Your Company is an early adopter of the Corporate Social Responsibility (CSR) initiatives. Corporate Social Responsibility continues to be the core value of your Company embedded in the core value of caring, which focuses on âserving and improving the communities in which we liveâ. Your Company works with âCummins India Foundationâ towards three broad focus areas viz. Higher Education, Energy and Environment and Equality of Opportunity. Additionally, Company also carries out other strategic initiatives.
Details about the CSR Policy and initiatives taken by the Company during the year are available on our website https://www.cummins.com/en/in/investors/india-corporate-governance. The Annual Report on our CSR Activities is appended as Annexure â11â which forms part of this Report.
29. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT :
As stipulated under the Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with the SEBI Circular dated May 10, 2021, your Company has introduced the Business Responsibility and Sustainability Report (âBRSRâ) for Financial Year 2022-23, which provides enhanced disclosures on Environment, Social and Governance (ESG) practices and focused areas of the Company, is appended as Annexure â12â and forms a part of this Report.
The Company is in compliance with applicable Secretarial Standards issued by the Institute of Company Secretaries of India, specifically Secretarial Standards on Meetings of the Board of Directors (SS-1) and Secretarial Standards on General Meetings (SS-2).
31. DIVIDEND DISTRIBUTION POLICY:
The Board of Directors of the Company have formulated a Dividend Distribution Policy which is appended as Annexure â9â and forms part of this Report. The policy is also available on our website https://www.cummins.com/en/in/investors/india-corporate-governance.
32. INVESTOR EDUCATION AND PROTECTION FUND (IEPF):
Pursuant to Section 124 and Section 125 of Companies Act, 2013 and IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, during the year under review, the Company has transferred the following unclaimed and unpaid dividend and corresponding shares to IEPF, upon completion of period of seven years:
|
Date of Declaration |
Type of Dividend |
Amount transferred (?) |
No of equity shares transferred |
|
August 06, 2015 |
Final Equity Dividend |
11,505,870 |
154,114 |
|
February 02, 2016 |
Interim Equity Dividend |
6,231,785 |
10,508 |
33. DETAILS OF INSOLVENCY AND BANKRUPTCY CODE:
During the year under review, your Company has neither made any application nor any application is pending for or against the Company under the Insolvency and Bankruptcy Code.
34. DETAILS REGARDING VALUATION REPORT:
During the year under review, your Company has not entered into any One-Time Settlement with Bankâs or Financial Institutions and therefore, no details of Valuation in this regard is available.
Further, the Directors state that no disclosure or reporting is required in respect of the following
items as there were no transactions or applicability with respect to these items during the year under
review:
a. Issue of equity shares with differential rights as to dividend, voting or otherwise;
b. Issue of shares (including sweat equity shares) by the Company to its employees;
c. The Managing Director of the Company did not receive any remuneration or commission from any of its subsidiaries. Further, the Company had not appointed any other Whole-time Director except the Managing Director;
d. No frauds were reported by Auditors under Section 143(12) of the Companies Act, 2013 and rules frame thereunder;
e. No equity shares were lying under unclaimed suspense account during the financial year 202223;
f. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companyâs operations. However, Membersâ attention is drawn to the Statement on Contingent Liabilities, commitments in the notes forming part of the Financial Statement; and
g. No material changes and commitments occurred during April 01, 2023 till the date of this Report which would affect the financial position of your Company.
ACKNOWLEDGEMENT:
The Directors would like to express their sincere appreciation for the assistance and co-operation received from the financial institutions, banks, government authorities, customers, vendors and members during the year under review. The Directors also wish to place on record their deep sense of appreciation for the committed services by the Companyâs executives, staff and associates.
For and on behalf of the Board of Directors,
Steven Chapman Ashwath Ram
Place : Pune Chairman Managing Director
Date : May 24, 2023 DIN: 00496000 DIN: 00149501
Note: AH the Annexures referred in the Directors â Report form an integral part of the same. The entire Annual Report along with the Notice convening the AGM and Financial Statements (Standalone and consolidated along with respective Audit Reports) shall be read together.
Mar 31, 2022
The Directors take pleasure in presenting the Sixty-first Annual Report together with inter-alia its annexures and audited financial statements (including standalone & consolidated along with respective Auditors Report thereon) for the year ended March 31,2022. The consolidated performance of the Company and its subsidiaries has been referred to wherever required.
On Standalone basis:-
During the Financial Year 2021-22, revenue from operations increased to f 614,040 Lacs as compared to f 432,924 Lacs during the previous year (42% higher). Profit after tax increased to f 88,665 Lacs from f 61,787 Lacs recorded for the previous year (44% higher).
On Consolidated basis:-
During the Financial Year 2021-22, revenue from operations increased to f 617,092 Lacs as compared to f 436,008 Lacs during the previous year (42% higher). Profit after tax increased to f 93,374 Lacs from f 63,503 Lacs recorded for the previous year (47% higher).
Financial Summary
|
Standalone |
Consolidated |
|||
|
2021-22 (f in Lacs) |
2020-21 (f in Lacs) |
2021-22 (f in Lacs) |
2020-21 (f in Lacs) |
|
|
APPROPRIATION OF PROFIT: |
||||
|
Profit before taxation |
115,945* |
80,796 |
120,698* |
82,500 |
|
Net Profit for the year after tax |
88,665 |
61,787 |
93,374 |
63,503 |
|
Dividend |
44,352 |
38,808 |
44,352 |
38,808 |
|
*Includes Exceptional items amounting to f 13,236 Lacs |
||||
The closing balance of reserves, including retained earnings, of the Company as at March 31, 2022 was f 479,722 Lacs. During the Financial Year, there was no amount proposed to be transferred to the Reserves.
3. COMPANYâS RESPONSE TO COVID:
Your Company continued to focus its efforts for COVID related support and relief, especially to COVID impacted and frontline warriors. Your Company experienced intense collaboration among its teams, and it focused on safety, health and well-being of its employees including various communities. It continued several health and wellness programs for its employees and stakeholders covering various aspects of physical and emotional wellbeing, counselling, support and awareness. It also focused its efforts in providing equitable access to COVID-19 vaccination to its employees alongside Governmental efforts. Within the Company, vaccination drives were also organized to aid employees and their immediate families to voluntarily get vaccinated for the COVID-19 virus. Following all COVID safety and hygiene protocols, plants at all locations were made fully operational including re-opening of Corporate Office, for regular business for employees.
4. BUSINESS UPDATE AND STATE OF COMPANYâS AFFAIRS:
The information on Company''s affairs and related aspects is provided under Management Discussion and Analysis Report, which has been prepared, inter-alia, in compliance with Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and forms part of the Annual Report.
Your Directors have recommended a final dividend of ? 10.50/- per equity share of ? 2/- each fully paid-up share in their meeting held on May 26, 2022, in addition to the interim dividend of ? 8/- per equity share of ? 2/- each fully paid-up share declared on February 10, 2022, aggregating to ? 18.50/- (i.e. 925 %) per equity share of ? 2/- each fully paid-up share for the year ended March 31, 2022 (previous year ?15/- per equity share i.e. 750%). The final dividend is subject to approval of the Members at the ensuing Annual General Meeting and shall be subject to deduction of income tax at source.
The paid-up share capital of the Company is ? 554,400,000/- divided into 277,200,000 equity shares of ? 2/- each as on March 31, 2022. Your Company has not come out with any issue (public, rights or preferential) during the year. There is no change in the share capital during Financial Year 2021-22.
7. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES:
Your Board is pleased to provide details of the following subsidiary, joint ventures and associates as on March 31, 2022 : -
a) Cummins Sales & Service Private Limited (CSSPL):
CSSPL, a wholly-owned subsidiary, of the Company focuses on sales of Cummins engines, parts, accessories and providing service support to engines and generators in parts of Northern India close to the National Capital Region (NCR), Delhi. CSSPL generated a revenue of ? 10,159 Lacs from its operations for the year ended March 31, 2022, as compared to ? 8,672 Lacs during the previous year (17% higher).
b) Cummins Research and Technology India Private Limited (CRTI):
CRTI is a 50:50 joint venture between Cummins Inc., USA and your Company, which was formed in 2003 with an intent to provide Information Technology enabled Mechanical Engineering development services primarily to Cummins Inc., USA, its subsidiaries and joint ventures in all parts of the world. Since, April 01,2016, CRTI closed its operations and your Board of Directors decided that the activity carried out by CRTI for your Company, shall be undertaken in-house by absorbing the appropriate number of employees from CRTI in your Company.
The Shareholders of CRTI, in their Extra-ordinary General Meeting held on April 01, 2022, passed a resolution to initiate voluntary winding-up of the CRTI under Companies Act, 2013 and Insolvency and Bankruptcy Code, 2016. Accordingly, the control over and the operations of CRTI are handed over to a registered Insolvency Professional effective from April 01, 2022 in accordance with the applicable statutory provisions.
c) Valvoline Cummins Private Limited (VCPL):
VCPL, a 50:50 joint venture between Valvoline International Inc., USA, a global leader in lubricants and engine oils, and your Company, VCPL generated a revenue of ? 169,488 Lacs from its operations for the year ended March 31, 2022, as compared to ? 134,104 Lacs during the previous year (26% higher).
d) Cummins Generator Technologies India Private Limited (CGT):
Your Company owns 48.54% shareholding in the Associate Company namely CGT which is in the business of design, manufacturing, marketing, sales and service of alternators and related spare parts. CGT generated revenue of ? 169,488 Lacs from its operations for the year ended March 31, 2022, as compared to ? 75,339 Lacs during the previous year (59% higher).
The Shareholders of CGT at their Extra-ordinary General Meeting held on March 17, 2022, approved a scheme of reduction of the issued, subscribed and paid-up share capital of the Company (the ''Scheme'') from ? 16,070,010 consisting of 1,607,001 equity shares of ? 10/- each to ? 15,995,680 consisting of 1,599,568 equity shares of ?10/- each by paying off, cancelling and extinguishing, in aggregate, 7,433 equity shares of the Company (''Capital Reduction'') as recommended by the Board of Directors in their meeting held on February 11, 2022. The Company has filed a petition with Hon''ble National Company Law Tribunal (''NCLT''), Mumbai Bench, seeking approval on the said Scheme of Capital Reduction on April 07, 2022. No effect of the scheme of reduction has been given in CGT financial statements as at and for the year ended March 31,2022, pending approval from NCLT.
As required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, consolidated financial statements of the Company, its subsidiary, joint ventures and associate companies, prepared in accordance with the applicable Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended, form part of the Annual Report and are reflected in the consolidated financial statements of the Company.
Further, a statement containing the salient features of the financial statement of subsidiaries, associate companies and joint ventures in the prescribed Form AOC-1 is appended as Annexure â1â which forms part of this Report.
The Company will make the said financial statements and related detailed information of CSSPL available upon the request by any Member of the Company. These financial statements will also be kept open for inspection by any Member at the Registered Office of the Company and of CSSPL. Pursuant to the provisions of Section 136 of the Companies Act, 2013, the financial statements of the Company, consolidated financial statements along with relevant documents and separate financial statements in respect of CSSPL, are available on the website of the Company.
8. CHANGE IN THE NATURE OF THE BUSINESS:
During the year under review, there was no change in the nature of the business pursuant to inter-alia Section 134 of the Companies Act, 2013 and Companies (Accounts) Rules, 2014.
9. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
No loan or guarantee was given, or investment was made by your Company during the Financial Year 2021-22 pursuant to Section 186 of the Companies Act, 2013.
Your Company has not accepted any Public Deposits under Chapter V of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 during the Financial Year 2021-22.
11. FUND RAISING BY ISSUANCE OF DEBT SECURITIES, IF ANY
Pursuance to SEBI Circular No. SEBI/HO/DDHS/CIR/P/2018/144 dated November 26, 2018, your Directors confirm that the Company is not defined as a âLarge Corporateâ as per the framework provided in the said Circular. Moreover, your Company has not raised any fund by issuance of debt securities.
12. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
During Financial Year 2021-22, no materially significant related party transactions were entered into by the Company, that may have potential conflict with the interests of Company, at large.
Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 in the prescribed Form AOC-2 is appended as Annexure â2â which forms part of this Report.
The Policy on materiality of related party transactions as approved by the Board may be accessed on the Company''s website at the link: https://www.cummins.com/en/in/investors/india-corporate-governance
As required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, related party transactions have been disclosed under significant accounting policies and notes forming part of the Financial Statements in accordance with relevant accounting standards.
During the Financial Year 2021-22 your Company has strived to imbibe energy conservation principles and initiatives across all its facilities.
During the year, the Company at its Kothrud Engine Plant (KEP) has installed Solar Photovoltaic (PV) and started the operation of 1250 KWp in December 2021,550 KWp in March 2022 & 1020 KWp in 2020, which has resulted in generation of 18.74 lacs Units of electricity. HHP Rebuild Centre has generated 7.10 lac units of electricity from their 625 KWp Solar Photovoltaic (PV) Plant installed in 2017. CPG SEZ Phaltan has generated 5.15 lac units of electricity from their 150 KWp Solar Photovoltaic (PV) Plant installed in 2017. The Solar PV Plant installed at Pirangut Power Systems Plant in 2020 has generated 1.78 lacs units of electricity in Financial Year 2021-22.
The Company has generated 32.86 Lacs units of electricity in Financial Year 2021-22 from onsite Solar installation.
The other key initiatives across multiple areas are highlighted below -
Heating Ventilation and Air Conditioning (HVAC) - Your Company has undertaken initiatives such as Installation of Variable Frequency Drive (VFD) with solenoid valves for Compressor cooling water system, HVLs fans, replacement of non-efficient motor with energy efficient motors, new energy efficient equipment for effective utilization of compressed air and induction heater for piston heaters.
Lighting - Similar to last year, your Company has continued the initiative to replace old lighting fittings with new-age energy efficient LED fittings within and outside some of our facilities. Also, installation of motion sensors at various locations has helped to reduce the energy consumption at sites.
Awareness Generation - This included improving awareness amongst employees to switch off major energy consuming equipment or units when idle as well as employing an energy review tool and energy balance tool to identify projects. The sites also conduct the unplugged challenge to switch off the equipment on holidays or non-production days, Compressed Air management program and leakages arrest drive.
These key initiatives resulted in annual energy savings of approximately 4.43 Lacs units of electricity in Financial Year 2021-22.
14. RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION:
Your Company is committed to introducing new products and improving existing products to have better performance levels, lower life cycle costs, excellent safety, recyclability characteristics and meet stringent emission norms tailored for the specific needs of the Indian industry.
Your Company continues this endeavour by developing the next generation of systems in collaboration with the parent company - Cummins Inc., USA.
Improved technical productivity, through new methodologies and technologies, is being continuously pursued to reduce the costs associated with new product development and customer support. An example of this is the further enhanced use of analysis-led design through computer models that help minimize hardware testing and therefore accelerate product development cycle times with reduced product testing.
A. New Product Development: -
The following new Products were developed as part of the above initiatives during the year: -
1. Rail engine product families to support the growing Rail Business;
2. Marine engine product families to support the increasing commercial Marine Business;
3. Further enhancements of non-diesel product development capability such as use of alternative fuels are being explored in India;
4. Telematics and Analytics capabilities have been developed to improve uptime and fuel efficiency performance of our products; and
5. To enhance the position of Cummins in the Low kVA segment, your Company has introduced a 40 kVA genset with X2.7 litre engine.
Further, your Company continues to strengthen its channel presence through its GOEM partners
who have added 12 number of additional sales dealers across various geographies.
B. Benefits derived as a result of the above activities are:-
1. Enhanced product and service capabilities through use of electronic tools and simulation software to deliver improved engine performance;
2. Enhanced capability to tailor engine designs to improve value proposition for customers through delivering superior power output, fuel economy, transient response and reduced emissions;
3. Enhanced product and service capabilities through use of electronic tools and simulation software to control the engine performance and combustion process;
4. Enhanced capability to tailor engine designs to improve the value proposition for customers through delivering superior power output, fuel economy, transient response and reduced emissions;
5. Product and component availability to meet the new emission norms ahead of implementation;
6. Safer, recyclable, reliable, durable and performance-efficient products and critical components;
7. Component indigenization capability was improved through enhanced test capability, rig test and flow bench development and availability; and
8. Significant enhancements in measurement capability were made to pursue business opportunities in non- diesel applications to serve both the rural and international communities.
C. Future plans include:-
1. Developing local âfit-for-marketâ solutions to meet upcoming emission regulations and market needs on commercial off-highway and power generation segments;
2. Technological innovation to add value to products in the areas of alternate fuels, fuel cells, power electronics, hybrid engines and recycle / re-use;
3. Continued expansion of the product range to serve the needs of both local and global market;
4. Continued focus on indigenization and partnering with suppliers for waste elimination initiatives; and
5. Focused engine development for the Power Generation segment for the upcoming emissions norms.
D. Your Company continues to draw benefits from Cummins Inc.âs technology, advanced engineering and research. With this support your Company is committed to develop advanced fuel-efficient and emission-compliant products that use a variety of energy sources and comply with future domestic emissions and carbon dioxide targets. These help to reduce Greenhouse Gas emissions and improve Air Quality, whilst also enabling the products to deliver superior performance, reliability, durability and recyclability.
E. Expenditure on Research & Development (R&D):-
The total expenditure on R & D was as follows:-
|
Particulars |
2021-22 |
2020-21 |
|
(f in Lacs) |
(f in Lacs) |
|
|
Capital |
2,093 |
1,677 |
|
Recurring |
4,451 |
5,749 |
|
Total |
6,544 |
7,426 |
|
Total R&D expenditure as a percentage of total sales turnover |
1.07% |
1.72% |
15. FOREIGN EXCHANGE EARNINGS AND OUTGO:
Your Company continues to be Net Foreign Exchange Earner. During the year under review, your Company exported 8759 engines and 7167 generator sets. Foreign exchange earned in terms of actual inflows during the year 2021-22 and foreign exchange outgo in terms of actual outflows during the year
2021-22 were as follows:-
|
Particulars |
FY 2021-22 |
FY 2020-21 |
|
(f in Lacs) |
(f in Lacs) |
|
|
Foreign exchange earnings* |
249,011 |
134,025 |
|
Foreign exchange outgo* |
97,380 |
106,376 |
|
*Equivalent value of various currencies |
||
16. MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE REPORT:
The Management Discussion and Analysis Report and the Corporate Governance Report which forms part of this Report are appended as Annexure â3â and â4â respectively.
The Company has obtained a Certificate from Practicing Company Secretary confirming compliance with conditions of the Code of Corporate Governance as stipulated in Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (including amendments thereof) and the same is appended as Annexure â6â which forms part of this Report.
The Company has received a Certificate from Practicing Company Secretary confirming that none of the Directors on the Board of the Company have been debarred or disqualified by MCA or SEBI or any such statutory authority from being appointed / continuing as Director and the same is appended as Annexure â7â which forms part of this Report.
As per the requirement under Section 92(3) of the Companies Act, 2013, the draft Annual Return for Financial Year 2021-22 is available on the website of the Company at the link: https://www.cummins.com/ en/in/investors/india-annual-reports. Since the Annual General Meeting is proposed to be held on August 10, 2022, the Company shall upload a copy of Annual Return for Financial Year 2021-22 as soon it has filed the said Annual Return with Registrar of Companies.
Business Risk Evaluation and Management is an ongoing process within the Organization. The Company has a robust Enterprise Risk Management Framework to identify, monitor and minimize risks. As a process, the risks associated with the business are identified and prioritized based on impact, probability of occurrence, organization''s risk management capability and velocity of risk. Such risks are reviewed by the Senior Management, Risk Management Committee and the Board periodically. Risk Owners are identified for each risk and metrics are developed for monitoring and reviewing the risk mitigation. The established comprehensive Risk Management Framework ensures that risk areas having a potential impact on Companyâs continued existence as a going concern and to its development are identified and addressed on timely basis.
The Risk Management Committee of the Board of Directors of your Company assists the Board in (a) overseeing and approving the Company''s enterprise wide risk management framework including the risk management processes, systems and practices of the Company; (b) overseeing that all the existing risks and potential risks that the organization faces including cyber security risks have been identified and assessed, and (c) overseeing that there are adequate of Company''s resources to perform risk management responsibilities and achieve its objectives. Further details on Risk Management Committee are included in the Corporate Governance Report.
The details and process of Enterprise Risk Management implemented by the Company through Risk Management Policy, are included in the Management Discussion and Analysis, which forms part of Annual Report.
19. INTERNAL FINANCIAL CONTROL:
Your Company has established adequate internal financial controls for ensuring orderly and efficient conduct of its business, including adherence to Company''s policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and the timely preparation of reliable financial information.
Details of internal financial control and its adequacy are included in the Management Discussion and Analysis Report which is appended as Annexure â3â and forms part of Annual Report.
20. VIGIL MECHANISM/ WHISTLE BLOWER POLICY:
Your Company''s leadership culture is to inspire and encourage all employees to reach their full potential. A great leadership culture begins with outstanding leaders who create an outstanding place to work, inspiring and encouraging all employees to achieve their full potential. Leaders connect people and their work to the vision, mission, values, brand promise and strategies of the company, motivating them and giving them a higher sense of purpose. Leaders also build trust in our teams and in our organizations and align on key goals and priorities. Leaders foster open communications and offer various opportunities to employees to express their feedback through several ways.
Your Company has a ''Vigil Mechanism Policy'' which inter-alia provides adequate safeguards against victimization of persons who may blow the whistle. Vigil Mechanism Policy may be accessed on the Company''s website at the link: https://www.cummins.com/en/in/investors/india-corporate-governance.
In addition, your Company has complied with provisions relating to constitution of an Internal Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and also has a stabilized well governed ethics investigations process. Regular workshops and awareness programmes against sexual harassment are conducted across the organization. During the year under review, no complaints pertaining to sexual harassment of woman employee was reported to the Committee and therefore no complaints remained unresolved as on March 31, 2022.
The Company is committed to the highest possible standards of openness, integrity and accountability in all its affairs and to providing a workplace conducive to open discussion of its business practices. Your Company has laid out infrastructures and policy through which the employees can voice their concerns about suspected unethical or improper practice, or violation of Cummins Code of Business Conduct or complaints regarding accounting, auditing, internal controls or disclosure practices of the Company. Protected disclosures can be made by a whistle blower through an email or dedicated telephone line or letter to the Managing Director of the Company or Letter to the Chairman of Audit Committee or via the Ethics helpline/ Webpage, details of which are available on website www.cumminsindia.com.
21. COMPLIANCE WITH THE CODE OF CONDUCT:
All Directors on the Board and Senior Management have affirmed compliance to the Code of Conduct(s) for the Financial Year 2021-22. A declaration signed by the Managing Director affirming compliance with the Company''s Code of Conduct by the Board of Directors and Senior Management for the Financial Year 2021-22 as required under Regulation 26(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is included in the Corporate Governance Report which is appended as Annexure â4â and forms part of this Report.
22. DIRECTORSâ RESPONSIBILITY STATEMENT:
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and external consultant(s) including audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Companyâs internal financial controls were adequate and effective during the Financial Year 2021-22.
Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:
(i) in the preparation of the annual accounts for the year ended March 31, 2022, the applicable accounting standards have been followed and there was no material departure from the same;
(ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31,2022 and of the profit for the period April 01,2021 to March 31,
2022;
(iii) they have taken proper and sufficient care 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;
(iv) they have prepared the annual accounts on a going concern basis;
(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively during the year; and
(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
a) Changes in the composition of the Board of Directors:
Appointments and Re-appointments
Mr. Steven Chapman (DIN:00496000) was regularized as Director (Non-Executive and NonIndependent) of the Company in the 60th Annual General Meeting of the Company held on August 12, 2021. Mr. Chapman continued to be Chairman of the Board, as appointed by the Board, effective October 01, 2020.
Mr. Ashwath Ram (DIN: 00149501), was appointed as a Director designated as Managing Director and Key Managerial Personnel, in the 59th Annual General Meeting of the Company held on August 25, 2020, effective August 17, 2019 for term of three years. On recommendation of the Nomination and Remuneration Committee, the Board of Directors have proposed re-appointment of Mr. Ashwath Ram as Managing Director of the Company for a period of three years effective from August 17, 2022. A resolution seeking shareholder''s approval for his re-appointment forms part of the Notice.
In accordance with the Companies Act, 2013 and Articles of Association of the Company, Mr. Norbert Nusterer (DIN: 07640359), Director (Non-Executive and Non-Independent) of the Company, retires by rotation and is eligible for re-appointment. The proposal seeking shareholder''s approval for his reappointment forms part of the Notice, which is also approved by the Board on the recommendation of Nomination and Remuneration Committee.
As required under Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard 2, particulars of Directors seeking appointment/re-appointment at this Annual General Meeting are given in the Annexure to the Notice and the Board recommends the respective resolutions to the Members for approval.
Cessation
During the year, Mr. Prakash Telang (DIN:00012562) ceased to be Director (Non-Executive and Independent) of the Company effective December 08, 2021 on account of his unfortunate demise.
Ms. Lorraine Alyn Meyer (DIN:08567527) resigned as Director (Non-Executive and NonIndependent) of the Company effective February 15, 2022 on account of retirement from Cummins Group and other personal reasons. She had confirmed that there were no other material reasons for her resignation.
The Board places on record its appreciation for the ceased Directors'' invaluable contribution and guidance during their tenure.
The details of Board composition, number of meetings held, details of directorships of Directors etc. are provided in the Corporate Governance Report which is appended as Annexure â4â and forms part of this Report.
b) Committees of the Board:
The Board of Directors have constituted following Committees in order to effectively cater its duties towards diversified role under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015:-
¦ Audit Committee;
¦ Stakeholders Relationship Committee;
¦ Nomination and Remuneration Committee;
¦ Corporate Social Responsibility Committee; and
¦ Risk Management Committee
Details of the constitution, broad terms of references of each Committee and number of meetings attended by individual Director etc. are provided in the Corporate Governance Report which is appended as Annexure â4â and forms part of this Report.
c) Policy on Directorâs Appointment and Remuneration:
The Policy of the Company on Director''s Appointment and Remuneration, including criteria for determining qualifications, positive attributes, independence of the Directors and other matters provided under Section 178 (3) of the Companies Act, 2013, adopted by the Board viz. Nomination and Remuneration Policy, is appended as Annexure â8â which forms part of this Report.
Details of the remuneration paid to the Board of Directors are provided in the Corporate Governance Report. It is affirmed that the remuneration paid to the Directors is as per the terms laid down in the Nomination and Remuneration Policy of the Company.
d) Board Performance Evaluation Mechanism:
Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance evaluation of its own performance and the Directors, Chairman individually, as well as the evaluation of the working of its Committees. Details of the evaluation mechanism is provided in the Corporate Governance Report which is appended as Annexure â4â and forms part of this Report.
e) Inter-se relationships between the Directors:
There are no relationships between the Directors inter-se.
f) Familiarization Programme for Independent Directors:
During the year, various documents, presentations, background notes etc. were shared with to Independent Directors to have a better insight in to state of affairs of the Company.
The Chairman and/or the Managing Director also have periodic discussions with the newly appointed Directors to provide them, details of initiatives of the Company for better understanding of the Company, its business and the regulatory framework in which the Company operates and equip him/ her to effectively fulfil his/ her role and responsibilities as a Director of the Company.
The details of familiarization programmes imparted are available at https://www.cummins.com/en/in/ investors/india-corporate-governance.
g) Declarations from the Independent Directors:
Pursuant to the provisions of Section 149 of the Companies Act, 2013 read along with Rules framed thereunder and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time, the Independent Directors have submitted inter-alia declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and the SEBI Listing Regulations. The Independent Directors during the year, have also re-submitted inter-alia declarations under the revised Regulation 16(1)(b) Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) (Third Amendment) Regulations, 2021, effective from January 01, 2022.
Further, the Independent Directors have also confirmed that there has been no change in the circumstances affecting their status as Independent Directors of the Company. The said certificates(s) were taken on record by Board after their requisite assessments.
24. NUMBER OF MEETINGS OF THE BOARD:
Five meetings of the Board of Directors were held during the year. The details of the meetings held and attendance there at are provided in the Corporate Governance Report which is appended as Annexure â4â and forms part of this Report. The maximum interval between any two meetings did not exceed 120 days, as prescribed by the Companies Act, 2013.
There were no changes in the Key Managerial Personnel(s) during the Financial Year.
The details in accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016, is appended as Annexure â10â which forms part of this Report. Any shareholder interested in obtaining a copy of the statement, may write to the Company Secretary at the Registered Office address of the Company.
Industrial relations at all the plants of the Company continue to be cordial during Financial Year 202122. Multiple initiatives have been rolled out for our shop, office and field technician employees under ''Advancing our workforce Strategy'' (AWS) at all sites across the globe. Key purpose of AWS is to inspire and encourage ''All Employees'' to reach their full potential by implementing similar Talent Management policies and processes for all the shop, office and field technician employees like those implemented for our managerial employees. We have introduced a Performance Management System for our Shop, Office & Technician employees. It will help us to reward better performance, help employees to create Individual Development Plans which will help them to grow in the organization. Your Company is also enhancing right environment by creating right spans of control so that it helps manager to spend quality time on employees'' developmental needs. We are taking right steps to provide them access to technology with which employees can leverage our online systems. Your Company have also introduced an internal job posting system for all new positions across organization which helps us to grow talent from nonexempt category. In addition, your Company have revised our Domestic Relocation Policy thus enabling seamless movement of talent across all categories encouraging them to take more learning opportunities. All these are steps in the right direction on our journey to help employees reach their full potential.
Your Company had announced a Voluntary Retirement Scheme at its Kothrud Engine Plant, Pune, on May 16, 2022. The Voluntary Retirement Scheme (herein referred to as âSchemeâ) was applicable to individual employees meeting all the eligibility criteria as stated in (a), (b) and (c) cumulatively -
a) Permanent employees of the Company who are working in Kothrud Engine Plant in the shopfloor and office category;
b) Employees who are above 45 years of age and less than 57 years of age as on May 16, 2022;
c) Employees who are on the permanent rolls of the Company for 10 years and more as on May 16, 2022.
Your Company believed that Scheme upon implementation will help in optimizing the fixed cost structures, build resilient supply chains and increase focus on manufacturing excellence. Intimation pursuant to Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, regarding implementation of this Scheme was filed with BSE Limited (âBSEâ) and National Stock Exchange of India Limited (âNSEâ) on May 16, 2022. Further, an update on the financial impact of the Scheme will also filed with BSE and NSE on conclusion of the Scheme.
STATUTORY AUDITORS:
At the 60th Annual General Meeting held on August 12, 2021, M/s. Price Waterhouse & Co., Chartered Accountants LLP, Chartered Accountants (Firm Registration No.: 304026E/E-300009) (âPWCâ), was appointed as Statutory Auditor of the Company to hold office till the conclusion of 65th Annual General Meeting.
There are no qualifications, reservations, adverse remarks or disclaimers made by the auditors in the Audit Report for the Financial Year 2021-22.
In terms of the Section 139(1) of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, the appointment of Statutory Auditors does not require ratification by the shareholders in Annual General Meeting. Accordingly, the Board noted the continued appointment of PWC as the Statutory Auditors of the Company for the Financial Year 2022-23 in its meeting held on May 26, 2022. PWC has informed the Company that their appointment is within the limits prescribed under Section 141 of the Companies Act, 2013.
SECRETARIAL AUDITOR:
M/s Pramod Shah & Associates, (FCS 334), was appointed to conduct the secretarial audit of the Company for the Financial Year 2021-22, as required under Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Secretarial Audit Report in Form MR-3 and Secretarial Audit Report pursuant to Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for Financial Year 2021-22 is appended as Annexure â5â which forms part of this Report. Both the reports do not contain any qualification, reservation or adverse remark.
The Annual Secretarial Compliance Report has been submitted to the stock exchanges as required under Regulation 24A of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.
The Board on the recommendation of the Audit Committee has re-appointed M/s Pramod Shah & Associates to conduct the secretarial audit of the Company for the Financial Year 2022-23 in its meeting held on May 26, 2022.
Further, during the Financial Year 2021-22 and two previous financial years, no penalties, strictures were imposed on the Company by stock exchange(s) or SEBI or any statutory authority, on any matter related to capital markets.
COST AUDITORS:
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, as amended from time to time, the cost audit records maintained by the Company in respect of its manufacturing activity is required to be audited. Your Directors, on the recommendation of the Audit Committee, had appointed M/s. C S Adawadkar & Co., Cost Accountants (Firm Registration Number: 100401), to audit the cost accounts of the Company for the Financial Year 2021-22 at a remuneration of ? 950,000/- plus taxes as applicable and re-imbursement of out of pocket expenses. The remuneration was ratified by shareholders in the 60th Annual General Meeting held on August 12, 2021.
Pursuant to recommendation of the Audit Committee, the Board in its meeting held on May 26, 2022 has appointed M/s C S Adawadkar & Co. (Firm Registration No.: 101542), to audit the cost accounts of the
Company for the Financial Year 2022-23 at a remuneration of ? 950,000/- plus taxes as applicable and re-imbursement of out of pocket expenses. As required under the Companies Act, 2013, the shareholders ratification for the remuneration payable to M/s. C S Adawadkar & Co, Cost Auditors, is being sought at the ensuing Annual General Meeting.
M/s. C S Adawadkar & Co, Cost Auditors, under Section 139(1) of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, have furnished a certificate of their eligibility and consent for appointment.
29. CORPORATE SOCIAL RESPONSIBILITY POLICY AND ITS REPORT:
Your Company is an early adopter of the Corporate Social Responsibility (CSR) initiatives. Corporate Social Responsibility continues to be of vital importance to your Company embedded in the core value of caring, which focuses on ''serving and improving the communities in which we live''. Your Company works with ''Cummins India Foundation'' towards three broad focus areas viz. Higher Education, Energy and Environment and Equality of Opportunity. Additionally, your Company also carries out other strategic CSR initiatives predominantly through its implementing agency.
In the ongoing crisis of COVID-19, your Company undertook series of immediate and emergency interventions to address urgent and evolving needs of the communities and various stakeholders. The relief and support initiatives included but were not limited to partnerships with State, Central, Local Government Bodies, donation of life saving equipments, support to frontline COVID warriors and working with Organizations to provide immediate relief etc.
Details about the CSR Policy and initiatives taken by the Company during the year are available on the website at link : https://www.cummins.com/en/in/investors/india-corporate-governance. The Annual Report on CSR Activities is appended as Annexure â11â which forms part of this Report.
30. BUSINESS RESPONSIBILITY REPORT:
As stipulated under the Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility Report describes the initiatives taken by the Company from environmental, social and governance perspective, which forms part of the Annual Report and is included after Financial Statements section.
The Company has key policies in place with respect to Environment, Social and Governance (ESG) areas which are made disclosed under the Business Responsibility Report. Your Company also contributes to global sustainability goals of Cummins Inc. (CMI), its Holding Company.
Your Company is further striving towards strengthening its ESG related procedures/polices considering introduction of Business Responsibility and Sustainability Report (BRSR) as a statutory requirement under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, effective Financial Year 2022-23. Accordingly, comprehensive BRSR will form part of subsequent year(s) Annual Report of the Company, as per applicable laws as amended from time to time.
The Company is in compliance with applicable Secretarial Standards issued by the Institute of Company Secretaries of India, specifically Secretarial Standards on Meetings of the Board of Directors (SS-1) and Secretarial Standards on General Meetings (SS-2).
32. DIVIDEND DISTRIBUTION POLICY:
The Board of Directors of the Company have formulated a Dividend Distribution Policy pursuant to Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, which
is appended as Annexure â9â and forms part of this Report. The policy is also available on our website https://www.cummins.com/en/in/investors/india-corporate-governance.
33. INVESTOR EDUCATION AND PROTECTION FUND (IEPF):
Pursuant to Section 124 and Section 125 of Companies Act, 2013 and IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, during the year under review, the Company has transferred the following unclaimed and unpaid dividend and corresponding shares to IEPF, upon completion of period of seven years:
|
Date of Declaration |
Type of Dividend |
Amount transferred |
No of equity shares transferred |
|
August 01, 2014 |
Final Equity Dividend |
9,109,752 |
294,714 |
|
September 10, 2014 |
Interim Equity Dividend |
5,410,340 |
5,269 |
|
Please refer Note no 18 of AGM Notice for further details pertaining to IEPF. |
|||
Further, your Directors state that no disclosure or reporting is required in respect of the following items
as there were no transactions or applicability with respect to these items during the year under review:
a. Issue of equity shares with differential rights as to dividend, voting or otherwise;
b. Issue of shares (including sweat equity shares) by the Company to its employees;
c. The Managing Director of the Company did not receive any remuneration or commission from any of its subsidiaries. Further, the Company had not appointed any other Whole-time Director except the Managing Director;
d. No frauds were reported by Auditors under Section 143(12) of the Companies Act, 2013 and rules frame thereunder;
e. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations However, Members'' attention is drawn to the Statement on Contingent Liabilities, commitments in the notes forming part of the Financial Statement; and
f. No material changes and commitments occurred during April 01, 2022 till the date of this Report which would affect the financial position of your Company.
ACKNOWLEDGEMENT:
Your Directors would like to express their sincere appreciation for the assistance and co-operation received from the financial institutions, banks, government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the Company''s executives, staff and associates.
Mar 31, 2021
The Directors take pleasure in presenting the Sixtieth Annual Report together with inter-alia its annexures and audited financial statements for the year ended March 31, 2021. The consolidated performance of the Company and its subsidiaries has been referred to wherever required.
On Standalone basis:-
During the Financial Year 2020-21, revenue from operations was f 432,924 Lacs as compared to f 515,773 Lacs during the previous year (16.06% lower). Profit after tax decreased to f 61,787 Lacs from f 62,934 Lacs recorded for the previous year (1.82% lower).
On Consolidated basis:-
During the Financial Year 2020-21, revenue from operations was f 436,008 Lacs as compared to f 519,145 Lacs during the previous year (16.01 % lower). Profit after tax decreased to f 63,503 Lacs from f 70,561 Lacs recorded for the previous year (10.00% lower).
|
Financial Summary |
||||
|
Standalone |
Consolidated |
|||
|
2020-21 |
2019-20 |
2020-21 |
2019-20 |
|
|
(f in Lacs) |
(f in Lacs) |
(f in Lacs) |
(f in Lacs) |
|
|
APPROPRIATION OF PROFIT: |
||||
|
Profit before taxation |
80,796 |
75,906 |
82,500 |
80,748 |
|
Net Profit for the year after tax |
61,787 |
62,934 |
63,503 |
70,561 |
|
Tax on dividend |
- |
9,687 |
- |
9,687 |
|
Dividend |
38,808 |
47,124 |
38,808 |
47,124 |
The closing balance of reserves, including retained earnings, of the Company as at March 31, 2021 was f 435,133 Lacs.
The outbreak of COVID-19 turned into a global pandemic and impacted the ability to do business starting in the quarter ending June 2020. Consequent lockdowns announced across India, resulted in temporary suspension of operations and temporary closure of offices and plants/manufacturing facilities of the Company in line with the government/local authoritiesâ directions. During the lockdown, your Company continued to provide support to customers who were providing essential services. Your Company as a part of its safety policies ensured that its employees are working from home and necessary facilities as feasible were provided. As the restrictions eased during the year, your Company resumed its operations following safety guidelines at all its plant locations. The corporate office(s) continued to remain closed. The Company continues to closely monitor the second wave of COVID 19 for any future impact on the operations of the Company. The Company is also monitoring the situation in the communities where it operates and focusing its CSR activities on COVID-19 pandemic related support and relief.
Your Company during the Financial Year has made disclosures on impact of COVID-19 on the operations of the Company, pursuance to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with SEBI Advisory dated May 20, 2020. The disclosures are available on the website of the Company at the link https://www.cummins.com/en/in/investors/india-investors-notices.
4. BUSINESS UPDATE AND STATE OF COMPANYâS AFFAIRS:
The information on Companyâs affairs and related aspects is provided under Management Discussion and Analysis Report, which has been prepared, inter-alia, in compliance with Regulation 34 of Listing Regulations and forms part of the Annual Report.
Your Directors have recommended a final dividend of f 8 /- per equity share of f 2/- each fully paid-up share in their meeting held on May 26, 2021 in addition to the interim dividend of f 7/- per equity share of f 2/- each fully paid-up share declared on January 28, 2021, aggregating to f 15/- (i.e. 750 %) per equity share of f 2/- each fully paid-up share for the year ended March 31, 2021 (previous year f 14/- per equity share i.e. 700%). The final dividend is subject to approval of the Members at the ensuing Annual General Meeting and shall be subject to deduction of income tax at source.
The paid-up share capital of the Company is f 554,400,000/- divided into 277,200,000 equity shares of f 2/- each as on March 31,2021. Your Company has not come out with any issue (public, rights or preferential) during the year. There is no change in the share capital during financial year 2020-21.
7. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES:
Your Board is pleased to provide details of the following subsidiary, joint ventures and associates as on March 31, 2021 : -
a) Cummins Sales & Service Private Limited (CSSPL):
CSSPL, a wholly-owned subsidiary, of the Company focuses on sales of Cummins engines, parts, accessories and providing service support to engines and generators in parts of Northern India close to the National Capital Region (NCR). CSSPL generated a revenue of f 8,672 Lacs from its operations for the year ended March 31, 2021, as compared to f 10,549 Lacs during the previous year (17.79% lower).
b) Cummins Research and Technology India Private Limited (CRTI):
CRTI is a 50:50 joint venture between Cummins Inc., USA and your Company, which was formed in 2003 with an intent to provide Information Technology enabled Mechanical Engineering development services primarily to Cummins Inc., USA, its subsidiaries and joint ventures in all parts of the world. Since, April 01,2016, CRTI closed its operations and your Board of Directors decided that the activity carried out by CRTI for your Company, shall be undertaken in-house by absorbing the appropriate number of employees from CRTI in your Company. The revenue from operations for the year ended March 31, 2021, and for the previous year was Nil.
c) Valvoline Cummins Private Limited (VCPL):
VCPL, a 50:50 joint venture between Valvoline International Inc., USA, a global leader in lubricants and engine oils, and your Company, VCPL generated a revenue of f 134,104 Lacs from its operations for the year ended March 31, 2021, as compared to f 129,544 Lacs during the previous year (3.52% higher).
d) Cummins Generator Technologies India Private Limited (CGT):
Your Company owns 48.54% shareholding in the Associate Company namely CGT which is in the business of design, manufacturing, marketing, sales and service of alternators and related spare parts. CGT generated revenue of f 75,339 Lacs from its operations for the year ended March 31,2021, as compared to f 79,089 Lacs during the previous year (4.74% lower).
As required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, consolidated financial statements of the Company, its subsidiary, joint ventures and associate companies, prepared in accordance with the applicable Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended, form part of the Annual Report and are reflected in the consolidated financial statements of the Company.
Further, a statement containing the salient features of the financial statement of subsidiaries, associate companies and joint ventures in the prescribed Form AOC-1 is appended as Annexure â1â which forms part of this Report.
The Company will make the said financial statements and related detailed information of CSSPL available upon the request by any Member of the Company. These financial statements will also be kept open for inspection by any Member at the Registered Office of the Company and of CSSPL. Pursuant to the provisions of Section 136 of the Companies Act, 2013, the financial statements of the Company, consolidated financial statements along with relevant documents and separate financial statements in respect of CSSPL, are available on the website of the Company.
8. CHANGE IN THE NATURE OF THE BUSINESS
During the year under review, there was no change in the nature of the business pursuant to inter-alia Section 134 of the Companies Act, 2013 and Companies (Accounts) Rules, 2014.
9. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
No loan or guarantee was given, or investment was made by your Company during the Financial Year 2020-21 pursuant to Section 186 of the Companies Act, 2013.
Your Company has not accepted any Public Deposits under Chapter V of the Companies Act, 2013 during the Financial Year 2020-21.
11. FUND RAISING BY ISSUANCE OF DEBT SECURITIES, IF ANY
Pursuance to SEBI Circular No. SEBI/HO/DDHS/CIR/P/2018/144 dated November 26, 2018, the Directors confirm that the Company is not defined as a âLarge Corporateâ as per the framework provided in the said Circular. Moreover, your Company has not raised any fund by issuance of debt securities.
12. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
During Financial Year 2020-21, no materially significant related party transactions were entered into by the Company, that may have potential conflict with the interests of Company, at large.
Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 in the prescribed Form AOC-2 is appended as Annexure â2â which forms part of this Report.
The Policy on materiality of related party transactions as approved by the Board may be accessed on the Companyâs website at the link: https://www.cummins.com/en/in/investors/india-corporate-governance
As required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, related party transactions have been disclosed under significant accounting policies and notes forming part of the Financial Statements in accordance with relevant accounting standards.
During the Financial Year 2020-21 your Company has strived to imbibe energy conservation principles and initiatives across all its facilities.
The Company at its SEZ and Pirangut locations has installed and started the operation of 400 KWp and 150 KWp solar PV plant in April 20 and July 20 which has resulted in generation of 2.36 lacs and 1.33 lacs of unit electricity. HHP Rebuild Centre has generated 7.67 lac units of electricity from their 625 KWp Solar Photovoltaic (PV) Plant installed in 2017. The Solar PV Plant installed last year at Kothrud has generated around 12.6 lacs units of electricity.
The other key initiatives across multiple areas are highlighted below -
Heating Ventilation and Air Conditioning (HVAC) - Your Company has undertaken initiatives such as Installation of Variable Frequency Drive (VFD) with solenoid valves for Compressor cooling water system, new efficient equipment for effective utilization of compressed air and induction heater for piston heaters.
Lighting - Similar to last year, your Company has continued the initiative to replace old lighting fittings with new-age energy efficient LED fittings within and outside some of our facilities. Also, installation of motion sensors at various locations has helped to reduce the energy consumption at sites.
Awareness Generation - This included improving awareness amongst employees to switch off major energy consuming equipment or units when idle as well as employing an energy review tool and energy balance tool to identify projects. The sites also conduct the unplugged challenge to switch off the equipment on holidays or non-production days
These key initiatives resulted in annual energy savings of approximately 5.78 Lacs units of electricity.
14. RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION:
Your Company is committed to introducing new products and improving existing products to have better performance levels, lower life cycle costs, excellent safety, recyclability characteristics and meet stringent emission norms tailored for the specific needs of the Indian industry.
Your Company continues this endeavour by developing the next generation of systems in collaboration with the parent company - Cummins Inc., USA.
Improved technical productivity, through new methodologies and technologies, is being continuously pursued to reduce the costs associated with new product development and customer support. An example of this is the further enhanced use of analysis-led design through computer models that help minimize hardware testing and therefore accelerate product development cycle times with reduced product testing.
A. New Product Development: -
The following new Products were developed as part of the above initiatives during the year: -
1. Rail engine product families to support the growing Rail Business;
2. Marine engine product families to support the increasing commercial Marine Business;
3. Further enhancements of non-diesel product development capability such as use of alternative fuels are being explored in India;
4. Telematics and Analytics capabilities have been developed to improve uptime and fuel efficiency performance of our products;
5. To enhance the position of Cummins in the Low kVA segment, your Company has introduced a new 40 kVA genset with X2.7 litre engine; and
6. Your Company continues to strengthen its channel presence through its GOEM partners who have added 12 number of additional sales dealers across various geographies.
B. Benefits derived as a result of the above activities are:-
1. Enhanced product and service capabilities through use of electronic tools and simulation software to deliver improved engine performance;
2. Enhanced capability to tailor engine designs to improve value proposition for customers through delivering superior power output, fuel economy, transient response and reduced emissions;
3. Enhanced product and service capabilities through use of electronic tools and simulation software to control the engine performance and combustion process;
4. Enhanced capability to tailor engine designs to improve the value proposition for customers through delivering superior power output, fuel economy, transient response and reduced emissions;
5. Product and component availability to meet the new emission norms ahead of implementation;
6. Safer, recyclable, reliable, durable and performance-efficient products and critical components;
7. Component indigenization capability was improved through enhanced test capability, rig test and flow bench development and availability; and
8. Significant enhancements in measurement capability were made to pursue business opportunities in nondiesel applications to serve both the rural and international communities.
C. Future plans include:-
1. Developing local âfit-for-marketâ solutions to meet upcoming emission regulations and market needs on commercial off-highway and power generation segments;
2. Technological innovation to add value to products in the areas of alternate fuels, fuel cells, power electronics, hybrid engines and recycle / re-use;
3. Continued expansion of the product range to serve the needs of both local and global market;
4. Continued focus on indigenization and partnering with suppliers for waste elimination initiatives; and
5. Focused engine development for the Power Generation segment for the upcoming emissions norms.
D. Your Company continues to draw benefits from Cummins Inc.âs technology, advanced engineering and research.
With this support your Company is committed to develop advanced fuel-efficient and emission-compliant products
that use a variety of energy sources and comply with future domestic emissions and carbon dioxide targets.
These help to reduce Greenhouse Gas emissions and improve Air Quality, whilst also enabling the products to
deliver superior performance, reliability, durability and recyclability.
E. Expenditure on Research & Development (R&D):-
The total expenditure on R & D was as follows:-
2020-21 2019-20
(f Lacs) (f Lacs)
Capital 1,677 14,534
Recurring 5,749 4,470
Total 7,426 19,004
Total R&D expenditure as a percentage of total sales turnover 1.72% 3.68%
15. FOREIGN EXCHANGE EARNINGS AND OUTGO:
Your Company continues to be Net Foreign Exchange Earner. During the year under review, your Company exported 6,176 engines and 4,027 generator sets. Foreign exchange earned in terms of actual inflows during the year 2020-21 and foreign exchange outgo in terms of actual outflows during the year 2020-21 were as follows:-
|
Particulars |
FY 2020-21 |
FY 2019-20 |
|
(f Lacs) |
(f Lacs) |
|
|
Foreign exchange earnings* |
134,025 |
155,025 |
|
Foreign exchange outgo* |
106,376 |
103,391 |
|
* Equivalent value of various currencies |
||
16. MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE REPORT:
The Management Discussion and Analysis Report and the Corporate Governance Report which forms part of this Report are appended as Annexure â3â and â4â respectively.
The Company has obtained a Certificate from Practicing Company Secretary confirming compliance with conditions of the Code of Corporate Governance as stipulated in Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (including amendments thereof) and the same is appended as Annexure â5â which forms part of this Report.
The Company has received a Certificate from Practicing Company Secretary confirming that none of the Directors on the Board of the Company have been debarred or disqualified by MCA or SEBI or any such statutory authority from being appointed / continuing as Director and the same is appended as Annexure â6â which forms part of this Report.
17. EXTRACT OF THE ANNUAL RETURN:
As per the requirement under Section 92(3) of the Companies Act, 2013, the draft Annual Return for FY 2020-21 is available on the website of the Company at the link: https://www.cummins.com/en/in/investors/india-annual-reports. Since the Annual General Meeting is proposed to be held on August 12, 2021, the Company shall upload a copy of Annual Return for Financial Year 2020-21 as soon it has filed the said Annual Return with Registrar of Companies.â
Business Risk Evaluation and Management is an ongoing process within the Organization. The Company has a robust risk management framework to identify, monitor and minimize risks and also to identify business opportunities. As a process, the risks associated with the business are identified and prioritized based on severity, likelihood and effectiveness of current detection. Such risks are reviewed by the Senior Management on a quarterly basis. Process owners are identified for each risk and metrics are developed for monitoring and reviewing the risk mitigation through Six Sigma Projects.
Risk Management Committee of the Board of Directors of your Company assists the Board in (a) overseeing and approving the Companyâs enterprise wide risk management framework including the risk management processes and practices of the Company; and (b) overseeing that all the existing risks and potential risks that the organization faces including cyber security risks have been identified and assessed, and (c) overseeing that there are adequate of Companyâs resources to perform risk management responsibilities and achieve its objectives. Further details on Risk Management Committee is included in the Corporate Governance Report.
The development and implementation of risk management policy has been covered in the Management Discussion and Analysis, which forms part of Annual Report.
19. INTERNAL FINANCIAL CONTROL:
Your Company has established adequate internal financial controls for ensuring orderly and efficient conduct of its business, including adherence to Companyâs policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and the timely preparation of reliable financial information.
Details of internal financial control and its adequacy are included in the Management Discussion and Analysis Report which is appended as Annexure â3â and forms part of Annual Report.
20. VIGIL MECHANISM/ WHISTLE BLOWER POLICY:
Your Companyâs leadership culture is to inspire and encourage all employees to reach their full potential. A great leadership culture begins with outstanding leaders who create an outstanding place to work, inspiring and encouraging all employees to achieve their full potential. Leaders connect people and their work to the vision, mission, values, brand promise and strategies of the company, motivating them and giving them a higher sense of purpose. Leaders also build trust in our teams and in our organizations and align on key goals and priorities. Leaders foster open communications and offer various opportunities to employees to express their feedback through several ways.
Your Company has a âVigil Mechanism Policyâ which inter-alia provides adequate safeguards against victimization of persons who may blow the whistle. Vigil Mechanism Policy may be accessed on the Companyâs website at the link: https://www.cummins.com/en/in/investors/india-corporate-governance
In addition, your Company has complied with provisions relating to constitution of an Internal Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and has a stabilized well governed ethics investigations process. Regular workshops and awareness programmes against sexual harassment are conducted across the organization. During the year under review, two complaints pertaining to sexual harassment of woman employee were reported to the Committee and the same were investigated in accordance with the procedures prescribed and resolved accordingly. No complaints were pending as on March 31, 2021.
The Company is committed to the highest possible standards of openness, integrity and accountability in all its affairs and to providing a workplace conducive to open discussion of its business practices. Your Company has laid out infrastructures and policy through which the employees can voice their concerns about suspected unethical or improper practice, or violation of Cummins Code of Conduct or complaints regarding accounting, auditing, internal controls or disclosure practices of the Company. Protected disclosures can be made by a whistle blower through an email or dedicated telephone line or letter to the Managing Director of the Company or Letter to the Chairman of Audit Committee or via the Ethics helpline/ Webpage, details of which are available on website www.cumminsindia.com.
21. COMPLIANCE WITH THE CODE OF CONDUCT:
All Directors on the Board and Senior Management have affirmed compliance to the Code of Conduct for the Financial Year 2020-21. A declaration signed by the Managing Director affirming compliance with the Companyâs Code of Conduct by the Board of Directors and Senior Management for the Financial Year 2020-21 as required under Regulation 26(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is included in the Corporate Governance Report which is appended as Annexure â4â and forms part of this Report.
22. DIRECTORSâ RESPONSIBILITY STATEMENT:
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and external consultant(s) including audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Companyâs internal financial controls were adequate and effective during the Financial Year 2020-21.
Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:
(i) in the preparation of the annual accounts for the year ended March 31,2021, the applicable accounting standards have been followed and there was no material departure from the same;
(ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2021 and of the profit for the period April 01,2020 to March 31, 2021;
(iii) they have taken proper and sufficient care 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;
(iv) they have prepared the annual accounts on a going concern basis;
(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively during the year; and
(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
a) Changes in the composition of the Board of Directors:
Appointments and Re-appointments
Ms. Rama Bijapurkar (DIN: 00001835), was appointed as Director (Non-Executive and Independent) of the Company for her first term of five consecutive years at the 59th Annual General Meeting, effective June 17, 2020.
Mr. Ashwath Ram (DIN: 00149501) was appointed as a Director designated as Managing Director of the Company in the 59th Annual General Meeting of the Company held on August 25, 2020, effective August 17, 2019 for term of three years.
Ms. Lorraine Alyn Meyer (DIN: 08567527) was appointed as a Director (Non-Executive and Non-Independent) of the Company in the 59th Annual General Meeting of the Company held on August 25, 2020, effective October 01, 2019.
Mr. Steven Chapman (DIN: 00496000) was appointed as Additional Director and Chairman of the Board of Directors effective October 01,2020. On recommendation of the Nomination and Remuneration Committee, the Board of Directors have proposed appointment of Mr. Steven Chapman as a Director (Non-Executive and NonIndependent) and Chairman of the Board, liable to retire by rotation. A resolution seeking shareholderâs approval for his appointment forms part of the Notice.
In accordance with the Companies Act, 2013 and Articles of Association of the Company, Mr. Donald Jackson (DIN: 08261104), Director (Non-Executive and Non-Independent) of the Company, retires by rotation and is eligible for re-appointment. The proposal seeking shareholderâs approval for his re-appointment forms part of the Notice.
As required under Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard 2, particulars of Directors seeking appointment/re-appointment at this Annual General Meeting are given in the Annexure to the Notice and the Board recommends the respective resolutions to the Members for approval.
Cessation
During the year, Ms. Anjuly Chib Duggal (DIN: 05264033) resigned as Director (Non-Executive and Independent) of the Company effective April 06, 2020 on account of personal reasons. She had confirmed that there were no other material reasons for her resignation.
Mr. Antonio Leitao (DIN: 05336740) resigned as Director (Non-Executive and Non-Independent) of the Company effective September 01,2020 on account of personal reasons. Further, there were no other material reasons for the resignation.
Mr. Venu Srinivasan (DIN: 00051523) resigned as Director (Non-Executive and Independent Director) of the Company effective September 01,2020 on account of personal reasons. He had confirmed that there were no other material reasons for his resignation.
Mr. Mark Levett (DIN: 00368287) resigned as Director (Non-Executive and Non-Independent) of the Company and Chairman of the Board effective September 30, 2020 on account of time constraints arising out of preoccupancy and personal reasons. Further, there were no other material reasons for the resignation.
The Board places on record its appreciation for their invaluable contribution and guidance during their tenure.
The details of Board composition, number of meetings held, details of directorships of Directors etc. are provided in the Corporate Governance Report which is appended as Annexure â4â and forms part of this Report.
b) Committees of the Board:
The Board of Directors have constituted following Committees in order to effectively cater its duties towards diversified role under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015:-
¦ Audit Committee;
¦ Stakeholders Relationship Committee;
¦ Nomination and Remuneration Committee;
¦ Corporate Social Responsibility Committee; and
¦ Risk Management Committee
Details of the constitution, broad terms of references of each Committee and number of meetings attended by individual Director etc. are provided in the Corporate Governance Report which is appended as Annexure â4â and forms part of this Report.
c) Policy on Directorâs Appointment and Remuneration:
The Policy of the Company on Directorâs Appointment and Remuneration, including criteria for determining qualifications, positive attributes, independence of the Directors and other matters provided under Section 178(3) of the Companies Act, 2013, adopted by the Board viz. Nomination and Remuneration Policy, is appended as Annexure â7â which forms part of this Report.
Details of the remuneration paid to the Board of Directors are provided in the Corporate Governance Report. It is affirmed that the remuneration paid to the Directors is as per the terms laid down in the Nomination and Remuneration Policy of the Company.
d) Board Performance Evaluation Mechanism:
Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance evaluation of its own performance and the Directors, Chairman individually, as well as the evaluation of the working of its Committees. Details of the evaluation mechanism is provided in the Corporate Governance Report which is appended as Annexure â4â and forms part of this Report.
e) Inter-se relationships between the Directors
There are no relationships between the Directors inter-se.
f) Familiarization Programme for Independent Directors:
During the year, various documents, background notes etc. were shared with to Independent Directors to have a better insight in to state of affairs of the Company
The Chairman and/or the Managing Director also have periodic discussions with the newly appointed Directors to provide them, details of initiatives of the Company for better understanding of the Company, its business and the regulatory framework in which the Company operates and equip him/ her to effectively fulfil his/ her role and responsibilities as a Director of the Company.
The details of familiarization programmes imparted are available at https://www.cummins.com/en/in/investors/ india-corporate-governance
g) Declarations from the Independent Directors:
Pursuant to the provisions of Section 149 of the Companies Act, 2013, the Independent Directors have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Companies
Act, 2013 along with Rules framed thereunder and Regulation 16(1 )(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and adherence to Schedule IV of the Companies Act, 2013. Further, the Independent Directors have also confirmed that there has been no change in the circumstances affecting their status as Independent Directors of the Company. The said Certificate(s) were taken on record by the Board after requisite assessment.
24. NUMBER OF MEETINGS OF THE BOARD:
Seven meetings of the Board of Directors were held during the year. The details of the meetings held and attendance there at are provided in the Corporate Governance Report which is appended as Annexure â4â and forms part of this Report. The maximum interval between any two meetings did not exceed 120 days, as prescribed by the Companies Act, 201 3.
Mr. Ashwath Ram (DIN: 00149501) was appointed as a Director designated as Managing Director and Key Managerial Personnel of the Company in the 59th Annual General Meeting of the Company held on August 25, 2020, effective August 17, 2019 for term of three years.
Mr. Ajay S. Patil was appointed as the Chief Financial Officer and Key Managerial Personnel of the Company effective April 01,2020.
Ms. Hemiksha Bhojwani (ACS 22170) resigned as the Company Secretary and Key Managerial Personnel of the Company effective May 11, 2020. Consequent to resignation of Ms. Bhojwani, Ms. Vinaya A. Joshi (ACS 25096) was appointed as the Company Secretary and Key Managerial Personnel of the Company effective June 17, 2020.
The details in accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016, is appended as Annexure â9â which forms part of this Report. Any shareholder interested in obtaining a copy of the statement, may write to the Company Secretary at the Registered Office of the Company.
Industrial relations at all the plants of the Company continue to be cordial. Multiple initiatives have been rolled out for shop, office and field technician employees under âAdvancing our workforce Strategyâ (AWS) for its establishments across the globe. Key purpose of AWS is to inspire and encourage âAll Employeesâ to reach their full potential by implementing talent management policies and processes for all the shop, office and field technician employees similar to that implemented for our managerial employees. Implementation of different initiatives under this strategy are in progress. In order to create performance culture, we are in process of implementing performance management system for the unionized Associates of the Company also.
STATUTORY AUDITORS:
At the 55th Annual General Meeting held on August 04, 2016, M/s. S R B C & Co. LLP (Firm Registration No. 324982E), were appointed as Statutory Auditors of the Company to hold office till the conclusion of 60th Annual General Meeting. In terms of the Section 139(1) of the Companies Act, 2013, the appointment of statutory auditors does not require ratification by the shareholders in Annual General Meeting, Accordingly, the Board noted the continued appointment of M/s. S. R. B. C. & Co. LLP as the Statutory Auditors of the Company for the Financial Year 2020-21. The Company Auditors M/s. S R B C & Co. LLP have completed 5 years as Statutory Auditors of the Company.
There are no qualifications, reservations, adverse remarks or disclaimers made by the auditors in the Audit Report for the Financial Year 2020-21.
In view of the provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, and on the recommendation of the Audit Committee, it is proposed to appoint M/s. Price Waterhouse & Co
Chartered Accountants LLP, Chartered Accountants (Firm Registration No. 304026E/E-300009) (âPWCâ) from the conclusion of this Annual General Meeting till the conclusion of 60th Annual General Meeting. PWC have informed the Company vide letter dated May 13, 2021, that their appointment, if made, would be within the limits prescribed under Section 141 of the Companies Act, 2013.
PWC have confirmed that they have subjected themselves to the peer review process of Institute of Chartered Accountants of India (ICAI) and hold valid certificate issued by the Peer Review Board of the ICAI.
SECRETARIAL AUDITOR:
M/s Pramod Shah & Associates, (FCS 334), was appointed to conduct the secretarial audit of the Company for the Financial Year 2020-21, as required under Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Secretarial Audit Report in Form MR-3 and Secretarial Audit Report pursuant to Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for Financial Year 2019-20 is appended as Annexure â10â which forms part of this Report. Both the reports do not contain any qualification, reservation or adverse remark.
The Annual Secretarial Compliance Report has been submitted to the stock exchanges as required under Regulation 24A of SESI (Listing Obligation and Disclosure Requirements) Regulations, 2015.
The Board on the recommendation of the Audit Committee has re-appointed M/s Pramod Shah & Associates to conduct the secretarial audit of the Company for the Financial Year 2021 -22.
Further, during the FY 2020-21 and two previous financial years, no penalties, strictures were imposed on the Company by stock exchange(s) or SEBI or any statutory authority, on any matter related to capital markets.
COST AUDITORS:
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, as amended from time to time, the cost audit records maintained by the Company in respect of its manufacturing activity is required to be audited. Your Directors, on the recommendation of the Audit Committee, had appointed M/s. Ajay Joshi & Associates (Firm Registration No. 101542), Pune, to audit the cost accounts of the Company for the Financial Year 2020-21 at a remuneration of f 950,000 plus taxes as applicable and re-imbursement of out of pocket expenses. The remuneration was ratified by shareholders in the 59th Annual General Meeting held on August 25, 2020.
Pursuant to recommendation of the Audit Committee, the Board in its meeting held on May 26, 2021 has appointed M/s C S Adawadkar & Co. (Firm Registration No. 100401), Pune to audit the cost accounts of the Company for the Financial Year 2021-22 at a remuneration of 950,000 plus taxes as applicable and re-imbursement of out of pocket expenses. As required under the Companies Act, 2013, the shareholders ratification for the remuneration payable to M/s. C S Adawadkar & Co, Cost Auditors, is being sought at the ensuing Annual General Meeting.
M/s. C S Adawadkar & Co, Cost Auditors, under Section 139(1) of the Companies Act, 2013 and the Rules framed thereunder, have furnished a certificate of their eligibility and consent for appointment.
29. CORPORATE SOCIAL RESPONSIBILITY POLICY AND ITS REPORT:
Your Company is an early adopter of the Corporate Social Responsibility (CSR) initiatives. Corporate Social Responsibility continues to be the core value of your Company embedded in the core value of caring, which focuses on âserving and improving the communities in which we liveâ. Your Company works with âCummins India Foundationâ towards three broad focus areas viz. Higher Education, Energy and Environment and Equality of Opportunity. Additionally, Company also carries out other strategic initiatives.
In the ongoing crisis of COVID-19, your Company undertook a series of immediate and emergency interventions to address urgent and evolving needs of the communities and various stakeholders. The relief and support initiatives included but were not limited to partnerships with State, Central, Local Government Bodies, donation of life saving equipments, support to frontline COVID warriors and working with Organizations to provide immediate relief etc.
Details about the CSR Policy and initiatives taken by the Company during the year are available on our website httos://www.cummins.com/en/in/investors/india-coroorate-aovernance. The Annual Report on our CSR Activities is appended as Annexure â11â which forms part of this Report.
30. BUSINESS RESPONSIBILITY REPORT:
As stipulated under the Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility Report describes the initiatives taken by the Company from environmental, social and governance perspective, which forms part of the Annual Report and is included after Financial Statements section.
The Company is in compliance with the Secretarial Standards on Meetings of the Board of Directors (SS-1) and Secretarial Standards on General Meetings (SS-2) issued by the Institute of Company Secretaries of India.
32. DIVIDEND DISTRIBUTION POLICY:
The Board of Directors of the Company have formulated a Dividend Distribution Policy which is appended as Annexure â8â and forms part of this Report. The policy is also available on our website https://www.cummins.com/en/ in/investors/india-corporate-governance
33. INVESTOR EDUCATION AND PROTECTION FUND (IEPF):
Pursuant to Section 124 and Section 125 of Companies Act, 2013 and IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, during the year under review, the Company has transferred the following unclaimed and unpaid dividend and corresponding shares to IEPF, upon completion of period of seven years:
|
Date of Declaration |
Type of Dividend |
Amount |
No of equity |
|
transferred (f) |
shares |
||
|
transferred |
|||
|
August 01, 2013 |
Final Equity Dividend |
8,740,008 |
3,290 |
|
February 04, 2014 |
Interim Equity Dividend |
5,567,870 |
2,905 |
Further, your Directors state that no disclosure or reporting is required in respect of the following items as there were
no transactions or applicability with respect to these items during the year under review:
a. Issue of equity shares with differential rights as to dividend, voting or otherwise;
b. Issue of shares (including sweat equity shares) by the Company to its employees;
c. Neither the Managing Director nor the Whole-time Directors of the Company received any remuneration or commission from any of its subsidiaries;
d. No frauds were reported by Auditors under Section 143(12) of the Companies Act, 2013;
e. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companyâs operations However, Members attention is drawn to the Statement on Contingent Liabilities, commitments in the notes forming part of the Financial Statement; and
f. No material changes and commitments occurred during April 01, 2021 till the date of this Report which would affect the financial position of your Company.
Your Directors would like to express their sincere appreciation for the assistance and co-operation received from the financial institutions, banks, government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the Companyâs executives, staff and associates.
On behalf of the Board of Directors,
Steven Chapman Ashwath Ram
Place : Pune Chairman Managing Director
Date : May 26, 2021 DIN: 00496000 DIN: 00149501
Mar 31, 2019
DIRECTORSâ REPORT
The Directors take pleasure in presenting the Fifty-Eighth Annual Report together with the audited financial statements for the year ended March 31, 2019. The consolidated performance of the Company and its subsidiaries has been referred to wherever required.
1. FINANCIAL RESULTS:
On Standalone basis:-
During the Financial Year 2018-19, revenue from operations was Rs, 565,900 Lacs as compared to Rs, 516,106 Lacs during the previous year (9.6% higher). Profit after tax increased to Rs, 72,257 Lacs from Rs, 70,847 Lacs recorded for the previous year (2.0% higher).
On Consolidated basis:-
During the Financial Year 2018-19, revenue from operations was Rs, 569,731 Lacs as compared to Rs, 519,045 Lacs during the previous year (9.8% higher). Profit after tax increased to Rs, 74,261 Lacs from Rs, 71,182 Lacs recorded for the previous year (4.3% higher).
|
Financial summary |
Standalone |
Consolidated |
||
|
2018-19 |
2017-18 |
2018-19 |
2017-18 |
|
|
(Rs, in Lacs) |
(Rs, in Lacs) |
(Rs, in Lacs) |
(Rs, in Lacs) |
|
|
APPROPRIATION OF PROFIT: Profit before taxation |
103,035 |
90,842 |
106,889 |
92,655 |
|
Net Profit for the year after tax |
72,257 |
70,847 |
74,261 |
71,182 |
|
Tax on dividend |
9,687 |
7,901 |
9,687 |
7,901 |
|
Dividend |
47,124 |
38,808 |
47,124 |
38,808 |
2. RESERVES:
The closing balance of reserves, including retained earnings, of the Company as at March 31, 2019 was Rs, 407,501 Lacs.
3. DIVIDEND:
Your Directors have recommended a final dividend of Rs, 10/- per equity share of Rs, 2/- each fully paid-up, in addition to the interim dividend of Rs, 7/- per equity share of Rs, 2/- each fully paid-up share declared on February 06, 2019, aggregating to Rs, 17/- (i.e. 850%) per equity share of Rs, 2/- each fully paid-up share for the year ended March 31, 2019 (last year Rs, 15/- per equity share i.e. 750%). The final dividend payout is subject to approval of the Members at the ensuing Annual General Meeting.
3. SHARE CAPITAL
The paid-up share capital of the Company is Rs, 554,400,000/- divided into 277,200,000 equity shares of Rs, 2/- each as on March 31, 2019. Your Company has not come out with any issue (public, rights or preferential) during the year.
4. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES:
Your Board is pleased to provide details of the following subsidiary, joint ventures and associates as on March 31, 2019:-
a) Cummins Sales & Service Private Limited (CSSPL):
CSSPL, a wholly-owned subsidiary, of the Company focuses on sales of Cummins engines, parts, accessories and providing service support to engines and generators in parts of Northern India close to the National Capital Region (NCR). CSSPL generated a revenue of Rs, 10,143 Lacs from its operations for the year ended March 31, 2019, as compared to Rs, 8,354 Lacs during the previous year (21.4% higher).
b) Cummins Research and Technology India Private Limited (CRTI):
CRTI is a 50:50 joint venture between Cummins Inc., USA and your Company, which was formed in 2003 with an intent to provide Information Technology enabled Mechanical Engineering development services primarily to Cummins Inc., USA, its subsidiaries and joint ventures in all parts of the world. Since, April 01, 2016, CRTI closed its operations and your Board of Directors decided that the activity carried out by CRTI for your Company, shall be undertaken in-house by absorbing the appropriate number of employees from CRTI in your Company. The revenue from operations for the year ended March 31, 2019, and for the previous year was Nil.
c) Valvoline Cummins Private Limited (VCPL):
VCPL, a 50:50 joint venture between Valvoline International Inc., USA, a global leader in lubricants and engine oils, and your Company, generated a revenue of Rs, 133,276 Lacs from its operations for the year ended March 31, 2019, as compared to f 128,006 Lacs during the previous year.
d) Cummins Generator Technologies India Private Limited (CGT):
Your Company owns 48.54% shareholding in the Associate Company namely CGT which is in the business of design, manufacturing, marketing, sales and service of alternators and related spare parts. CGT generated revenue of Rs, 74,361 Lacs from its operations for the year ended March 31, 2019, as compared to Rs, 63,807 Lacs during the previous year (16.5% higher).
Your Company announces consolidated financial results on an annual basis. As required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, consolidated financial statements of the Company, its subsidiary, joint ventures and associate company, prepared in accordance with the applicable Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended, form part of the Annual Report and are reflected in the consolidated financial statements of the Company.
Further, a statement containing the salient features of the financial statement of subsidiaries, associates and joint ventures in the prescribed Form AOC-1 is appended as Annexure â1â which forms part of this Report.
The Company will make the said financial statements and related information of CSSPL available upon the request by any member of the Company. These financial statements will also be kept open for inspection by any Member at the Registered Office of the Company and of CSSPL. Pursuant to the provisions of Section 136 of the Companies Act, 2013 the financial statements of the Company, consolidated financial statements along with relevant documents and separate financial statements in respect of CSSPL, are available on the website of the Company.
5. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
The unsecured loan given to Cummins Technologies India Private Limited (which is a subsidiary of Cummins Inc., USA) in 2011 in compliance with the then applicable, Companies Act, 1956 and Rules there under was fully repaid to the Company during the year, and no other loan or guarantee was given, or investment was made by your Company during the Financial Year 2018-19.
6. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 in the prescribed Form AOC-2 is appended as Annexure â2â which forms part of this Report.
The Policy on materiality of related party transactions as approved by the Board may be accessed on the Companyâs website at the link: https://www.cumminsindia.com/investors/corporate-goverance.
As required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Related party transactions have been disclosed under significant accounting policies and notes forming part of the Financial Statements in accordance with the relevant accounting standards.
7. CONSERVATION OF ENERGY:
During the FY 2018-19, your Company has strived to imbibe energy conservation principles and initiatives across all its facilities - Kothrud Engine Plant (Pune), Power Systems Business Unit Plant (Phaltan), Distribution Business Unit Plants (Phaltan) and India Parts Distribution Centre (Phaltan).
A 625 kWp grid connected solar power plant was installed and made operational at the Distribution Business Unit Plant at Phaltan in FY 2017-18. This installation of solar renewable energy system Plant has helped us save total units of 2,90,584 and a financial saving of f 22,28,403/- for the FY 2018-19.
The other key initiatives across multiple areas are highlighted below -
HVAC - Your Company has undertaken initiatives such as installation of temperature based control system for the operation of cooling towers, AC optimum utilization through various logical controls, etc.
Lighting - Similar to last year, your Company has continued the initiative to replace old lighting fittings with new-age energy efficient LED fittings within and outside some of our facilities.
Awareness Generation - This included improving awareness amongst employees to switch off major energy consuming equipment or units when idle as well as employing an energy review tool and energy balance tool to identify projects.
These key initiatives resulted in annual energy savings of approximately 12.08 Lacs units of electricity and f 98.1 Lacs of saving in energy costs.
8. RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION:
Your Company is committed to introducing new products and improving existing products to have better performance levels, lower life cycle costs, excellent safety, recyclability characteristics, meet stringent emission norms tailored for the specific needs of the Indian market.
The Technical Center of your Company continues in this Endeavour by developing the next generation of systems in collaboration with the parent company - Cummins Inc., USA.
Improved technical productivity through new methodologies and technologies, is being continuously pursued to reduce the costs associated with new product development and customer support. An example of this is the further enhanced use of analysis-led design computer models that help minimize hardware testing and therefore accelerate product development cycle times.
To ensure the health and safety of employees, the Technical Center also pursued several initiatives to help drive towards the goal of zero-recordable incidents.
A. New Product Development:-
The following new Products were developed as part of the above initiatives during the year:-
1. Rail engine product families to support the growing Rail Business;
2. Marine engine product families to support the increasing commercial Marine Business;
3. Further enhancement of the non-diesel product development capability as alternative fuels are being explored in India;
4. Telematics capability has been developed to improve uptime and fuel efficiency of our products;
5. Fit for market 910 kVA Genset node introduced in the market to serve specific requirement of the Metro segment; and
6. To enhance position of Cummins in the Low kVA market, your Company has introduced a new 35 kVA genset with X2.7 litre engine.
B. Benefits derived as a result of the above activities are:-
1. Enhanced product and service capabilities through use of electronic tools and simulation software to control the engine performance and combustion process;
2. Enhanced capability to tailor engine designs to improve the value proposition for customers through delivering superior power output, fuel economy, transient response and reduced emissions;
3. Product and component availability to meet the new emission norms ahead of implementation;
4. More safe, recyclable, reliable, durable and performance-efficient products and critical components;
5. Component indigenization capability was improved through enhanced test capability, rig test and flow bench development and availability; and
6. Significant enhancements in measurement capability were made to pursue business opportunities in nondiesel markets to serve both the rural and international communities.
C. Future plans include:-
1. Developing local âfit-for-marketâ solutions to meet upcoming emission regulations and market needs on commercial off-highway segment;
2. Technological innovation to add value to the products in the areas of alternate fuels, recycle / re-use and hybrid engines;
3. Continued expansion of the product range to serve the local and global market needs;
4. Continued focus on indigenization and partnering with suppliers for waste elimination initiatives; and
5. Focused engine development for the Power Generation market for the upcoming emissions norms.
D. Your Company continues to draw benefits from Cummins Inc.âs technology, advanced engineering and research.
With this support your Company is committed to develop advanced fuel-efficient and emission-compliant products that use a variety of energy sources and comply with future domestic emissions and carbon dioxide targets.
These help to reduce Greenhouse Gas emissions and improve Air Quality, whilst also enabling the products to deliver superior performance, reliability, durability and recyclability.
E. Expenditure on Research & Development (R&D):-
The total expenditure on R & D was as follows:-
|
2018-19 |
2017-18 |
|
|
(Rs, Lacs) |
(Rs, Lacs) |
|
|
Capital |
8 3 |
26 |
|
Recurring |
3,329 |
2,892 |
|
Total |
3,412 |
2,918 |
|
Total R&D expenditure as a percentage of total sales turnover |
0.6% |
0.4% |
9. FOREIGN EXCHANGE EARNINGS AND OUTGO:
Your Company continues to be Net Foreign Exchange Earner. During the year under review, your Company exported 4,779 engines and 7,659 generator sets. Foreign exchange earned in terms of actual inflows during the year 2018-19 was Rs, 200,745 Lacs (equivalent value of various currencies). Foreign exchange outgo in terms of actual outflows during the year 2018-19 was Rs, 102,425 Lacs (equivalent value of various currencies).
10. MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE REPORT:
The Management Discussion and Analysis Report and the Corporate Governance Report which forms part of this Report are appended as Annexure â3â and â4â respectively.
The Company has obtained a Certificate from Practicing Company Secretary confirming compliance with conditions of the Code of Corporate Governance as stipulated in Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (including amendments thereof) and the same is appended as Annexure â5Aâ which forms part of this Report.
11. EXTRACT OF THE ANNUAL RETURN:
Extract of the annual return as prescribed under Section 92(3) of the Companies Act, 2013 is appended as Annexure â6â which forms part of this Report.
12. RISK MANAGEMENT:
Business Risk Evaluation and Management is an ongoing process within the Organization. The Company has a robust risk management framework to identify, monitor and minimize risks as also identify business opportunities. As a process, the risks associated with the business are identified and prioritized based on severity, likelihood and effectiveness of current detection. Such risks are reviewed by the senior management on a quarterly basis. Process owners are identified for each risk, and metrics are developed for monitoring and reviewing the risk mitigation through Six Sigma Projects.
Risk Management Committee of the Board of Directors of your Company assists the Board in (a) overseeing and approving the Companyâs enterprise wide risk management framework; and (b) overseeing that all the risks that the organization faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational, other risks have been identified and assessed, and there is an adequate risk management infrastructure in place capable of addressing those risks. The development and implementation of risk management policy has been covered in the Management Discussion and Analysis, which forms part of this Report.
13. INTERNAL FINANCIAL CONTROL:
Details of internal financial control and its adequacy are included in the Management Discussion and Analysis Report which is appended as Annexure â3â and forms part of this Report.
14. VIGIL MECHANISM/ WHISTLE BLOWER POLICY:
Your Companyâs leadership culture is to inspire and encourage all employees to reach their full potential. A great leadership culture begins with the authentic leaders who create an outstanding place to work, inspiring and encouraging all employees to achieve their full potential. As leaders, we connect people and their work to the vision, mission, values, brand promise and strategies of the company, motivating them and giving them a higher sense of purpose. We build trust in our teams and in our organizations and align on key goals and priorities.
The Company has a âVigil Mechanism Policyâ which inter alia provides adequate safeguards against victimization of persons who may blow the whistle. In addition, the Company has complied with provisions relating to constitution of an Internal Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and has a stabilized well governed ethics investigations process. During the year under review, two complaints pertaining to sexual harassment of women employees were reported to the Company and the same were investigated in accordance with the procedures prescribed and adequate steps were taken to resolve them and no complaints are pending. Vigil Mechanism Policy may be accessed on the Companyâs website https://www.cumminsindia.com/investors/ corporate-goverance.
The Company is committed to the highest possible standards of openness, integrity and accountability in all its affairs and to providing a workplace conducive to open discussion of its business practices. Your Company has laid out infrastructures and policies through which the employees can voice their concerns about suspected unethical or improper practice, or violation of Cummins Code of Conduct or complaints regarding accounting, auditing, internal controls or disclosure practices of the Company. Protected disclosures can be made by a whistle blower through an email or dedicated telephone line or letter to the Managing Director of the Company or Letter to the Chairman of Audit Committee or via the Ethics helpline available.
15. CODE OF CONDUCT COMPLIANCE:
All members of the Board and Senior Management have affirmed compliance to the Code of Conduct for the Financial Year 2018-19. A declaration signed by the Managing Director affirming compliance with the Companyâs Code of Conduct by the Board of Directors and Senior Management for the Financial Year 2018-19 as required under Regulation 26(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is included in the Corporate Governance Report which is appended as Annexure â4â and forms part of this Report.
16. DIRECTORSâ RESPONSIBILITY STATEMENT:
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and external consultant(s) including audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Companyâs internal financial controls were adequate and effective during the FY 2018-19.
Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:
(i) in the preparation of the annual accounts for the year ended March 31, 2019, the applicable accounting standards have been followed and there was no material departure from the same;
(ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2019 and of the profit for the period April 01, 2018 to March 31, 2019;
(iii) they have taken proper and sufficient care 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;
(iv) they have prepared the annual accounts on a going concern basis;
(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively during the year; and
(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
17. DIRECTORS:
a) Changes in the composition of the Board of Directors: Appointments and Re-appointments
During the year, Mr. Donald Jackson (DIN: 08261104) was appointed as an Additional (Non-Executive and Non-Independent) Director of the Company with effect from October 30, 2018 and Mrs. Anjuly Chib Duggal (DIN: 05264033) was appointed as an Additional (Non-Executive and Independent) Director of the Company with effect from December 19, 2018. A resolution seeking shareholderâs approval for their appointment forms part of the Notice.
Mr. P. S. Dasgupta (DIN: 00012552), Mr. Venu Srinivasan (DIN: 00051523), Mr. Rajeev Bakshi (DIN: 00044621), Mr. Nasser Munjee (DIN: 00010180), and Mr. Prakash Telang (DIN: 00012562), were appointed as Independent Directors of the Company at the 53rd Annual General Meeting for a period of five years. Based on the recommendation of Nomination and Remuneration Committee and the Board, their re-appointment for a second term of five consecutive years is proposed at the ensuing Annual General Meeting for approval of the Members by way of Special Resolution.
In accordance with the Companies Act, 2013 and Articles of Association of the Company, Mr. Norbert Nusterer (DIN: 07640359), Director of the Company, retires by rotation and is eligible for re-appointment. The proposal seeking members approval for his re-appointment forms part of the Notice.
During the year, the Board in its meetings held on May 24, 2018, August 09, 2018, October 26, 2018 and February 06, 2019 noted the presence of Mr. Norbert Nusterer in India and consequent cessation of Mr. J.M. Barrowman as Alternate Director to Mr. Nusterer. The Board further confirmed the appointment of Mr. Barrowman as Alternate Director to Mr. Nusterer upon the return of original Director Mr. Nusterer to U.S.A.
During the year, the Board in its meetings held on August 09, 2018, noted the presence of Ms. Suzanne Wells in India and consequent cessation of Ms. Nicole McDonald as Alternate Director to Ms. Wells. The Board further confirmed the appointment of Ms. McDonald as Alternate Director to Ms. Wells upon the return of original director Ms. Wells to U.S.A.
Cessation
During the year, Mr. Mark Smith (DIN: 06852777) resigned as Director of the Company with effect from May 24, 2018, and Ms. Nicole McDonald (DIN: 07369062) resigned as an Alternate Director to Ms. Suzanne Wells, Director of the Company with effect from September 25, 2018.
As required under Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard 2, particulars of Directors seeking appointment/re-appointment at this Annual General Meeting are given in the Annexure to the Notice.
The details of number of meetings of the Board etc. are provided in the Corporate Governance Report which is appended as Annexure â4â and forms part of this Report.
b) Committees of the Board:
The Board of Directors have constituted following Committees in order to effectively cater its duties towards diversified role under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015:-
- Audit Committee;
- Stakeholders Relationship Committee;
- Nomination and Remuneration Committee;
- Corporate Social Responsibility Committee; and
- Risk Management Committee
Details of the constitution, terms of references of each Committee and number of meetings attended by individual Directors etc. are provided in the Corporate Governance Report which is appended as Annexure â4â and forms part of this Report.
c) Policy on Directorâs Appointment and Remuneration:
The Policy of the Company on Directorâs Appointment and Remuneration, including criteria for determining qualifications, positive attributes, independence of the directors and other matters provided under Section 178(3) of the Companies Act, 2013, adopted by the Board is appended as Annexure â7â which forms part of this Report. Details of the remuneration paid to the Board of Directors are provided in the Corporate Governance Report. The remuneration paid to the Directors is as per the terms laid down in the Nomination and Remuneration Policy of the Company.
d) Board Performance Evaluation Mechanism:
Pursuant to the provisions and based on the criteria specified in the Companies Act, 2013 and Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance evaluation of its own performance and the Directors individually, as well as the evaluation of the working of its Committees. Details of the evaluation mechanism is provided in the Corporate Governance Report which is appended as Annexure â4â and forms part of this Report.
e) Familiarization Programme for Independent Directors:
During the year, the Management provided various documents, background notes etc. to Independent Directors to have a better insight of the Company. The Chairman and the Managing Director also has a one-to-one discussion with the newly appointed Directors to provide details of initiatives for the Director to understand the Company, its business and the regulatory framework in which the Company operates and equip him/ her to effectively fulfil his/ her role as a Director of the Company. The details of familiarization programmes imparted are available at https://www.cumminsindia.com/investors/corporate-goverance.
1) Declarations from Independent Directors:
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
Pursuant to the provisions of Section 149 of the Companies Act, 2013, the Independent Directors have submitted declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 along with Rules framed thereunder and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and adherence to Schedule IV of the Companies Act, 2013. There has been no change in the circumstances affecting their status as Independent Directors of the Company.
18. KEY MANAGERIAL PERSONNEL:
During the year, Mr. K. Venkata Ramana (FCS 4138) resigned as Group Vice President, Legal & Company Secretary and Key Managerial Personnel of the Company with effect from December 31, 2018.
Ms. Hemiksha Bhojwani (ACS 22170) was appointed as the Company Secretary and Key Managerial Personnel of the Company with effect from April 01, 2019.
19. PARTICULARS OF EMPLOYEES:
The details in accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016, is appended as Annexure â9â which forms part of this Report. Any shareholder interested in obtaining a copy of the statement, may write to the Company Secretary at the Registered Office of the Company.
20. INDUSTRIAL RELATIONS:
Industrial relations at the Companyâs plants continue to be cordial. Multiple initiatives have been rolled out providing development and growth opportunities to our shop employees.
21. AUDITORS:
STATUTORY AUDITORS:
At the 55th Annual General Meeting held on August 04, 2016, M/s. S. R. B. C. & Co. LLP (Firm Registration No. 324982E), were appointed as statutory auditors of the Company to hold office till the conclusion of Sixtieth Annual General Meeting. In terms of Section 139(1) of the Companies Act, 2013, the appointment of statutory auditors does not require ratification by the shareholders in Annual General Meeting. Accordingly, the Board noted the appointment of M/s. S. R. B. C. & Co. LLP as the Statutory Auditors of the Company for the FY 2019-20.
M/s. S. R. B. C. & Co. LLP have informed the Company vide letter dated May 15, 2019 that their appointment, is within the limits prescribed under Section 141 of the Companies Act, 2013.
There are no qualifications, reservations, adverse remarks or disclaimers made by the auditors in the Audit Report for the year 2018-19. There was one instance of delay in transfer of interim dividend declared for the FY 2010-11 and it had no financial implication.
SECRETARIAL AUDITOR:
Dr. K. R. Chandratre, Company Secretary in Practice, was appointed to conduct the secretarial audit of the Company for the Financial Year 2018-19, as required under Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Secretarial Audit Report in Form MR-3 and Secretarial Audit Report pursuant to Regulation 24A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 for Financial Year 2018-19 is appended as Annexure â10â which forms part of this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
The Annual Secretarial Compliance Report has been submitted to the stock exchanges within 60 days from the end of the financial year.
COST AUDITORS:
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, as amended from time to time, the cost audit records maintained by the Company in respect of its manufacturing activity is required to be audited. Your Directors, on the recommendation of the Audit Committee, appointed M/s. Ajay Joshi & Associates (Firm Registration No. 101542), Pune, to audit the cost accounts of the Company for the Financial Year 2018-19 at a remuneration of f 950,000 plus taxes as applicable and re-imbursement of out of pocket expenses. As required under the Companies Act, 2013, the Membersâ ratification for the remuneration payable to M/s. Ajay Joshi & Associates, Cost Auditors, is being sought at the ensuing Annual General Meeting.
M/s. Ajay Joshi & Associates, Cost Auditors, under Section 139(1) of the Companies Act, 2013 and the Rules framed thereunder, have furnished a certificate of their eligibility and consent for appointment.
22. CORPORATE SOCIAL RESPONSIBILITY POLICY AND ITS REPORT:
Your Company is an early adopter of the Corporate Social Responsibility (CSR) initiatives. Corporate Responsibility continues to be the core value of your Company embedded in the core value of Caring, which focuses on âserving and improving the communities in which we liveâ. Your Company works with âCummins India Foundationâ towards three broad focus areas viz. Higher Education, Energy and Environment and Equality of Opportunity.
Details about the CSR Policy and initiatives taken by the Company during the year are available on our website https://www.cumminsindia.com/investors/corporate-goverance. The Annual Report on our CSR activities is appended as Annexure â11â which forms part of this Report.
23. BUSINESS RESPONSIBILITY REPORT:
As stipulated under the Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015, the Business Responsibility Report describes the initiatives taken by the Company from environmental, social and governance perspective, which forms part of the Annual Report.
24. SECRETARIAL STANDARDS:
The Company is in compliance with the Secretarial Standards on Meetings of the Board of Directors (SS-1) and Secretarial Standards on General Meetings (SS-2) issued by the Institute of Company Secretaries of India.
25. DIVIDEND DISTRIBUTION POLICY:
The Board of Directors of the Company have formulated a Dividend Distribution Policy which is appended as Annexure â8â and forms part of this report. The policy is also available on our website https://cumminsindia.com/ investors/corporate-goverance.
26. GENERAL:
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
a. Details relating to deposits covered under Chapter V of the Companies Act, 2013;
b. Issue of equity shares with differential rights as to dividend, voting or otherwise;
c. Issue of shares (including sweat equity shares) by the Company to its employees;
d. Neither the Managing Director nor the Whole-time Directors of the Company received any remuneration or commission from any of its subsidiaries;
e. No frauds were reported by auditors under Section 143(12) of the Companies Act, 2013;
f. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companyâs operations. However, Members attention is drawn to the Statement on Contingent Liabilities, commitments in the notes forming part of the Financial Statement; and
g. No material changes and commitments occurred during April 01, 2019 till the date of this Report which would affect the financial position of your Company.
ACKNOWLEDGEMENT:
Your Directors would like to express their sincere appreciation for the assistance and co-operation received from the financial institutions, banks, government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the Companyâs executives, staff and associates.
On behalf of the Board of Directors,
Mark Levett Sandeep Sinha
Place : Mumbai Chairman Managing Director
Date : May 22, 2019 DIN: 00368287 DIN: 02400175
Mar 31, 2018
The Directors take pleasure in presenting the Fifty-Seventh Annual Report together with the audited financial statements for the year ended March 31, 2018. With the challenging economic conditions of the previous year continuing into 2018, your Company has focused on improving productivity, eliminating waste, re-aligning the cost structure and increasing market share.
1. FINANCIAL RESULTS:
On Standalone basis:-
During the Financial Year 2017-18, revenue from operations was Rs.516,106 Lacs as compared to Rs.542,875 Lacs during the previous year (4.9% lower). Profit after tax decreased to Rs.70,847 Lacs from Rs.73,463 Lacs recorded for the previous year (3.6% lower).
On Consolidated basis:-
During the Financial Year 2017-18, revenue from operations was Rs.519,045 Lacs as compared to Rs.545,779 Lacs during the previous year (4.9% lower). Profit after tax reduced to Rs.71,182 Lacs from Rs.73,627 Lacs recorded for the previous year (3.3% lower).
Financial summary
|
Standalone |
Consolidated |
|||
|
2017-18 |
2016-17 |
2017-18 |
2016-17 |
|
|
APPROPRIATION OF PROFIT: |
(Rs. in Lacs) |
(Rs. in Lacs) |
(Rs. in Lacs) |
(Rs. in Lacs) |
|
Profit before taxation |
90,840 |
90,824 |
84,077 |
84,301 |
|
Net Profit for the year after tax |
70,845 |
73,463 |
71,182 |
73,627 |
|
Tax on dividend |
7,901 |
7,901 |
7,901 |
7,901 |
|
Dividend |
38,808 |
38,808 |
38,808 |
38,808 |
2. DIVIDEND:
Your Directors have recommended a final dividend of Rs.10/- per equity share of Rs.2/- each fully paid-up, in addition to the interim dividend of Rs.5/- per equity share of Rs.2/- each fully paid-up share declared on February 01, 2018, aggregating to Rs.15/- (i.e. 750%) per equity share of Rs.2/- each fully paid-up share for the year ended March 31, 2018 (last year Rs.14/- per equity share i.e. 700%). The final dividend payout is subject to approval of the Members at the ensuing Annual General Meeting.
The paid up share capital of the Company is Rs.554,400,000/- divided in to 277,200,000 equity shares of Rs.2/- each. Your Company has not come out with any issue (public, rights or preferential) during the year.
3. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES:
Your Board is pleased to provide details of the following subsidiary, joint ventures and associates as on March 31, 2018:-
a) Cummins Sales & Service Private Limited (CSSPL):
CSSPL (formerly known as, Cummins Svam Sales & Service Private Limited) a wholly-owned subsidiary of the Company focuses on sales of Cummins engines, parts, accessories and providing service support to engines and generators in parts of Northern India close to the National Capital Region (NCR). CSSPL generated a revenue of Rs.8,354.25 Lacs from its operations for the year ended March 31, 2018, as compared to Rs.7,922.34 Lacs during the previous year (5.5% higher).
b) Cummins Research and Technology India Private Limited (CRTI):
The revenue from the operations of Cummins Research and Technology India Private Limited (CRTI), a 50:50 joint venture between Cummins Inc., USA and your Company for the year ended March 31, 2018, was Nil previous year (Nil). CRTI was formed in 2003 with an intent to provide Information Technology enabled Mechanical Engineering development services primarily to Cummins Inc., USA, its subsidiaries and joint ventures in all parts of the world. Effective April 01, 2016, CRTI closed its operations and your Board of Directors decided that the activity carried out by CRTI for your Company, shall be undertaken in-house by absorbing the appropriate number of employees from CRTI in your Company. This has further enabled your Company to enhance efficiency, optimize the response time, reduce the administrative procedures, and avoid duplication of efforts. In short, there has been simplicity in running the same activities in a more effective manner.
c) Valvoline Cummins Private Limited (VCPL):
VCPL, a 50:50 joint venture with Valvoline International Inc., USA, a global leader in lubricants and engine oils, generated a revenue of Rs.128,006 Lacs from its operations for the year ended March 31, 2018, as compared to Rs.125,374 Lacs during the previous year.
d) Cummins Generator Technologies India Private Limited (CGT):
Your Company owns 48.54% shareholding in the Associate Company namely CGT which is in the business of design, manufacturing, marketing, sales and service of alternators and related spare parts. CGT generated revenue of Rs.63,807 Lacs from its operations for the year ended March 31, 2018, as compared to Rs.60,245 Lacs during the previous year (5.91% higher).
Your Company announces consolidated financial results on an annual basis. As required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, consolidated financial statements of the Company, its subsidiary, joint ventures and associate, prepared in accordance with the applicable Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended, form part of the Annual Report and are reflected in the consolidated financial statements of the Company.
Further, a statement containing the salient features of the financial statement of subsidiaries, associate companies and joint ventures in the prescribed Form AOC-1 is appended as Annexure â1â which forms part of this Report.
The Company will make the said financial statements and related detailed information of CSSPL available upon the request by any member of the Company. These financial statements will also be kept open for inspection by any Member at the Registered Office of the Company and of CSSPL. Pursuant to the provisions of section 136 of the Companies Act, 2013 the financial statements of the Company, consolidated financial statements along with relevant documents and separate financial statements in respect of CSSPL, are available on the website of the Company.
4. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
Other than the unsecured loan given to Cummins Technologies India Private Limited (which is a subsidiary of Cummins Inc., USA) in 2011 in compliance with the then applicable, Companies Act, 1956 and Rules thereunder, no other loan or guarantee was given or investment was made by your Company during the Financial Year 2017-18.
5. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 in the prescribed Form AOC-2 is appended as Annexure â2â which forms part of this Report.
The Policy on materiality of related party transactions as approved by the Board may be accessed on the Companyâs website at the link: https://www.cumminsindia.com/investors/corporate-goverance.
6. CONSERVATION OF ENERGY:
During the Financial Year 2017-18, your Company has strived to imbibe energy conservation principles and initiatives across all its facilities - Kothrud Engine Plant (Pune), Phaltan Midrange Upfit Centre (Phaltan), Power Generation Business Unit Plant (Phaltan), Distribution Business Unit Plants (Phaltan) and India Parts Distribution Centre (Phaltan).
A 635 kWp grid connected solar power plant was installed and made operational at the Distribution Business Unit Plant at Phaltan in Financial Year 2017-18. This installation has helped save 60,000 units of electricity every month and has resulted in a monthly saving of Rs.4.5 Lacs in energy costs.
The other key initiatives across multiple areas are highlighted below -
HVAC - Your Company has undertaken initiatives such as installation of energy efficient air compressors, cooling towers, air conditioning units as well as High-Voltage-Low-Speed (HVLS) fans across the operation areas of key facilities.
Lighting - Your Company took the initiative to replace old lighting fittings with new-age energy efficient LED fittings within and outside some of our facilities
Awareness Generation - This included employing an energy review tool and energy balance tool to identify projects as well as improving awareness amongst employees to switch off major energy consuming equipment or units when idle.
IMPACT OF THE ABOVE MEASURES:
These key initiatives resulted in annual energy savings of approximately 10.31 Lac units of electricity and Rs.91.55 Lacs of saving in Energy costs
7. RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION:
Your Company is committed to introducing new products and improving existing products to have better performance levels, lower life cycle costs, excellent safety, recyclability characteristics, meet stringent emission norms for the specific needs of the Indian customer. The Technical Center of your Company continues in this endeavour by indigenizing components and developing the next generation of systems in collaboration with the parent company - Cummins Inc., USA.
Improved technical productivity, through new methodologies and technologies being introduced, is being continuously pursued to reduce the costs associated with new product development and customer support. An example of this is the further enhanced use of analysis-led design computer models that help minimize hardware testing and therefore accelerate product development cycle times.
To ensure the health and safety of employees, the Technical Center also pursued several initiatives to help drive towards the goal of zero-recordable incidents.
A. New Product Development:-
The following new Products were developed as part of the above initiatives during the year:-
1. Key Rail engine product families to support the growing Rail Business
2. Key Marine engine product families to support the increasing commercial Marine Business
3. Further enhancement of non-diesel product development capability as alternative fuels are being explored in India
4. Telematics capability has been developed to improve uptime and fuel efficiency of our products
B. Benefits derived as a result of the above activities are:-
1. Enhanced development capabilities through use of electronic tools and simulation software to control the engine performance and combustion process
2. Enhanced capability to tailor engine designs to improve the value proposition for customers through delivering superior power output, fuel economy, transient response and reduced emissions
3. Product and component availability to meet the new emission norms ahead of implementation
4. More safe, recyclable, reliable, durable and performance-efficient products and critical components
5. Component indigenization capability was improved through enhanced test capability, rig test and flow bench development and availability
6. Significant enhancements in measurement capability were made to pursue business opportunities in nondiesel markets to serve both the rural and international communities
C. Future plans include:-
1. Developing local âfit-for-marketâ solutions to meet upcoming emission regulations and market needs on commercial off-highway segment
2. Technological innovation to add value to the products in the areas of alternate fuels, recycle / re-use and hybrid engines
3. Continued expansion of the product range to serve the local and global market needs
4. Continued focus on indigenization and partnering with suppliers for waste elimination initiatives
5. Alternate source development for various components across the product line
6. Focussed engine development for the Power Generation market for the upcoming emissions norms
D. Your Company continues to draw benefits from Cummins Inc.âs technical capabilities and advanced technology.
With continued support from Cummins Inc., USA your Company is committed to develop advanced fuel-efficient and emission-compliant products that work on a variety of energy sources and comply with upcoming domestic and global emission regulations. These help to reduce Greenhouse Gas emission and improve Air Quality, whilst also enabling the products to deliver superior performance, reliability, durability and recyclability.
E. Expenditure on R & D:-
The total expenditure on R & D was as follows:-
8. FOREIGN EXCHANGE EARNINGS AND OUTGO:
Your Company continues to be Net Foreign Exchange Earner. During the year under review, your Company exported 6,994 engines and 7,998 generator sets thereby achieving total export earnings of Rs.144,484 Lacs.
Foreign exchange earnings and outgo (including royalty, dividend, etc.) during the year under review were as follows:-
9. MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE REPORT:
The Management Discussion and Analysis Report and the Corporate Governance Report which forms part of this Report are appended as Annexure â3â and â4â respectively.
The Company has obtained a Certificate from Practicing Company Secretary confirming compliance with conditions of the Code of Corporate Governance as stipulated in Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the same is appended as Annexure â5â which forms part of this Report.
10. EXTRACT OF THE ANNUAL RETURN:
Extract of the annual return as prescribed under Section 92 (3) of the Companies Act, 2013 is appended as Annexure â6â which forms part of this Report.
11. RISK MANAGEMENT:
Business Risk Evaluation and Management is an ongoing process within the Organization. The Company has a robust risk management framework to identify, monitor and minimize risks as also identify business opportunities. As a process, the risks associated with the business are identified and prioritized based on severity, likelihood and effectiveness of current detection. Such risks are reviewed by the senior management on a quarterly basis. Process owners are identified for each risk, and metrics are developed for monitoring and reviewing the risk mitigation through Six Sigma Projects.
Risk Management Committee of the Board of Directors of your Company assists the Board in (a) overseeing and approving the Companyâs enterprise wide risk management framework; and (b) overseeing that all the risks that the organization faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational, other risks have been identified and assessed, and there is an adequate risk management infrastructure in place capable of addressing those risks.
12. INTERNAL FINANCIAL CONTROL:
Details of internal financial control and its adequacy are included in the Management Discussion and Analysis Report which is appended as Annexure â3â and forms part of this Report.
13. VIGIL MECHANISM/ WHISTLE BLOWER POLICY:
Your Company is committed to fostering a physically and psychologically safe, integrity based, respectful, inclusive, high performance culture that breaks down hierarchies and organizational boundaries, and engages the full talents of our diverse employees to delight all our stakeholders (employees, customers, partners, shareholders, suppliers, communities) consistently.
The Company has a âWhistle Blower Policyâ which inter alia provides adequate safeguards against victimization of persons who may blow the whistle. In addition, the Company also has constituted an Internal Committee (under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013) and an Ethics Committee comprising of senior executives of the Company. Protected disclosures can be made by a whistle blower through an email or dedicated telephone line or letter to the Managing Director of the Company or Letter to the Chairman of Audit Committee. Whistle Blower Policy may be accessed on the Companyâs website at the link: https://www.cumminsindia.com/investors/corporate-goverance. Details of number of complaints filed and resolved by the Internal Committee during the year are provided in the Business Responsibility Report of the Company.
14. CODE OF CONDUCT COMPLIANCE:
All members of the Board and Senior Management have affirmed compliance to the Code of Conduct for the Financial Year 2017-18. A declaration signed by the Chairman & Managing Director affirming compliance with the Companyâs Code of Conduct by the Board of Directors and Senior Management for the Financial Year 2017-18 as required under Regulation 26(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is included in the Corporate Governance Report which is appended as Annexure â4â and forms part of this Report.
15. DIRECTORSâ RESPONSIBILITY STATEMENT:
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and external consultant(s) including audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Companyâs internal financial controls were adequate and effective during the Financial Year 2017-18.
Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:
(i) in the preparation of the annual accounts for the year ended March 31, 2018, the applicable accounting standards have been followed and there was no material departure from the same;
(ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2018 and of the profit for the period April 01, 2017 to March 31, 2018;
(iii) they have taken proper and sufficient care 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;
(iv) they have prepared the annual accounts on a going concern basis;
(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively during the year; and
(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
16. DIRECTORS:
a) Changes in the composition of the Board of Directors:
During the year, Mr. Anant J. Talaulicar (DIN: 00031051) resigned as Chairman and Managing Director of the Company with effect from November 08, 2017 and Mr. Pradeep Bhargava, (DIN: 00525234) resigned as an Alternate Director of the Company with effect from February 23, 2018.
During the year, Mr. Sandeep Sinha (DIN: 02400175) was appointed as Managing Director of the Company with effect from February 01, 2018 and Mr. Mark Levett (DIN: 00368287) was appointed as an Additional Director and Chairman of the Board with effect from March 02, 2018.
The Board at its meeting held on August 3, 2017 noted the presence of Mr. Norbert Nusterer (DIN: 07640359) during July 31, 2017 to August 5, 2017 and Ms. Suzanne Wells (DIN: 06954891) during July 31, 2017 to August 4, 2017 in India and consequent cessation of Mr. J. M. Barrowman (DIN: 00668324) as an Alternate Director for Mr. Norbert Nusterer and Ms. Nicole McDonald (DIN: 07369062) as an Alternate Director to Ms. Suzanne Wells, effective July 31, 2017.
The Board confirmed appointment of Mr. J. M. Barrowman in terms of its resolution dated October 26, 2016, as an Alternate Director to Mr. Norbert Nusterer effective August 5, 2017 and appointment of Ms. Nicole McDonald in terms of its resolution dated November 5, 2015, as an Alternate Director to Ms. Suzanne Wells effective August 4, 2017 upon return of Original Directors to U.S.A.
The Board at its meeting held on August 3, 2017, appointed Mr. Mark Smith (DIN: 06852777), as an Additional Director effective August 3, 2017 and Mr. Pradeep Bhargava (DIN: 00525234), as an Alternate Director to Mr. Mark Smith.
The Board at its meeting held on October 26, 2017 noted the presence of Mr. Norbert Nusterer (DIN: 07640359) during October 23, 2017 to October 27, 2017 in India and consequent cessation of Mr. J. M. Barrowman (DIN: 00668324), as an Alternate Director for Mr. Norbert Nusterer, effective October 23, 2017. The Board confirmed appointment of Mr. J. M. Barrowman in terms of its resolution dated October 26, 2016, as an Alternate Director to Mr. Norbert Nusterer effective October 27, 2017 upon return of Original Director to U.S.A.
The Board noted the presence of Mr. Norbert Nusterer (DIN: 07640359) and Ms. Suzanne Wells (DIN: 06954891) during January 29, 2018 to February 2, 2018 in India and consequent cessation of Mr. J. M. Barrowman and Ms. Nicole McDonald as Alternate Directors effective January 29, 2018. The Board confirmed appointment of Mr. J. M. Barrowman in terms of its resolution dated October 26, 2016, as an Alternate Director to Mr. Norbert Nusterer effective February 2, 2018 and appointment of Ms. Nicole McDonald in terms of its resolution dated November 5, 2015, as an Alternate Director to Ms. Suzanne Wells effective February 2, 2018 upon return of Original Directors to USA.
In accordance with the Companies Act, 2013 and Articles of Association of the Company, Mr. Antonio Leitao (DIN: 05336740), Director of the Company, retires by rotation and is eligible for re-appointment.
Additional information as required under the Companies Act, 2013 and Regulation 36 of the SEBI (Listing Obligations and Disclosure Requirements), 2015 in respect of the directorsâ appointment/ reappointment is provided below:
|
Particulars |
Mr. Mark Levett |
Mr. Sandeep Sinha |
Mr. Antonio Leitao |
|
Age (years) |
69 |
47 |
54 |
|
Qualification |
BA from Hanover College & MBA from Michigan State University |
Bachelorâs degree-Production Engineering, Manipal Institute of Technology (India) and Masterâs degree from Kelly School of Business |
Holds a degree in Electrical Engineering from the University of Brittany in France and an executive MBA from Stanford University |
|
Experience/ Expertise/ Brief Resume |
Refer item no. 6 of the explanatory statement of the Notice convening this Meeting. |
Refer item no. 5 & 7 of the explanatory statement of the Notice convening this Meeting. |
Refer item no. 4 of the explanatory statement of the Notice convening this Meeting. |
|
Relationship with other Directors / Key Managerial Personnel (KMP) |
Not related to any Director / KMP |
Not related to any Director / KMP |
Not related to any Director / KMP |
|
Directorships/ Membership of Committees in listed entities as on March 31,2018 |
NIL |
NIL |
NIL |
|
Shareholding as on March 31, 2018 |
NIL |
NIL |
NIL |
The details of number of meetings of the Board etc. are provided in the Corporate Governance Report which is appended as Annexure â4â and forms part of this Report.
b) Committees of the Board:
The Board of Directors have constituted following committees in order to effectively cater its duties towards diversified role under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015:-
- Audit Committee;
- Stakeholders Relationship Committee;
- Nomination and Remuneration Committee;
- Corporate Social Responsibility Committee; and
- Risk Management Committee
Details of the constitution, terms of references of each Committee and number of meetings attended by individual Director etc. are provided in the Corporate Governance Report which is appended as Annexure â4â and forms part of this Report.
c) Policy on Directorâs Appointment and Remuneration:
The Policy of the Company on Directorâs Appointment and Remuneration, including criteria for determining qualifications, positive attributes, independence of the directors and other matters provided under Section 178 (3) of the Companies Act, 2013, adopted by the Board is appended as Annexure â7â which forms part of this Report. Details of the remuneration paid to the Board of Directors are provided in the Corporate Governance Report. We affirm that the remuneration paid to the Directors is as per the terms laid down in the Nomination and Remuneration Policy of the Company.
d) Board Performance Evaluation Mechanism:
Pursuant to the provisions of the Companies Act, 2013 and Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance evaluation of its own performance and the Directors individually, as well as the evaluation of the working of its Committees. Details of the evaluation mechanism is provided in the Corporate Governance Report which is appended as Annexure â4â and forms part of this Report.
e) Familiarization Programme for Independent Directors:
The Independent Directors of the Company are associated with the Company for many years and are very familiar with the Company. During the year, the Management provided various documents, background notes etc. to have a better insight of the Company. The Chairman and the Managing Director also has a one-to-one discussion with the newly appointed Directors. Details of initiatives for the Director to understand the Company, its business and the regulatory framework in which the Company operates and equips him/ her to effectively fulfil his/ her role as a Director of the Company. The details of familiarisation programmes imparted are available at https://www.cumminsindia.com/investors/corporate-goverance.
f) Declarations from the Independent Directors:
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both, under of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
17. PARTICULARS OF EMPLOYEES:
The details in accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016, is appended as Annexure â9â which forms part of this Report.
A statement containing the details as prescribed under Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended from time to time forms part of this Report. Any shareholder interested in obtaining a copy of the statement, may write to the Company Secretary at the Registered Office of the Company.
18. INDUSTRIAL RELATIONS:
Industrial relations at the Companyâs plants continue to be cordial. Many initiatives have been rolled out providing development and growth opportunities to our shop employees e.g. B. Tech program has been launched in partnership with BITS Pilani.
19. AUDITORS:
SECRETARIAL AUDITOR:
Dr. K. R. Chandratre, Company Secretary in Practice, was appointed to conduct the secretarial audit of the Company for the Financial Year 2017-18, as required under Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Secretarial Audit Report in Form MR-3 for Financial Year 2017-18 is appended as Annexure â10â which forms part of this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
COST AUDITORS:
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, as amended from time to time the cost audit records maintained by the Company in respect of its manufacturing activity is required to be audited. Your Directors, on the recommendation of the Audit Committee, appointed M/s. Ajay Joshi and Associates, Pune, to audit the cost accounts of the Company for the Financial Year 2018-19 on a remuneration of Rs.950,000 plus taxes as applicable and re-imbursement of out of pocket expenses. As required under the Companies Act, 2013, the Membersâ ratification for the remuneration payable to M/s. Ajay Joshi and Associates, Cost Auditors is being sought at the ensuing Annual General Meeting.
20. CORPORATE SOCIAL RESPONSIBILITY POLICY AND ITS REPORT:
Your Company is an early adopter of the Corporate Social Responsibility (CSR) initiatives. Corporate Responsibility continues to be the core value of your company embedded in the core value of caring, which focuses on âserving and improving the communities in which we liveâ. Your Company works with âCummins India Foundationâ towards three broad focus areas viz. Higher Education, Energy and Environment and Equality of opportunity.
Details about the CSR Policy and initiatives taken by the Company during the year are available on our website https://www.cumminsindia.com/investors/corporate-goverance. The Annual Report on our CSR Activities, is appended as Annexure â11â which forms part of this Report.
21. BUSINESS RESPONSIBILITY REPORT:
As stipulated under the Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Business Responsibility Report describes the initiatives taken by the Company from environmental, social and governance perspective, which forms part of the Annual Report.
22. SECRETARIAL STANDARDS:
The Company is in compliance with the Secretarial Standards on Meetings of the Board of Directors (SS-1) and Secretarial Standards on General Meetings (SS-2) issued by the Institute of Company Secretaries of India.
23. GENERAL:
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
a. Details relating to deposits covered under Chapter V of the Companies Act, 2013;
b. Issue of equity shares with differential rights as to dividend, voting or otherwise;
c. Issue of shares (including sweat equity shares) by theCompany to its employees;
d. Neither the Managing Director nor the Whole-time Directors of the Company received any remuneration or commission from any of its subsidiaries;
e. No frauds were reported by auditors under Section 143(12) of the Companies Act, 2013;
f. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companyâs operations (However, Members attention is drawn to the Statement on Contingent Liabilities, commitments in the notes forming part of the Financial Statement); and
g. No material changes and commitments occurred during April 01, 2018 till the date of this Report which would affect the financial position of your Company.
ACKNOWLEDGEMENT:
Your Directors would like to express their sincere appreciation for the assistance and co-operation received from the financial institutions, banks, government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the Companyâs executives, staff and associates.
On behalf of the Board of Directors,
Mark Levett Sandeep Sinha
Place : Mumbai Chairman Managing Director
Date : May 24, 2018 DIN: 00368287 DIN: 02400175
Mar 31, 2017
The Directors take pleasure in presenting the Fifty-Sixth Annual Report together with the audited financial statements for the year ended March 31, 2017. With the challenging economic conditions of the previous year continuing into 2016, your Company has focused on improving productivity, eliminating waste, re-aligning the cost structure and increasing market share.
1. FINANCIAL RESULTS:
On a standalone basis: -
During the Financial Year 2016-17, revenue from operations was Rs.542,875 Lacs as compared to Rs.508,806 Lacs during the previous year (6.70% higher). Profit after tax decreased to Rs.73,463 Lacs from Rs.75,430 Lacs recorded for the previous year (2.61% lower).
On a consolidated basis: -
During the Financial Year 2016-17, revenue from operations was Rs.545,779 Lacs as compared to Rs.509,940 Lacs during the previous year (7.03% higher). Profit after tax increased to Rs.73,627 Lacs from Rs.72,132 Lacs recorded for the previous year (2.07% higher).
Financial Summary: -
|
Standalone |
Consolidated |
|||
|
2016-17 |
2015-16 |
2016-17 |
2015-16 |
|
|
APPROPRIATION OF PROFIT: |
(Rs. in Lacs) |
(Rs. in Lacs) |
(Rs. in Lacs) |
(Rs. in Lacs) |
|
Profit before taxation |
90,824 |
91,038 |
84,301 |
79,937 |
|
Net Profit for the year after tax |
73,463 |
75,430 |
73,627 |
72,132 |
|
Tax on dividend |
7,901 |
7,901 |
7,901 |
7,901 |
|
Dividend |
38,808 |
38,808 |
38,808 |
38,808 |
2. DIVIDEND:
Your Directors have recommended a final dividend of Rs.9/- per equity share of Rs.2/- each fully paid-up, in addition to the interim dividend of Rs.5/- per equity share of Rs.2/- each fully paid-up share declared on February 1, 2017, aggregating to Rs.14/- (i.e. 700%) per equity share of Rs.2/- each fully paid-up share for the year ended March 31, 2017 (last year Rs.14/- per equity share i.e. 700%). The final dividend payout is subject to approval of the Members at the ensuing annual general meeting.
The paid up share capital of the Company is Rs.554,400,000/- divided in to 277,200,000 equity shares of Rs.2/- each. Your Company has not come out with any issue (public, rights or preferential) during the year.
3. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES:
Your Board is pleased to provide details of the following subsidiary, joint ventures and associate companies as on March 31, 2017: -
a) Cummins Sales & Service Private Limited (CSSPL):
CSSPL [formerly known as Cummins Svam Sales & Service Private Limited), a wholly-owned subsidiary of the Company focuses on sales of Cummins engines, parts, accessories and providing service support to engines and genrators in parts of Northern India close to the National Capital Region (NCR). CSSPL generated a revenue of Rs.7,922.34 Lacs from its operations for the year ended March 31, 2017, as compared to Rs.7,514.07 Lacs during the previous year (5.43% higher).
b) Cummins Research and Technology India Private Limited (CRTI):
The revenue from operations of Cummins Research and Technology India Private Limited (CRTI), a 50:50 joint venture between Cummins Inc., USA and your Company for the year ended March 31, 2017, was nil as compared to Rs.3,084 Lacs during the previous year. CRTI was formed in 2003 with an intent to provide information technology enabled mechanical engineering development services primarily to Cummins Inc., USA, its subsidiaries and joint ventures in all parts of the world. Effective April 1, 2016, CRTI closed its operations and your Board of Directors decided that the activity carried out by CRTI for your Company, shall be undertaken in-house by absorbing the appropriate number of employees from CRTI in your Company. This has further enabled your Company to enhance efficiency, optimize the response time, reduce administrative procedures and avoid duplication of efforts. In short, there has been simplicity in running the same activities in a more effective manner.
c) Valvoline Cummins Private Limited (VCPL):
VCPL, a 50:50 joint venture with Valvoline International Inc., USA, a global leader in lubricants and engine oils, generated a revenue of Rs.125,374 Lacs from its operations for the year ended March 31, 2017, as compared to Rs.116,897 Lacs during the previous year.
d) Cummins Generator Technologies India Private Limited (CGT):
Your Company owns 48.54% shareholding in the Associate Company namely CGT which is in the business of design, manufacturing, marketing, sales and service of alternators and related spare parts. CGT generated a revenue of Rs.60,245 Lacs from its operations for the year ended March 31, 2017, as compared to Rs.53,622 Lacs during the previous year (12.35% higher).
Your Company announces consolidated financial results on an annual basis. As required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, consolidated financial statements of the Company, its subsidiary, joint ventures and associate, prepared in accordance with the applicable Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended, form part of the Annual Report and are reflected in the consolidated financial statements of the Company.
Further, a statement containing the salient features of the financial statement of subsidiaries, associate companies and joint ventures in the prescribed Form AOC-1 is appended as Annexure â1â which forms part of this Report.
The Company will make the said financial statements and related detailed information of CSSPL available upon request by any member of the Company. These financial statements will also be kept open for inspection by any Member at the Registered Office of the Company and of CSSPL. Pursuant to the provisions of Section 136 of the Companies Act, 2013, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited accounts in respect of CSSPL, are available on the website of the Company.
4. INITIATIVES AT PHALTAN:
Currently, the manufacturing plants of your Company operational at the Megasite at Phaltan are the HHP Rebuild Center, Phaltan Mid Range Upfit Center (PMUC) and the India Parts Distribution Center at the Domestic Tariff Area and the Low Horsepower Generator set plant at the Special Economic Zone (SEZ).
Based on sustained lower demand and in order to optimize costs and better utilize existing resources, it was decided to outsource manufacturing of âCâ series engines and âBâ series natural gas engines by way of contract manufacturing and to shift certain activities, resources and operations to other existing factories of Cummins group companies operating at Phaltan which resulted in the closure of PMUC operations. After the closure, the partially empty plant has been made available for Cummins Technologies India Private Limited on rental basis at armâs length basis.
While the common facilities such as the creche, administration office and health center commenced operations since August 2014, a training center for employees including an auditorium with a seating capacity oRs.250 people became functional since June 2015.
The other training center that had commenced operations in December 2015 at the Megasite, is the technical training center. With a capacity to train more than 550 engineers and 300 customers annually to service High Horsepower, Heavy duty and MidRange mechanical engines, generator sets and complex components that make up these products, the training center will further enhance your Companyâs capability to provide world-class service experience to the end-user.
In addition to the manufacturing and related facilities, a residential campus to house Phaltan based employees of your Company in a high quality, safe and clean environment near the Megasite has also been established. This facility comprises of four buildings with 240 rooms, a cafeteria and a club house. Your Company is also setting up 625 KW Roof Top Solar power plant, which will power the plant with Green Power. This solar plant will be operational in the year 2017.
5. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
Other than the unsecured loan given to Cummins Technologies India Private Limited (which is a subsidiary of Cummins Inc., USA) in 2011 in compliance with the then applicable, Companies Act, 1956 and Rules thereunder, no other loan or guarantee was given or investment was made by your Company during the Financial Year 2016-17.
6. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 in the prescribed Form AOC-2 is appended as Annexure â2â which forms part of this Report.
The Policy on materiality of related party transactions and dealings with related party transactions as approved by the Board may be accessed on the Companyâs website at the link: âhttp://www.cumminsindia.com/investors/corporate-governanceâ.
7. CONSERVATION OF ENERGY:
Your Company continued to undertake various energy conservation initiatives during the year, some of which are given below:
Kothrud Engine Plant (KEP), Pune:
- Improved LUX level and reduction in energy consumption of illumination devices by 50%;
- Reduction of monthly energy consumption of street lights without affecting present light condition;
- Achieved energy savings on lighting load by giving automatic control of lights and ACs in conference rooms and stores;
- Achieved energy savings by improving the MSEDCL power transformation efficiency from 97% to 99.5% with improved power quality;
- Achieved energy savings by improving efficiency by installation oRs.2.5 MVA energy efficient transformer;
- Achieved energy savings by controlling operation of test cell blowers as per number of test cells in operation;
- Reduction of monthly energy consumption of AHU without affecting present air circulation condition;
- Reduction of average electricity consumption from 88,853 kWh to 79,968 kWh per month (10% reduction) in heat treatment operations;
- 10% reduction in electricity consumption per SMH in NHNT/ K6 block; and
- Use of energy review tool and energy balance tool for identifying energy saving projects.
The Plant continued implementation of the following initiatives: -
- Replacement oRs.46 nos. oRs.400 watt Metal Halide Lamps in the KV engine Assembly, Test, Paint area by 100 watt LED lamps;
- Reduction of power consumption of ventilation blowers of U4 Power House;
- Reduction of power consumption of water pumps for U4 Power House;
- Energy savings achieved by closing air ball valves in shop and assembly testing area when machine is not in use;
- Improved LUX level and energy efficiency of illumination devices in NH NT Assembly. ( 2 x 36 watt lamps replaced by 20 watt LED tubes - 46 nos.); and
- Replacement of Cummins Technical Center India (CTCI) transformer by energy efficient transformer.
IMPACT OF THE ABOVE MEASURES:
All these initiatives resulted in savings oRs.7.26 Lacs units of electricity, Rs.58 lacs saving of energy cost and GHG reduction oRs.595 tons of CO2 emission.
Phaltan Midrange Upfit Center, Phaltan:
- On account of downsizing of activities at PMUC no specific initiatives were undertaken.
Power Generation Business Unit Plant, Pirangut and Phaltan SEZ:
- Reduction of power consumption from test cell lighting by replacing 216 watt T5 tube fitting with 100 watt LED fitting which will result in 53% power saving w.r.t. to consumption;
- Reduction of power consumption from test cell blower which resulted in 11% power saving w.r.t. consumption;
- Reduction of power consumption from shop lighting by replacing 216 watt T5 tube fitting with 100 watt LED fitting (46 nos.); and
- Reduction of power consumption during the Unplugged Challenge by 9,500 kWh.
Distribution Business Unit Plants (Erandwane, Pune and HHP Rebuild Center, Phaltan):
- Replacement of street light from 96 CFL to 34 LED fittings. (Total 26 Nos.)
- Installation of control system for cooling tower fan motor of temperature control system.
- Installation of HULs fans (2 Nos.) in the stores area.
- Assigned responsibilities to individuals for air conditioning to shut off in break times.
India Parts Distribution Center, Phaltan:
- Provision of individual switches for lamps of inbound and outbound workstations. Previously there was one master switch, so even if only one workstation is operational, lamps of all workstations would remain ON;
- Half yearly service of AHU initiated resulting into overall air flow and thus, effectiveness; and
- Periodic service of air compressor initiated resulting into less restriction in the suction line and improved efficiency.
IMPACT OF THE ABOVE MEASURES:
All these intiatives were taken towards the energy improvement which will deliver the result in terms of energy conservation in the year 2017.
8. RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION:
Your Company is committed to introducing new products and improving existing products to have better performance levels, lower life cycle costs, excellent safety, recyclability characteristics, meet stringent emission norms and specific needs of the Indian customer. The Technical Center of your Company continues in this endeavour by indigenizing components and developing the next generation of components and systems in collaboration with the parent company
- Cummins Inc., USA.
In order to improve technical productivity, new methodologies and technologies have been introduced and enhancements in capabilities are being continuously pursued to reduce the costs associated with new product development and customer support. An example of this is the enhanced use of analysis-led design computer models that help minimize hardware testing and therefore accelerate product development cycle times. Continued implementation of Six Sigma initiatives have resulted in significant cost savings and improved operating efficiency.
To ensure the health and safety of employees, the Technical Center also pursued several initiatives to help drive towards the goal of zero-recordable incidents.
A. New Product Development: -
The following new Products were developed as part of the above initiatives during the year:-
1. Key Industrial engine product families to support the growing Industrial Business.
2 Key Marine engine product families to support the increasing commercial Marine Business.
3. Fundamental electronics capability to help develop products that comply with on board diagnostics legislation.
4. Further enhancement of non-diesel product development capability.
B. Benefits derived as a result of the above activities are: -
1. Enhanced development capabilities through use of electronic tools and simulation software to control the engine performance and combustion process.
2. Enhanced capability to tailor engine designs to improve the value proposition for customers through delivering superior power output, fuel economy and transient response and reduced emissions.
3. Product and component availability to meet the new emission norms ahead of implementation.
4. More safe, recyclable, reliable, durable and performance-efficient products and critical components.
5. Component indigenization capability was improved through enhanced test capability, rig test and flow bench development and availability.
6. Significant enhancements in measurement capability were made to pursue business opportunities in non diesel markets to serve both the rural and international communities.
C. Future plans include: -
1. Developing local âfit for marketâ solutions to meet upcoming emission regulations, local and rural market needs.
2. Technological innovation to add value to the products in the areas of alternate fuels, recycle / re-use and hybrid engines.
3. Continued expansion of the product range to serve the local and global market needs.
4. Providing energy-efficient solutions to reduce carbon footprint and improve recyclability.
5. Continued focus on indigenization and partnering with suppliers for waste elimination initiatives.
6. Alternate source development for various engine components.
7. Expanding the coverage of our engine development for the Power Generation market.
D. Your Company continues to draw benefits from Cummins Inc.âs technical capabilities and advanced technology. With continued support from Cummins Inc., USA, your Company is committed to develop advanced fuel-efficient and emission-compliant engines that work on a variety of fuel sources and comply with forthcoming domestic and global emission regulations, to help reduce Greenhouse Gas emission, whilst also enabling the products to deliver superior performance, reliability, durability and recyclability.
E. Expenditure on R & D:-
The total expenditure on R & D was as follows:-
|
2016-2017 |
2015-2016 |
|
|
(Rs. in Lacs) |
(Rs. in Lacs) |
|
|
Capital |
395 |
1 |
|
Recurring |
3,067 |
2,510 |
|
Total |
3,462 |
2,511 |
|
Total R&D expenditure as a percentage of total sales turnover |
0.65% |
0.51% |
9. FOREIGN EXCHANGE EARNINGS AND OUTGO:
Your Company continues to be a net foreign exchange earner. During the year under review, your Company exported 6,209 engines and 9,954 generator sets thereby achieving total export earnings of Rs.152,219 Lacs.
Foreign exchange earnings and outgo (including royalty, dividend etc.) during the year under review were as follows:-
10. MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE REPORT:
The Management Discussion and Analysis Report and the Corporate Governance Report which forms part of this Report is appended as Annexure â3â and â4â respectively.
The Company has obtained a Certificate from Practicing Company Secretary confirming compliance with conditions of the Code of Corporate Governance as stipulated in Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the same is appended as Annexure â5â which forms part of this Report.
11. EXTRACT OF THE ANNUAL RETURN:
Extract of the annual return as prescribed under Section 92(3) of the Companies Act, 2013 is appended as Annexure â6â which forms part of this Report.
12. RISK MANAGEMENT:
Business Risk Evaluation and Management is an ongoing process within the Organization. The Company has a robust risk management framework to identify, monitor and minimize risks as also identify business opportunities. As a process, the risk associated with the business are identified and prioritized based on severity, likelihood and effectiveness of current detection. Such risks are reviewed by the senior management on a quarterly basis. Process owners are identified for each risk and metrics are developed for monitoring and reviewing the risk mitigation through Six Sigma Projects.
Audit and Risk Management Committee of the Board of Directors of your Company assists the Board in (a) overseeing and approving the Companyâs enterprise wide risk management framework; and (b) overseeing that all the risks that the organization faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks.
13. INTERNAL FINANCIAL CONTROL:
Details of internal financial control and its adequacy are included in the Management Discussion and Analysis Report which is appended as Annexure â3â and forms part of this Report.
14. VIGIL MECHANISM/ WHISTLE BLOWER POLICY:
Your Company is committed to fostering a physically and psychologically safe, integrity based, respectful, inclusive, high performance culture that breaks down hierarchies and organizational boundaries, and engages the full talents of our diverse employees to delight all our stakeholders (employees, customers, partners, shareholders, suppliers, communities) consistently.
The Company has a âWhistle Blower Policyâ which inter alia provides adequate safeguards against victimization of persons who may blow the whistle. In addition, the Company also has constituted an Internal Complaints Committee (under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013) and an Ethics Committee comprising of senior executives of the Company. Protected disclosures can be made by a whistle blower through an email or dedicated telephone line or letter to the Chairman & Managing Director of the Company or Letter to the Chairman of Audit and Risk Management Committee. Whistle Blower Policy may be accessed on the Companyâs website at the link: âhttp://www.cumminsindia.com/investors/corporate-governanceâ. Details of number of complaints filed and resolved by the Internal Complaints Committee during the year are provided in the Business Responsibility Report of the Company.
15. CODE OF CONDUCT COMPLIANCE:
All members of the Board and Senior Management have affirmed compliance to the Code of Conduct for the Financial Year 2016-17. A declaration signed by the Chairman & Managing Director affirming compliance with the Companyâs Code of Conduct by the Board of Directors and Senior Management for the Financial Year 2016-17 as required under Regulation 26(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is included in the Corporate Governance Report which is appended as Annexure â4â and forms part of this Report.
16. DIRECTORSâ RESPONSIBILITY STATEMENT:
Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and external consultant(s) including audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by Management and the relevant Board Committees, including the Audit and Risk Management Committee, the Board is of the opinion that the Companyâs internal financial controls were adequate and effective during the Financial Year 2016-17.
Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:
(i) in the preparation of the annual accounts for the year ended March 31, 2017, the applicable accounting standards have been followed and there was no material departure from the same;
(ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31, 2017 and of the profit for the period April 01, 2016 to March 31, 2017;
(iii) they have taken proper and sufficient care 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;
(iv) they have prepared the annual accounts on a going concern basis;
(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively during the year; and
(vi) they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.
17. DIRECTORS:
a) Changes in the composition of the Board of Directors:
During the year, Mr. Edward Pence (DIN: 06577765), resigned as a Director of the Company with effect from August 4, 2016 due to change in his profile at Cummins Inc., USA and consequently, Mr. J. M. Barrowman (DIN: 00668324) ceased to be an Alternate Director for Mr. Edward Pence from August 4, 2016.
The Board, at its meeting held on August 4, 2016, noted the presence of Ms. Suzanne Wells (DIN: 06954891) in India during August 1, 2016 to August 4, 2016 and consequent cessation of Ms. Nicole McDonald (DIN: 07369062) as an Alternate Director of Ms. Wells effective August 1, 2016. The Board confirmed appointment of Ms. McDonald as an Alternate Director for Ms. Wells effective August 5, 2016 upon return of Original Director (Ms. Wells) to the USA.
The Board, at its meeting held on October 26, 2016, appointed Mr. Norbert Nusterer (DIN: 07640359) as an Additional Director of the Company and Mr. J. M. Barrowman (DIN: 00668324) as an Alternate Director to Mr. Nusterer effective October 26, 2016.
The Board, at its meeting held on February 2, 2017, noted the presence of Mr. Norbert Nusterer (DIN: 07640359) in India during January 31, 2017 to February 1, 2017 and consequent cessation of Mr. J. M. Barrowman (DIN: 00668324) as an Alternate Director of Mr. Nusterer effective January 31, 2017. The Board confirmed appointment of Mr. Barrowman as an Alternate Director for Mr. Nusterer effective February 2, 2017 upon return of Original Director (Mr. Nusterer) to the USA.
The Board, at its meeting held on February 2, 2017, noted the presence of Ms. Suzanne Wells (DIN: 06954891) in India during January 31, 2017 to February 3, 2017 and consequent cessation of Ms. Nicole McDonald (DIN: 07369062) as an Alternate Director of Ms. Wells effective January 31, 2017. The Board confirmed appointment of Ms. McDonald as an Alternate Director for Ms. Wells effective February 4, 2017 upon return of Original Director (Ms. Wells) to the USA.
In accordance with the Companies Act, 2013 and Articles of Association of the Company, Ms. Suzanne Wells, Director of the Company, retires by rotation and is eligible for re-appointment.
The details of number of meetings of the Board etc. are provided in the Corporate Governance Report which is appended as Annexure â4â and forms part of this Report.
b) Committees of the Board:
The Board of Directors have constituted following committees in order to effectively cater its duties towards diversified role under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015: -
- Audit and Risk Management Committee;
- Stakeholders Relationship Committee;
- Nomination and Remuneration Committee; and
- Corporate Social Responsibility Committee.
Details of the constitution, terms of references of each Committee and number of meetings attended by individual director etc. are provided in the Corporate Governance Report which is appended as Annexure â4â and forms part of this Report.
c) Policy on Directorâs Appointment and Remuneration:
The Policy of the Company on Directorâs Appointment and Remuneration, including criteria for determining qualifications, positive attributes, independence of the directors and other matters provided under Section 178 (3) of the Companies Act, 2013, adopted by the Board is appended as Annexure â7â which forms part of this Report. Details of the remuneration paid to the Board of Directors are provided in the Corporate Governance Report. We affirm that the remuneration paid to the Directors is as per the terms laid down in the Nomination and Remuneration Policy of the Company.
d) Board Performance Evaluation Mechanism:
Pursuant to the provisions of the Companies Act, 2013 and Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance evaluation of its own performance and the Directors individually, as well as the evaluation of the working of its Committees. Details of the evaluation mechanism is provided in the Corporate Governance Report which is appended as Annexure â4â and forms part of this Report.
e) Familiarization Programme for Independent Directors:
The Independent Directors of the Company are associated with the Company for many years and are very familiar with the Company. During the year, the Management provided various documents, background notes, etc. to have a better insight of the Company. The Chairman & Managing Director also has a one-to-one discussion with the newly appointed Directors. Details of initiatives for the Director to understand the Company, its business and the regulatory framework in which the Company operates and equip him / her to effectively fulfil his / her role as a Director of the Company. The details of familiarisation programmes imparted are available at âhttp://www.cumminsindia.com/investors/corporate-governanceâ.
f) Declarations from the Independent Directors:
The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under both, the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
18. PARTICULARS OF EMPLOYEES:
The details in accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016, is appended as Annexure â8â which forms part of this Report.
A statement containing the details as prescribed under Rule 5(2) and Rule 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended from time to time forms part of this Report. Any shareholder interested in obtaining a copy of the statement, may write to the Company Secretary at the Registered Office of the Company.
19. INDUSTRIAL RELATIONS:
Industrial relations at the Companyâs plants continue to be cordial.
20. AUDITORS:
STATUTORY AUDITORS:
At the Annual General Meeting held on August 4, 2016, M/s. S R B C & CO LLP (Firm Registration No. 324982E), were appointed as statutory auditors of the Company to hold office till the conclusion of Sixtieth Annual General Meeting. In terms of the Section 139(1) of the Companies Act, 2013, the appointment of auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s. S R B C & CO LLP, as statutory auditors of the Company is placed for ratification by the shareholders. M/s. S R B C & CO LLP have informed the Company vide letter dated April 27, 2017 that their appointment, if made, would be within the limits prescribed under Section 141 of the Companies Act, 2013.
There are no qualifications, reservations or adverse remarks or disclaimers made by the auditors in the Audit Report for the year 2016-17.
SECRETARIAL AUDITOR:
Dr. K. R. Chandratre, Company Secretary in Practice, was appointed to conduct the secretarial audit of the Company for the Financial Year 2016-17, as required under Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Secretarial Audit Report in Form MR-3 for Financial Year 2016-17 is appended as Annexure â9â which forms part of this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.
COST AUDITORS:
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, as amended from time to time, the cost audit records maintained by the Company in respect of its manufacturing activity is required to be audited. Your Directors, on the recommendation of the Audit and Risk Management Committee, appointed M/s. Ajay Joshi and Associates, Pune, to audit the cost accounts of the Company for the Financial Year
2017-18 on a remuneration of Rs.9.5 Lacs plus taxes as applicable and re-imbursement of out of pocket expenses. As required under the Companies Act, 2013, the Membersâ ratification for the remuneration payable to M/s. Ajay Joshi and Associates, Cost Auditors is being sought at the ensuing Annual General Meeting.
21. CORPORATE SOCIAL RESPONSIBILITY POLICY AND ITS REPORT:
Your Company is an early adopter of the Corporate Social Responsibility (CSR) initiatives. Corporate Responsibility is one of the six core values of your Company, which focuses on âserving and improving the communities in which we liveâ. Your Company works with âCummins India Foundationâ towards three broad focus areas viz. Higher Education, Energy & Environment and Social Justice & Infrastructure.
Details about the CSR Policy and initiatives taken by the Company during the year are available on our website âhttp://www.cumminsindia.com/investors/corporate-governanceâ. The Annual Report on our CSR Activities, is appended as Annexure â10â which forms part of this Report.
22. BUSINESS RESPONSIBILITY REPORT:
As stipulated under the Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations,
2015, the Business Responsibility Report describes the initiatives taken by the Company from environmental, social and governance perspective, which forms part of the Annual Report.
23. GENERAL:
Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:
a. Change in Key Managerial Personnel during the year;
b. Details relating to deposits covered under Chapter V of the Companies Act, 2013;
c. Issue of equity shares with differential rights as to dividend, voting or otherwise;
d. Issue of shares (including sweat equity shares) to employees of the Company under any scheme;
e. Neither the Managing Director nor the Whole-time Directors of the Company received any remuneration or commission from any of its subsidiaries;
f. No frauds were reported by auditors under Section 143(12) of the Companies Act, 2013;
g. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companyâs operations (however, Members attention is drawn to the Statement on Contingent Liabilities, commitments in the notes forming part of the Financial Statement); and
h. No material changes and commitments occurred during April 1, 2017 till the date of this Report which would affect the financial position of your Company.
ACKNOWLEDGEMENT:
Your Directors would like to express their sincere appreciation for the assistance and co-operation received from financial institutions, banks, government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the Companyâs executives, staff and associates.
On behalf of the Board of Directors,
Anant J. Talaulicar
Place : Pune Chairman & Managing Director
Date : June 29, 2017 DIN: 00031051
Mar 31, 2015
The Directors take pleasure in presenting the Fifty Fourth Annual
Report together with the audited financial statements for the year
ended March 31, 2015.
1. FINANCIAL RESULTS :
During the Financial Year 2014-15, net revenue from operations was Rs.
440,580 Lacs as compared to Rs. 397,667 Lacs during the previous year
(11% higher). Exports and other foreign exchange earnings stood at Rs.
177,422 Lacs as compared to Rs. 125,831 Lacs during the previous year
(41% higher). Profit after tax increased to Rs. 78,585 Lacs from Rs.
60,002 Lacs recorded for the previous year (31% higher).
2014-2015 2013-2014
(Rs. in Lacs) (Rs. in Lacs)
APPROPRIATION OF PROFIT :
Profit before taxation 93,739 81,751
Net Profit for the year after tax but
before tax on proposed dividend 78,585 60,002
Tax on proposed dividend 7,434 6,124
Proposed Dividend 38,808 36,036
Transferred to General Reserve NIL 6,000
2. DIVIDEND :
Your Directors have recommended a final dividend of Rs. 9/- per equity
share of Rs. 2/- each fully paid-up, in addition to the interim
dividend of Rs. 5/- per equity share of Rs. 2/- each fully paid-up
share declared on September 10, 2014, aggregating to Rs. 14/- (i.e.
700%) per equity share of Rs. 2/- each fully paid-up share for the year
ended March 31, 2015 (last year Rs. 13/- per equity share i.e. 650%).
The final dividend payout is subject to approval of the Members at the
ensuing Annual General Meeting.
3. JOINT VENTURES AND ASSOCIATES :
While there is no company which has become / ceased to be joint venture
or associate during the Financial Year 2014-15, the Company has
following joint ventures and associate as on March 31, 2015 : -
a) Cummins Research and Technology India Private Limited (CRTI) :
The net revenue from the operations of Cummins Research and Technology
India Private Limited (CRTI), a 50:50 joint venture between Cummins
Inc., U.S.A. and your Company, for the year ended March 31, 2015 was
Rs. 3,372 Lacs as compared to Rs. 6,329 Lacs during the previous year
(47% lower). CRTI has a Research and Technology Center at Pune and is
engaged in providing Information Technology enabled Mechanical
Engineering development services primarily to Cummins Inc., U.S.A., its
subsidiaries and joint ventures in all parts of the world. CRTI is
converted from a Public Company limited by shares in to a Private
Company limited by shares under the Companies Act, 2013 with effect
from December 10, 2014.
b) Valvoline Cummins Private Limited (VCL) :
VCL, a 50:50 joint venture with Valvoline International Inc., U.S.A., a
global leader in lubricants and engine oils, generated net revenue of
Rs. 100,614 Lacs from its operations for the year ended March 31, 2015
as compared to Rs. 100,923 Lacs during the previous year. VCL is
converted from a Public Company limited by shares in to a Private
Company limited by shares under the Companies Act, 2013 with effect
from October 14, 2014.
c) Cummins SVAM Sales & Service Private Limited (CSSSL) :
CSSSL is a 50:50 joint venture with SVAM Power Plants Private Limited,
a dealer of your Company. CSSSL focuses on sales and service of Cummins
engines and generator sets in parts of Northern India. CSSSL generated
net revenue of Rs. 6,940 Lacs from its operations for the year ended
March 31, 2015 as compared to Rs. 6,584 Lacs during the previous year
(5% higher). CSSSL is converted from a Public Company limited by shares
in to a Private Company limited by shares under the Companies Act, 2013
with effect from February 3, 2015.
d) Cummins Generator Technologies India Private Limited (CGT) :
Your Company owns approx. 48.5% shareholding in the Associate Company
namely CGT which is in the business of manufacturing, marketing, sales
and service of alternators and related spare parts. CGT generated net
revenue of Rs. 51,565 Lacs from its operations for the year ended March
31, 2015 as compared to Rs. 49,722 Lacs during the previous year (4%
higher). CGT is converted from a Public Company limited by shares in to
a Private Company limited by shares under the Companies Act, 2013 with
effect from December 10, 2014.
Further, a statement containing the salient features of the joint
ventures and associate in the prescribed Form AOC-1 is appended as
Annexure ''1'' which forms part of this Report.
4. INITIATIVES AT PHALTAN :
Currently various manufacturing plants are operational at Megasite at
Phaltan, such as the HHP Rebuild Center, the India Parts Distribution
Center, the Phaltan MidRange Upfit Center (PMUC) at the Domestic Tariff
Area and the Low Horsepower Generator Set plant at the Special Economic
Zone (SEZ).
While the common facilities like the Crèche, Administration Office and
Health Center have commenced operations since August 2014, the facility
for Area Business Office Training Center including an Auditorium having
sitting capacity for 250 people has become functional since June 2015.
A Technical Training Center (at Phaltan), to support the Distribution
Business, is expected to commence its operations by September 30, 2015.
This Center has a capacity to train more than 550 engineers and 300
customers on special programs on controls, alternators etc.
In addition to manufacturing and related facilities, construction of a
residential campus facility for employees of the Company near the
Megasite, Phaltan, is expected to be completed by September 30, 2015
which comprises of four buildings with 500 rooms, a cafeteria and a
club house.
5. INDIA OFFICE CAMPUS (IOC) :
Your Board of Directors are pleased to inform that the India Office
Campus at Balewadi, Pune has become fully functional and currently
houses all professional employees of the Company and its group
companies located across various offices in Pune.
The Company proposes to shift its present Registered Office from
Kothrud, Pune 411038 Maharashtra India to Cummins India Office Campus,
Tower A, 5th Floor, Survey No. 21, Balewadi, Pune 411045 with effect
from July 1, 2015.
Up to March 31, 2015, your Company has incurred total capital
expenditure of Rs. 68,308 Lacs for the first and second towers of the
IOC premises and an additional expenditure of Rs. 27,200 Lacs is
proposed for the third tower.
6. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS :
Other than the unsecured loan given to Cummins Technologies India
Private Limited (which is a subsidiary of Cummins Inc., U.S.A.) in 2011
in compliance with the Companies Act, 1956 and Rules thereunder, no
other loan or guarantee is given or investment is made by your Company
during the Financial Year 2014-15.
7. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES :
Particulars of contracts or arrangements with related parties referred
to in Section 188 (1) of the Companies Act, 2013 in the prescribed Form
AOC-2 is appended as Annexure ''2'' which forms part of this Report.
The Policy on materiality of related party transactions and dealings
with related party transactions as approved by the Board may be
accessed on the Company''s website at the link:
''http://www.cumminsindia.com/MAIN/corporate.html''.
8. CONSERVATION OF ENERGY :
Your Company continued to undertake various energy conservation
initiatives during the year, some of which are given below:
Industrial Engine Business Unit Plants (Kothrud) :
- Reduction in 20% of power consumption in BU04 against standard
machining hours;
- Reduction in Energy Consumption of new KV upfit from 179 kWh per
engine to 143 kWh per engine by automation of blower line pumps;
- Implementation of energy saving project by replacing reciprocating
type compressor by scroll type in Engineering AC plant; and
- Implementation of automated tools for energy review and balancing for
identifying energy saving opportunities.
Power Generation Business Unit Plant, Pirangut and Phaltan Special
Economic Zone (SEZ) :
- Use of LED fittings and natural sky lights on roofs to ensure minimal
use of lights on the shop floor during day time;
- Maintaining a unity power factor and improving the power factor;
- Efficient load sharing between the distribution transformers leading
to energy savings;
- Reduction in compressor energy consumption by 5% by way of efficient
operation, leakage elimination, use of air guns, demand-based pressure
control at Pirangut.
Distribution Business Unit Plants (Erandwane, Pune and HHP Rebuild
Center, Phaltan) :
- Installation of HVLS Fan with VFD for shop floor to reduce use of
wall mounting fans and improve air flow;
- Maintaining a unity power factor at the HHP Rebuild Center;
- Alternate switching off, of the street lights after duty hours;
- Use of VRV air conditioners for Administrative Building at Phaltan,
thereby achieving energy savings;
- Maintaining AHU with additional screen filters and resulted in better
efficiency with power saving;
- Use of sky lights on roofs to ensure minimal use of lights on the
shop floor during day time; and
- Optimum utilization of dedicated air conditioning units instead of
centralized AC system.
India Parts Distribution Center, Phaltan :
- Installation of Solar water heater for dish cleaning at cafeteria.
Quarterly preventive maintenance plan is place to validate
effectiveness;
- Use of motion activated sensors in the racking aisles and the office
area and dock station. Quarterly preventive maintenance plan is to
check working conditions of all sensors;
- Use of sky lights in the plant to reduce need for lighting during
daytime;
- Use of motion sensors in rest rooms to reduce electricity
consumption;
- Monitoring power off schedule and surprise audit by the Security Team
and Safety Point Leaders which ensures optimum usage of available
electrical equipment;
- Use of pull cords installation at offices and at packaging areas to
reduce the lighting load consumption;
- Use of dual circuit motion sensors in meeting rooms;
- Use of VRV air conditioners for the administrative block;
- Use of energy efficient T-5 tubes at ware house to achieve energy
savings;
- Use of solar LED street lights at certain locations namely, internal
connecting roads, Admin Block, Hill top area etc. to reduce energy
consumption; and
- Area Specific Energy dash board created, monthly release to entire
plant team to ensure area specific focus remain intact.
Phaltan Midrange Upfit Center, Phaltan :
- Reduction of 10% Electrical Energy Consumption for all External
Utility lights which saved 200 units per month; and
- Reduction of 5% Electrical Energy Consumption for Plant Lights and
Fans.
Major initiatives undertaken during the previous year and continued
during the year are as follows : -
- Efficient load sharing between the distribution transformers leading
to energy savings;
- Maintaining unity power factor by reducing line energy losses;
- Use of natural sky lights on roofs to ensure minimal use of lights on
the shop floor during day time;
- Use of energy efficient VRV air conditioners for the administrative
building;
- Occupancy based control for AC and electricity and use of LED/ T-5
Lights;
- Use of 5-star rated air conditioners for ground floor and first floor
at office area;
- Use energy efficient HVLS fan for shop floor ventilation;
- Use of dry type transformers to minimize energy loss; and
- Use of pull cords installation at offices and at packaging areas to
reduce the lighting load consumption.
Your Company has made an overall capital investment of Rs. 755 Lacs on
energy conservation equipment at various plants as on March 31, 2015.
IMPACT OF THE ABOVE MEASURES :
The above initiatives resulted in savings of about Rs. 107 Lacs in
addition to Greenhouse Gas (GHG) emission reduction by 20% compared to
FY 2013-14. The energy units saved during the year were about 12,60,450
kWh.
9. RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION :
With a view to satisfy legislative, customer and market needs, your
Company is committed to introducing new products and improving existing
products to have better performance levels, lower life cycle costs,
excellent safety and recyclability characteristics and meet stringent
emission norms and, is geared towards meeting specific needs of the
Indian customer.
The Technical Center of your Company continues in its endeavour to
indigenize components and develop the next generation of components and
systems in collaboration with the parent company - Cummins Inc., to
reduce costs, improve fuel-efficiency, improve safety, enhance
recyclability, and enhance performance and durability of its products.
In order to improve technical productivity, new methodologies and
technologies have been introduced and enhancements in capabilities are
being continuously pursued to reduce the costs associated with new
product development and customer support. Continued implementation of
Six Sigma initiatives resulted in significant cost savings and improved
operating efficiency.
To ensure the health and safety of employees, the Technical Center also
pursued several initiatives to help drive towards the goal of
zero-recordable incidents.
A. New Product Development :- The following new Products were
developed as part of the above initiatives during the year:-
1. Emissions recipe to meet BSIII, BSIV and OBDII emission regulations
for On Highway Commercial Vehicle ratings.
2. Advanced BSIII electronic products to enhance competitiveness in
the Automotive segment and drive towards lower fuel consumption and
higher power density product offerings for customers.
3. Multiple stationary engine families to meet the upcoming CPCB II
Power Generation regulations up to 800 kW.
4. Key Industrial engine product families to support the growing
Industrial Business.
5. Key Marine engine product families to support the increasing
commercial Marine Business.
6. Fundamental electronics capability to help develop products that
comply with OBD II (On Board Diagnostics) legislation.
7. Further enhancement of non-diesel product development capability.
8. Improved capability in intake air characteristic measurements to
enhance understanding and control of the combustion process.
B. Benefits derived as a result of the above activities are:-
1. Enhanced development capabilities through use of electronic tools
and simulation software to control the engine performance and
combustion process.
2. Enhanced capability to tailor engine designs to improve the value
proposition for customers through delivering superior power output,
fuel economy, and transient response and reduced emission.
3. Product and component availability to meet the new emission norms
ahead of implementation.
4. More safe, recyclable, reliable, durable and performance-efficient
products and critical components were made available for the customers.
5. Component indigenization capability was improved through enhanced
test capability, rig test and flow bench development and availability.
6. Significant enhancements in measurement capability were made to
pursue business opportunities in non- diesel markets to serve both the
rural and international communities.
C. Future plans include :- 1. Developing local ''fit for market''
solutions to meet upcoming emission regulations, local and rural market
needs.
2. Technological innovation to add value to the products in the areas
of alternate fuels, recycle / re-use and hybrid engines.
3. Continued expansion of the product range to serve the local and
global market needs.
4. Providing energy-efficient solutions to reduce carbon footprint and
improve recyclability.
5. Continued focus on indigenization and partnering with suppliers for
waste elimination initiatives.
6. Alternate source development for various engine components.
7. Expanding the coverage of our engine development for the Power
Generation market.
8. Advanced common rail electronic fuel systems to meet market needs
for upcoming BS IV emission norms in Commercial Vehicle market aimed at
delivering better performance through globally tested Cummins Fuel
Systems technology.
D. Your Company continues to draw benefits from Cummins Inc.''s
technical capabilities and advanced technology. With continued support
from Cummins Inc., your Company is committed to develop advanced
fuel-efficient and emission-compliant engines that work on a variety of
fuel sources and comply with forthcoming domestic and global emission
regulations, to help reduce Greenhouse Gas emission, whilst also
enabling the products to deliver superior performance, reliability,
durability and recyclability.
E. Expenditure on R & D :- The total expenditure on R & D was as
follows :-
2014-2015 2013-2014
(Rs. in Lacs) (Rs. in Lacs)
Capital 1,138 790
Recurring 1,639 4,220
Total 2,777 5,010
Total R&D expenditure as a
percentage of total sales turnover 0.63% 1.26%
11. MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE REPORT :
As per clause 49 of the Equity Listing Agreement with Stock Exchanges,
the Management Discussion and Analysis Report and the Corporate
Governance Report is appended as Annexure ''3'' and ''4'' respectively
which form part of this Report.
The Company has obtained a Certificate from the Statutory Auditors
confirming compliance with conditions of the Code of Corporate
Governance as stipulated in Clause 49 of the Listing Agreement with the
Stock Exchanges and the same is appended as Annexure ''5'' which forms
part of this Report.
12. EXTRACT OF THE ANNUAL RETURN :
Extract of the annual return as prescribed under Section 92 (3) of the
Companies Act, 2013 is appended as Annexure ''6'' which forms part of
this Report.
13. RISK MANAGEMENT :
Business Risk Evaluation and Management is an ongoing process within
the Organization. The Company has a robust risk management framework to
identify, monitor and minimize risks as also identify business
opportunities. As a process, the risks associated with the business are
identified and prioritized based on Severity, Likelihood and
Effectiveness of current detection. Such risks are reviewed by the
senior management on a quarterly basis. Process owners are identified
for each risk and metrics are developed for monitoring and reviewing
the risk mitigation through Six Sigma Projects.
During the year, your Directors have re-constituted the Finance and
Audit Committee of the Board of Directors of the Company as ''Audit and
Risk Management Committee'' additionally entrusting the Committee with
the responsibility to assist the Board in (a) Overseeing and approving
the Company''s enterprise wide risk management framework; and (b)
Overseeing that all the risks that the organization faces such as
strategic, financial, credit, market, liquidity, security, property,
IT, legal, regulatory, reputational and other risks have been
identified and assessed and there is an adequate risk management
infrastructure in place capable of addressing those risks.
14. INTERNAL FINANCIAL CONTROL :
The Board has adopted the policies and procedures for ensuring the
orderly and efficient conduct of its business, including adherence to
the Company''s policies, the safeguarding of its assets, the prevention
and detection of frauds and errors, the accuracy and completeness of
the accounting records, and the timely preparation of reliable
financial information.
15. VIGIL MECHANISM / WHISTLE BLOWER POLICY :
The Company has a ''Whistle Blower'' Policy which provides adequate
safeguards against victimization of persons who may blow whistle. In
addition, the Company also has constituted Internal Complaints
Committee (under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013) and an Ethics
Committee comprising of senior executives of the Company. Protected
disclosures can be made by a whistle blower through an email or
dedicated telephone line or letter to the Chairman & Managing Director
of the Company or Letter to the Chairman of Audit and Risk Management
Committee. Whistle Blower Policy may be accessed on the Company''s
website at the link: ''http://www.cumminsindia.com/MAIN/corporate.html''.
Details of number of complaints filed and resolved by the Internal
Complaints Committee during the year are provided in the Business
Responsibility Report of the Company.
16. CODE OF CONDUCT COMPLIANCE :
A declaration signed by the Chairman & Managing Director affirming
compliance with the Company''s Code of Conduct by the Directors and
Senior Management for the Financial Year 2014-15 as required under
Clause 49 of the Equity Listing Agreement with Stock Exchanges is
included in the Corporate Governance Report which is appended as
Annexure ''4'' and forms part of this Report.
17. DIRECTORS'' RESPONSIBILITY STATEMENT :
In pursuance of the provisions of Section 134 (5) of the Companies Act,
2013, your Directors make the following statement:
(i) that in the preparation of the annual accounts for the year ended
March 31, 2015, the applicable accounting standards have been followed
and there was no material departure from the same;
(ii) that the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company as on March 31, 2015 and of the profit for
the period April 1, 2014 to March 31, 2015;
(iii) that the Directors have taken proper and sufficient care 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;
(iv) that the Directors have prepared the annual accounts on a going
concern basis;
(v) that the Directors have laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and were operating effectively during the year; and
(vi) that the Directors had devised proper systems to ensure compliance
with the provisions of all applicable laws and that such systems were
adequate and operating effectively.
18. DIRECTORS :
a) Changes in the composition of the Board of Directors :
During the year, Mr. Mark Smith (DIN 06852777) and Ms. Suzanne Wells
(DIN 06954891) were appointed as Additional Directors of the Company
w.e.f. May 23, 2014 and August 22, 2014 respectively. Mr. Pradeep
Bhargava (DIN 00525234) has been appointed as an Alternate Director to
Mr. Mark Smith w.e.f. May 23, 2014. Subsequently, Mr. Mark Smith is
appointed as a Director, liable to retire by rotation, in the Annual
General Meeting held on August 1, 2014.
The Board, at its Meeting held on August 1, 2014, noted the presence of
Mr. Edward Pence (DIN 06577765) in India during July 30, 2014 to August
3, 2014 and consequent cessation of Mr. J. M. Barrowman (DIN 00668324)
as an Alternate Director of Mr. Edward Pence effective July 30, 2014.
The Board confirmed appointment of Mr. J. M. Barrowman as an Alternate
Director to Mr. Edward Pence effective August 4, 2014 upon return of
Original Director (Mr. Edward Pence) to the U.S.A.
In its Meeting held on September 10, 2014, the Board of Directors noted
the presence of Mr. Mark Smith in India during September 9, 2014 to
September 13, 2014 and consequent cessation of Mr. Pradeep Bhargava as
an Alternate Director to Mr. Mark Smith effective September 9, 2014.
The Board, at its Meeting dated September 10, 2014 confirmed
appointment of Mr. Pradeep Bhargava, as an Alternate Director to Mr.
Mark Smith effective September 14, 2014 upon return of Original
Director (Mr. Mark Smith) to the U.S.A.
The Board, at its Meeting held on November 6, 2014, noted the presence
of Mr. Edward Pence in India during November 4, 2014 to November 7,
2014 and consequent cessation of Mr. J. M. Barrowman as an Alternate
Director of Mr. Edward Pence effective November 4, 2014. The Board
confirmed appointment of Mr. J. M. Barrowman as an Alternate Director
to Mr. Edward Pence effective November 8, 2014 upon return of Original
Director (Mr. Edward Pence) to the U.S.A.
Mr. Patrick Ward (DIN 02871925) and Mr. Rajasekhar Menon (DIN 03074942)
stepped down as Directors of the Company w.e.f. May 22, 2014 and August
2, 2014 respectively, due to their personal reasons. Mr. Pradeep
Bhargava, Alternate Director to Mr. Ward also ceased to be a Director
consequent to resignation of Mr. Ward. The Board of Directors placed
on record their appreciation for the contribution made by Mr. Menon,
Mr. Ward and Mr. Bhargava.
In accordance with the Companies Act, 2013 and Articles of Association
of the Company, Mr. Casimiro Antonio Vieira Leitao and Mr. Edward
Phillip Pence, Directors of the Company, retire by rotation and are
eligible for re- appointment.
b) Committees of the Board :
The Board of Directors have constituted following committees in order
to effectively cater its duties towards diversified role under the
Companies Act, 2013 and Equity Listing Agreement with the Stock
Exchanges:-
- Audit and Risk Management Committee;
- Stakeholders Relationship Committee;
- Nomination and Remuneration Committee; and
- Corporate Social Responsibility Committee.
Details of the constitution, terms of references of each Committee and
number of meetings attended by individual director etc. are provided in
the Corporate Governance Report which is appended as Annexure ''4'' and
forms part of this Report.
c) Appointment of Key Managerial Personnel :
At their Meeting held on June 27, 2014 of the Board of Directors of the
Company, Mr. Anant J. Talaulicar, Chairman & Managing Director and Mr.
Rajiv Batra, Chief Financial Officer were formally designated as ''Key
Managerial Personnel'' under Section 203 of the Companies Act, 2013.
Mr. K. Venkata Ramana, Group Vice President - Legal and Company
Secretary was appointed as ''Key Managerial Personnel'' of the Company
effective December 11, 2014.
d) Policy on Director''s Appointment and Remuneration :
The Policy of the Company on Director''s Appointment and Remuneration,
including criteria for determining qualifications, positive attributes,
independence of the directors and other matters provided under Section
178 (3) of the Act, adopted by the Board is appended as Annexure ''7''
which forms part of this Report. Details of the remuneration paid to
the Board of Directors are provided in the Corporate Governance Report.
We affirm that the remuneration paid to the Directors is as per the
terms laid down in the Nomination and Remuneration Policy of the
Company.
e) Board Performance Evaluation Mechanism :
Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of
the Listing Agreement, the Board has carried out the annual performance
evaluation of its own performance and the Directors individually, as
well as the evaluation of the working of its Committees. Details of the
evaluation mechanism is provided in the Corporate Governance Report
which is appended as Annexure ''4'' and forms part of this Report.
f) Familiarization Programme for Independent Directors :
The Independent Directors of the Company are associated with the
Company for many years and are very familiar with the Company. During
the year, the Management provided various documents, background notes
etc. to have a better insight of the Company. The Chairman & Managing
Director also has a one-to-one discussion with the newly appointed
Directors. Details of initiatives for the Director to understand the
Company, its business and the regulatory framework in which the Company
operates and equips him/ her to effectively fulfil his/ her role as a
Director of the Company are available at
''http://www.cumminsindia.com/MAIN/corporate.html''.
g) Declarations from the Independent Directors :
The Company has received declarations from all the Independent
Directors of the Company confirming that they meet the criteria of
independence as prescribed both under the Act and Clause 49 of the
Equity Listing Agreement with the Stock Exchanges.
19. PARTICULARS OF EMPLOYEES :
The table containing the names and other particulars of employees in
accordance with the provisions of Section 197 (12) of the Act, read
with Rule 5 (1) of the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, is appended as Annexure ''8'' which
forms part of this Report.
A statement containing the names of every employee employed throughout
the Financial Year and in receipt of remuneration of f 60 Lacs or more,
or employed for part of the year and in receipt of f 5 Lacs or more per
month under Rule 5 (2) and 5 (3) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 forms part of this
Report and is available on your Company''s website at
http://www.cumminsindia.com/MAIN/annual reports.html. Any shareholder
interested in obtaining a copy of the statement, may write to the
Company Secretary at the Registered Office of the Company.
20. INDUSTRIAL RELATIONS :
Industrial relations at the Company''s plants continue to be cordial.
21. AUDITORS :
STATUTORY AUDITORS :
The Auditors, Price Waterhouse, Chartered Accountants, retire and hold
office until the conclusion of the ensuing Annual General Meeting and
are eligible for re-appointment under the Companies Act, 2013. They
have confirmed their eligibility to the effect that their
re-appointment, if made, would be within the prescribed limits under
the Act and that they are not disqualified for re-appointment. As
required under Clause 49 of the Listing Agreement, the auditors have
also confirmed that they hold a valid certificate issued by the Peer
Review Board of the Institute of Chartered Accountants of India.
SECRETARIAL AUDITOR :
Dr. K. R. Chandratre, Company Secretary in practice was appointed to
conduct the secretarial audit of the Company for the Financial Year
2014-15, as required under Section 204 of the Act and the Companies
(Appointment and Remuneration of Managerial Personnel) Rules, 2014. The
Secretarial Audit Report in Form MR-3 for Financial Year 2014-15 is
appended as Annexure ''9'' which forms part of this Report. The
Secretarial Audit Report does not contain any qualification,
reservation or adverse remark.
COST AUDITORS :
Pursuant to Section 148 of the Companies Act, 2013 read with The
Companies (Cost Records and Audit) Amendment Rules, 2014, the cost
audit records maintained by the Company in respect of its manufacturing
activity is required to be audited. Your Directors had, on the
recommendation of the Audit and Risk Management Committee, appointed
Messrs Ajay Joshi and Associates, Pune to audit the cost accounts of
the Company for the Financial Year 2015-16 on a remuneration of f 9
Lacs. As required under the Companies Act, 2013, the remuneration
payable to the cost auditor is required to be placed before the Members
in a general meeting for their determination. Accordingly, a Resolution
seeking Member''s determination for the remuneration payable to Messrs
Ajay Joshi and Associates, Cost Auditors is included at Item No. 7 of
the Notice convening the Annual General Meeting.
22. CORPORATE SOCIAL RESPONSIBILITY POLICY AND ITS REPORT :
Your Company is an early adopter of the corporate social responsibility
(''CSR'') initiatives. Corporate Responsibility is one of the six core
values of your Company, which focuses on ''serving and improving the
communities in which we live''. Your Company works with ''Cummins India
Foundation'' towards three broad focus areas viz. Higher Education,
Energy and Environment and Social Justice (including Local Community
Infrastructure Development).
Details about the CSR Policy and initiatives taken by the Company
during the year are available on our website
''http://www.cumminsindia.com/CIF/about us.html''. The Annual Report on
our CSR Activities, is appended as Annexure ''10'' which forms part of
this Report.
23. BUSINESS RESPONSIBILITY REPORT :
As stipulated under the Equity Listing Agreement with Stock Exchanges,
the Business Responsibility Report describing the initiatives taken by
the Company from environmental, social and governance perspective is
attached as part of the Annual Report.
24. GENERAL :
Your Directors state that no disclosure or reporting is required in
respect of the following items as there were no transactions on these
items during the year under review:
a. Details relating to deposits covered under Chapter V of the Act;
b. Issue of equity shares with differential rights as to dividend,
voting or otherwise;
c. Issue of shares (including sweat equity shares) to employees of the
Company under any scheme;
d. Neither the Managing Director nor the Whole-time Directors of the
Company received any remuneration or commission from any of its
subsidiaries;
e. No significant or material orders were passed by the Regulators or
Courts or Tribunals which impact the going concern status and Company''s
operations; and
f. No material changes and commitments occurred during April 1, 2015
till the date of this Report which would affect the financial position
of your Company.
ACKNOWLEDGEMENT :
Your Directors would like to express their sincere appreciation for the
assistance and co-operation received from the financial institutions,
banks, government authorities, customers, vendors and members during
the year under review. Your Directors also wish to place on record
their deep sense of appreciation for the committed services by the
Company''s executives, staff and workers.
On behalf of the Board of Directors,
Anant J. Talaulicar
Chairman & Managing Director
Mumbai: May 28, 2015
DIN: 00031051
Mar 31, 2014
Dear Members,
The Directors have pleasure in presenting the Fifty Third Annual
Report and the Audited Accounts of the Company for the year ended March
31, 2014.
1. FINANCIAL RESULTS :
During the Financial Year 2013-14, net revenue from operations was f
397,667 Lacs as compared to f 458,938 Lacs during the previous year
(13% lower). Exports and other foreign exchange earnings stood at f
125,831 Lacs as compared to f 131,597 Lacs during the previous year (4%
lower). Profit after tax decreased to Rs. 60,002 Lacs from Rs. 76,411 Lacs
recorded for the previous year (21% lower).
2013-2014 2012-2013
(Rs. in Lacs) (Rs. in Lacs)
APPROPRIATION OF PROFIT :
Profit before taxation 81,751 105,133
Net Profit for the year after tax
but before tax on proposed dividend 60,002 76,411
Tax on dividend 6,124 6,017
Dividend 36,036 36,036
Transferred to General Reserve 6,000 7,641
Balance carried to Balance Sheet 136,699 124,857
2. DIVIDEND :
Your Directors have recommended a final dividend of Rs. 8/- per equity
share of Rs. 2/- each fully paid-up, in addition to the interim dividend
of Rs. 5/- per equity share of Rs. 2/- each fully paid declared on February
4, 2014, aggregating to Rs. 13/- per equity share of Rs. 2/- each fully
paid-up share for the year ended March 31, 2014.
3. JOINT VENTURES :
a) Cummins Research and Technology India Limited (CRTI) :
The net revenue from the operations of Cummins Research and Technology
India Limited (CRTI), a 50:50 joint venture between Cummins Inc.,
U.S.A. and your Company, for the year ended March 31, 2014 was Rs. 6,329
Lacs as compared to Rs. 8,512 Lacs during the previous year (26% lower).
CRTI has a Research and Technology Center at Pune and is engaged in
providing Information Technology enabled Mechanical Engineering
development services primarily to Cummins Inc., its subsidiaries and
joint ventures in all parts of the world.
b) Valvoline Cummins Limited (VCL) :
VCL, a 50:50 joint venture with Valvoline International Inc., U.S.A., a
global leader in lubricants and engine oils, generated net revenue of Rs.
100,923 Lacs from its operations for the year ended March 31, 2014 as
compared to Rs. 96,897 Lacs during the previous year (4% higher).
c) Cummins SVAM Sales & Service Limited (CSSSL) :
CSSSL is a 50:50 joint venture with SVAM Power Plants Private Limited,
a dealer of your Company. CSSSL focuses on sales and service of Cummins
engines and generator sets in parts of Northern India. CSSSL generated
net revenue of Rs. 6,584 Lacs from its operations for the year ended
March 31, 2014 as compared to Rs. 6,209 Lacs during the previous year (6%
higher).
4. INITIATIVES AT PHALTAN :
Your Company continues with its expansion initiatives at the Megasite
in Phaltan with the following projects :
- A facility for the Power Generation Business was inaugurated at MIDC
Special Economic Zone at the Megasite, Phaltan in July, 2013. This is
the sixth facility of the Cummins Group of Companies in Phaltan. This
Plant is established to manufacture generator sets and generator drive
engines in the low and medium kilowatt range for export markets (with a
matured capacity of 51,000 units by 2016).
- A Technical Training Center facility at Phaltan is expected to
commence its operations in March 2015 with a capacity to train 550
engineers, 300 customers and special programs on controls, alternators
etc. for dealer engineers, customers and OEMs every year.
- Common facilities like the Area Business Organization Training Center
and Auditorium, Crèche, Administration Office are expected to commence
their operations in March 2015.
Your Company''s facility at Viman Nagar, Pune which catered to B-series
engine based generators, closed down its operations w.e.f. March 31,
2013, due to synergizing business operations at the Megasite. The
closure of the said facility did not have any material impact on the
business of your Company as the demand for this product is being
catered effectively from the facility located at Phaltan Megasite Upfit
Center, Phaltan.
5. INDIA OFFICE CAMPUS (IOC) :
Your Company had entered into an Understanding for the purchase of a
ten-acre Office Campus at Balewadi, Pune (India Office Campus). The IOC
is to house all professional employees located at various offices in
Pune with the exception of design/development engineers who will be
based at the Kothrud campus Technical Center, and manufacturing support
employees who will be located in the various plants. Your Company
proposes to let out surplus office space to other Cummins Group
companies, if any, after housing all of its professional employees.
This initiative would offer the distinct advantage of co-locating most
of the Cummins Group professional employees at one location and derive
synergies of co-location. As on March 31, 2014, your Company incurred
total capital expenditure of Rs. 32,250 Lacs and an additional
expenditure of Rs. 38,700 Lacs is proposed till the second part of the
facility is made fully functional.
6. MANAGEMENT DISCUSSION AND ANALYSIS / CORPORATE GOVERNANCE REPORT :
As per Clause 49 of the Listing Agreement with Stock Exchanges, the
Management Discussion and Analysis Report and the Corporate Governance
Report are annexed and form part of the Directors'' Report.
7. CODE OF CONDUCT COMPLIANCE :
A declaration signed by the Chairman and Managing Director affirming
compliance for the Financial Year 2013-14, with the Company''s Code of
Conduct by the Directors and Senior Management as required under Clause
49 of the Listing Agreement with Stock Exchanges, is annexed and forms
part of the Directors'' Report.
8. DIRECTORS'' RESPONSIBILITY STATEMENT :
In pursuance of the provisions of Section 217 (2AA) of the Companies
Act 1956, your Directors make the following statement :
(i) that in the preparation of the annual accounts, all applicable
accounting standards have been followed and there was no material
departure from the accounting standards;
(ii) that the Directors have selected such accounting policies and
applied them consistently and made judgements and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company as on March 31, 2014 and of the profit for
the period April 1, 2013 to March 31, 2014;
(iii) that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities;
(iv) that the Directors have prepared the annual accounts on an ongoing
concern basis; and
(v) that the Directors have laid down internal financial controls to be
followed by the Company and that such internal financial controls are
adequate and were operating effectively during the year.
9. CONSERVATION OF ENERGY :
Your Company continued to undertake various energy conservation
initiatives during the year, some of which are given below :
Industrial Engine Business Unit Plant (Kothrud)
- Reduction in compressed air electrical energy consumption from 32 kWh
per cylinder to 27 kWh per cylinder;
- Reduction in power consumption of machines in the Cylinder Block Line
from 635 kWh to 571 kWh per equivalent KV cylinder blocks;
- 15% reduction in IEBU Refrigeration tonnage usage from 2167 Tons to
1798 Tons;
- Reduction in energy consumption of Main Power House Pumping system
from 19,000 kWh to 12,000 kWh per month;
- Reduction in energy consumption of CNC machines from 1216 kWh to 1034
kWh per day in Cylinder Head section;
- 25% reduction in power consumption of hot well pump houses by
demand-based pump rpm control automation using PLC and automation;
- Continued maintaining unity power factor by reducing line energy
losses; and
- Energy saving by load balancing of Transformers - elimination of no
load and load losses by switching off of Transformer A, B and D.
The Plant continued implementation of the following initiatives :
- Efficient load sharing between the distribution transformers leading
to energy savings;
- Maintaining unity power factor by reducing line energy losses;
- Use of natural sky lights on roofs to ensure minimal use of lights on
the shop floor during day time; and
- Use of VRV air conditioners for the administrative building.
Power Generation Business Unit Plant (Pirangut)
- Use of natural sky lights on roofs to ensure minimal use of lights on
the shop floor during day time;
- Maintaining a unity power factor and improving the power factor;
- Efficient load sharing between the distribution transformers leading
to energy savings; and
- Reduction in compressor energy consumption by 5% by way of efficient
operation, leakage elimination, use of air guns, demand-based pressure
control at Pirangut.
The Plant continued implementation of the following initiatives :
- Use of LED light fittings in office wash rooms;
- Use of motion sensors in rest rooms to reduce electricity
consumption;
- Pull cords installation at offices to reduce the lighting load
consumption;
- Use of 5-star rated air conditioners for ground floor and first floor
at office area;
- Use of energy efficient T-5 tubes in the shop floor to achieve energy
savings; and
- Use energy efficient HVLS fan for shop floor ventilation.
Distribution Business Unit Plants (Erandwane, Pune and HHP Rebuild
Center, Phaltan)
- Use of APFC (Automatic Power Factor Correction) panel for power
factor correction at the load end;
- Installation of solar water heater for canteen;
- Installation of temperature controller for cooling tower;
- Use of T5 tubes with electronic ballast for the shop floor, street
and office area lighting;
- Maintaining a unity power factor at the HHP Rebuild Centre and
improving the power factor at the Erandwane, Pune;
- Use of sky lights on roofs to ensure minimal use of lights on the
shop floor during day time; and
- Energy saving rounds during the break between the shifts.
The Plants continued implementation of the following initiatives :
- Alternate switching off, of the street lights after duty hours;
- Installation of EM6 controller for controlling of air compressors
(auto switching off the air compressors);
- Use of dry type transformers to minimize energy loss;
- Use of VRV air conditioners for Administrative Building at Phaltan
thereby achieving energy savings;
- Load reduction in administration building at Erandwane, Pune by
localized lighting at work stations and redesigning of general lighting
as well as natural lighting;
- Pull cord switches for administration block lighting;
- Reduction of AHU water pump - Water supply to AHU given from the test
cell pumps;
- Discontinued use of 30 HP Air compressor and instead use of portable
air compressor of 5HP at Erandwane site; and
- Increased AHU preventative maintenance frequency has resulted in
better efficiency with power saving.
India Parts Distribution Center (Phaltan)
- Installation of Solar street light at the Hill Top area;
- Installation of Solar water heater for dish cleaning at cafeteria;
- Use of motion activated sensors in the racking aisles and the office
area and dock station;
- Use of sky lights in the plant to reduce need for lighting during
daytime;
- Use of motion sensors in rest rooms to reduce electricity
consumption;
- Monitoring power off schedule and surprise audit by the Security Team
and Safety Point Leaders which ensures optimum usage of available
electrical equipment;
- Use of pull cords installation at offices and at packaging areas to
reduce the lighting load consumption;
- Use of dual circuit motion sensors in meeting rooms;
- Use of VRV air conditioners for the administrative block;
- Use of energy efficient T-5 tubes at ware house to achieve energy
savings; and
- Use of solar LED street lights at certain locations namely, internal
connecting roads, Admin Block, Hill Top area etc. to reduce energy
consumption.
IMPACT OF THE ABOVE MEASURES :
The above initiatives resulted in savings of about Rs. 271 Lacs in
addition to Greenhouse Gas (GHG) emission reduction by 3,131,153 tons
during the year. The energy units saved during the year were about
14,643 kWh.
10. RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION :
With a view to satisfy legislative, customer and market needs, your
Company is committed to introducing new products and improving existing
products to have better performance levels, lower life cycle costs,
excellent safety and recyclability characteristics and meet stringent
emission norms.
The Technical Center of your Company continues in its endeavour to
indigenize components and develop the next generation of components and
systems in collaboration with the parent company - Cummins Inc., to
reduce costs, improve fuel-efficiency, improve safety, enhance
recyclability, and enhance performance and durability of its products.
In order to improve technical productivity, new methodologies and
technologies have been introduced and enhancements in capabilities are
being continuously pursued to reduce the costs associated with new
product development and customer support. Continued implementation of
Six Sigma initiatives resulted in significant cost savings and improved
operating efficiency.
To ensure the health and safety of employees, the Technical Center also
pursued several initiatives to help drive towards the goal of
zero-recordable incidents.
A. New Product Development :
The following new Products were developed as part of the above
initiatives during the year :
1. Emissions recipe to meet BSIII, BSIV and OBDII emission regulations
for Automotive ratings.
2. Advanced BSIII electronic products to enhance competitiveness in
the Automotive segment and drive towards lower fuel consumption and
higher power density product offerings for customers.
3. Multiple stationary engine families to meet the upcoming CPCB II
Power Generation regulations up to 800 kW.
4. Key Industrial engine product families to support the increasing
Industrial Business.
5. Key Marine engine product families to support the increasing
commercial Marine Business.
6. Fundamental electronics capability to help develop products that
comply with OBD II (On Board Diagnostics) legislation.
7. Further enhancement of non-diesel product development capability.
8. Improved capability in intake air characteristic measurements to
enhance understanding and control of the combustion process.
B. Benefits derived as a result of the above activities are :
1. Enhanced development capabilities through use of electronic tools
and simulation software to control the engine performance and
combustion process.
2. Enhanced capability to tailor engine designs to improve the value
proposition for customers through delivering superior power output,
fuel economy, and transient response and reduced emission.
3. Product and component availability to meet the new emission norms
ahead of implementation.
4. More safe, recyclable, reliable, durable and performance-efficient
products and critical components were made available for the customers.
5. Component indigenisation capability was improved through enhanced
test capability, rig test and flow bench development and availability.
6. Significant enhancements in measurement capability were made to
pursue business opportunities in non- diesel markets to serve both the
rural and international communities.
C. Future plans include :
1. Developing local ''fit for market'' solutions to meet upcoming
emission regulations, local and rural market needs.
2. Technological innovation to add value to the products in the areas
of alternate fuels, recycle / re-use and hybrid engines.
3. Continued expansion of the product range to serve the local and
global market needs.
4. Providing energy-efficient solutions to reduce carbon footprint and
improve recyclability.
5. Continued focus on indigenization and partnering with suppliers for
waste elimination initiatives.
6. Alternate source development for various engine components.
7. Expanding the coverage of our engine development for the Power
Generation market.
D. Your Company continues to draw benefits from Cummins Inc.''s
technical capabilities and advanced technology. With continued support
from Cummins Inc., your Company is committed to develop advanced
fuel-efficient and emission-compliant engines that work on a variety of
fuel sources and comply with forthcoming domestic and global emission
regulations, to help reduce Greenhouse Gas emission whilst also
enabling the products to deliver superior performance, reliability,
durability and recyclability.
E. Expenditure on R & D :
The total expenditure on R & D was as follows :
2013-2014 2012-2013
(f in Lacs) (f in Lacs)
Capital 790 812
Recurring 4,220 3,959
Total 5,010 4,771
Total R&D expenditure as a
percentage of total
sales turnover 1.26% 1.04%
12. PARTICULARS OF EMPLOYEES :
Information as per Section 217 (2A) of the Companies Act, 1956 (the
"Act"), read with the Companies (Particulars of Employees) Rules, 1975,
forms part of this Report. As per the provisions of Section
219(1)(b)(iv) of the Act, the Directors'' Report and Accounts are being
sent to the Shareholders, excluding the statement giving particulars of
employees under Section 217(2A) of the Act.
Any Shareholder interested in obtaining a copy of the statement, may
write to the Company Secretary at the Registered Office of the Company.
13. DIRECTORS :
Mr. Anant J. Talaulicar has been re-appointed as Managing Director for
five (5) years from April 25, 2013.
During the year, Mr. Edward Pence and Mr. Rajasekhar Menon were
appointed as Additional Directors of the Company w.e.f. May 10, 2013
and August 3, 2013 respectively. Mr. Edward Pence is appointed as a
Director in the Annual General Meeting held on August 1, 2013. Mr. J.
M. Barrowman has been appointed as an Alternate Director to Mr. Edward
Pence w.e.f. May 10, 2013. In its Meeting held on May 10, 2013, the
Board of Directors noted the presence of Mr. Patrick Ward in the State
of Maharashtra, India during May 6, 2013 to May 10, 2013 and consequent
cessation of Mr. Pradeep Bhargava as an Alternate Director to Mr.
Patrick Ward effective May 6, 2013. The Board, at its Meeting held on
May 10, 2013 confirmed appointment of Mr. Pradeep Bhargava, as an
Alternate Director to Mr. Patrick Ward effective May 11, 2013 upon
return of Original Director (Mr. Patrick Ward) to U.S.A. In its Meeting
held on November 7, 2013, the Board of Directors noted the presence of
Mr. Edward Pence in the State of Maharashtra, India during November 5,
2013 to November 9, 2013 and consequent cessation of Mr. J. M.
Barrowman as an Alternate Director to Mr. Edward Pence effective
November 5, 2013. The Board, at its Meeting held on November 7, 2013,
confirmed appointment of Mr. J. M. Barrowman, as an Alternate Director
to Mr. Edward Pence effective November 9, 2013 upon return of Original
Director (Mr. Edward Pence) to the U.S.A.
Mr. Mark Levett and Mr. James Kelly stepped down as Directors of the
Company w.e.f. May 9, 2013 and August 2, 2013, respectively. Mr. J.M.
Barrowman, Alternate Director to Mr. Mark Levett, also ceased to be a
Director consequent to resignation of Mr. Levett.
In accordance with the provisions of the Companies Act, 2013 and the
Articles of Association of the Company, Mr. Casimiro Antonio Vieira
Leitao and Mr. Edward Phillip Pence, Directors of the Company, retire
by rotation and are eligible for re-appointment.
14. INDUSTRIAL RELATIONS :
Industrial relations at the Company''s plants continue to be cordial.
15. AUDITORS :
The Auditors, Price Waterhouse, Chartered Accountants, retire and hold
office until the conclusion of the ensuing Annual General Meeting and
are eligible for re-appointment under the Companies Act, 2013.
COST AUDITORS :
Your Company appointed M/s Parkhi Limaye & Co., Cost Auditors, Pune as
its Cost Auditors for the year 2013-14. The Cost Audit report and the
Compliance Report for the year 2012-13 in the revised format, which was
due on September 30, 2013, was filed with the Ministry of Corporate
Affairs on September 21, 2013 for the Company.
On behalf of the Board of Directors,
Anant J. Talaulicar
Mumbai: May 22, 2014 Chairman & Managing Director
Mar 31, 2013
The Directors have pleasure in presenting the Fifty Second Annual
Report and the Audited Accounts of the Company for the year ended March
31, 2013.
1. FINANCIAL RESULTS :
During the financial year 2012-13, net revenue from operations was Rs.
458,938 Lacs as compared to Rs. 411,722 Lacs during the previous year
(11% higher). Exports and other foreign exchange earnings were at Rs.
131,597 Lacs as compared to Rs.123,616 Lacs during the previous year
(6% higher). Profit after tax increased to Rs. 76,411 Lacs from Rs.
59,127 Lacs recorded for the previous year (29% higher).
2012 - 2013 2011 - 2012
(Rs. in Lacs) (Rs. in Lacs)
APPROPRIATION OF PROFIT :
Profit before taxation 105,133 82,463
Net Profit for the year after tax but
before tax on proposed dividend 76,411 59,127
Tax on dividend 6,017 4,947
Dividend 36,036 30,492
Transferred to General Reserve 7,641 5,913
Balance carried to Balance Sheet 124,857 98,140
2. DIVIDEND :
Your Directors have recommended a final dividend of Rs. 8/- per equity
share of Rs. 2/- each fully paid-up, in addition to the interim
dividend of Rs. 5/- per equity share of Rs. 2/- each fully paid
declared on January 31, 2013, aggregating to Rs. 13/- per equity share
of Rs. 2/- each fully paid-up share for the year ended March 31, 2013.
3. JOINT VENTURES :
a) Cummins Research and Technology India Limited (CRTI) :
The net revenue from the operations of Cummins Research and Technology
India Limited (CRTI), a 50:50 joint venture between Cummins Inc.,
U.S.A. and your Company, for the year ended March 31, 2013 was Rs.
8,512 Lacs as compared to Rs. 6,550 Lacs during the previous year (30%
higher). CRTI has a Research and Technology Centre at Pune and is
engaged in providing Information Technology enabled Mechanical
Engineering development services primarily to Cummins Inc., its
subsidiaries and joint ventures in all parts of the world.
b) Valvoline Cummins Limited (VCL) :
VCL,a 50:50 joint venture with Valvoline International Inc., U.S.A., a
global leader in lubricants and engine oils generated net revenue of
Rs. 96,897 Lacs from its operations for the year ended March 31, 2013
as compared to Rs. 83,900 Lacs during the previous year (15% higher).
c) Cummins SVAM Sales & Service Limited (CSSSL) :
CSSSL is a 50:50 joint venture incorporated on January 17, 2012 with
SVAM Power Plants Private Limited, a Dealer of your Company. CSSSL
focuses on sales and service of Cummins engines and generator sets in
parts of Northern India. The net revenue for the year ended March 31,
2013 (being the first year of operations of CSSSL) was Rs. 6,209 Lacs
and was profitable.
4. INITIATIVES AT PHALTAN :
Your Company continues with its expansion initiatives at the Megasite
in Phaltan with the following projects:
- The Phaltan Midrange Engine Upfit Center (PMUC) was inaugurated at
the Megasite, Phaltan in March, 2013. This is the fifth facility of the
Cummins Group of Companies in Phaltan. The Upfit Center has been
established to assemble, upfit, test and paint diesel and natural gas
engines, both mechanical and electronic, of B and L series. In
addition, the facility will also manufacture C series engines. This
entire range will serve the power generation, industrial and on-highway
applications. This facility will have an annual capacity of 24,000
engines and shall cater to the requirements of Construction, Marine,
Compressor and Fire Pump sectors, as well on highway natural gas
engines.
- A facility for Power Generation Business Unit to manufacture
generator sets and generator drive engines in the low and medium
kilowatt range for export markets (with a matured capacity of 51,000
units by 2016) is expected to commence operation during the second
quarter of 2013 in the MIDC Special Economic Zone.
- The India Parts Distribution Center (IPDC) facility, which became
operational in the third quarter of 2011-12, completed its ramp up in
the year 2012-13 enabling Cummins to better fulfill the demand for
aftermarket Parts in the domestic market. The first year of operations
was marked by several achievements including becoming best-in-class for
shipment quality across all Cummins PDCs, improvement in delivery,
reduction in backorders and improved fulfillment for Engine Down
Orders.
Your Company''s facility at Daman which catered to B series engine based
generators, closed down its operations w.e.f. August 3, 2012, due to
the lowering demand in market and reduction in the subsidies to be
availed of, at the facility. The closure of the said facility did not
have any material impact on the business of your Company as the demand
for this product is being catered effectively from the facility located
at Pirangut, Pune.
5. INDIA OFFICE CAMPUS (IOC) :
Your Company had entered into an Understanding for the purchase of a
ten acre Office Campus at Balewadi, Pune (India Office Campus/IOC). The
IOC shall house all professional employees located at various offices
in Pune with the exception of design/development engineers who will be
based at the Kothrud campus technical center, and manufacturing support
employees who will be located in the plants. Your Company proposes to
let out surplus office space, if any, after housing all of its exempt
employees to other Cummins Group companies. This initiative would offer
the distinct advantage of co-locating most of the Cummins Group
professional employees at one location and derive synergies of
co-location. The total capital expenditure for IOC is about Rs. 73,000
Lacs. The same is expected to be ready for occupation in phases
commencing early 2014.
6. MANAGEMENT DISCUSSION & ANALYSIS / CORPORATE GOVERNANCE REPORT :
As per clause 49 of the Listing Agreement with Stock Exchanges, the
Management Discussion & Analysis Report and the Corporate Governance
Report are annexed and form part of the Directors'' Report.
7. CODE OF CONDUCT COMPLIANCE :
A declaration signed by the Chairman and Managing Director affirming
compliance for the Financial Year 2012-13 with the Company''s Code of
Conduct by the Directors and Senior Management as required under Clause
49 of the Listing Agreement with Stock Exchanges, is annexed and forms
part of the Directors'' Report.
8. DIRECTORS'' RESPONSIBILITY STATEMENT :
In pursuance of the provisions of section 217 (2AA) of the Companies
Act 1956, your Directors make the following statement:
(i) that in the preparation of the annual accounts, all applicable
accounting standards have been followed and there was no material
departure from the accounting standards;
(ii) that the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company as on March 31, 2013 and of the profit for
the period April 1, 2012 to March 31, 2013;
(iii) that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
(iv) that the Directors have prepared the annual accounts on a going
concern basis.
9. CONSERVATION OF ENERGY :
Your Company continued to undertake various energy conservation
initiatives during the year, some of which are given below:
Engine Business Unit Plants (Kothrud and Pune - Nagar Road)
- Reduction in compressor energy consumption by efficient operation,
leakage elimination, use of air guns, demand based pressure control,
etc. by 33%;
- 34% reduction in power consumption of pump houses by demand based
pump rpm control automation using PLC & automation;
- NH/NT engine assembly energy consumption was reduced by 22% by
automation of ventilation blowers, lighting, syncool pump and AC plant;
- Efficient load sharing between the distribution transformers
leading to energy savings;
- Six sigma project completed successfully for energy saving in the
Cylinder Head machining section;
- Maintaining unity power factor by reducing line energy losses;
- Use of natural sky lights on roofs to ensure minimal use of lights
on the shop floor during day time; and
- Use of VRV air conditioners for the administrative building.
Power Generation Business Unit Plants, Pirangut
- Use of LED light fittings in office wash rooms;
- Use of motion sensors in rest rooms to reduce electricity
consumption;
- Pull cords installation at offices to reduce the lighting load
consumption;
- Use of 5 star rated air conditioners for ground floor & first floor
at office area;
- Use of energy efficient T-5 tubes in the shop floor to achieve
energy savings; and
- Use energy efficient HVLS fan for shop floor ventilation.
Distribution Business Unit Plants (Erandwane and HHP Rebuild Center,
Phaltan)
- Use of APFC (Automatic Power Factor Correction) panel for power
factor correction at the load end;
- Alternate switching off, of the street lights after duty hours;
- Use of T5 tubes with electronic ballast for the shop floor, street
and office area lighting;
- Maintaining a unity power factor at the HHP Rebuild Center and
improving the power factor at the Erandwane, Pune plant;
- Use of sky lights on roofs to ensure minimal use of lights on the
shop floor during day time;
- Installation of EM6 controller for controlling of air compressors
(auto switching off the air compressors);
- Use of dry type transformers to minimize energy loss;
- Use of VRV air conditioners for Administrative Building at Phaltan
thereby achieving energy savings;
- Load reduction in administration building at Erandwane, Pune by
localized lighting at work stations and redesigning of general lighting
as well as natural lighting;
- Pull cord switches for administration block lighting;
- Reduction of AHU water pump - Water supply to AHU given from the
test cell pumps;
- Discontinued use of 30 HP Air compressor & instead use of portable
air compressor of 5HP at Erandwane site; and
- Increased AHU preventative maintenance frequency resulted in to
better efficient with power saving.
Parts Distribution Center, Phaltan, Maharashtra
- Use of motion activated sensors in the racking aisles and the
office area;
- Use of sky lights in the plant to reduce need for lighting during
daytime;
- Use of motion sensors in rest rooms to reduce electricity
consumption;
- Power off schedule & surprise audit through security team & safety
point leaders has ensured optimum usage of available electrical
equipment;
- Pull cords installation at offices to reduce the lighting load
consumption;
- Use of VRV air conditioners for the administrative block;
- Use of energy efficient T-5 tubes at ware house to achieve energy
savings.
IMPACT OF THE ABOVE MEASURES :
The above initiatives resulted in savings of about Rs. 237 Lacs in
addition to Greenhouse Gas (GHG) emission reduction by 2,552 tons
during the year. The energy units saved during the year were about
2,721,251 kWh.
10. RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION :
With a view to satisfy legislative, customer and market needs, your
Company is committed to introducing new products and improving existing
products to have better performance levels, lower life cycle costs,
excellent safety and recyclability characteristics and meet stringent
emission norms.
The Technical Center of your Company continues in its endeavour to
indigenize components and develop the next generation of components and
systems in collaboration with the parent company - Cummins Inc., to
reduce costs, improve fuel efficiency, improve safety, enhance
recyclability, enhance performance and durability of its products. In
order to improve technical productivity, new methodologies and
technologies have been introduced and enhancements in capabilities are
being continuously pursued to reduce the costs associated with new
product development and customer support. Continued implementation of
Six Sigma initiatives resulted in significant cost savings and improved
operating efficiency.
To ensure the health and safety of employees, the Technical Center also
pursued several initiatives to help drive towards the goal of zero
recordable incidents.
A. New Product Development:
The following new Products were developed as part of the above
initiatives during the year:
1. Emissions recipe to meet BSIII, BSIV and OBDII emission regulations
for Automotive ratings.
2. Advanced BSIII electronic products to enhance competitiveness in
the Automotive segment and drive towards lower fuel consumption and
higher power density product offerings for customers.
3. Multiple stationary engine families to meet the upcoming CPCB II
Power Generation regulations up to 800 kW.
4. Key Industrial engine product families to support the increasing
Industrial Business.
5. Key Marine engine product families to support the increasing
Commercial Marine Business.
6. Fundamental electronics capability to help develop products that
comply with OBD II (On Board Diagnostics) legislation.
7. Further enhancement of non-diesel product development capability.
8. Improved capability in intake air characteristic measurements to
enhance understanding and control of the combustion process.
B. Benefits derived as a result of the above activities are:
1. Enhanced development capabilities through use of electronic tools
and simulation software to control the engine performance and
combustion process.
2. Enhanced capability to tailor engine designs to improve the value
proposition for customers through delivering superior power output,
fuel economy, transient response and reduced emission.
3. Product and component availability to meet the new emission norms
ahead of implementation.
4. More safe, recyclable, reliable, durable and performance efficient
products and critical components were made available for the customers.
5. Component indigenisation capability was improved through enhanced
test capability, rig test and flow bench development and availability.
6. Significant enhancements in measurement capability were made to
pursue business opportunities in non- diesel markets to serve both the
rural and international communities.
C. Future plans include:
1. Developing local "fit for market" solutions to meet upcoming
emission regulations, local and rural market needs.
2. Technological innovation to add value to the products in the areas
of alternate fuels, recycle / re-use and hybrid engines.
3. Continued expansion of the product range to serve the local and
global market needs.
4. Providing energy efficient solutions to reduce carbon foot print
and improve recyclability.
5. Continued focus on indigenization and partnering with suppliers for
waste elimination initiatives.
6. Alternate source development for various engine components.
7. Expanding the coverage of our engine development for the Power
Generation market.
D. Your Company continues to draw benefits from Cummins Inc.''s
technical capabilities and advanced technology. With continued support
from Cummins Inc., your Company is committed to develop advanced fuel
efficient and emission compliant engines that work on a variety of fuel
sources and comply with forthcoming domestic and global emission
regulations, to help reduce Greenhouse Gas emission whilst also
enabling the products to deliver superior performance, reliability,
durability and recyclability.
E. Expenditure on R & D:
The total expenditure on R & D was as follows:
2012-2013 2011-2012
(Rs. in Lacs) (Rs. in Lacs)
Capital 812 1,023
Recurring 3,959 3,834
Total 4,771 4,857
Total R&D expenditure as a percentage
of total sales turnover 1.04% 1.18%
11. FOREIGN EXCHANGE EARNINGS AND OUTGO :
During the year under review, your Company exported 5,581 engines and
6,715 generator sets thereby achieving total export earnings of Rs.
127,035 Lacs.
Foreign Exchange earnings and gross outgo (including royalty, dividend
etc.) during the year under review were as follows :
2012-2013 2011-2012
(Rs.in Lacs) (Rs. in Lacs)
(a) Earnings 131,597 123,616
(b) Outgo -
- Raw Materials/
components 51,308 45,193
- Capital Equipment 623 1,918
- Others 26,554 26,800
78,485 73,911
12. PARTICULARS OF EMPLOYEES :
Information as per Section 217 (2A) of the Companies Act, 1956 (the
"Act"), read with the Companies (Particulars of Employees) Rules,
1975, forms part of this Report. As per the provisions of Section
219(1)(b)(iv) of the Act, the Directors'' Report and Accounts are
being sent to the Shareholders excluding the statement giving
particulars of employees under Section 217(2A) of the Act.
Any Shareholder interested in obtaining a copy of the statement, may
write to the Company Secretary at the Registered Office of the Company.
13. DIRECTORS :
Mr. Anant J. Talaulicar was initially appointed as the Managing
Director of the Company for a period of 5 years from July 29, 2003 to
April 24, 2008 and then subsequently re-appointed for a further period
of 5 years from April 25, 2008 to April 24, 2013. At the Board Meeting
held on January 31, 2013, Mr. Anant J. Talaulicar was re-appointed as
Managing Director of the Company for a further period of five years
effective April 25, 2013, subject to approval of the Central Government
and the Shareholders.
During the year, Mr. Sean Milloy, Alternate Director to Mr. John Wall,
ceased to be a Director of the Company effective July 28, 2012 upon
arrival of Mr. John Wall, Original Director, to the State of
Maharashtra. Mr. John Wall, Mr. B. H. Reporter and Mr. Mark A. Levett
stepped down as Directors of the Company w.e.f. August 2, 2012,
February 1, 2013 and May 9, 2013 respectively. On account of cessation
of Mr. Mark A. Levett as Director of the Company, Mr. J.M. Barrowman,
Alternate Director to Mr. Mark Levett also ceased to be a Director. Mr.
Antonio Leitao, Mr. Prakash M. Telang and Mr. Edward Phillip Pence were
appointed as Additional Directors of the Company w.e.f. August 3, 2012,
January 31, 2013 and May 10, 2013, respectively. Mr. J. M. Barrowman
has been appointed as Alternate Director to Mr. Edward Phillip Pence
w.e.f. May 10, 2013.
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, M/s. James Kelly, Venu
Srinivasan and Rajeev Bakshi, Directors of the Company, retire by
rotation and are eligible for re-appointment.
14. INDUSTRIAL RELATIONS :
Industrial relations at the Company''s plants continue to be cordial.
15. AUDITORS :
The Auditors, Price Waterhouse, Chartered Accountants, retire and hold
office until the conclusion of the ensuing Annual General Meeting and
are eligible for re-appointment.
COST AUDITORS :
Your Company appointed M/s Parkhi Limaye & Co., Cost Auditors, Pune as
its Cost Auditors for the year 2012-13. The Cost Audit report and the
Compliance Report for the year 2011-12 in the revised format, which was
due on January 31, 2013, was filed with the Ministry of Corporate
Affairs on December 25, 2012 for the Company.
On behalf of the Board of Directors,
Anant J. Talaulicar
Chairman & Managing Director
Pune: May 10, 2013
Mar 31, 2012
The Directors have pleasure in presenting the Fifty First Annual
Report and the Audited Accounts of the Company for the year ended March
31, 2012.
1. FINANCIAL RESULTS :
During the financial year 2011-12, net revenue from operations was Rs.
411,722 Lacs as compared to Rs. 404,253 Lacs during the previous year
(2% higher). Exports and other foreign exchange earnings were at Rs.
123,616 Lacs as compared to Rs. 108,975 Lacs during the previous year
(13% higher). Profit after tax marginally increased to Rs. 59,127 Lacs
from Rs. 59,099 Lacs recorded for the previous year.
2011-2012 2010-2011
(Rs. in Lacs) (Rs. in Lacs)
APPROPRIATION OF PROFIT :
Profit before taxation 82,463 80,237
Net Profit for the year after
tax but before tax on proposed
dividend 59,127 59,099
Tax on dividend 4,947 4,872
Dividend 30,492 29,700
Transferred to General Reserve 5,913 5,910
Balance carried to Balance Sheet 98,140 80,365
2. DIVIDEND :
Your Directors have recommended a final dividend of Rs. 6/- per equity
share of Rs. 2/- each fully paid-up, in addition to the interim
dividend of Rs. 5/- per share declared on February 9, 2012, aggregating
to Rs. 11/- per share for the year ended March 31, 2012 on the enhanced
paid-up share capital post issuance of Bonus shares in the ratio of
2:5.
3. INCREASE IN AUTHORISED SHARE CAPITAL AND ISSUANCE OF BONUS EQUITY
SHARES :
Pursuant to the approval of the shareholders at the Extra-Ordinary
General Meeting held on September 9, 2011, the Authorized Share Capital
of your Company was increased from Rs. 4,000 Lacs to Rs. 8,000 Lacs
which facilitated issuance of 792 Lac Bonus Shares of Rs. 2/- each in
the ratio of 2:5 (two equity bonus shares for every five equity shares
held) to the shareholders of the Company. Consequently, the paid-up
capital of your Company stands increased from Rs. 3,960 Lacs to Rs.
5,544 Lacs.
4. JOINT VENTURES :
a) Cummins Research and Technology India Limited (CRTI) :
The net revenue from operations of Cummins Research and Technology
India Limited (CRTI), a 50:50 joint venture between Cummins Inc.,
U.S.A. and your Company, for the year ended March 31, 2012, was Rs.
6,550 Lacs as compared to Rs. 4,676 Lacs during the previous year (40%
higher). CRTI has a Research and Technology Center at Pune and is
engaged in providing Information Technology Enabled Mechanical
Engineering Development Services to Cummins Inc., its subsidiaries and
joint ventures across the world.
b) Valvoline Cummins Limited (VCL) :
VCL is a 50:50 joint venture with Valvoline International Inc., U.S.A.,
a global leader in lubricants and engine oils. The net revenue from
operations of VCL for the year ended March 31, 2012 was Rs. 83,900 Lacs
as compared to Rs. 70,364 Lacs during the previous year (19% higher).
c) Cummins SVAM Sales & Service Limited (CSSSL) :
On January 17, 2012, a 50:50 Joint Venture company, namely Cummins SVAM
Sales & Service Limited was formed with a paid-up capital of Rs. 1,200
Lacs with SVAM Power Plants Private Limited (one of the existing
Dealers of your Company). The registered office of CSSSL is located at
Delhi. CSSSL will concentrate its efforts on sales and service of
Cummins engines and generator sets in Northern India.
5. INITIATIVES AT PHALTAN :
Your Company continues with its expansion initiatives at the Megasite
in Phaltan with the following projects :
- The India Parts Distribution Center (IPDC) has been established with
an aim to enhance supply chain efficiency in aftermarket parts
distribution. Equipped with state-of-the-art infrastructure, this
Center will serve as a logistics hub to facilitate improve inbound
receiving and inventory management capabilities and enhance Cummins'
ability to serve its customers significantly. The IPDC has been in
operation since the third quarter of 2011-12.
- A facility for Power Generation Business Unit to manufacture
generator sets and generator drive engines in the low and medium horse
power range for export markets (with a matured capacity of 51,000 units
by 2016) is now expected to commence operation during Q2 of 2013. This
facility is being set up in the MIDC Special Economic Zone.
- The B, C and L series engine upfit facility is now expected to
commence operations by end of 2012. This facility will have an annual
capacity of 20,000 engines and shall cater to the requirements of
construction, compressor, marine and fire pump sectors.
6. INDIA OFFICE CAMPUS (IOC) :
Your Company has entered into an Understanding for the purchase of an
Office Campus at Balewadi, Pune (India Office Campus / IOC). The IOC
shall house all its exempt employees located at various offices in
Pune. Your Company proposes to let out surplus office space, if any,
after housing all of its exempt employees to other Cummins group
companies for their exempt employees. This initiative would offer the
distinct advantage of co-locating all Cummins group professional
employees at one location to derive synergies of co-location. The total
capital expenditure for IOC shall be about Rs. 73,000 Lacs for the
total space. The same is expected to be ready for occupation in phases
from April 2014.
7. MANAGEMENT DISCUSSION & ANALYSIS/ CORPORATE GOVERNANCE REPORT :
As per Clause 49 of the Listing Agreement with Stock Exchanges, the
Management Discussion & Analysis Report and the Corporate Governance
Report are annexed and form part of the Directors' Report.
8. CODE OF CONDUCT COMPLIANCE :
A declaration signed by the Chairman and Managing Director affirming
compliance with the Company's Code of Conduct by Directors and Senior
Management, for the Financial Year 2011-12, as required under Clause 49
of the Listing Agreement with Stock Exchanges is annexed and forms part
of the Directors' Report.
9. DIRECTORS' RESPONSIBILITY STATEMENT :
In pursuance of the provisions of section 217 (2AA) of the Companies
Act, 1956, your Directors make the following statement :
(i) that in the preparation of the annual accounts, all applicable
accounting standards have been followed and there was no material
departure from the accounting standards;
(ii) that the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company as on March 31, 2012 and of the profit for
the period April 1, 2011 to March 31, 2012;
(iii) that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
(iv) that the Directors have prepared the annual accounts on a going
concern basis.
10. CONSERVATION OF ENERGY :
Your Company continued to undertake various energy conservation
initiatives during the year, some of which are given below :
Engine Business Unit Plants (Kothrud and Pune - Nagar Road)
- Improved furnace load utilization through effective operation of
furnaces in the heat treatment area.
- Reduction in power consumption of hot well pumps by installation of
variable frequency drives.
- Energy saving by replacement of metal halide lamps by T5 light
fittings in QSK60 assembly.
- Cycle modification of gear grinding machine enabling automatic
switching off the spindle motor of the same machine.
- Reduction in energy consumption at NHNT Assembly & Testing Unit by
switching off idle pumps, AC chillers, Lighting, etc.
- Reduction in energy consumption of Nagar Road plant by using daylight
for lighting, switching off AC chillers and providing Variable
Frequency Drive (VFD) for Compressors.
Power Generation Business Unit Plants (Kasar Amboli and Daman)
- Installation of energy efficient lights.
- Enhancement in power factor to unity reducing line energy losses.
Distribution Business Unit Plants (Erandwane and HHP Rebulid Center,
Phaltan)
- Use of APFC (Automatic Power Factor Correction) panel for power
factor correction at load side.
- Alternate switching off of the street lights after duty hours.
- Use of T5 tubes with electronic ballast for shop floor, street and
office area lighting.
- Maintaining a unity power factor at the HHP Rebuild Center and
improving the power factor at Erandwane, Pune plant.
- Use of sky lights on roofs to ensure minimal use of lights on the
shop floor during day time.
- Installation of EM6 controller for controlling of air compressors
(automatic switching off of the air compressors).
- Use of dry type transformers to minimize energy loss.
- Use of VRV air conditioners for Administrative Building at Phaltan
thereby achieving energy savings.
- Load reduction in administration building at Erandwane, Pune by
localized lighting at work stations and redesigning of general lighting
as well as natural lighting.
India Parts Distribution Center, Phaltan
- Use of motion activated sensors in the racking aisles and the office
area.
- Use of sky lights in the plant to reduce need for lighting during
daytime.
IMPACT OF THE ABOVE MEASURES :
The above initiatives resulted in savings of about Rs. 57 Lacs in
addition to Greenhouse Gas (GHG) emission reduction by 685 tons during
the year. The energy units saved during the year were about 711,446
kWh.
11. RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION :
With a view to satisfy customer and market needs, your Company is
committed to introducing new products and improve existing products
which will have better performance levels, lower life cycle costs and
meet stringent emission norms.
The Technical Center of your Company, in collaboration with the parent
company - Cummins Inc., U.S.A., continues in its endeavour to
indigenize components and develop the next generation of components and
systems to reduce costs, improve fuel efficiency, enhance performance
and durability of its products. In addition, to improve technical
productivity, new methodologies and technologies have been introduced
and enhancements in capabilities are being continuously pursued to
reduce the costs associated with new product development and customer
support. Continued implementation of six sigma initiatives resulted in
significant cost savings and improved operating efficiency.
To ensure the health and safety of employees, the Technical Center also
pursued several initiatives to help drive towards the goal of zero
recordable incidents.
A. New Product Development :
The following new products were developed as part of the above
initiatives during the year :
1. Emission recipe to meet BS IV emission regulations for Automotive
ratings.
2. BS III products to enhance competitiveness in the Automotive
segment and drive towards lower fuel consumption and higher power
density product offerings for customers.
3. Multiple engine families to meet the upcoming CPCB II Power
Generation regulations.
4. Key Industrial engine product families to support the increasing
Industrial Business.
5. Fundamental electronics capability to help achieve upcoming OBD II
(On Board Diagnostics) legislation.
6. Enhancement of non-diesel product development capability.
7. Improved capability in intake air characteristic measurements to
enhance understanding and control of the combustion process.
B. Benefits derived as a result of the above activities are :
1. Enhanced development capabilities through use of electronic tools
and software to control the engine performance and combustion process.
2. Enhanced capability to tailor the products to improve the value
proposition for customers through delivering superior fuel economy,
transient response and reduced emission.
3. Product and component availability to meet the new emission norms
ahead of implementation.
4. More reliable, durable and performance efficient products and
critical components were made available for the customers.
5. Component indigenisation capability was improved through enhanced
rig test and flow bench development and availability.
6. Significant enhancement to pursue business opportunities in
non-diesel markets.
C. Future plans include :
1. Developing local solutions to meet upcoming emission regulations
and market needs.
2. Technological innovation to add value to the products in the areas
of alternate fuels and hybrid engines.
3. Continued expansion of the product range to serve the local and
global market needs.
4. Providing energy efficient solutions to reduce carbon foot print.
5. Continued focus on indigenization and partnering with suppliers for
waste elimination initiatives.
6. Alternate source development for various engine components.
7. Low range engine development for Power Generation Market.
D. Your Company continues to draw benefits from Cummins Inc.'s
technical capabilities and advanced technology. With continued support
from Cummins Inc., your Company is committed to develop advanced fuel
efficient and emission compliant engines to comply with forthcoming
domestic and global emission regulations and help reduce Greenhouse Gas
emissions and also enabling the products to deliver superior
performance.
E. Expenditure on R & D :
The total expenditure on R & D was as follows :
2011-2012 2010-2011
(Rs. in Lacs) (Rs. in Lacs)
a) Capital 1,023 500
b) Recurring 3,834 3,269
c) Total 4,857 3,769
d) Total R&D expenditure as a
percentage of total sales
turnover 1.18% 0.93%
13. PARTICULARS OF EMPLOYEES :
Information as per Section 217 (2A) of the Companies Act, 1956 (the
"Act"), read with the Companies (Particulars of Employees) Rules, 1975,
forms part of this Report. As per the provisions of Section
219(1)(b)(iv) of the Act, the Directors' Report and Accounts are being
sent to the Shareholders excluding the statement giving particulars of
employees under Section 217(2A) of the Act.
Any Shareholder interested in obtaining a copy of the statement, may
write to the Company Secretary at the Registered Office of the Company.
14. DIRECTORS :
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, M/s. P. S. Dasgupta, Nasser
Munjee and Patrick Ward, Directors of the Company, retire by rotation
and are eligible for re-appointment.
15. INDUSTRIAL RELATIONS :
Industrial relations at the Company's plants continue to be cordial.
16. AUDITORS :
The Auditors, Price Waterhouse, Chartered Accountants, retire and hold
office until the conclusion of the ensuing Annual General Meeting and
are eligible for re-appointment.
COST AUDITORS :
Your Company appointed M/s. Parkhi Limaye & Co., Pune as its Cost
Auditors for the year 2011-12. The Cost Audit report for the year
2010-11 was due on September 27, 2011 and was filed with the Ministry
of Corporate Affairs on September 23, 2011 for Kothrud and Daman plants
and on September 27, 2011 for Kasar Amboli, Pune plant.
On behalf of the Board of Directors,
Anant J. Talaulicar
Pune : May 15, 2012 Chairman & Managing Director
Mar 31, 2011
The Directors of Cummins India Limited have pleasure in presenting the
Fiftieth Annual Report and Audited Accounts of the Company for the year
ended March 31, 2011.
1. FINANCIAL RESULTS:
During the year under review, net sales turnover was Rs. 39,454,427
(000) (Rs. 39,454 million) as compared to Rs. 28,448,704 (000) (Rs.
28,449 million) during the previous year (39% higher). Exports and
other foreign exchange earnings were Rs. 10,962,713 (000) (Rs. 10,963
million) as compared to Rs. 5,076,277 (000) (Rs. 5,076 million) during
the previous year (116% higher). Profit after tax was Rs. 5,909,903
(000) (Rs. 5,910 million) as compared to Rs. 4,438,672 (000) (Rs.
4,439 million) for the previous year (33% higher).
2010-2011 2009-2010
(Rs. 000) (Rs.OOO)
APPROPRIATION OF PROFIT:
Profit before taxation 8,023,667 6,109,147
Net Profit for the year after tax but
before tax on proposed dividend 5,909,903 4,438,672
Tax on dividend 487,161 399,213
Dividend 2,970,000 2,376,000
Transferred to General Reserve 590,991 443,867
Balance carried to Balance Sheet 8,036,470 6,174,719
2. DIVIDEND:
Your Directors have recommended a final dividend of Rs. 8/- per equity
share of Rs. 2/- each fully paid-up, for the year ended March 31, 2011,
in addition to the interim dividend of Rs. II- per share declared on
February 3,2011, aggregating to Rs. 15/- per share for the year.
3. JOINT VENTURES:
a) Cummins Exhaust India Limited (CEIL):
Your Company divested its entire shareholding of 2 million equity
shares in Cummins Exhaust India Limited (a joint venture engaged in the
business of manufacture and sale of exhaust silencers and mufflers for
Internal Combustion Engines), as it was no longer considered core or
strategic to the Company. The shares were sold to MVG Acquisition
Corp., USA on April 29, 2011 for a consideration of Rs. 534.40 million.
b) Cummins Research and Technology India Limited (CRTI):
The sales and other income of Cummins Research and Technology India
Limited (CRTI), a 50:50 joint venture between Cummins Inc., U.S.A. and
your Company, for the year ended March 31, 2011, was Rs. 467,843 (000)
(Rs. 468 million) as compared to Rs. 409,910 (000) (Rs. 410 million)
during the previous year (14% higher). CRTI has a Research and
Technology Centre at Pune and is engaged in providing Information
Technology Enabled Mechanical Engineering Development Services to
Cummins Inc., its subsidiaries and joint ventures across the world.
c) Valvoline Cummins Limited (VCL):
VCL is a 50:50 joint venture with Valvoline International Inc., U.S.A.,
a global leader in lubricants and engine oils. The net sales and other
income of VCL for the year ended March 31, 2011 was Rs. 7,083,285
(000) (Rs. 7,083 million) as compared to Rs. 5,821,835 (000) (Rs.
5,822 million) during the previous year (22% higher). VCL has declared
a dividend of Rs. 10/- per equity share of Rs. 10/- each on equity
paid-up share capital of Rs. 190 million during the Financial Year
2010-11.
4. INITIATIVES AT THE CUMMINS MEGASITE :
Owing to continued strong demand, your Company stepped up its expansion
initiatives at the Cummins Megasite at Phaltan with the following
projects :
- A High Horse Power Engine Rebuild centre - which has a state of the
art facility to rebuild HHP engines, started its operations in March
2011.
- A Parts Distribution Centre (PDC) - which will undertake kitting of
parts and components and distribution of the same from a centralized
location to cater to the requirements of other Cummins plants as well
as after market, is under construction. The PDC is expected to commence
operations in the third quarter of this year.
- A unit for the manufacture/assembly and upfit of B, C and L series
engines is also being set up at the Megasite. This facility is
expected to commence operations by the first half of 2012, with an
annual capacity of approx. 20,000 engines. The plant would cater to the
requirements of engines for the construction, compressor, marine and
fire pump markets.
- A facility for the manufacture of Power Generator Sets and G-Drives
in the low and medium horse power range is also being set up on the
MIDC SEZ at Phaltan. This facility is expected to commence production
by the middle of 2012 and would have a matured annual capacity of
51,000 units by 2015, mainly for export markets.
Your Company also identified opportunities to provide support to
Project Affected People (land owners) by way of providing employment to
qualified and eligible members and extending education assistance to
others.
5. MANAGEMENT DISCUSSION & ANALYSIS / CORPORATE GOVERNANCE REPORT :
As per clause 49 of the Listing Agreement with Stock Exchanges, the
Management Discussion & Analysis Report and Corporate Governance Report
are annexed and form part of the Directors Report.
6. CODE OF CONDUCT COMPLIANCE :
A declaration signed by the Chairman and Managing Director affirming
compliance with the Companys Code of Conduct by Directors and Senior
Management, for the Financial Year 2010-2011, as required under Clause
49 of the Listing Agreement with Stock Exchanges is annexed and forms
part of the Directors Report.
7. DIRECTORS RESPONSIBILITY STATEMENT:
In pursuance of the provisions of section 217 (2AA) of the Companies
Act, 1956, your Directors make the following statement: -
(i) that in the preparation of the annual accounts, all applicable
accounting standards have been followed and there was no material
departure from the accounting standards;
(ii) that the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company as on March 31, 2011 and of the profit for
the period April 1, 2010 to March 31, 2011;
(iii) that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
(iv) that the Directors have prepared the annual accounts on a going
concern basis.
8. CONSERVATION OF ENERGY:
Your Company continued to undertake various energy conservation
initiatives during the year, some of which are given below :-
Engine Business Unit Plants (Kothrud and Pune - Nagar Road) :-
- Reduction in power consumption of KV ATPU area for lighting, cooling
towers, and other applications.
- Waste Heat Recovery from powerhouse generator set by generation of
hot water for use in canteen.
- Reduction in energy consumption of hydraulic press by machine cycle
modification.
Power Generation Business Unit Plants (Kasar Amboli and Daman) :-
- Compressor AC Drive control installation.
- Installation of energy efficient lights.
- Compressor health check up and air leakage preventive maintenance.
- Installation of LED based street lights.
Distribution Business Unit, Erandawana, Pune :-
- Load reduction in administration building by localized lighting at
work stations and redesigned general lighting as well as natural
lighting.
- Use of energy efficient chokes, light fittings, lamps, push pull
switches etc.
- Improved power factor.
IMPACT OF THE ABOVE MEASURES :
The above initiatives resulted in savings of about Rs. 3,743 (000) in
addition to Green House Gas (GHG) emission reduction by 490 tons during
the year. The energy units saved during the year were about 470,492
kWh.
Cummins Megasite, Phaltan :-
Your Company initiated following energy conservation initiatives at the
Megasite :
- Use of composite wall and high performance double glazing for fagade,
thereby achieving reduction in load on the air conditioning system.
- Use of sky lights on roofs to ensure minimal use of lights on the
shop floor during day time.
- Use of APFC (Automatic Power Factor Correction) panel for power
factor correction at load side.
- Use of dry type transformers to minimize loss of electricity.
- Motion sensors with dimmable ballast for the IT building.
- Use of motion sensors to ensure effective utilization of power.
- Use of timers for alternate switching of street lights after duty
hours.
- Use of TS tubes with electronic ballast for shop floor, street and
office area lighting.
- Use of glass wool to reduce the working temperature on the shop
floor.
- Use of VRV air conditioners for the administrative buildings thereby
achieving energy savings.
9. RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION :
Your Company remains committed to introducing new products and
improving existing products which meet stringent emission norms, have
higher levels of performance and lower life cycle costs, to satisfy
market needs.
The Technical Centre of your Company continues in its endeavour to
indigenize components and develop the next generation of components and
systems in collaboration with Cummins Inc., to reduce costs, improve
fuel efficiency, performance and durability of its products. In
addition, technical productivity enhancements are continuously pursued
to reduce the costs associated with new product development.
A. New Product Development:
The following new products were developed as part of the above
initiatives during the year:
1. Emission recipe development to meet BS-IV emission regulations for
Automotive ratings. Multiple Power ratings from 99 HP to 380 HP were
developed for various applications.
2. Development of BS-III new ratings. Multiple Power ratings from 99
HP were developed for various applications.
3. Established FTIR Ammonia slip measurement facility to meet BS-IV
requirements.
4. Integration of Continental fuel system on GTA855 emissionised
recipe for gas compression market.
5. Reduction in cost of ownership by integration of Champion spark
plugs on GTA855 engines.
6. Indigenous C8.3 engine certified by IRS for marine application used
on 120KW and 80KW Gensets.
B. Benefits derived as a result of the above activities are:
a. Significantly lower development cost ensured value addition to the
customers.
b. On time availability of emissions compliant and fuel efficient
products to customers.
c. More reliable, durable and performance efficient products and
critical components were made available.
d. Component indigenisation and six sigma initiatives resulted in
significant cost savings.
e. The above initiatives helped in securing new customers.
C. Future plans include :
- Developing local solutions to meet upcoming emissions regulations and
market needs,
- Technological innovation to add value to products in the areas of
alternative fuels and hybrid engines,
- Emphasis to reduce carbon foot prints and energy efficient solutions,
- Continued focus on indigenization and supplier partnership based
waste elimination initiatives,
- Alternate source development for various engine components,
- Low range engine development for the Power Generation Market.
D. Your Company continues to draw benefits from Cummins Inc.s
technical capabilities and advanced technology. With continued support
from Cummins Inc., U.S.A., your Company is committed to develop
advanced fuel efficient and emissions compliant engines to comply with
forthcoming domestic and global emissions regulations.
E. Expenditure on R & D :
The total expenditure on R & D was as follows :-
2010-2011 2009-2010
(Rs. 000) (Rs. 000)
a) Capital 50,018 314,195
b) Recurring 326,936 317,559
c) Total 376,954 631,754
d) Total R&D expenditure as a
percentage of total sales turnover 0.96% 2.22%
10. FOREIGN EXCHANGE EARNINGS AND OUTGO :
During the year under review, your Company exported 9,310 engines and
4,908 generator sets thereby achieving export earnings of Rs.
10,604,257 (000) (Rs. 10,604 million).
Foreign Exchange earnings and gross outgo (including royalty, dividend
etc.) during the year under review were as follows :-
2010-2011 2009-2010
(Rs.000) (Rs.OOO)
(a) Earnings 10,962,713 5,076,277
(b) Outgo -
- Raw Materials/components 5,576,732 3,134,867
- Capital equipment 478,759 305,254
- Others 2,455,656 1,354,102
8,511,147 4,794,223
11. PARTICULARS OF EMPLOYEES :
Information as per Section 217(2A) of the Companies Act, 1956 (the
Act), read with the Companies (Particulars of Employees) Rules, 1975,
forms part of this Report. As per the provisions of Section 219(1
)(b)(iv) of the Act, the Directors Report and Accounts are being sent
to the Shareholders excluding the statement giving particulars of
employees under Section 217(2A) of the Act.
Any Shareholder interested in obtaining a copy of the statement, may
write to the Assistant Company Secretary at the Registered Office of
the Company.
12. DIRECTORS:
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, M/s. Mark Levett, Venu
Srinivasan and Rajeev Bakshi, Directors of the Company, retire by
rotation and are eligible for re-appointment.
13. INDUSTRIAL RELATIONS :
Industrial relations at the Companys plants continue to be cordial.
14. AUDITORS:
The Auditors, Price Waterhouse, Chartered Accountants, hold office
until the conclusion of the ensuing Annual General Meeting and are
eligible for re-appointment.
COST AUDITORS:
Your Company appointed M/s. Parkhi Limaye & Co., Cost Auditors, Pune as
its Cost Auditors for the year 2010-11. The Cost Audit report for the
year 2009-10 was filed with the Ministry of Corporate Affairs on
September 26, 2010, due date being September 27, 2010.
On behalf of the Board of Directors,
Anant J. Talaulicar
Mumbai: May 30, 2011 Chairman & Managing Director
Mar 31, 2010
The Directors of Cummins India Limited have pleasure in presenting the
Forty-Ninth Annual Report and the Audited Accounts of the Company for
the year ended March 31, 2010.
1. FINANCIAL RESULTS :
During the year under review, net sales turnover was Rs. 28,448,704
(Ã000) (Rs. 28,449 million) as compared to Rs. 33,042,837 (Ã000) (Rs.
33, 043 million) during the previous year (14% lower). Exports and
other foreign exchange earnings were Rs. 5,076,277 (Ã000) (Rs. 5,076
million) as compared to Rs. 13,424,852 (Ã000) (Rs. 13,425 million)
during the previous year (62% lower). Profit after tax was Rs.
4,438,672 (Ã000) (Rs. 4,439 million) as compared to Rs. 4,336,611
(Ã000) (Rs. 4,337 million) for the previous year (2% higher).
2009-2010 2008-2009
(Rs. Ã000) (Rs.Ã000)
APPROPRIATION OF PROFIT :
Profit before taxation 6,109,147 5,990,216
Net Profit for the year after tax but
before tax on proposed dividend 4,438,672 4,336,611
Tax on dividend 399,213 319,846
Dividend 2,376,000 1,782,000
Transferred to General Reserve 443,867 433,661
Balance carried to Balance Sheet 6,174,719 4,955,127
2. DIVIDEND :
Your Directors have recommended a final dividend of Rs. 6/- per equity
share of Rs. 2/- each fully paid-up, for the year ended March 31, 2010,
in addition to the interim dividend of Rs. 6/- per share declared on
December 3, 2009, aggregating to Rs.12/- per share for the year.
3. CONSOLIDATED FINANCIAL STATEMENTS :
Consolidated Financial Statements are not being published, as
consequent to the amalgamation of its subsidiaries, Cummins Sales and
Service India Limited (CSS) and Cummins Auto Services Limited (CASL)
with your Company, your Company no longer has any subsidiaries.
4. JOINT VENTURES :
a. Cummins Exhaust India Limited (CEIL) :
Sales and other income of CEIL, a 50:50 Joint Venture between Cummins
Filtration Inc., U.S.A. and your Company, for the year ended March 31,
2010, was Rs. 447,572 (Ã000) (Rs. 448 million) as compared to Rs.
429,565 (Ã000) (Rs. 430 million) during the previous year (4 % higher).
CEIL declared a dividend aggregating to Rs.14.5 per equity share of Rs.
10/- each during the year ended March 31, 2010, on the paid-up share
capital of Rs. 40,000 (Ã000). CEIL is engaged in the business of
manufacture and sale of exhaust silencers and mufflers for Internal
Combustion Engines.
b. Cummins Research and Technology India Limited (CRTI) :
Sales and other income of Cummins Research and Technology India Limited
(CRTI), a 50:50 Joint Venture between Cummins Inc., U.S.A. and your
Company, for the year ended March 31, 2010, was Rs. 409, 910 (Ã000)
(Rs. 410 million ) as compared to Rs. 482,717 (Ã000) (Rs. 483 million)
during the previous year (15 % lower).
CRTI has a Research and Technology Centre at Pune and is engaged in
providing Information Technology Enabled Mechanical Engineering
Development Services to Cummins Inc., its subsidiaries and joint
ventures across the world.
c. Valvoline Cummins Limited (VCL) :
VCL is a 50:50 joint venture with Valvoline International Inc., U.S.A.,
a global leader in lubricants and engine oils. Sales and other income
of VCL for the year ended March 31, 2010 was Rs. 5,823,353 (Ã000) (Rs.
5,823 million) as compared to Rs. 4,470,661 (Ã000) (Rs. 4,471 million)
during the previous year (30% higher). VCL has declared a dividend of
Rs. 12.60 per equity share of Rs. 10/- each on equity paid-up share
capital of Rs. 190,000 (Ã000) during the financial year 2009-10.
5. INITIATIVES AT PHALTAN :
With the recovery in the economy, your Company has once again stepped
up activity and investment at its Phaltan Project. Two projects are
underway and are expected to commence operations during the third
quarter of 2010.
- A High Horse Power Rebuild centre which will have a state of the art
facility to Rebuild upto 900 High Horse Power engines per annum.
- A Parts Distribution Centre (PDC) which will undertake kitting,
assembly of products, parts, components etc. and distribution of the
same from a centralized location to cater to the requirements of other
plants of Cummins as well as after market.
Total investment in these projects and in building common
infrastructure facilities for the plants at Phaltan is expected to be
around Rs. 1,200,000 (Ã000) during the year 2010-11.
6. OTHER INITIATIVES :
Your Company reacted with agility to brace the economic slowdown at the
beginning of the year. Some initiatives in this direction included :
- Effective redeployment of manpower among Business Units / Group
Companies to ensure optimum utilization of resources.
- Judicious capital investments and deferment of capital expenditure
where possible, without affecting growth. However, investment in
people, customer relationships, new products & technologies and
critical projects / capacity expansion continued as planned to
strengthen your CompanyÃs position for long term profitable growth in
India.
- CBS operations, which commenced during the FY 2004-05 for
transactional services, like financial transactions, payroll
processing, IT infrastructure management etc., were discontinued
effective September 1, 2009, to enable the Company to focus on its core
business activities. However, in order to ensure continuity of services
as per quality and security standards of Cummins, these services have
been outsourced to a group company, Cummins Technologies India Limited
(CTIL).
- Intensified use of Accelerated Cost Efficiency and Six Sigma tools to
drive down costs.
- Effective vendor management and consolidation to leverage better
costs.
7. MANAGEMENT DISCUSSION & ANALYSIS / CORPORATE GOVERNANCE REPORT :
As per clause 49 of the Listing Agreement with Stock Exchanges, the
Management Discussion & Analysis Report and Corporate Governance Report
are annexed and form part of the Directorsà Report.
8. CODE OF CONDUCT COMPLIANCE :
A declaration signed by the Chairman and Managing Director affirming
compliance with the CompanyÃs Code of Conduct by Directors and Senior
Management, for the Financial Year 2009-2010, as required under Clause
49 of the
Listing Agreement with Stock Exchanges is annexed and forms part of the
Directorsà Report.
9. DIRECTORSÃ RESPONSIBILITY STATEMENT :
In pursuance of the provisions of section 217 (2AA) of the Companies
Act, 1956, your Directors make the following statement :-
(i) that in the preparation of the annual accounts, all applicable
accounting standards have been followed and there was no material
departure from the accounting standards;
(ii) that the Directors have selected such accounting policies and
applied them consistently and made judgments and estimates that are
reasonable and prudent so as to give a true and fair view of the state
of affairs of the Company as on March 31, 2010 and of the profit for
the period April 1, 2009 to March 31, 2010;
(iii) that the Directors have taken proper and sufficient care for the
maintenance of adequate accounting records in accordance with the
provisions of the Companies Act, 1956, for safeguarding the assets of
the Company and for preventing and detecting fraud and other
irregularities; and
(iv) that the Directors have prepared the annual accounts on a going
concern basis.
10. CONSERVATION OF ENERGY :
Your Company continued to undertake various energy conservation
initiatives during the year, some of which are given below :-
Engine Business Unit Plants (Kothrud and Pune - Nagar Road) :-
- Reduction of electrical energy transmission losses from 7.5% to 6%.
- Reduction of R & D old pump house energy consumption by 40% through
redesigning of the pumping system.
- Increase in power efficiency of non-CNC machines by reducing
auxiliary power consumption.
- Reduction of power consumption of selected CNC machines from 229 kWh
per equivalent KV engine to 206 kWh per equivalent KV engine by
modifying machine cycle and consequently avoiding wastages in energy
consumption.
- Reduction in power consumption of cooling tower from 3735 kWh/Day to
2900 kWh/Day by operating cooling towers without the use of fans.
- Reduction in power consumption of New KV Engine Assembly Utilities by
reducing wastages in pumping and air conditioning system.
- Waste Heat Recovery from Powerhouse genset cooling water to reduce
electrical energy consumption at canteen area.
Power Generation Business Unit Plants (Kasar Amboli and Daman) :-
- Re-arrangement of office and canteen lighting.
- Reduction in compressor air leakages and centralisation of compressed
air system.
- Energy saving un-plug initiative which involves power switch off on
holidays.
- Air conditioning control and usage.
- Effective utilisation of natural light on the shop floor.
Distribution Business Unit (CS&S), Erandawana, Pune :-
- Load reduction in administration building by localized lighting at
work stations and redesigned general lighting as well as natural
lighting.
- Improved power factor.
IMPACT OF THE ABOVE MEASURES :
The above initiatives resulted in savings of about Rs. 12,943 (Ã000) in
addition to Green House Gas (GHG) emission reduction by 3,410 tons
during the year. The energy units saved during the year was
approximately 1,815,804 kWh.
11. RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION :
Your Company remains committed to introducing new products and
improving the existing products which meet stringent emission norms,
have higher levels of performance and lower life cycle costs, in order
to meet market needs.
The Technical Centre of your Company continues in its endeavour to
indigenize components and develop the next generation of components and
systems in collaboration with Cummins Inc., to reduce costs, and
improve fuel efficiency, performance and durability of its products. In
addition, technical productivity enhancements are continuously pursued
to reduce the costs associated with new product development.
A. New Product Development :
The following new Products were developed as part of the above
initiatives during the year :
1. KTA-50-L CNG Dual-fuel DEMU for locomotive application.
2. Development of emissionized G-855-P and GTA-855-P engines for Gas
Compression application.
3. Development of B Gas Plus CNG engine calibration for integration
with Hybrid transmission system.
4. Industrial rating development for 143 HP Engines.
5. Certification for 140 HP Engines.
6. Rating assessment of stage II Emission Norms for 200 kVA Engines.
7. Tier I rating development for a Dozer application for QST30 Engine.
8. EU stage II emission rating development for KTA19 engine for the
Power Generation market.
9. Commissioning of Euro-IV level state-of-the-art emissions
measurement facility at the Technical Centre.
B. Benefits derived as a result of the above activities are :-
a. Significantly lower development cost, ensured value addition to the
customers.
b. On time availability of emission compliant and fuel efficient
products to customers.
c. More reliable, durable and performance efficient products and
critical components were made available.
d. Component indigenization and Six Sigma initiatives resulted in
significant cost savings.
e. The above initiatives helped in winning new customers.
C Future plans include :
- Continued cost reduction initiatives using proven methods like Six
Sigma.
- Continued focus on indigenization and supplier partnership based
waste elimination initiatives.
- Alternate source development for various engine components.
- Introduction of full authority electronic diesel as well as natural
gas engines compliant with future emissions requirements for all
markets.
- Low range engine development for Power Generation Market.
D. Your Company continues to draw benefits from Cummins Inc.Ãs
technical capabilities and advanced technology. With continued support
from Cummins Inc., U.S.A., your Company is committed to developing
advanced fuel efficient and emissions compliant engines that comply
with forthcoming domestic and international emissions regulations.
E. Expenditure on R & D :
The total expenditure on R & D was as follows :-
2009-2010 2008-2009
(Rs.Ã000) (Rs.Ã000)
a) Capital 314,195 100,132
b) Recurring 317,559 307,990
c) Total 631,754 408,122
d)Total R&D expenditure as a
percentage of total sales
turnover 2.22% 1.23%
13. PARTICULARS OF EMPLOYEES :
Information as per Section 217(2A) of the Companies Act, 1956 (the
Act), read with the Companies (Particulars of Employees) Rules, 1975,
forms part of this Report. As per the provisions of Section
219(1)(b)(iv) of the Act, the Directorsà Report and Accounts are being
sent to the Shareholders excluding the statement giving particulars of
employees under Section 217(2A) of the Act.
Any Shareholder interested in obtaining a copy of the statement, may
write to the Assistant Company Secretary at the Registered Office of
the Company.
14. DIRECTORS :
During the year under review, M/s. S.M. Chapman and Glyn Price stepped
down as Directors of the Company w.e.f. December 3, 2009, and January
25, 2010 respectively. The Board of Directors place on record their
appreciation for the contributions made by M/s. S.M. Chapman and Glyn
Price.
M/s. Patrick Ward and James Kelly were appointed as Additional
Directors of the Company w.e.f. from December 3, 2009 and January 25,
2010 respectively. Mr. Pradeep Bhargava (erstwhile Alternate Director
to Mr. S. M. Chapman) has been appointed as an Alternate Director to
Mr. Patrick Ward w.e.f. December 3, 2009. The resolutions confirming
the appointment of Mr. Partick Ward and Mr. James Kelly as Directors,
are being placed at the ensuing Annual General Meeting.
In accordance with the provisions of the Companies Act, 1956 and the
Articles of Association of the Company, M/s. Nasser Munjee, B. H.
Reporter and John Wall, Directors of the Company, retire by rotation
and are eligible for re- appointment.
15. INDUSTRIAL RELATIONS :
Your CompanyÃs operations at the facility at Kothrud in Pune were
partially disrupted effective September 15, 2009 due to a strike by its
Production Associates demanding re-opening of the wage agreement signed
in conciliation. The strike was called off effective November 20, 2009.
The business was not significantly affected during the strike, as your
Company sustained manufacturing operations with the help of Diploma
Mechanical Engineers and Managers. Post the strike, industrial
relations have become very cordial and have been further strengthened
by frequent communication between Associates and Management,
co-operation and participation by Associates in management programs,
etc.
16. AUDITORS :
The Auditors, Price Waterhouse, Chartered Accountants, retire and hold
office until the conclusion of the ensuing Annual General Meeting and
are eligible for re-appointment.
On behalf of the Board of Directors,
Anant J. Talaulicar
Mumbai: May 29, 2010 Chairman & Managing Director
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Cummins India Ltd. குறித்த கூடுதல் தகவல்களை
-
Cummins India Ltd. டூல்ஸ்
- பல்க் டீல்ஸ்
- பிளாக் டீல்ஸ்
-
Cummins India Ltd. நிறுவன தகவல்கள்
- நிறுவன சுயவிவரம்
- நிறுவன வரலாறு
- நிர்வாக குழு
- மூலதன வடிவம்
- புராடெக்ட் மிக்ஸ்
- வங்கியாளர்/தணிக்கையாளர்/பதிவாளர்
-
நிறுவன வரலாறு
- போனஸ்
- மும்பை பங்குச் சந்தையில் விலை வரலாறு
- என்எஸ்இ விலை வரலாறு
-
Cummins India Ltd. முக்கிய நிதியில் விகிதங்கள்
- விகிதங்கள்
-
Cummins India Ltd. முடிவுகள்
- காலாண்டு முடிவுகள்
- அரையாண்டு முடிவுகள்
- 9 மாத முடிவுகள்
- வருடாந்திர முடிவுகள்
-
Cummins India Ltd. நிதியியல் தகவல்கள்
- தணிக்கை முடிவுகள்
- பணப்பாய்வு
- இருப்பு நிலைக்குறிப்பு
-
Cummins India Ltd. அறிக்கை
- கணக்கியல் கோட்பாடுகள்
- தணிக்கையாளர்கள் அறிக்கை
- இயக்குநர்கள் அறிக்கை
- கணக்கு குறிப்புகள்
-
Cummins India Ltd. கார்ப்பரேட் அறிவிப்புகள்
- புத்தக முடிவு
- ஈவுத்தொகை
- நிர்வாகக் குழுக் கூட்டங்கள்
- பெயர் மாற்றம்
