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CG Power & Industrial Solutions Ltd.

BSE: 500093 Sector: Engineering
BSE 00:00 | 01 Jul 189.85 -1.50






NSE 00:00 | 01 Jul 190.45 -1.20






OPEN 192.00
VOLUME 49120
52-Week high 219.60
52-Week low 71.00
P/E 68.29
Mkt Cap.(Rs cr) 28,992
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 192.00
CLOSE 191.35
VOLUME 49120
52-Week high 219.60
52-Week low 71.00
P/E 68.29
Mkt Cap.(Rs cr) 28,992
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

CG Power & Industrial Solutions Ltd. (CGPOWER) - Director Report

Company director report



Your Directors are pleased to present their Eighty-fourth Annual Reporton the business and operations of your Company along with the revised audited financialstatements both standalone and consolidated for the financial year ended 31 March 2021.


As your Company was under severe financial stress the consortium oflenders of the Company (‘Lenders') led by State Bank of India initiatedsteps for resolution of stressed asset (resolution plan) under the Reserve Bank ofIndia's circular dated 7 June 2019 on Prudential Framework for Resolution of StressedAssets (as amended or modified) (‘Prudential Framework'). A series of actionswere initiated by the Company and the Lenders leading to Tube Investments of IndiaLimited (‘TII') a listed company and part of the Murugappa Groupacquiring a controlling stake in the Company on 26 November 2020. The chronology of eventsrelating to the above is given below:

7 August 2020 TII submitted a binding bid to the Lenders to acquire majority stake in the Company.
TII entered into Securities Subscription Agreement with the Company for acquiring a controlling stake in the Company through a combination of investment in equity shares (642523365 shares) and warrants (175233645 warrants) aggregating to Rs. 700 crores subject to compliance of certain conditions and receipt of certain approvals.
11 August 2020 Based on TII‘s offer the Lenders initiated a Swiss Challenge Process inviting competing bids
28 August 2020 After the completion of the Swiss Challenge Process TII was declared as the successful bidder to acquire controlling stake in the Company.
The Lead Bank i.e. State Bank of India issued a Letter of Intent (‘LOI') to TII detailing the terms and conditions to be fulfilled by TII to complete the acquisition of controlling stake in the Company.
2 September 2020 The then Board of Directors of your Company approved further issue of 68728522 equity shares in the Company by way of a preferential issue aggregating to Rs. 100 crores.
13 October 2020 The Competition Commission of India accorded its approval to the acquisition proposal of TII.
28 October 2020 TII conveyed its acceptance to the Letter of Intent issued by State Bank India the Lead Bank.
20 November 2020 TII the Company and the Lenders executed binding agreements for one time settlement of funded facilities that were outstanding and restructuring of the non funded facilities extended to and availed by the Company. The salient terms of the agreements were:
a) Compromise settlement by making an upfront payment of Rs. 650 crores to Lenders
b) Conversion of Rs. 200 crores out of the balance funded facilities into unrated unsecured unlisted non-convertible debentures having a tenure of 5 years to be issued to the Lenders
c) Payment of around Rs. 150 crores to the Lenders out of the proceeds from the sale of "CG House" within a period of 5 years
d) Replacement / substitution of non fund based facilities extended by the members of the Lenders consortium
26 November 2020 TII subscribed to the equity shares and warrants issued to them on private placement basis and remitted Rs. 587.50 crores towards subscription amount for the Equity / Warrants and accordingly TII was allotted 642523365 Equity Shares and 175233645 warrants thus becoming the majority shareholder of the Company with a controlling stake of 50.62% which subsequently got enhanced to 53.16% when further capital of Rs. 100 crore was infused by TII in December 2020.
On the same day the Board of the Company was re-constituted with the then Directors resigning from the Board and appointment of Mr. Vellayan Subbiah Mr. M A M Arunachalam Mr. Natarajan Srinivasan Mr. P S Jayakumar Mr. Shailendra N Roy and Ms. Sasikala Varadachari as new Directors on the Board. Mr. Natarajan Srinivasan was appointed as the Managing Director of the Company.
Settlements were entered into with the Lenders who had lent monies to overseas subsidiaries of the Company on the strength of the Corporate Guarantees extended by the Company. The Company initiated the process of settling these guarantee liabilities as per the agreed settlement.
Post the acquisition
Post acquisition of the controlling interest the new Board / Management initiated several steps to complete the conditions in the LOI and also took steps to revive the business operations and addressed several issues that were haunting the Company. The key steps initiated were:
26 November 2020 TII was classified as the new Promoter of the Company in the place of the erstwhile Promoters. Prior to this the erstwhile promoters were de-classified and ceased to be Promoters of the Company on 19 November 2020.
26 November 2020 to 31 December 2020 Made payments aggregating to approximately Rs. 650 crores to Lenders during the period. Based on the steps taken by the Company the Company was classified as a STANDARD ASSET and ceased to be a Non-Performing Asset.

Recasting of Accounts

5 March 2020 Based on the application made by Ministry of Corporate Affairs Union of India the Hon'ble National Company Law Tribunal Mumbai Bench (‘NCLT') had ordered the re-opening of books of accounts of the Company and its subsidiaries for the past five years (2014-15 to 2018-19) to recast them and also get the recast accounts audited by Independent Auditors.
1 February 2021 The following two CA firms were appointed by Ministry of Corporate Affairs:
a) M/s. Kalyaniwalla & Mistry LLP - for recasting of the Accounts of the Company and its subsidiaries for five years i.e. from 2014-15 to 2018-19
b) M/s. CNK & Associates LLP - to audit the recast accounts and issue their Report thereof.

Post Balance Sheet Events:

While at the end of the financial year the recasting of accounts andaudit of such recast accounts of the past period as stated above were in progresssubsequently in the current financial year i.e. 2021-22 the exercise was completed. Therecast accounts so audited were placed before the Board on 9 September 2021 and the Boardapproved its submission to Regional Director (West) Ministry of Corporate Affairs. TheRegional Director submitted the re-cast accounts to Hon'ble NCLT and the same weretaken on record by the Hon'ble NCLT vide its order dated 26 October 2021.

The Company had applied to Hon'ble NCLT seeking its approval forvoluntary revision of the financial statements of the Company for the financial years2019-20 and 2020-21 to give effect to the consequential changes that arose on account ofthe said recast accounts for the preceding year ended 31 March 2019. The Hon'ble NCLTaccorded its approval for the voluntary revision on 22 December 2021. Based on the saidapproval the Company has given consequential effect of the recast accounts of thefinancial year 2018-19 (closing balances and other items) in the financial statements ofthe financial years 2019-20 and 2020-21.

The revised financial statements of the Company for the financial years2019-20 and 2020-21 giving effect to the recast accounts were approved by the Board inits meeting held on 31 December 2021 and the same are being circulated and placed beforethe shareholders for their approval / adoption at the ensuing Annual General Meeting (‘AGM')of the Company.


Your Company's standalone net revenue from operations was Rs. 2526crore during the year under review compared to Rs. 3169 crore in the previous year andthe consolidated net revenue from continuing operations during the year under review wasRs. 2964 crore compared to Rs. 5110 crore in the previous year.

Details of consolidated segment-wise revenue and profit before interestand tax (‘PBIT') of the two key business units - Power Systems andIndustrial Systems - and how these compare with the previous financial year are given inTable 1. Your Company's financial performance for the year ended 31 March 2021 ascompared to the previous year is given in Table 2.


(in Rs. crore)

2020-21 2019-20
Consolidated Net Sales
Power Systems 862 2736
Industrial Systems 2092 2361
Consolidated PBIT
Power Systems (82) (266)
Industrial Systems 201 246


(in Rs. crore)

Standalone Consolidated
2020-21 2019-20 2020-21 2019-20
Net Sales and Services 2526 3169 2964 5110
EBIDTA 156 160 219 44
Less: Finance cost 166 248 197 324
Less: Depreciation 81 91 138 211
Loss before Exceptional Items & Tax (91) (179) (116) (491)
Exceptional items (net) 915 (1369) 1543 (909)
Profit / (loss) Before Tax 824 (1548) 1427 (1400)
Less: Tax Expense 135 (68) 147 (76)
Profit / (loss) from continuing operations 689 (1480) 1280 (1324)
Less: Minority Interest NA NA 16 7
Profit / (loss) after minority interest 689 (1480) 1296 (1317)
Profit / (loss) before tax from discontinued operations - - 0 (7)
Tax expense on discontinued operations - - - 0
Profit / (loss) from discontinued operations - - 0 (7)
Total Profit / (loss) for the year 689 (1480) 1296 (1324)

Drop in standalone revenue was due to the financial constraints forworking capital faced by the Company. Further the bankruptcy / voluntary liquidation /divestment of some of the overseas subsidiaries of the Company contributed to drop inconsolidated revenue during the year.

A detailed review of the operations and financial performance of yourCompany and each of its business units is contained in the ‘Management Discussion andAnalysis' of this Annual Report.


Tube Investments of India Limited (TII) was classified as Promoter on26 November 2020. Prior to this the entities belonging to Avantha group promoted by Mr.Gautam Thapar which were classified as the Promoter and Promoter Group of the Companyholding 8574 equity shares of your Company (i.e. <0.002% shareholding) werereclassified to public category pursuant to approvals received from BSE Limited (‘BSE')and the National Stock Exchange of India Limited (‘NSE') on 19 November2020.


As the global COVID-19 pandemic rapidly developed into an Indian healthcrisis the Government of India announced a nationwide lockdown with effect from 25 March2020. In view of the Government directive and considering the health and safety ofemployees your Company suspended operations in all its factories and offices in Indiatill 28 April 2020. However non-operational activities relating to the factoriessales offices and the corporate office of the Company continued to be performed by suchemployees who were provided work from home facility.

All manufacturing plants resumed with limited and restricted operationson 29 April 2020 in terms of approvals received from respective authorities and afterimplementing Standard Operating Practices in the interest of health and safety of theemployees. Gradually operations at the factories were scaled up. Moreover based on therelaxations allowed your Company commenced operations at its sales regional andcorporate offices while strictly adhering to the terms and conditions of such relaxationsand taking all necessary precautions for the health and safety of its employees.

Your Company partnered with local private hospitals and accelerated thevaccination of employees / workmen and has also taken up steps to ensure vaccination forall employees.

With the economic activity gaining momentum post the COVID-19 lockdownseveral measures announced by the government and rollout of the vaccines resulted in anuptick in economic sentiments but the resurgent COVID-19 second wave had put break in thegrowth momentum. However from June 2021 onwards the economic activities have resumed andcontinued without any disruption.

Despite the pandemic situation and the severe financial stress that wasfaced till TII infused the funds the Company had continued its operations and remained agoing concern.


Due to financial stress and unviable operations decisions were takento prune / close down certain subsidiaries of the Company as given under:

a) Divestment of stake in CG Service Systems France SAS

During the year under review CG International BV (‘CGIBV')a subsidiary of the Company divested its entire shareholding in CG Service Systems FranceSAS (‘SEFR') subsidiary of CGIBV along with its liabilities for a netconsideration of €30000 to AK Group France pursuant to a Share Purchase Agreementdated 23 June 2020. Upon completion of the divestment SEFR has ceased to be a subsidiaryof the Company with effect from 20 July 2020.

b) Bankruptcy of Belgium entities

As stated in the Annual Report for the financial year 2019-20 CGHoldings Belgium NV and CG Power Systems Belgium NV step down subsidiaries of theCompany were declared as bankrupt by the Commercial Court in Belgium on 3 February 2020.The Commercial Court has appointed Receivers who are in the process of auctioning theassets of CG Holdings Belgium NV and CG Power Systems Belgium NV including investments intheir subsidairies.

c) Bankruptcy of CG Electric Systems Hungary Zrt. (ESHU)

On 7 July 2020 the Metropolitan Court in Budapest Hungary declaredCG Electric Systems Hungary Zrt. (‘ESHU') a step-down subsidiary of theCompany in Hungary as bankrupt and commenced liquidation proceedings. The Court hasappointed a liquidator who has now taken control of ESHU. However the Company has settledits guarantee obligations towards MFB Bank which had given loan facility to ESHU.

d) Liquidation of subsidiaries

CG - GANZ GENERTOR- S MOTORGYRT Korltolt FelelssgTrsasg a step down subsidiary of the Company in Hungary has got liquidated post theyear under review.

Further the following subsidiaries of the Company are in the processof being liquidated subject to receipt of statutory and regulatory approvals:

- CG Power Solutions UK Limited;

- CG Power & Industrial Solutions Middle East FZCO;

- CG Sales Networks Malaysia sdn. bhd.; Further the Board of Directorsof the Company has also approved proposal for voluntary winding of CG International(Holdings) Singapore Pte. Ltd. and CG Middle East FZE.

e) Initiation of corporate insolvency proceedings against CG PowerSolutions Limited under the Insolvency and Bankruptcy Code 2016

On 18 August 2021 your Board has approved a proposal to initiateCorporate Insolvency Proceedings against one of its non-operating subsidiaries i.e. CGPower Solutions Limited under the provisions of the Insolvency and Bankruptcy Code 2016.


Your Board does not recommend any dividend for the financial year ended31 March 2021.


The Reserves on standalone basis at the beginning of the yearamounted to `(442) Crore and at the end of the year stood at Rs. 776 Crore


As on 31 March 2021 your Company had 3 Indian and 11 foreignsubsidiaries (excluding 2 subsidiaries in Belgium along with their subsidiaries declaredas bankrupt; 4 subsidiaries in voluntary liquidation and 1 subsidiary declared insolvent).During the year under review your Company has not incorporated or acquired any company.

Pursuant to the Companies (Indian Accounting Standards) Rules 2015 andRegulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations2015 (‘SEBI LODR') the financial statements reflect the consolidation ofaccounts of your Company and its subsidiaries associates and joint venture companies.

Pursuant to Section 136 of the Companies Act 2013 ( ‘Act') the audited financial statements including the consolidated financial statementsand related information of your Company and audited/ unaudited annual accounts of each ofits subsidiaries are placed on the website of your Company.

Highlight of performance of operational subsidiaries of the Company isgiven below:

1. CG-PPI Adhesive Products Limited [CG PPI]:

CG PPI is the Company's subsidiary in Goa. Your Company holds81.42% of CG PPI's equity capital. The Company manufactures and deals in specialityadhesive tapes and speciality adhesive labels.

During the year under review CG PPI recorded revenue of Rs. 15.30crores. (Previous year: Rs. 15.32 crores) and registered profit before tax of Rs. 0.82crores. (Previous year loss before tax: Rs. 1.01 crores).


QEI LLC is the subsidiary of CG Power Americas LLC (Formerly BravinLLC) and a wholly owned step-down subsidiary of your Company in US operating in multiplemarkets and business sectors within and relating to distribution control load managementcontrol and supervisory control and data acquisition systems.

During the year under review QEI LLC recorded revenue of $9.17 Mni.e. equivalent to Rs. 67.06 crores (Previous year: $10.38 Mn i.e. equivalent toRs. 75.57 crores). It registered profit before tax of $2.45 Mn i.e. equivalent to Rs.17.89 crores (previous year: profit before tax of $1.39 Mn i.e. equivalent to Rs.10.10 crores).

3. CG Drives & Automation Sweden AB:

CG Drives & Automation Sweden AB is a subsidiary of CG IndustrialHoldings Sweden AB and a wholly owned step-down subsidiary of your Company in Sweden. Itis a technology partner for energy efficient products and solutions. It developsmanufactures and markets the equipment for control and protection of industrial processes.

During the year under review CG Drives & Automation Sweden ABrecorded revenue of SEK 241.12 Mn i.e. equivalent to Rs. 208.52 crores (Previousyear: SEK 312.81 Mn i.e. equivalent to Rs. 234.68 crores) and registered profit before taxof SEK 2.58 Mn i.e. equivalent to Rs. 2.23 crores. (Previous year profit before tax: SEK5.50 Mn i.e. equivalent to Rs. 4.12 crores).

4. CG Drives & Automation Germany GmbH:

CG Drives & Automation Germany GmbH is a subsidiary of CGInternational BV Netherlands and a wholly owned step-down subsidiary of your Company inGermany. The Company is into manufacture sale maintenance and repair of electronicdevices and facilities in the area of drive technology.

During the year under review CG Drives & Automation Germany GmbHrecorded revenue of €15.64 Mn i.e. equivalent to Rs. 137.18 crores (previousyear: €17.18 Mn i.e. equivalent to Rs. 138.00 crores). It registered profit beforetax of €0.22 Mn i.e. equivalent to Rs. 1.96 crores (previous year loss before tax:€0.07 Mn i.e. equivalent to Rs. 0.54 crores).

5. CG Drives & Automation Netherlands BV:

CG Drives & Automation Netherlands BV is a subsidiary of CGInternational BV Netherlands and a wholly owned step-down subsidiary of your Company inNetherlands. It is into development production and marketing of inverter productsincluding electrical motor drives and the trade of related products.

During the year under review CG Drives & Automation Netherlands BVrecorded revenue of € 6.80 Mn i.e. equivalent to Rs. 59.59 crores. (Previous year:€6.59 Mn equivalent to Rs. 52.90 crores) and registered profit before tax of€0.34 Mn i.e. equivalent to Rs. 2.99 crores. (Previous year profit before tax: €0.27 Mn i.e. equivalent to Rs. 2.16 crores).

Other than above the remaining subsidiaries of the Company do not haveany business operations. In terms of Section 129 of the Act statement containing salientfeatures of the financial statements of your Company's subsidiaries/ associates/joint ventures companies in Form AOC-1 is given in the notes to the financial statementsin this Annual Report.

Pursuant to Regulation 16 of the SEBI LODR a policy for determiningmaterial subsidiary of your Company as approved by the Board of Directors is madeavailable on the website under


a) Re-opening of the books of accounts by the Ministry of CorporateAffairs

Pursuant to a petition filed by the Ministry of Corporate Affairs (‘MCA')under Section 130 of the Companies Act 2013 the National Company Law Tribunal MumbaiBench ‘Hon'ble( NCLT') through its order dated

5 March 2020 allowed the re-opening of books of accounts of yourCompany and its subsidiary companies for the past five financial years up to 31 March2019. Accordingly the MCA vide its letter dated 1 February 2021 appointed

(a) Kalyaniwalla & Mistry LLP ‘KMLLP' ( )Chartered Accountants for the purpose of re-opening the books of accounts and re-castingthe financial statements of the Company and its subsidiaries for the said five financialyears and

(b) C N K & Associates LLP (‘CNK') CharteredAccountants for the purpose of auditing the re-opened and recast accounts.

KMLLP and CNK completed the assignments of re-opening of books ofaccounts and recasting the financial statements and the audit of recast financialstatements and furnished the duly audited re-stated financial statements to your Companyand the same were submitted to the Regional Director (Western Region) Ministry ofCorporate Affairs.

Pursuant to the recasting of financial statements as mentioned abovethere was a negative impact on the net-worth of the Company on a consolidated basis forthe financial year ended 31 March 2019 and the quantum of the negative impact wasapproximately Rs. 2647 crores which resulted in Net worth turning negative (Rs. 462crores) for the financial year ended 31 March 2019 as per the recast financial statements.This impact was mainly due to provisions made as re-casting adjustments in the financialyear 2018-19 in respect of the funds transferred to the erstwhile promoters and its groupentities.

The said recast financial statements were submitted by the MCA toHon'ble NCLT and the same were taken on record by the Hon'ble NCLT vide itsorder dated 26 October 2021.

b) Voluntary revision of financial statements

The financial statements of the Company for the financial year ended2019-20 were approved and adopted by the shareholders of the Company at the 83rdAnnual General Meeting of the Company held on 19 October 2020. Further the financialstatements of the Company for the financial year ended 2020-21 were approved byyour Board on 11 June 2021 and the financial results were disclosed to the stockexchanges.

However considering that closing balances in the recast financialstatements of the Company for the financial year ended 31 March 2019 will have tobe carried forward as opening balances for the financial year 2019-20 the financialstatements of the Company for the financial year 2019-20 and 2020-21 were required to berevised to give effect as stated above. In view of the above your Company made anapplication to Hon'ble NCLT on 17 June 2021 for voluntary revision in financialstatements of the Company for the financial years 2019-20 and 2020-21 in order to maintainconsistency with the recast books of accounts.

The Hon'ble NCLT vide its order dated 22 December 2021approved the said application filed by the Company and allowed the voluntary revision offinancial statements of the Company for financial years 2019-20 and 2020-21. The order ofHon'ble NCLT was received by the Company on 24 December 2021. Considering the timeconstraints for holding the AGM of the Company on or before 31 December 2021 your Companyhad applied to Hon'ble NCLT seeking extension of time for holding the AGM of theCompany. Hon'ble NCLT vide its order dated 3 December 2021 granted extension of timeto hold the AGM on or before 31 March 2022.

M/s. CNK & Associates LLP Chartered Accountants (‘CNK')was appointed to carry out the audit of revised financial statements of the Company forthe financial year 2019-20. CNK has issued an unmodified opinion on the revised financialstatements of the Company for the financial year 2019-20. The revised financial statementsfor financial year 2019-20 is given in a separate section which forms part of this AnnualReport. Further revised financial statements for financial years 2019-20 and 2020-21 havebeen approved by your Board and the same is being placed before the shareholders for theirapproval. A statement showing the summary impact of the recast books of accounts of theCompany as at 31 March 2019 considered in voluntary revision of financialstatements of the Company for the year ended 31 March 2020 and necessary consequentialchanges made therein are given in Note 3B of the Notes to the Accounts.


During the year under review the Final Report on the Investigationinitiated by the Company in the previous year was received. Hon'ble Justice Mr.T. S. Thakur (Retd.) (former Chief Justice of India) who was appointed to oversee /monitor the said Investigation also provided his report. Your Company has shared theFinal Report with relevant authorities including SEBI and Serious Fraud InvestigationOffice (‘SFIO'). Your Company is extending full co-operation to theinvestigating agencies and information and documents as sought by them are being provided.


a) Investigation by the Serious Fraud Investigation Office (SFIO)

Based on a recommendation of the Ministry of Corporate Affairs theSFIO has initiated an investigation into the affairs of your Company and its subsidiaries.Your Company is extending full co-operation to the SFIO and information and documents assought by them are being provided. The investigation is in progress.

b) Investigations by Central Bureau of Investigations (‘CBI')

Based on a complaint filed by State Bank of India (‘SBI')on behalf of all the former lenders of the Company with respect to certain transactionsthat took place in the past details of which have already been furnished by the Companyin the disclosures made to the stock exchanges on 19 August 2019 the Central Bureau ofInvestigations (‘CBI') registered an FIR against the Company itserstwhile promoters and some of the past directors/ officials of the Company. On 24 June2021 officials of CBI visited the registered office of the Company at Mumbai seekinginformation on certain transactions involving erstwhile promoters management and theirassociates which are also subject matter of existing investigation by SFIO and SEBI.

Your Company has represented to SBI requesting for exclusion of theCompany from the list of the accused named in the FIR as the Company itself is a victimof the fraud committed by other accused named in the FIR. Further full co-operation isbeing extended to CBI and information and documents as sought by them are being provided.

c) Investigations by Enforcement Directorate

Enforcement Directorate has sought information from your Company inconnection with investigations being carried out by them under Prevention of MoneyLaundering Act against the erstwhile promoter and the previous management. Fullco-operation is being extended by your Company and information and documents as sought bythe Enforcement Directorate are being provided.


At the 81st Annual General Meeting of your Company M/s S RB C & CO LLP Chartered Accountants (Firm Registration No. 324982E/E300003) (‘SRBC')and M/s K K Mankeshwar & Co. Chartered Accountants (Firm Registration No.106009W) (‘KKM')were appointed as Joint Statutory Auditors of the Company for a term of five years up tothe conclusion of 86th Annual General Meeting of your Company.

Cessation of KKM as Auditor

In the 83rd Annual Report for the financial year ended2019-20 the Members were informed regarding the decision of the Board to remove KKM asthe Joint Statutory Auditors of the Company and the subsequent resignation by KKM as theJoint Statutory Auditors vide their email dated 25 January 2020 upon communication of thisdecision.

Since the resignation tendered by KKM was not in accordance withapplicable laws and was after the decision of the then Board to seek approval of theCentral Government for removal of KKM your Company filed an application with the MCA forremoval of KKM as Joint Statutory Auditors of the Company. After hearing both the partiesin the matter the Regional Director Western Region Mumbai vide its order dated 27August 2020 disposed off the said application as infructuous since KKM had alreadyresigned as the statutory auditors of the Company. Accordingly your Company took onrecord the resignation tendered by KKM vide their email dated 25 January 2020 in terms ofthe order passed by the Regional Director in the matter.

Qualified Opinion by the Auditors and Board Responses

Shareholders may note that pursuant to restatement of the financialstatements of the Company for five financial years i.e. from 2014-15 to 2018-19 and theconsequential revision in financial statements of the Company for the subsequent yearsthe Disclaimer of Opinion given by Statutory Auditors in the past have now been dropped bythem from their Audit Report on the revised Financial Statements of the Company for thefinancial year 2020-21. In respect of the revised Standalone Financial Statements theStatutory Auditors have furnished an unmodified opinion and in respect of the ConsolidatedFinancial Statements they have furnished a qualified opinion. Further the StatutoryAuditors have also included certain matters in the "Emphasis of Matter"paragraph in the Auditors' Reports for the year 2020-21.

The qualified opinion furnished by the Statutory Auditors on therevised Consolidated Financial Statements of the Company is mentioned below along withyour Board's response to these observations given in italics.

1. The Group has not made provision towards the corporate guaranteeamounting to Rs. 41.56 crores invoked by a bank as at March 31 2021.Consequently we are unable to comment on the impact of the above matter on these RevisedConsolidated Financial Statements.

Board Response

CGIBV a wholly owned subsidiary of the Company has given acorporate guarantee against loan taken by Belgium Entities which has been secured againstthe assets of Belgium Entities (ceased to be subsidiaries from the assumed date of January1 2020). The lender has invoked the corporate guarantee amounting to Rs. 41.56 crore dueto bankruptcy proceedings initiated of Belgium Entities. The Company has not madeprovision towards this invocation of corporate guarantee on the assumption that theestimated recoverable value of assets of Belgium entities to be realised by Receiversshall be sufficient to meet this liability.

2. We draw attention to note 3A(f) of the Revised ConsolidatedFinancial Statements which indicate that the accompanying Revised Consolidated FinancialStatements include unaudited financial statements and other unaudited financialinformation in respect of;

(a) 5 subsidiaries part of continued operations of the Group whosefinancial statements and other financial information reflect total assets of Rs.173.88 crores as at March 31 2021 total revenues of Rs. 57.61 crores total net lossafter tax Rs. 22.09 crores and total comprehensive loss (net) of Rs. 22.09 croresfor year ended March 31 2021 and net cash outflows of Rs. 3.03 crores for the yearended March 31 2021;

(b) 1 subsidiary part of discontinued operations of the Group whosefinancial statements and other financial information reflect total assets of Rs.5.98 crores as at March 31 2021 total revenues of Rs. Nil total net profit after taxRs. 0.06 crores and total comprehensive income (net) of Rs. 0.06 crores for theyear ended March 31 2021 and net cash inflows of Rs. 0.22 crores for the yearended March 31 2021;

Our report in so far as it relates to amounts and disclosures includedin respect of these subsidiaries is based solely on such financial statements and otherfinancial information as available and considered by the management. We are unable todetermine the impact on total revenues assets and loss for the year had these entitiesbeen subjected to an audit.

Board Response

The Company has complied with the regulation 33(3)(h) of the SEBI LODRwith respect to coverage of audit of the Company's operations by Auditors andthe total revenue of remaining unaudited entities constitutes approx. 2% of theconsolidated revenue of the Company.


As per the requirement of Section 148(1) of the Act read with rulesmade thereunder your Company is required to maintain cost accounts and records.Accordingly your Company has maintained cost accounts and records for financial year2020-21 as applicable for its product range.

During the year under review the Company filed the Cost Audit Reportfor the financial year 2019-20 with the Registrar of Companies Mumbai within theprescribed statutory deadline. Cost Audit Report for the financial year 2020-21 has alsobeen filed with the Registrar of Companies Mumbai within the prescribed time.

Upon recommendation of the Audit Committee the Board has re-appointedM/s R. Nanabhoy & Co as Cost Auditor of your Company for financial year 2021-22 at aremuneration of Rs. 700000/- (Rupees Seven Lakhs only) per annum plus out-of-pocketexpenses and taxes as applicable. The Act mandates that the remuneration payable to theCost Auditor is ratified by the shareholders. Accordingly a resolution seeking theshareholders' ratification of the remuneration payable to the Cost Auditors for thefinancial year 2021-22 is included in the Notice convening the ensuing Annual GeneralMeeting.


Your Company had appointed M/s. Parikh & Associates PractisingCompany Secretaries Mumbai (Firm Registration Number: P1988MH009800) to undertake theSecretarial Audit of the Company for financial year 2020-21.

Your Company has generally complied with the Secretarial Standards andthe Secretarial Audit Report is annexed in Form MR-3 for financial year 2020-21 as Annexure4 to this Report.

The Board's response in relation to the observations made by theSecretarial Auditor in the Secretarial Audit Report is provided below:

01. The Company has appointed Chief Financial Officer as required underSection 203 of the Companies Act 2013 only on 5 February 2021.

Board's Response:


The delay in appointment of Chief Financial Officer of the Company wasdue to the extra-ordinary situation faced by the Company and the transition in theManagement of the Company. The Chief Financial Officer was appointed after the newmanagement took control of the affairs of the Company.

02. The requirement under Regulation 33(3)(h) of SEBI ListingRegulations subject to at least eighty percent of each of the consolidated revenueassets and profits respectively for quarters ended June 2020 September 2020 December2020 and March 2021 have not been subject to limited review by the Auditors.

Board's Response:

Financial information of certain entities of the Company wasunaudited due to either removal or resignation of officers or directors or due to loss ofcontrol or on account of bankruptcy or voluntary liquidation. For the quarter ended March2021 the requirement under Regulation 33(3)(h) of SEBI LODR had not been met only interms of the profitability criteria in respect of the original Financial Statements / Resultsof the Company for the year ended 31 March 2021 published in June 2021. However inrespect of the Revised Financial Statements of the Company for the year ended 31 March2021 96% of consolidated assets 98% of consolidated revenue and 88% of the consolidatedprofit have been subject to audit thus complying with the requirement under Regulation33(3)(h) of SEBI LODR.

03. Submission of the outcome of meeting of the Board of Directors heldon June 27 2020 has been delayed beyond the statutory timelines under Regulation 30 readwith Part A of Schedule III of SEBI Listing Regulations.

Board's Response: In view of the pandemic situationwhich was prevailing in June 2020 the meetings of the Audit Committee and Board were heldby video conferencing and the participants of the meeting including Directors StatutoryAuditors and other officials of the Company participated remotely from different locationsin Mumbai and outside Mumbai. As a result there was a delay in co-ordinating andobtaining all the signatures from the signatories. In view of the above there was delayin submission of outcome of Board meeting held on 27 June 2020 beyond statutory timelines.

04. The amount of unclaimed dividend due to be transferred to InvestorEducation and Protection Fund (IEPF) as on 7 December 2020 and 28 February 2021 and thecorresponding shares could not be credited to IEPF Account due to technical glitches. As aresult the said amount remained due and outstanding as on 31 March 2021. The Company hassince transferred the amounts to IEPF.

Board's Response: The amounts could not be credited to IEPFAccount due to technical glitches. The Company has since transferred the amounts to IEPFAccount.


The Company has adequate internal controls consistent with the natureof business and size of the operations to effectively provide for safety of its assetsreliability of financial transactions with adequate checks and balances adherence toapplicable statutes accounting policies approval procedures and to ensure optimum use ofavailable resources. These systems are reviewed and improved on a regular basis. It has acomprehensive budgetary control system to monitor revenue and expenditure against approvedbudget on an ongoing basis.



As on the date of this report your Company's Board of Directorsconsists of eight Directors comprising

(i) Three Non-Executive Non-Independent Directors which includes theNon-Executive Chairman of the Board

(ii) Four Non-Executive Independent Directors and

(iii) a Managing Director.

Mr. Vellayan Subbiah Non-Executive Director is the Chairman of yourBoard and Mr. M A M Arunachalam and Mr. Kalyan Kumar Paul are Non-ExecutiveNon-Independent Directors on your Board. Mr. P S Jayakumar Mr. Shailendra Roy Ms.Sasikala Varadachari and Mr. Sriram Sivaram are Independent Directors in terms ofRegulation 16 of the SEBI LODR and Section 149 of the Act.

Mr. Natarajan Srinivasan is the Managing Director on your Board.

Your Board consists of professionals with diverse functional expertiseindustry experience educational qualifications and gender mix relevant to fulfilling yourCompany's objectives and strategic goals.

Change in Composition of the Board

a) Appointments and Cessation

At the beginning of the year your Company's Board of Directorsconsisted of eight Directors comprising of

(i) a Whole-Time Executive Director and

(ii) seven Independent Non-Executive Directors as follows:

Name of Director Category
1. Mr. Ashish Guha Non-Executive Independent Director and Chairman of the Board
2. Mr. Jitender Balakrishnan Non-Executive Independent Director
3. Mr. Narayan K. Seshadri Non-Executive Independent Director
4. Mrs. Ramni Nirula Non-Executive Independent Director
5. Mr. Pradeep Mathur Non-Executive Independent Director
6. Dr. Aditi Raja Non-Executive Independent Director
7. Dr. Rathin Roy Non-Executive Independent Director
8. Mr. Sudhir Mathur Whole Time Executive Director

In terms of the Securities Subscription Agreement executed between theCompany and TII TII acquired a controlling stake in the Company on 26 November 2020 andconsequently all the above erstwhile Board members of your Company resigned and the Boardof Directors of the Company was reconstituted by appointment of six new Directors –(i) three new Independent Directors and (ii) three persons nominated by TII as directorson the Board of Directors of the Company with effect from 26 November 2020 as follows:

Name Category
1. Mr. Vellayan Subbiah Non-Executive Non-Independent Director and Chairman of the Board
2. Mr. M A M Arunachalam Non-Executive Non-Independent Director
3. Mr. P S Jayakumar Non-Executive Independent Director
4. Mr. Shailendra Narain Roy Non-Executive Independent Director
5. Ms. Sasikala Varadachari Non-Executive Independent Director
6. Mr. Natarajan Srinivasan Managing Director

Mr. Natarajan Srinivasan was appointed as the Managing Director of theCompany initially for a period of three years but subsequently your Board revised histenure to two years i.e. from 26 November 2020 to 25 November 2022. Mr. Srinivasan doesnot receive any remuneration or commission from any of the Company's subsidiaries.

The shareholders of the Company at their extra-ordinary generalmeeting held on 7 June 2021 regularized the appointment of above Additional Directors intheir respective capacity as Non-Executive Non-Independent Directors Non-ExecutiveIndependent Directors and the Managing Director. The shareholders have also approvedwaiver of recovery of excess remuneration paid if any to managing director during thefinancial year 2020-21 in the event of loss or inadequate profits during the said year.

Further based on the recommendations of the Nomination andRemuneration Committee your Board had appointed Mr. Sriram Sivaram and Mr. Kalyan KumarPaul as Additional Directors in the capacity of Non-Executive Independent Director andNon-Executive Non-Independent Director of the Company respectively with effect from 11June 2021. In accordance with Section 161 of the Act they can hold office up to the dateof the Annual General Meeting of the Company held after their appointment or the last dateon which the Annual General Meeting should have been held and are eligible for beingappointed as Directors. Accordingly your Company has obtained approval of the Members fortheir appointment as Directors through Postal Ballot on 30 December 2021.

b) Retirement by rotation

In terms of the provisions of Section 152 of the Act and the Rules madethereunder and Article 114 of the Articles of Association of the Company Mr. VellayanSubbiah retires by rotation at the ensuing Annual General Meeting of the Company and iseligible for re-appointment.

As per Regulation 36 of the SEBI LODR and Secretarial Standard-2 onGeneral Meetings issued by the Institute of Company Secretaries of India (SS-2) a briefprofile and other relevant details regarding re-appointment of Mr. Vellayan Subbiah arecontained in the Annexure accompanying the explanatory statement to the Notice of theensuing Annual General Meeting.


Your Company has received declarations from all its IndependentDirectors confirming that they meet the criteria of independence as laid down underSection 149 of the Act and Regulation 16 of the SEBI LODR.

In the opinion of the Board all the Independent Directors of yourCompany fulfil the conditions of independence as specified in the Act and SEBI LODR andare independent of the management and have the integrity expertise and experienceincluding the proficiency as required to effectively discharge their roles andresponsibilities in directing and guiding the affairs of the Company.

The Company has received a certificate from M/s Parikh &Associates Practising Company Secretaries confirming that none of the Directors on theBoard of the Company have been debarred or disqualified from being appointed or continuingas Directors of companies by the SEBI Ministry of Corporate Affairs or any such otherstatutory authority.


During the financial year 2020-21 your Board of Directors met 23times inter alia to resolve the financial stress faced by the Company and to guide andnavigate the Company during the challenging and difficult situation faced during the yearin addition to dealing with other matters to be dealt with by the Board in accordance withthe provisions of the Act SEBI LODR and other statutory provisions.

Details of Board Meetings held and the attendance of Directors aregiven in the Section titled "Report on Corporate Governance" which forms partof this Annual Report.


Your Board has established following committees in compliance with therequirements of the Act and SEBI LODR:

(i) Audit Committee

(ii) Nomination and Remuneration Committee

(iii) Corporate Social Responsibility Committee

(iv) Risk Management Committee and

(v) Stakeholders' Relationship Committee.

Details of composition of the statutory committees number of meetingsheld and attendance of Committee members thereof during the financial year is given in theSection titled "Report on Corporate Governance" forming part of this AnnualReport.

As mentioned earlier in this Directors' Report the Board ofDirectors of your Company was reconstituted with effect from 26 November 2020 with theresignation of all the erstwhile Board members and appointment of new directors.Consequently the composition of committees was also changed with effect from 26 November2020 to induct the new Board members in the above committees. The change in composition ofthe committees is given in the Section titled "Report on Corporate Governance"forming part of this Annual Report.

All recommendations of the Audit Committee have been accepted by theBoard.

The Special Situation Committee and the Capital Restructuring Committeeconstituted in the financial year 2019-20 were dissolved on 26 November 2020. Your Boardhas constituted a Finance Committee comprising of Mr. Vellayan Subbiah Chairman of theBoard and Mr. Natarajan Srinivasan Managing Director to inter alia take decisionsrelating to borrowings investments and lending from time to time within such limits /sub-limits as may be decided by the Board.


Mr. Sudhir Mathur who was the Whole Time Executive Director and a KMPof the Company since 10 May 2019 had resigned with effect from close of business hours on26 November 2020.

Mr. Natarajan Srinivasan was appointed as the Managing Director and aKMP of the Company with effect from 26 November 2020.

Mr. Susheel Todi was appointed as the Chief Financial Officer of theCompany effective from 5 February 2021.

Mr. Alen Ferns was the Company Secretary and Compliance Officer of theCompany till the closure of business hours on 5 February 2021 and thereafter he wasre-designated as the Deputy General Manager – Secretarial of the Company.

Mr. K. R. Viswanarayan who was appointed as the Company Secretary andCompliance officer of the Company with effect from 6 February 2021 resigned from theservices of the Company effective from close of business hours on 31 March 2021.

Mr. P. Varadarajan was appointed as the Company Secretary andCompliance Officer of the Company with effect from 1 April 2021.


Your Company has formulated a Remuneration Policy governing theappointment and remuneration of Directors KMP Senior Management and other employees. TheRemuneration Policy of the Company provides a performance driven and market-orientedframework to ensure that the Company attracts retains and motivates high qualityexecutives who can achieve the Company's goals while aligning the interests ofemployees shareholders and all stakeholders in accordance with the group's valuesand beliefs. The terms of reference of the Nomination and Remuneration Committee includesformulation of criteria for determining qualifications positive attributes andindependence of Directors.

The Company's Remuneration Policy is available on the website ofthe Company under:

Your Company has adopted a Board Diversity Policy to reap the benefitsof a broader experience in decision making.


In line with the requirements of the Act and the SEBI LODR an annualevaluation of performance of the Board its Committees and individual Directors wascarried out during the year under review. Pursuant to the provisions of Schedule IV of theAct and Regulation 25 of the SEBI LODR the Independent Directors of your Company at ameeting held on 25 March 2021 evaluated the performance of Non-Independent Directors theBoard as a whole performance of the Chairman; and also assessed the quality quantity andtimeliness of flow of information between the Management and the Board.

Since the Board of the Company was re-constituted w.e.f. 26 November2020 board evaluation was conducted by the new board members.


Pursuant to Regulation 25 of the SEBI LODR your Company familiarizesits Independent Directors with their roles rights responsibilities as well as theCompany's business and operations. Moreover Directors are regularly updated on thebusiness strategies and performance management structure and key initiatives ofbusinesses at every Board Meeting. Details of the programme can be viewed under thefollowing link available on the Company's website: aspx?cnl2=yrnPqECUvhk=


All related party transactions that were entered into during thefinancial year under review were on arm's length basis and were in the ordinarycourse of business. Hence disclosure of particulars of contracts/arrangements entered intoby your Company with related parties in Form AOC-2 is not applicable for the year underreview. There were no materially significant related party transactions during the yearwhich may have a potential conflict with the interest of the Company at large. The AuditCommittee grants omnibus approval for transactions which are of repetitive nature withrelated parties.

Related party transactions entered during the year under review aredisclosed in the notes to the Financial Statements.

None of the Directors had any pecuniary relationship or transactionswith the Company except the payments made to them in the form of remuneration / sittingfee.

The Company's Related Party Transactions Policy is made availableon the website of the Company under:


Pursuant to the provisions of Section 186 of the Act and Schedule V ofthe SEBI LODR particulars of loans guarantees given and investments made by your Companyduring financial year 2020-21 are given in the notes to the Financial Statements.


Pursuant to Regulation 34 of the SEBI LODR the Business ResponsibilityReport for the year 2020-21 highlighting the initiatives taken by the Company in the areasof environment social economic and governance is given in the Section titled"Business Responsibility Report" which forms part of this Report and is alsoavailable on the website of your Company under: aspx?cnl2=Nu/tTrrPlMI=


CG's comprehensive Risk Management Framework involves athree-tiered approach taking into account the Enterprise Risks Process Risks andCompliance Risks.

Enterprise risk identification and mitigation initiatives are handledthrough an on-going process for each of the businesses as well as for CG as a whole. Thecoverage extends to all key business exposures. After getting a measure of each suchenterprise risk the mitigation actions are tracked.

The Risk Management Committee of the Board reviews the key risksassociated with the businesses of your Company and their mitigation measures.


During the year under review your Company's R&D activitiescontinued to focus on development of indigenous and energy efficient products.


Developed Permanent Magnet AC Motors (PMAC) for ElectricVehicle application. These motors developed with special rare earth magnet and low wattloss steel are compact in size and gives very high efficiency for the given power weightratio.

• Developed ultra premium energy efficient motors (IE5) meetinginternational standards and became the first Indian company to do so in inductiontechnology along with permanent magnet.

• Developed pressurized enclosure motor for use in hazardous areaZone1 applications. The Motor is equipped with fully automated dry air purge system toensure safety aspect through critical interlocks. This is mainly used in oil and gassector.

Drives and Automation

• Developed new control platform CB2.1 which offered Modbus RTUand standby supply option as standard. The new platform offers a strong foundation forfuture with much higher communication speeds possibilities for CAN communication and alsowireless connection with PC control software EmoSoftCom through PPU.

• Designed the Next Gen E frames 2.1 for 75 and 90kW drives with21% reduction in size with better competitiveness. The unique design makes it possible toconvert a drive from IP20 to IP54 and vice-versa at any place giving much greaterflexibility to the customers.

• Developed and introduced Advanced EmoDrive application softwarea mobile phone application for monitoring and control of the drives. This application canwork through Bluetooth or Wifi enabled keypad of the Drive and does not require anyhardwired connection which helps in not only monitoring the runtime status of the Drivebut can also be used to control it in real time.

• Developed Next Generation VSS single phasedrive with advancefeatures like Compact design high starting torque detachable display MPPT (Maximumpower point tracking) support torque control that can deal with up to 50C ambientsupport.


• Developed a low voltage high current brushless single bearingTraction Alternator C1019B for Tata Steel Project. The efficiency of 2 X 700 HP Shuntinglocomotive is improved with this new Alternator when compared to existing system of 1400HP Single Engine Alternator system.

• Indigenously developed Filter Cubicle Panels and AuxiliaryCircuit Cubicle Panels and received approvals from authorities of Indian Railways.

• Developed an electric point machine with arrangement ofSecondary Drive replacing spring setting device for thick web switch which would ensurefull butting of tongue rail with stock rail from crossing point to Junction Over Head(JOH) location.


• Developed a new Transformer Monitoring System through Internetof Things (IoT) cloud based named as Smart Controller designed to effectively monitorand manage the AT&C (Aggregate Technical & Commercial) loss which is a challengeto the Indian Power Sector. Further to support the Government of India (GOI) initiativeand build Railway Infrastructure in the country indigenously developed and successfullyconducted short circuit test of Trackside Transformer of 21.6/30.24 MVA 132/27 kV forIndian Railways.

• Expanded product range by introducing three phase shunt reactorswith stringent requirements of very low vibration and noise for domestic and exportmarkets. Also developed software for optimising thermal characteristics of products bymaking least use of cooling equipment and electrical grade steels which will help inreduced use of commodities.

• Worked on development of new core materials new electrodeformation new constructional designs for current transformers and new passiveferro-resonance circuit and electrode configuration for capacitor voltage transformers forhigher reliability and performance. Developed 800 kV Bushing for 800 kV Transformers andreactors. Also established manufacturing process for UHV Instrument Transformers.

• Indigenous development of 145 kV and 245 kV Hybrid Gas InsulatedSwitchgear (GIS) with objective of economical design with reduced Greenhouse gas andenhanced reliability.

• Successfully launched indigenously developed 40.5kV SF6 GasCircuit Breaker. These Breakers are compact with latest Arc Assist technology deployinglow energy mechanism. Further developed 12kV Ring Main Unit (RMU) – Arista-S forSmart Distribution application to strengthen the Power Distribution networks in utilitiesfor reliability and continuity of power supply.


Details as required under Section 134 of the Act read with theCompanies (Accounts) Rules 2014 are given in the prescribed format as Annexure 1to this Report.


A detailed review of the Environment Health and Safety (EHS) measuresundertaken by your Company is given in the Section titled "Management Discussion andAnalysis" which forms part of this Report.


A detailed review of the operations performance and future outlook ofyour Company and its businesses is given in the Section titled "Management Discussionand Analysis" which forms part of this Report.


A section on Corporate Governance standards followed by your Companyas stipulated under Schedule V of SEBI LODR is enclosed separately.

A certificate from M/s Parikh & Associates Practising CompanySecretaries regarding compliance with the conditions of Corporate Governance asstipulated under SEBI LODR is annexed to the Report on Corporate Governance.


Your Company is now a part of the Murugappa Group which is known forits tradition of philanthropy and community service.

Owing to the financial stress faced by the Company coupled withCOVID-19 induced lockdown and its impact on business operations your Company could notincur any CSR expenditure during the year under review. It may be noted that during theyear under review there was no statutory requirement to incur any CSR expenditure inview of the average net profits of the Company for past three financial years beingnegative.

However your Company is committed towards inclusive growth and basedon the recommendation of the Board-level CSR Committee your Company will be identifyingfocus areas / CSR initiatives to be carried out in the coming financial years in order tohave a maximum impact.

Details of the composition of the CSR Committee and CSR Policy of theCompany are given in the Section titled ‘Annual Report on CSR initiatives' inAnnexure 2 of this Report.


Your Company has appointed Datamatics Business Solutions Limited (‘DBSL')an entity which is registered with SEBI as its Registrar and Share Transfer Agent.Contact details of DBSL are mentioned in the section titled "Report on CorporateGovernance" of this Annual Report.


Disclosures pertaining to remuneration and other details as requiredunder Section 197 of the Act read with Rule 5(1) of the Companies (Appointment andRemuneration of Managerial Personnel) Rules 2014 are given in Annexure 3 to thisReport. In accordance with the provisions of Section 197(12) of the Act read with Rule5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 thenames and other particulars of the employees covered under the said rule shall be madeavailable to any Member on a specific request made in this regard by him or her inwriting.


The shareholders of the Company had through special resolution passedby Postal Ballot on 23 September 2021 approved the introduction and implementationof Employee Stock Option Plan 2021 ( ‘ESOP 2021' / ‘Scheme' )and authorised the Board / Nomination and Remuneration Committee to issue to the eligibleemployees such number of Options under the ESOP 2021 as would be exercisable into notexceeding 27000000 (Two Crore Seventy Lakhs) fully paid-up equity shares of Rs. 2 eachin the Company.

The Nomination and Remuneration Committee shall act as the CompensationCommittee and is empowered to formulate detailed terms and conditions of the ESOP 2021administer and supervise the same.

The maximum number of Options under ESOP 2021 that may be granted toeach eligible employee shall vary depending upon the grade however the same shall notexceed 2000000 (Twenty Lakhs) in number per eligible Employee in any year and inaggregate. The specific employees to whom the Options would be granted and theireligibility criteria would be determined by the Nomination and Remuneration Committee atits sole discretion.

Options granted under ESOP 2021 would vest on or after 1 (one) yearfrom the date of grant but not later than 4 (four) years from the date of grant of suchOptions or any other terms as decided by the Nomination and Remuneration Committee.

As on the date of this report your Company has granted 1834100options to the eligible employees under ESOP 2021. Since the ESOP Scheme of the Companywas introduced and implemented in financial year 2021-22 the disclosure as required underthe relevant SEBI Regulations is not applicable for financial year ended 31 March 2021.


Your Company has adopted a Prevention of Sexual Harassment Policy andhas also constituted an Internal Complaint Committee in compliance with the SexualHarassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013. TheInternal

Complaint Committee has been constituted region-wise presided by awoman employee and comprising five to seven Company employees with an external member towhom employees can address their complaints.

During the year under review no incident of sexual harassment wasreported.


Your Company has set up a vigil mechanism viz. a Whistle BlowerPolicy as per the provisions of Section 177 of the Act and Regulation 22 of the SEBI LODRto enable its employees to report violations genuine concerns unethical behaviour andirregularities if any which could adversely affect the Company's operations. Noneof the Whistle Blowers was denied access to the Audit Committee of the Board.

The Ombudsperson appointed by your Board deals with the complaintsreceived by or against employees customers and vendors of the Company and supervises theinvestigation ensures appropriate action and submits a report to the Chairman of theAudit Committee on a quarterly basis.


Pursuant to Regulation 43A of the SEBI LODR your Company hasformulated a Dividend Distribution Policy. It is available on the website of the Companyunder: aspx?cnl2=yrnPqECUvhk=


Your Company has not accepted any deposits from public or its membersunder Chapter V of the Act and no deposits were outstanding as on 31 March 2021.


During the year under review your Company allotted equity shares andwarrants to Tube Investments of India Limited (‘TII') on preferentialallotment / private placement basis as follows:

- 642523365 equity shares aggregating to approx. Rs. 550 Crore and175233645 warrants aggregating to approx. Rs. 150 Crore were allotted on 26November 2020.

- 68728522 equity shares aggregating to approx. Rs. 100 Crore wereallotted on 19 December 2020.

The issue proceeds were utilized by the Company for thepurposes/objects as stated in the Offer document and explanatory statement to the noticeof the Extraordinary General Meeting wherein the shareholders' approval was given forthe said issue.

In case of warrants TII has paid 25% of warrant considerationaggregating to Rs. 37.50 Crore at the time of warrants subscription. The balance warrantsubscription money is payable by TII upon exercising the option to convert the warrantsinto equity shares. The warrants can be exercised by TII in one or more tranches at anytime on or before expiry of 18 months from the date of allotment of warrants.

As on 31 March 2021:

• The authorised share capital of your Company was Rs.4076000000/- (Rupees Four Hundred Seven Crore And Sixty Lakh) divided into2038000000 equity shares of Rs. 2/-(Rupees two) each.

• The subscribed and paid-up share capital of your Company stoodat Rs. 2675996058/-(Rupees Two Hundred And Sixty Seven Crore Fifty Nine Lakhs NinetySix Thousand and Fifty Eight only) consisting of 1337998029 equity shares of Rs.2/- (Rupees two) each.

Post 31 March 2021 your Company issued and allotted 13845000 equityshares to Standard Chartered Bank (Singapore) Limited on preferential allotment basis forsettlement of obligations under the Guarantee Obligations (SCB')Settlement Agreement. Consequently as on date the subscribed and paid-up share capitalof your Company is Rs. 2703686058/-(Rupees Two Hundred And Seventy Crore Thirty SixLakhs Eighty Six Thousand and Fifty Eight only) consisting of 1351843029 equity sharesof Rs. 2/- (Rupees two) each.

Your Company's equity shares are listed and traded on BSE Limitedand National Stock Exchange of India Limited.

Your Company had issued Global Depository Receipts ( ‘GDRs') in 1996 and the underlying shares for each GDR were issued in the name of The Bankof New York or the Depository. Each GDR is equivalent to five equity shares. On 5February 2021 your Board approved the proposal for termination of GDR program of theCompany and delisting of GDRs which were outstanding and listed on the London StockExchange subject to compliance with the applicable laws. Accordingly the GDRs gotdelisted from the London Stock Exchange effective from 24 May 2021.

As on 31 March 2021 104462 GDRs were outstanding.


Pursuant to sub-section 3(a) of Section 134 and sub-section (3) ofSection 92 of the Act a copy of the Annual Return of the Company as on 31 March2021 is placed on the website of the Company and the same is available on the followinglink: aspx?cnl2=Nu/tTrrPlMI=


During the year under review the Statutory Auditors of the Company hadnot reported any matter under Section 143(12) of the Act. Therefore disclosure is notapplicable in terms of Section 134(3)(ca) of the Act.


The Company has not issued any equity shares with differential rightsas to dividend voting or otherwise.


The Board of Directors confirm that the Company has in place aframework of internal financial controls and compliance system which is monitored andreviewed by the Audit Committee and the Board besides the statutory internal andsecretarial auditors. To the best of their knowledge and belief and according to theinformation and explanations obtained by them your Directors make the followingstatements in terms of Section 134(3)(c) of the Companies Act 2013:

a) the annual Financial Statements for the year ended 31 March 2021have been prepared in conformity with the applicable accounting standards along withproper explanation relating to material departures if any;

b) that such accounting policies as mentioned in the Notes to theFinancial Statements have been selected and applied consistently and judgment andestimates have been made that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as at 31 March 2021 and of the profit of theCompany for the year ended on that date;

c) that proper and sufficient care has been taken for the maintenanceof adequate accounting records in accordance with the provisions of the Companies Act2013 for safeguarding the assets of the Company and for preventing and detecting fraud andother irregularities;

d) that the annual Financial Statements have been prepared on a goingconcern basis;

e) that proper internal financial controls to be followed by theCompany have been laid down and that the financial controls are adequate and wereoperating effectively; f) that proper systems have been devised to ensure compliance withthe provisions of all applicable laws and that such systems were adequate and operatingeffectively.


The Board of Directors wishes to convey its gratitude and appreciationto all employees for their tremendous efforts as well as their exemplary dedication andcontribution to your Company's performance. The Directors would also like to thankthe Central and State Governments Shareholders State Bank of India and other Bankers whowere part of the SBI Consortium Ministry of Corporate Affairs Customers SuppliersDealers Employees and Employee Unions SBI Capital Markets Ltd. and all other businessassociates for their continued support extended to your Company.

On behalf of the Board of Directors
Vellayan Subbiah
(DIN: 01138759)
Mumbai 31 December 2021