Your Directors are pleased to present the Second Annual Report on the business andoperations of the Company and the accounts for the Financial Year ended 31st March 2016.The Consumer Product business of Crompton Greaves Limited (CGL) was demerged into theCompany effective 1st October 2015 and therefore there are no prior year comparablenumbers.
Pursuant to the Scheme of Arrangement of demerger the Company issued and allotted on22nd March 2016 626746142 [Sixty Two Crores Sixty Seven Lakhs Forty Six ThousandOne Hundred and Forty Two Only] fully paid up Equity Shares in the ratio of 1 equityshare(s) of the face value of Rs. 2/- (Rupees Two) each credited as fully paid-up forevery 1 equity share(s) of Rs. 2/- (Rupees Two) each as fully paid-up held by the membersin Crompton Greaves Limited to the members on the record date fixed as 16th March 2016.Further pursuant to the Section 102 of the Companies Act 1956 the scheme of arrangementand the consent received from all the shareholders of the Company simultaneously with theabove issue and allottment 250000 equity shares issued previously to Crompton GreavesLimited were cancelled extinguished and annulled.
In view of the effective date being 1st January 2016 and the Company receiving thelisting approvals from BSE Limited and National Stock Exchange of India Limited on 13thMay 2016 it was not mandatorily required to comply with certain requirements mentionedin the Companies Act 2013 ( Rs. the Act") and the Securities and Exchange Board ofIndia (Listing Obligations and Disclosure Requirement) Regulations 2015. However as astep towards good corporate practice the Company has voluntarily complied with many ofthe provisions mentioned in the Act and the aforesaid Regulations.
The table below depicts the financial performance of the Company for the year ended31st March 2016. However this reflects the business performance from 1st October 2015i.e. the appointed date for the demerger.
(Rs. in crores)
|Particulars ||Year ended 31st March 2016 ||Year ended 31st March 2015 |
|Sales/Income from operations (Net of excise duty) ||1812 ||- |
|Total income ||1816 ||- |
|Profit before Exceptional Items and Tax ||172 ||(3) |
|Exceptional items ||14 ||- |
|Profit before Tax ||158 ||(3) |
|Tax expenses (including deferred Tax) ||52 ||(1) |
|Profit after Tax ||105 ||(2) |
OVERVIEW OF COMPANY FINANCIAL PERFORMANCE
Revenue grew 11.2 % to Rs. 1811.68 crores. Operating Profit (PBIT before Corporateexpenses and Exceptional Items) at Rs. 246.52 crores was up by 18.4% versus thecorresponding period last year. The previous year sales and segment profit numbers of theconsumer product segment of CGL have been considered for reference.
Finance costs of Rs. 31.75 crores represent the cost of servicing the term loan of Rs.700 crores.
Expenses of Rs. 11.29 crores incurred for the demerger have been classified asexceptional item alongwith the write off of a security deposit of Rs. 2.64 Crores.
Profit Before Tax. "PBT" was Rs. 157.68 crores and Profit after Tax"PAT" was Rs. 105.19 crores. PBT margin was 8.7% and PAT margin was 5.8%.
To take care of the liquidity requirements of the transitional period following thedemerger and possible refinancing of the term loan your Directors propose to retain theentire Profit After Tax (PAT) in the Statement of Profit and Loss and do not recommend anydividend. The balance in the Statement of Profit and Loss account remains available fordistribution in future.
No amount is proposed to be transferred to reserves.
Your Company had a term loan of Rs. 700 crores as on 1st October 2015. The loan has atenure of 6 years and is repayable in 22 instalments of which 2 instalments have beenpaid. The outstanding as on 31st March 2016 is Rs. 636.38 crores.
The loan is secured by first charge on the Company fixed assets and first charge on thebrand "Crompton Greaves".
HUMAN RESOURCES & EMPLOYEE RELATIONS
Your Company believes that human resources play a significant role in its futuregrowth. We attract competent professionals who are committed to perform and provide them aconducive challenging and learning work environment.
With a focus on nurturing and retaining talent your Company provides avenues forlearning and development through functional behavioural and leadership training programsknowledge exchange conferences communication channels for information sharing etc. toname a few.
The industrial relations in respect of all manufacturing facilities and units of yourCompany are cordial.
The Company had employee strength of 1530 as on 31st March 2016.
DIRECTORATE & KEY MANAGERIAL PERSONNEL
The appointment and remuneration of Directors is governed by the Nomination andRemuneration Policy of the Company which also contains the criteria for determiningqualifications positive attributes and independence of Directors. The Policy aims atattracting and retaining high calibre personnel from diverse educational fields and withvaried experience to serve on the Board for guiding the Management team to enhanceorganizational performance. The detailed Nomination and Remuneration Policy is containedin the Corporate Governance section of the Annual Report.
The Company Board comprises five members. Mr. Shantanu Khosla (Mr. Khosla) wasappointed as an additional Director on 21st September 2015 and as the Managing Directorof the Company on 1st January 2016 subject to the approval of the Members. As perSection 161 of the Companies Act Mr. Khosla being an Additional Director holds officeupto the date of the ensuing Annual General Meeting (AGM) and is eligible to be appointedas a Director of the Company. The Company has received a notice in writing from a memberalong with the deposit of requisite amount under Section 160 of the Act signifying hiscandidature. The resolution seeking Mr. Khosla appointment has been included in the Noticeof the Annual General Meeting (AGM) together with his brief details.
During the year under review Members approved the appointment of Mr. D. Sundaram andMr. P M. Murty as Non-Executive Independent Directors of the Company for a period of fiveconsecutive years with effect from 26th August 2015 whose offices are not liable toretire by rotation.
Mr. H. M. Nerurkar was appointed as an additional Non-Executive Independent Director on25th January 2016 and is proposed to be appointed as Non-Executive Independent Directorof the Company whose office is not liable to retire by rotation at the ensuing AGM.
Ms. Sonia N. Das is the other Non-Executive Director and was appointed on 25th January2016 and is proposed to be appointed as a Director liable to retire by rotation at theensuing AGM.
Since all of your Directors are additional Directors or Independent Directors there isno Director liable to retire by rotation at the ensuing AGM.
The Directors are reputed professionals with diverse functional expertise industryexperience educational qualifications and gender mix relevant to fulfilling the Companyobjectives and strategic goals.
Mr. Sushant Arora resigned from the Board w.e.f. 21st September 2015. Mr. Atul Gulateeand Mr. Madhav Acharya stepped down from their directorship of the Company with effectfrom 5th February 2016 and 4th January 2016 respectively. The Board places on record itsgratitude and appreciation for Mr. Sushant Arora Rs. s Mr. Atul Gulatee and Mr. MadhavAcharya guidance to the Company during their tenure as a Director.
All Independent Directors have submitted declarations that they continue to meet thecriteria of independence as laid down under Section 149(6) of the Companies Act 2013 readwith the rules thereof.
Upon his re-appointment as a Director Mr. Khosla shall continue to hold office as theManaging Director of the Company. His profile details are contained in the accompanyingNotice of the forthcoming Annual General Meeting and in the Corporate Governance Report.
Mr. Mathew Job was designated as the Chief Executive Officer with effect from 1stJanuary 2016. Mr. Sandeep Batra was designated as Chief Financial Officer with effectfrom 1st January 2016 and was also appointed as Company Secretary and Compliance Officerwith effect from 12th February 2016.
Since the appointed date for Scheme of arrangement was 1st October 2015 thereforeSection 134(3)(p) of the Act read with rule 8(4) of Companies (Accounts) Rules 2014pertaining to formal annual evaluation of the Board and its Committees is not applicableto your Company for the F.Y 2015-16.
The Board of Directors met Seven (07) times during F.Y 2015-16. The details of themeetings and the attendance of the Directors are mentioned in the Corporate GovernanceReport.
The Board has established Committees as a matter of good corporate governance practiceand as per the requirements of the Companies Act 2013. The Committees are AuditCommittee Nomination and Remuneration Committee Corporate Social ResponsibilityCommittee and Stakeholders Rs. Relationship & Share Transfer Committee. Thecomposition terms of reference number of meetings held and business transacted by theCommittees is given in the Corporate Governance Report.
SUBSIDIARY COMPANIES ASSOCIATES & JOINT VENTURES
Your Company has no subsidiaries associates and joint ventures.
RELATED PARTY TRANSACTIONS
All contracts or arrangements or transactions with related parties were at arms Rs.length basis. There were no material contracts or arrangements or transactions withrelated parties therefore Form AOC-2 does not form part of this report.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
There were no Loans Guarantees and Investments made by the Company under Section 186of the Companies Act 2013.
A Risk Management policy has been developed and implemented by the Company foridentification of risk elements which in the opinion of the Board may threaten theexistence of the Company. The key elements of the Company risk management framework havebeen captured in the risk management policy which details the process for identifyingescalating prioritizing mitigating and monitoring key risk events and action plans. Theassessment of the risks covers business risks operational risks physical risksregulatory risks fraud risks people risks information risks and IPR risks. There areappropriate assurance and monitoring mechanisms in place to monitor the effectiveness ofthe risk management framework including the mitigation plans identified by the Managementfor key risks identified through the risk management exercise.
INTERNAL FINANCIAL CONTROLS
Your Company has in place adequate systems and procedures for implementation ofinternal financial control across the organization which enables the Company to ensurethat these controls are operating effectively.
RESEARCH AND DEVELOPMENT
Introduction of new range of LED bulbs LED consumer luminaires and range extension ofLED bulbs helped in increased market penetration of LED products. Using state of the artdesign tools and techniques covering thermal optical and electronics aspects; highperformance aesthetic and highly energy efficient products like the Hawk series ofstreetlights and Pluto/Neptune/Jupiter series of area/industrial lights were introduced.These aerodynamically designed products and other new products in the office and retaillighting space increased our new product sale contribution to over 30%. The efforts onintroduction of cost competitive products and continuous value engineering substantiallycontributed towards meeting the challenges of market.
R & D efforts also helped the Company in providing the best in industry solutionsto customers for various projects of national significance and winning major orders inEESL airports auto power and street lighting projects like the Kannur InternationalAirport NBCC Dwarka High court.
The Company has introduced India first intelligent ceiling fan which can adjust itsspeed by sensing the room temperature. Dedicated remote with radio frequency based remotefunctions is pairable with the fan. This aesthetically superior ceiling fan would enhancecomfort level to the end user.
The Company has also developed a super efficient ceiling fan with permanent magnetbrushless technology. This fan consumes the lowest power for highest air delivery.
The business has developed high "head" two stage monobloc pumps. Theseinnovatively designed pumps can deliver "head" upto 80m. The motors are designedto work on wide voltage with enhanced aesthetics.
The Company Rs. s premium pump offering Crompton "Force" series was chosenfor the prestigious "I" (India Design Mark) by CII. To perform in varied voltageconditions in the country the Company has developed low voltage models in its flagshipMINI range. MINI Amber is specially developed to cater to tier II and tier III towns.
The Company is ready with highly efficient BLDC solar pumps upto 4.0HP and premiumstainless steel and monobloc pumps upto 10.0HP The pumps are controlled by maximum powerpoint trackers (MMPT) which increase the solar efficiency.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO
As required by the Companies Act 2013 read with the Companies (Accounts) Rules 2014the relevant data pertaining to conservation of energy technology absorption and foreignexchange earnings and outgo is given in the prescribed format as Annexure 1 to thisReport.
ENVIRONMENT HEALTH & SAFETY (EHS)
The Company has articulated its EHS Policy to confirm its commitment related to theenvironment safety & health of all employees and stakeholders and to minimizeadverse environmental impact from its activities.
Environment health and safety related management programs are being undertaken oncontinuous basis for eliminating unsafe working conditions improving work environment aswell as hygiene and minimizing adverse impact on environment by effective re-utilizationof treated STP and ETP water.
As a result of its environmental commitment Pumps division was awarded prize for 2ndbest garden and environment conservations in the Large Industry segment at theirAhmednagar factory location. The competition was organized by Rotary Club of AhmednagarMidtown in March 2016.
The EHS scorecard is reviewed regularly in periodic business review meetings. Theexisting EHS activities are further enhanced and strengthened through training programs onregular basis.
All the manufacturing facilities are certified for ISO14001 and OSHAS18001 standards.Yearly audits are conducted by certifying agencies to confirm adherence to proceduresprescribed in the standards.
We have set a benchmark of zero accidents at workplace by ensuring employee engagementby following the PDCA cycle as follows:
1. Near miss reporting.
2. Monthly meetings to discuss near miss reports identify areas of improvement andreview effectiveness of past actions.
3. Planning activities to mitigate EHS related issues.
4. Identifying and conducting training programs.
5. Regular Assessments by certifying agencies confirming to OHSAS 18001 and ISO 14001standards.
CORPORATE SOCIAL RESPONSIBILITY (CSR)
Your Company is committed towards embracing responsibility for its corporate actionsand achieve fruitful impact of its business actions not only on its stakeholders but alsothe society at large. As per the provisions of the Companies Act 2013 there was no amountrequired to be spent on CSR. Your Company has formed the CSR Committee and the CSR Policyis available on the website of the Company. During the year 2016-17 the Company wouldundertake CSR initiatives in compliance with Schedule VII to the Companies Act 2013.
Electronic copies of the Annual Report and Notice of the 2nd Annual General Meetingwill be sent to all members whose e-mail addresses are registered with theCompany/Depository Participant(s). For members who have not registered their emailaddresses physical copies of the Notice and Annual Report will be sent in the permittedmode. [Members requiring physical copies can send a request to the Company.] The physicalcopies of the aforesaid documents will also be available at the Company Registered Officefor inspection during normal business hours on all working days excluding Saturdays.
MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY
There are no material changes and commitments affecting the financial position of theCompany which has occurred between the end of the financial year of the Company i.e. 31stMarch 2016 and the date of the Boards Rs. Report.
EVENTS AFTER THE REPORTING PERIOD AND TILL THE DATE OF LISTING
In order to re-finance the loan we have initiated the process to seek the approval ofshareholders to raise funds upto Rs. 700 Crores through issue of Secured Non-ConvertibleDebentures (NCDs) including debenture stock bonds etc. in one or more tranches throughprivate placement.
In accordance with the Scheme the equity shares issued pursuant to the Scheme havebeen listed on BSE Limited and National Stock Exchange of India Limited on 13th May 2016.BSE Limited has been defined as the Designated Stock Exchange of the Company.
Upon recommendation of the Audit Committee the Board has appointed M/s. Ashwin Solanki& Associates as Cost Auditors for the period 1st October 2015 to 31st March 2016.At the ensuing Annual General Meeting their remuneration is proposed to be ratified bythe shareholders.
The Company has appointed M/s. Mehta and Mehta Practising Company Secretaries toundertake the Secretarial Audit of the Company. The Report of the Secretarial Audit forperiod 1st October 2015 to 31st March 2016 is annexed herewith as Annexure 2 to theReport.
MATERIAL ORDERS OF REGULATORS/COURTS/TRIBUNALS
No significant or material orders were passed by the Regulators or Courts or Tribunalswhich impact the going concern status and Company operations in future.
DIRECTORS Rs. RESPONSIBILITY STATEMENT
The Directors would like to assure the Members that the Financial Statements for theyear under review conform in their entirety to the requirements of the Companies Act2013. The Directors confirm that:
the Annual Accounts have been prepared in conformity with the applicableAccounting Standards;
the Accounting Policies selected and applied on a consistent basis give a trueand fair view of the affairs of the Company and of the profit for the Financial Year;
sufficient care has been taken that adequate accounting records have beenmaintained for safeguarding the assets of the Company; and for prevention and detection offraud and other irregularities;
the Annual Accounts have been prepared on a going concern basis;
the internal financial controls laid down in the Company were adequate andoperating effectively;
the systems devised to ensure compliance with the provisions of all applicablelaws were adequate and operating effectively.
SHARE REGISTRAR & TRANSFER AGENT
M/s. Karvy Computershare Private Limited ("Karvy") a SEBI registeredRegistrar & Share Transfer Agent ("RTA") has been appointed as the CompanyRTA. The contact details of Karvy are mentioned in the Report on Corporate Governance.
No public deposits have been accepted by the company during the year under review.
PARTICULARS OF EMPLOYEES
Since your Company was not listed during the year under review the statement ofparticulars required pursuant to Section 197(12) of the Companies Act 2013 read withRule 5(1) and (2) of The Companies (Appointment and Remuneration of Managerial Personnel)Rules 2014 is not applicable to your Company and does not form a part of this Report.
COMPLAINTS RELATING TO SEXUAL HARASSMENT
In terms of The Sexual Harassment of Women at Workplace (Prevention Prohibition andRedressal) Act 2013 it is mandatory to review status of sexual harassment relatedcomplaints in the Annual Report. There were no incidents of sexual harassment reported inthe Company. For protection against sexual harassment your Company has formed an InternalComplaints Committee to which employees can write in their complaints. The Company has aPrevention of Sexual Harassment Policy which has formalised a free and fair enquiryprocess for dealing with such issues with defined timelines.
Your Company has formulated a Vigil Mechanism & Whistle Blower Policy with a viewto providing a mechanism for employees to report violations and assure them of the processthat will be followed to address the reported violation. The Policy also lays down theprocedures to be followed by Senior Management for tracking of complaints givingfeedback conducting investigations and taking disciplinary actions. It also providesassurances and guidelines on confidentiality of the reporting process and protection fromreprisal to complainants. No personnel has been denied access to the Audit Committee.
The Company Statutory Auditors M/s. Sharp & Tannan hold office up to theconclusion of the forthcoming Annual General Meeting; and being eligible are recommendedfor re-appointment on terms recommended by the Audit Committee to the Board of Directors.
They have furnished the requisite certificate to the effect that their re-appointmentif effected will be in accordance with Section 141(3)(g) of the Companies Act 2013. TheNotes on Financial Statements referred to in the Annual Report are self explanatory and donot call for any further comments.
During the year no frauds have been reported by auditors under sub-section (12) ofSection 143 of the Companies Act 2013 either to Audit Committee of the Company or to theCentral Government.
EXTRACT OF ANNUAL RETURN
The details forming part of the extract of the Annual Return in Form MGT 9 is annexedherewith as Annexure 3.
Your Directors wish to convey their gratitude and appreciation to all of the Companyemployees at all its locations for their tremendous personal efforts as well as theircollective dedication and contribution to the Company performance.
The Directors would also like to thank the employee unions shareholders customersdealers suppliers bankers government and all other business associates consultants andall the stakeholders for their continued support extended to the Company and theManagement.
On behalf of the Board of Directors
For Crompton Greaves Consumer Electricals Limited
|Place: Mumbai ||Shantanu Khosla ||D. Sundaram |
|Date: 18th May 2016 ||Managing Director ||Director |
ANNEXURES TO BOARDS Rs. REPORT
Pursuant to Clause (m) of sub-section 3 of Section 134 of the Companies Act 2013 andRule 8(3) of the Companies (Accounts)
A. CONSERVATION OF ENERGY
(a) ENERGY CONSERVATION MEASURES TAKEN
As an electrical goods company we feel special responsibility towards energyconservation. This is reflected as much in our process upgrades as in our productdevelopment focus. Some of the activities carried out are as below:
1. Efficient thermal processes in lamp manufacturing reduced natural gas consumptionfrom 18000 M3/Day to 16200 M3/Day.
2. Energy efficient multi head vacuum pumps replaced the volumetric vacuum pumps toreduce energy consumption by 50%.
3. Reduced per person power consumption by 5% and water consumption by 10% at Barodafacility through eliminating wastages.
4. Energy efficient furnaces in Fans unit to reduce energy consumption by 10%.
5. 4 KVA solar lighting system installed in the canteen building at Goa for fan andlight loads.
6. Steps taken to install solar lighting for street lighting within the factorypremises.
(b) CAPITAL INVESTMENT ON ENERGY CONSERVATION EQUIPMENT
1. Rs. 25 lakhs were invested in energy efficient furnaces in dye casting process forfans.
2. Rs. 10 lakhs were invested for energy efficient pumps at Baroda facility.
B. TECHNOLOGY ABSORPTION
The technology focus for the company has been on process improvement for better qualityand lower cost new product development and import substitution.
The Company follows Six Sigma Methodology for continuous improvement in productquality & reduction in waste generation. In FY 2015-16 10 major Green Belt projectswere completed. These resulted in quality improvement and cost reduction of Rs. 83.3lakhs. In Fluorescent Tube Light product group test bed rejections were reduced by 50%.
In-House CFD (Computational Fluid Design) FEA (Finite Element Analysis) andHydraulic design competencies developed through advanced tools like Cfturbo. Use ofsimulations through CFD software has a huge scope in improving the overall efficiency ofthe pumps.
Developed GSM controller that allows the user to communicate with the pumpsetthrough mobile. Technology bundled with multiple critical protections for pumps. GSMcontroller was showcased at Make in India conference.
Developed eSense range aesthetically superior ceiling fan with automatictemperature control and radio frequency based remote functions.
New Super Energy Efficient Ceiling fan with permanent magnet brushlesstechnology with added features developed to BEE specifications to cater to high energyefficient market. These fans would save more than 50% energy.
Developed technology on alternate magnet for lower cost and higher productivityis brushless motor technology. These flexible plastic magnets would enhance assemblyreliability lower production cost and ensure indigenous availability.
Introduced new product series in luminaries with high performance inaerodynamics thermal optics and electronics.
C. IMPORTED TECHNOLOGY
D. EXPENDITURE ON R&D
R&D expenditure for the period: Rs. 50 lakhs
E. FOREIGN EXCHANGE EARNING AND OUTGO
|Foreign exchange earned: ||Rs. 28.75 Crores |
|Foreign exchange used: ||Rs. 109.11 Crores |
On behalf of the Board of Directors For Crompton Greaves Consumer ElectricalsLimited
| ||Shantanu Khosla ||D. Sundaram |
| ||Managing Director ||Director |
|Place: Mumbai || || |
|Date: 18th May 2016 || || |
FORM No. MR-3 SECRETARIAL AUDIT REPORT FOR THE FINANCIAL YEAR ENDED 31st MARCH 2016
[Pursuant to Section 204(1) of the Companies Act 2013 and the Rule 9 of the Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014]
Crompton Greaves Consumer Electricals Limited
We have conducted the secretarial audit of the compliance of applicable statutoryprovisions and the adherence to good corporate practices by Crompton Greaves ConsumerElectricals Limited (hereinafter called "the Company"). Secretarial audit wasconducted in a manner that provided us a reasonable basis for evaluating the corporateconducts/statutory compliances and expressing our opinion thereon.
Based on our verification of the Company books papers minutes books forms andreturns filed and other records maintained by the Company and also the informationprovided by the Company its officers agents and authorized representatives during theconduct of secretarial audit we hereby report that in our opinion the Company hasduring the audit period 1st October 2015 - 31st March 2016 complied with the statutoryprovisions listed hereunder and also that the Company has proper Board processes andcompliance mechanism in place to the extent in the manner and subject to the reportingmade hereinafter:
We have examined the books papers minute books forms and returns filed and otherrecords maintained by the Company during the audit period 1st October 2015 - 31st March2016 according to the provisions of:
(i) The Companies Act 2013 ( Rs. the Act Rs. ) and the rules made thereunder;
(ii) The Securities Contracts (Regulation) Act 1956 ( Rs. SCRA Rs. ) and the rulesmade thereunder;
(iii) The Depositories Act 1996 and the Regulations and Bye-laws framed thereunder;
(iv) Foreign Exchange Management Act 1999 and the rules and regulations madethereunder to the extent of Foreign Direct Investment Overseas Direct Investment andExternal Commercial Borrowing (during the year under review not applicable to the Companyas the company does not have any Foreign Direct Investment Overseas Direct Investment andExternal Commercial Borrowings);
(v) The following Regulations and Guidelines prescribed under the Securities andExchange Board of India Act 1992 ( Rs. SEBI Act Rs. ):-
(a) The Securities and Exchange Board of India (Substantial Acquisition of Shares andTakeovers) Regulations 2011(during the year under review not applicable to the Company);
(b) The Securities and Exchange Board of India (Prohibition of Insider Trading)Regulations 1992;
(c) The Securities and Exchange Board of India (Issue of Capital and DisclosureRequirements) Regulations 2009 (during the year under review not applicable to theCompany);
(d) The Securities and Exchange Board of India (Share Based Employee Benefits)Regulations 2014 (during the year under review not applicable to the Company);
(e) The Securities and Exchange Board of India (Issue and Listing of Debt Securities)Regulations 2008 (during the year under review not applicable to the Company);
(f) The Securities and Exchange Board of India (Registrars to an Issue and ShareTransfer Agents) Regulations 1993 regarding the Companies Act and dealing with client;
(g) The Securities and Exchange Board of India (Delisting of Equity Shares)Regulations 2009 (during the year under review not applicable to the Company); and
(h) The Securities and Exchange Board of India (Buyback of Securities) Regulations1998 (during the year under review not applicable to the Company);
(vi) Bureau of Indian Standards
The National Standards Body Of India
(vii) Bureau of Energy Efficiency (Government of India Ministry of Power)
We have examined compliance with the applicable clauses/regulations of the following:
a) Secretarial Standards issued by the Institute of Company Secretaries of India;
b) Listing Agreement entered with National Stock Exchange of India Limited BSE Limitedand Securities and Exchange Board of India (Listing Obligations and DisclosureRequirements) Regulations 2015 (during the year under review not applicable to theCompany);
During the period under review the Company has complied with the provisions of ActRules Regulations Guidelines Standards etc. mentioned above.
We further report that:
The Board of Directors of the Company is duly constituted with proper balance of theExecutive Directors Non-Executive Directors and Independent Directors. The changes in thecomposition of the Board of Directors that took place during the period under review werecarried out in compliance with the provisions of the Act.
Adequate notice is given to all directors to schedule the Board Meetings agenda anddetailed notes on agenda were sent at least seven days in advance and a system exists forseeking and obtaining further information and clarifications on the agenda items beforethe meeting and for meaningful participation at the meeting.
All decisions of the Board are carried through unanimously. As per the records providedby the Company none of the member of the Board dissented on any resolution passed at themeeting of the Board.
We further report that there are adequate systems and processes in the Companycommensurate with the size and operations of the Company to monitor and ensure compliancewith applicable laws rules regulations and guidelines.
We further report that during the audit period the Company had following specificevents/actions having a major bearing on the Company affairs in pursuance of the abovereferred laws rules regulations guidelines standards etc.
Pursuant to the Scheme of arrangement of demerger the Company issued and allotted on22nd March 2016 626746142 [Sixty Two Crores Sixty Seven Lakhs Forty Six ThousandOne Hundred and Forty Two Only] fully paid up Equity Shares in the ratio of 1 equityshare(s) of the face value of Rs. 2/- (Rupees Two) each credited as fully paid-up forevery 1 equity share(s) of Rs. 2/- (Rupees Two) each as fully paid-up held by the membersin Crompton Greaves Limited to the members on the record date fixed as 16th March 2016.
Further pursuant to the Section 102 of the Companies Act 1956 the scheme ofarrangement and the consent received from all the shareholders of the Companysimultaneously with the above issue and allotment 250000 equity shares issuedpreviously to Crompton Greaves Limited were cancelled extinguished and annulled.
We further report that the Members in pursuance to Section 180 of the Companies Act2013 approved the borrowing limit of Rs. 1500 crores at the Extraordinary General Meetingheld on 23rd November 2015
For Mehta & Mehta
(ICSI Unique Code P1996MH007500)
FCS No : 5782
CP No. : 2486
Date : 18th May 2016
Note: This report is to be read with our letter of even date which is annexed as Rs.ANNEXURE A Rs. and forms an integral part of this report.
Crompton Greaves Consumer Electricals Limited
Our report of even date is to be read along with this letter.
1. Maintenance of secretarial record is the responsibility of the management of theCompany. Our responsibility is to express an opinion on these secretarial records based onour audit.
2. We have followed the audit practices and processes as were appropriate to obtainreasonable assurance about the correctness of the contents of the secretarial records. Theverification was done on test basis to ensure that correct facts are reflected insecretarial records. We believe that the processes and practices we followed provide areasonable basis for our opinion.
3. We have not verified the correctness and appropriateness of financial records andBooks of Accounts of the Company.
4. Where ever required we have obtained the Management representation about thecompliance of laws rules and regulations and happening of events etc.
5. The compliance of the provisions of corporate laws rules regulations standards isthe responsibility of management. Our examination was limited to the verification ofprocedures on test basis.
6. The secretarial audit report is neither an assurance as to the future viability ofthe Company nor of the efficacy or effectiveness with which the management has conductedthe affairs of the Company.
For Mehta & Mehta
(ICSI Unique Code P1996MH007500)
FCS No : 5782
CP No. : 2486
Date : 18th May 2016