Your Directors are pleased to present the Fifth Annual Report on thebusiness and operations of the Company and the accounts for the Financial Year ended 31stMarch 2019.
The table below depicts the standalone financial performance of yourCompany for the year ended 31st March 2019.
( र crore)
|Particulars ||Year ended 31st March 2019 ||Year ended 31st March 2018 |
|Revenue from operations ||4478.91 ||4105.12 |
|Total income ||4527.17 ||4135.87 |
|Profit before Tax ||561.56 ||485.44 |
|Tax expense ||159.04 ||161.65 |
|(including deferred Tax) || || |
|Profit after Tax ||402.52 ||323.79 |
With effect from 1st July 2017 the country implemented a new taxregime wherein several taxes were subsumed into a single tax head which was known as Goodsand Services Tax (GST). Under the prevailing revenue reporting requirements the incomefrom sales/operations got reduced with commensurate reduction in cost of purchases. Inorder to make the numbers comparable with the previous year suitable adjustments havebeen made while commenting on sales growth numbers in this report.
OVERVIEW OF COMPANY'S FINANCIAL PERFORMANCE
Comparable revenue grew by 11.1% to र 4478.91 crore. Profit Before Tax(PBT) at र 561.56 crore was up by 15.7 % versus last year.
Finance costs of र 59.50 crore represents the interest cost on theNon-Convertible Debentures of र 650 crore.
Based on an assessment order received during the year the Company haswritten-back an amount of र 28.45 crore in respect of an earlier assessment year and thesame is netted-off from the current tax expense for the year ended
31st March 2019. Profit After Tax for the year under review was at र402.52 crore growth of 24.3%.
INCREASE IN SHARE CAPITAL Exercise of Stock Options
During the year under review your Company has made followingallotments pursuant to the exercise of options by eligible employees under the CromptonEmployee Stock
Option Scheme - 2016:
|Date of Allotment ||No. of Shares |
|17th May 2018 ||25575 |
|19th December 2018 ||99151 |
|19th February 2019 ||45376 |
|16th March 2019 ||30713 |
|Total ||200815 |
Accordingly the total paid-up share capital of the Company as on thedate of this Report is र 1253971840 divided into 626985920 equity shares of र 2/-each.
The applicable disclosures as stipulated under SEBI (Share BasedEmployee Benefits) Regulations 2014 are provided in Annexure 1 to this report.
Your Directors are pleased to recommend a dividend of र 2 perOrdinary (Equity) Share of the face value of र 2 each payable to those Shareholders whosenames appear in the
Register of Members as on the Book Closure Date. The dividend outgoinclusive of tax on distributed profits would absorb a sum of र 151.17 crore.
In terms of Regulation 43A of the SEBI (Listing Obligations andDisclosure Requirements) Regulations 2015 (Listing Regulations) the Companyhas adopted a Dividend Distribution Policy which is available on the Company'swebsite (https://www.crompton.co.in/media/Dividend-
Your Company has Non-Convertible Debentures (NCDs) aggregating to र 650crore listed on National Stock Exchange of India Ltd.
Out of these NCDs Series A amounting to र 300 crore are due forredemption on 24th June 2019.
CREATION OF DEBENTURE REDEMPTION RESERVE
Your Company has created a Debenture Redemption Reserve (DRR) of 25% ofthe total value for Series A Non-Convertible Debentures (ISIN: INE299U07015) issued onPrivate Placement basis as required under Rule 18 sub-rule 7 of the Companies (ShareCapital and Debentures) Rules 2014.
Debenture Redemption Reserve stands at र 75 crore on the outstandingamount of NCDs issued on Private Placement basis due for redemption on 24th June 2019.
Under the Companies Act 2013 there is no requirement to transfer anysum to General Reserve in relation to the payment of dividend. Accordingly the entireundistributed Profit after Tax is carried forward in the Statement of Profit and Loss.
REVISION IN CREDIT RATING
CRISIL has upgraded your Company's long-term rating fromAA/Positive to AA+/ Stable. The short-term rating at A1+ remains the highest.
INDIAN CORPORATE GOVERNANCE SCORECARD
The Indian Corporate Governance Scorecard is a fair assessment ofcorporate governance practices at the corporate level. BSE Ltd. jointly with InternationalFinance Corporation (IFC) and Institutional Investor Advisory Services (IIAS) with thefinancial support of the Government of Japan has developed this Scorecard based on theG20/ OECD Principles of Corporate Governance.
Your Company has featured for the second time in a row amongst the top10 companies amongst S&P BSE 100 (BSE 100) companies evaluated on this IndianCorporate Governance Scorecard.
HUMAN RESOURCES & EMPLOYEE RELATIONS HR Philosophy and Approach
Capability development is one of the 5 pillars of your
Company's long-term business strategy. It is intended to drive thesame through directing the Company's focus on
(a) Selection and on-boarding of the right talent.
(b) Optimising their performance and (c) Developing leadership at alllevels.
Your Company has a very strong culture based on integrity transparencyand empathy. In order to drive consumer employee and shareholder value your Company consistentlypromotes skills of Personal Leadership Courage People Development Innovation andExecution Excellence as the core five Crompton Behaviours. These behavioural patterns aredemonstrated appropriately by leadership teams multi-layer training and reward andrecognition programmes. Crompton's behavioural patterns are a unique blend of all itspeople and processes ranging from talent acquisition to performance management to careerdevelopment.
Employee Performance & Engagement
Employee engagement is measured on real-time basis.
The same is done through tracking engagement at each employee levelthrough AI-enabled tools such as Amber and HyPhen. A variety of strong employee engagementprogrammes ranging from frequent one-on-one interaction between employee and manager andthe leadership team is encouraged throughout the organisation. In addition there areother two-way communication forums and extensive reward and recognition schemes.
The Performance Management process aims at achieving high-degree ofobjectivity and transparency and provides continuous feedback to the employees to improveproductivity. Continuous feedback Performance Management System is being rolled out atsome Business Units to communicate what is required from employees and give them feedbackon how well they are achieving their job goals.
Employee Welfare and Policies
Your Company has always been conscious to promote all-round employeewelfare. Environment Health and Safety (EHS) guidelines are deployed to promote workplacehealth and safety and create a healthy environment. On regular basis the policies arebenchmarked with market standards and are upgraded as and when necessary.
Your Company believes in developing and building a long-term talentpipeline to ensure that suitable internal candidates are available to assume openpositions when vacancies are created through retirement promotion or resignations. Anon-going partnership is pursued with various management financial and technical educationinstitutes for systematically injecting fresh talent. There is significant usage of AI& Neuroscience including TalView Knack Hogan Korn Ferry etc. in selecting theright profile candidates.
Your Company has a well-established process for identification andretention of key talent. A multi-layered retention mechanism is in place ranging fromcareer and skill development programmes to financial retention programmes based on equitycompensation and long-term cash retention. A robust process to identify and developsuccessors for critical positions is a regular practice. The development process consistsof multi-rater feedback and scientific assessment tools followed by personaliseddevelopment plans and coaching.
Employee and Leadership Development
In line with your Company's long-term business strategy there arerobust employee development programmes which aim to achieve the right balance betweenstructured interventions (in the form of classroom and web-based training programmes) andon-the-job and experiential learning through career movements special assignments andprojects. It is intended to build best-in-class capability in the area of Go-to-MarketOperational Excellence and Quality Brand and Portfolio Management and Innovation.
Employee Relations & Compliance
Your Company enjoys a highly cordial and productive relationship withthe employees' representative bodies. A long-standing practice of participativemanagement on various topics related to productivity and employment conditions with theemployees' union is observed. Both in letter and spirit the management abides tovarious prevalent labour legislations in order to regulate relationship between employeesand your Company.
Digitalising HR Practices
In the area of Human resources like elsewhere there is strong focuson innovation to continuously enhance employee experience. Cutting-edge tools are beingdeployed to sharpen employee experience. These actions range from implementingBest-in-Class Tools such as Success Factor to AI Neuroscience Gamification etc.
DIRECTORATE & KEY MANAGERIAL PERSONNEL
The appointment and remuneration of Directors is governed by the Policydevised by the Nomination and Remuneration Committee of your Company. The detailedNomination and Remuneration Policy is contained in the Corporate Governance Section of theAnnual Report.
Your Company's Board comprises eight members. The Chairman Mr. H.M. Nerurkar is an Independent Director. Mr. Shantanu Khosla is the Managing Director.
Mr. D. Sundaram Mr. P. M. Murty and Ms. Smita Anand are otherIndependent Directors. Ms. Shweta Jalan Mr. Sahil
Dalal and Mr. Promeet Ghosh are Non-Executive Non-
Ms. Smita Anand was appointed as an additional Non-
Executive Independent Director on 10th December 2018 and is proposedto be appointed as Non-Executive
Independent Director of the Company at the ensuing Annual
General Meeting (AGM). Her details as required under the SEBI (ListingObligations and Disclosure Requirements) Regulations 2015 are contained in theaccompanying Notice convening the ensuing AGM of your Company. Appropriate resolutionseeking your approval to her appointment as
Independent Director is included in the Notice.
Mr. Sahil Dalal Director is liable to retire by rotation and beingeligible for re-appointment at the ensuing AGM of your Company has offered himself forre-appointment. His details as required under the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 are contained in the accompanying Notice convening theensuing AGM of your Company. Appropriate resolution seeking your approval to hisre-appointment as Director is included in the Notice.
Mr. Shantanu Khosla Managing Director Mr. Mathew Job Chief ExecutiveOfficer Mr. Sandeep Batra Chief Financial Officer and Ms. Pragya Kaul Company Secretaryare Key
Managerial Personnel of the Company in accordance with the provisionsof Section 2(51) and Section 203 of the Companies Act 2013 read with the Companies(Appointment & Remuneration of Managerial Personnel) Rules 2014 (including anystatutory modification(s) or re-enactment(s) thereof for the time being in force).
Your Board of Directors met six (06) times during the financial year2018-19. The details of the meetings and the attendance of the Directors are mentioned inthe Corporate
The Board has established Committees as a matter of good corporategovernance practices and as per the requirements of the Companies Act 2013. TheCommittees are Audit Committee Nomination and Remuneration Committee Corporate SocialResponsibility Committee Stakeholders' Relationship & Share Transfer CommitteeRisk Management
Committee Allotment Committee for allotment of shares arising out ofStock Options and Strategic Investment
Committee. The composition terms of reference number of meetings heldand business transacted by the Committees is given in the Corporate Governance Report.
In terms of requirements of the Companies Act 2013 read with the Rulesissued thereunder and SEBI (Listing Obligations and Disclosure Requirements) 2015 theBoard carried out the annual performance evaluation of the Board of Directors as a wholeCommittees of the Board and individual Directors.
The Board Evaluation cycle was completed by your
Company internally led by the Independent Chairman of the Company alongwith the Chairman of the Nomination and
Remuneration Committee (NRC).
The parameters for performance evaluation of the Board includecomposition of the Board process of appointment to the Board of Directors commonunderstanding of the roles and responsibilities of the Board members timelines forcirculating board papers content and the quality of information provided to the Boardattention to the Company's long-term strategic issues evaluating strategic risksoverseeing and guiding acquisitions etc.
Some of the performance indicators for the Committees includeunderstanding the terms of reference effectiveness of discussions at the Committeemeetings information provided to the Committee to discharge its duties and performance ofthe Committee vis-a-vis its responsibilities.
Performance of individual Directors was evaluated based on parameterssuch as attendance at the meeting(s) contribution to Board deliberations engagement withcolleagues on the Board ability to guide the Company in key matters knowledge andunderstanding of relevant areas and responsibility towards stakeholders. All the Directorswere subject to self evaluation and peer evaluation.
The performance of the Independent Directors was evaluated taking intoaccount the above factors as well as independent decision-making and non-conflict ofinterest. Further the evaluation process was based on the affirmation received from theIndependent Directors that they met the independence criteria as required under theCompanies Act
2013 and Listing Regulations 2015.
The Board Evaluation discussion was focussed around how to make theBoard more effective as a collective body in the context of the business and the externalenvironment in which the Company functions. From time to time during the year the Boardwas apprised of relevant business issues and related opportunities and risks. The Boarddiscussed various aspects of its functioning and that of its Committees such as structurecomposition meetings functions and interaction with management and what needs to be doneto further augment the effectiveness of the Board's functioning. Additionally duringthe evaluation discussion the Board also focussed on the contribution being made by theBoard as a whole through its Committees and discussions on a one-on-one basis with theChairman.
The overall assessment of the Board was that it was functioning as acohesive body including the Committees of the Board. They were functioning well withperiodic reporting by the Committees to the Board on the work done and progress madeduring the reporting period. The Board also noted that the actions identified in the pastquestionnaire-based evaluations had been acted upon.
Subsequent to the evaluation done in the financial year 2018-19 someaction areas have been identified for the Board to engage itself with. These includereview of your Company's goals strategy capability gaps competitive landscapetechnological developments SWOT analysis etc. and also a thorough review of key issuesfacing the Company. All these will be suitably dealt with by the Board.
Your Company has in place a structured induction and familiarisationprogramme for its Directors. Upon appointment Directors receive a Letter of Appointmentsetting out in detail the terms of appointment duties responsibilities obligationsCode of Conduct for Prevention of Insider Trading and Code of Conduct applicable toDirectors and Senior Management Personnel. They are also updated on all business-relatedissues and new initiatives.
Regular presentations and updates on relevant statutory changesencompassing important laws are made and circulated to the Directors.
The Directors appointed as members on the Corporate SocialResponsibility Committee (CSR) are also involved and briefed about CSRinitiatives of the Company. Senior executives of the Company make presentations to themembers of the Board on the performance of the Company and strategic initiatives.
Brief details of the familiarisation programme are uploaded and can beaccessed on the Company's website at https://www.crompton.co.in/media/Familiarisation-Programme- for-
SUBSIDIARY COMPANIES ASSOCIATES & JOINT VENTURES
Your Company has two wholly-owned subsidiaries which are as follows:
1. Pinnacles Lighting Project Private Limited (CIN:U74999MH2018PTC318891) was incorporated on 31st
December 2018 to execute design manufacture test supply O&Mof LED Street Lights & Poles and other related works for implementation of GreenfieldStreet Lighting Project for 19 Urban Local Bodies (ULBs) in Odisha. This contract receivedfrom Government of Odisha Housing & Urban Development Department is on Public-PrivatePartnership (PPP) basis.
2. Nexustar Lighting Project Private Limited (CIN:U74999MH2019PTC318955) was incorporated on 2nd
January 2019 to execute design manufacture test supply O&M ofLED Street Lights & Poles and other related works for implementation of GreenfieldStreet Lighting Project for 36 Urban Local Bodies (ULBs) in Odisha. This contract receivedfrom Government of Odisha Housing & Urban Development Department is on Public-PrivatePartnership (PPP) basis.
Pursuant to the provisions of Section 129(3) of the Companies Act2013 a statement containing salient features of financial statements of subsidiaries inForm AOC-1 is attached herewith as Annexure 2. The separate audited financial statementsin respect of each of the subsidiary companies shall be kept open for inspection at theRegistered Office of your Company during working hours for a period of 21 days before thedate of the Annual General Meeting. The separate audited financial statements in respectof each of the subsidiary companies are also available on the website of your Company athttps://www.crompton.co.in/accounts-of-subsidiary-companies/.
RELATED PARTY TRANSACTIONS
In accordance with the requirements of the Companies Act
2013 and Listing Regulations 2015 your Company has a Policy onRelated-Party Transactions which can be accessed through weblinkhttps://www.crompton.co.in/media/Policy-on-RPT-CGCEL.pdf.
All related party transactions are placed before the
Audit Committee for review and approval. Prior omnibus approval of theAudit Committee and the Board is obtained for the transactions which are of a foreseen andrepetitive nature. A statement giving details of all related-party transactions is placedbefore the Audit Committee for their noting/approval on a quarterly basis.
There were no material transactions with related parties (i.e.transactions exceeding 10% of the annual consolidated turnover entered into during theyear as per the last audited financial statements). Accordingly the disclosure oftransactions entered into with related parties pursuant to the provisions of Section188(1) of the Companies Act 2013 and Rule 8(2) of the Companies (Accounts) Rules 2014 inForm AOC-2 is not applicable.
PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS
There were no Loans and Guarantees made by the Company under Section186 of the Companies Act 2013. The details of investments made by the Company underSection 186 of the Companies Act 2013 form part of this Annual Report.
Your Company recognises that risk is an integral part of business andis committed to managing the risks in a proactive and efficient manner. Your Companyperiodically assesses risks in the internal and external environment and incorporatesrisk mitigation plans in its strategy and business/operational plans. Every risk iscarefully looked into as in some of the cases post-analysis it may lead to a new businessopportunity.
Your Company has a well-defined risk management framework in place. Therisk management framework works at various levels from top to bottom across theenterprise. These levels form the strategic defence cover of the Company's riskmanagement.
Your Company's Risk Management Committee monitors and reviews therisk mitigation plan.
Appropriate steps are being taken by your Company to mitigate andreduce the impact of these risks to the operations of the Company. The key business risksfacing the Company and steps taken to mitigate the same are as detailed below:
|Key Business Risks ||Risk trend 2018-19 ||How these risks are mitigated / next steps |
|Go-to-Market The ability to manage business continuity while establishing the new distribution model. Your Company is looking at IT enablement and realigning roles and rewards to a new way of working. ||Decrease in Risk profile ||The pilot project for Go-to-Market was completed during the year with learnings documented. Your Company is in the process of digitalising its dealer experience through implementation of a dedicated dealer portal. The portal is aimed to improve customer satisfaction resulting in ease of doing business. |
|Operational excellence The ability to improve and sustain quality and drive down costs at the same time. ||Same as last year ||Your Company has initiated vendor rationalisation emphasis on in-house manufacturing and scorecard evaluation of vendors has been put in place. |
| || ||Your Company has set up the Centralised Commodity teams during the year to have a consolidated view on capability and capacity for the entire Company-wide procurement function as against the earlier decentralised process. |
| || ||Your Company has put in place a quality and process improvement programme across the Company including strategic vendors during the year with progress being tracked at regular Management reviews. Through multiple interventions undertaken during the year your Company initiated product lifecycle management by strengthening demand planning process (including filling competency gaps) thereby improving forecast accuracy and deliver on time in full. |
|Branding/Innovation The ability to continue to outsmart competition. ||Same as last year ||Your Company has put in place a Centralised Marketing structure during the year thereby strengthening its consumer insight process and filling up competency gaps in the concerned function. |
| || ||Your Company is strengthening NPD process through a three Gate approval process viz. Gate 1: Establishing of the project; Gate 2: Commitment to the project; Gate 3: Launch agreement for the project. |
|Ability to succeed in the new business model (ESCO) in lighting where the customer does not pay for the fixtures but instead asks the supplier to share the gains from the savings generated. Correct estimation and assessment of the contractual risks and obligations in such models becomes very important. ||Decrease in risk profile ||Your Company has decided not to pursue ESCO projects. However your Company is standardising the process for assessing the tenders/business opportunities through- |
| || ||a) Defining Process framework & Go-No-Go parameters along with Authority Matrix; |
| || ||b) Digitalising Lead to Order process. |
|Organisation Excellence Ability to attract and retain the right talent may lead to your Company's inability to achieve organisation's goals. ||Same as last year ||Your Company has put in place Succession Planning framework mapping career development and progression opportunities for suitable employees and thereby ensuring talent retention. |
|Regulatory Environment ||Same as last year ||Your Company is working with various Industry Associations around regulatory changes like E-waste improving energy efficiency of products and similar initiatives as these could prove to be disruptive for the industry. This will help ensure that the changeover is smooth and in the interest of all stakeholders. |
INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY
Your Board has adopted policies and procedures for ensuring the orderlyand efficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation of reliablefinancial disclosures
Your Company has in place a robust internal audit framework. Thismonitors the efficacy of internal controls with the objective of providing to the AuditCommittee and the Board of Directors an independent and reasonable assurance on theadequacy and effectiveness of the organisation's risk management control andgovernance processes. The framework is commensurate with the nature of the business sizescale and complexity of its operations.
The Risk Management Committee (RMC) identifies evaluatesand mitigates operations strategic and external risks. RMC has the overall responsibilityfor monitoring and recovering the Risk Management Plan and associated practices of theCompany. Details of the composition of the RMC have been disclosed as part of theCorporate Governance Report.
Internal Auditors periodically audit the adequacy and effectiveness ofthe internal controls laid down by the management and suggest improvements. The audit planis approved by the Audit Committee which regularly reviews the compliance to this plan.
Findings along with management response are shared with the AuditCommittee. Status of action plans are also shared with the Audit Committee. The AuditCommittee also reviews the steps taken by the management to ensure that there are adequateinternal financial controls in design and operation.
Ongoing monitoring is performed as an integral part of the day-to-daysupervision review and measurement of the internal audit functions.
Your Company has deployed controls through its policies and procedures.These policies and procedures are periodically revisited to ensure that they remainupdated to changes in the environment. There is a well laid out process for makingamendments to processes in the Company and implications of changes are well visualised andplanned. All stakeholders are consulted so that implementation is smooth.
Your Company continues to invest in IT tools to automate controls tothe extent possible so as to minimise errors and lapses. Controls with respect toauthorisation in underlying
IT systems are reviewed periodically to ensure that users have accessto only those transactions that apply to their specific roles.
Various functions run periodic reports which are focussed onidentifying exceptions through data analysis as part of their routine monitoringactivities. Corrective actions if any are . taken promptly by the respective functions.
Your Company has an IT tool which helps to track statutory compliancesas close as possible to the actual due date.
Any deviations are highlighted for prompt corrective action. Functionalowners take responsibility for initiating preventive action.
This web-based compliance management system not only helps adhere tothe regulatory requirements but also develops a culture of self-regulation andaccountability within the organisation. In the present times when governance is lookedupon as a critical aspect of sustainability the compliance management system plays asignificant ensuring good corporate governance.
The Certificate provided by Managing Financial Officer in theCertification Section of the Annual Report discusses the adequacy of the internal controlsystems and procedures.
RESEARCH AND DEVELOPMENT (R&D)
Your Company has a strong focus on in-house research and developmentand promotes a culture for innovation. The
Company's team focusses on continuous and sustainable productinnovations working across the product lifecycle aspects including design developmentand manufacturing phases.
Continuing the spirit of innovation to create new consumer delightsbased on core insights this year your Company launched an array of products in fans:
Air 360 - To solve the consumer issue of not experiencing air in thecorner of the rooms your Company launched ceiling fans which give air circulation in 50%*more space and delivers the best air release in the metal fan category in industry.
(*Resultsasperinternallabtests.Actualperformance may vary as permanufacturing tolerances.)
VsenseTM range of ceiling fans - Many parts of India face low voltageproblem and when voltage drops down the speed of the ceiling fans drops considerably. Tosolve this problem VsenseTM fan uses its smart controls to increasethemotorspeedandgiveshigherRPM at low in India 5-star bulb has a unique shape whichvoltages.
AirBuddy - During consumer research it was observed that the personworking in the kitchen does not feel comfortable while cooking as the existing aircirculation solutions do not work effectively during cooking. Air Buddy range of fans withtheir sleek and modular design fit perfectly into any kitchen. They provide personalisedsoft air flow to ensure a comfortable cooking experiance without disturbing the gas flame.
Aura new range of fans - Your Company came up with industry'sfirst 5-year warranty for new range products by providing DuratechTM technology whichincludes core engineering enhancements to meet long-lasting performance needs. Theseproducts carry new fluidic design parameters and are built into the designer series offans like 2D and 3D motifs.
All these products have attractive design and packaging. Resources havebeen invested to create industry popular colours and craftsmanship with the best-in-classfinish and choice of appropriate materials.
Research and Development led to development of much improvedenergy-efficient pumps for a variety of applications to enhance ease and convenience ofuse and conserve water. Some of the products introduced during the year were:
Monobloc (2HP) and open well (3 to 7.5 HP) pumps with wide voltagedesign which perform effectively in wide fluctuations of supply voltage in rural areas.This variety is useful to farmers as there are no frequent repairs required and there islesser downtime.
Many parts of the country have high TDS (Salty) and more sand contentin borewell water where normal materials of construction do not sustain. Hence 4WSSseries of pumps with stainless steel impeller and diffuser for better reliability as wellas efficiency were developed by your Company.
Solar pumping systems with MNRE certifications were developed in AC (57.5 10 HP) as well as BLDC (5 HP) motors and further development is in process.These Solar pumps deliver minimum 10 to 15% more discharge than MNRE guidelines.
Your Company has launched ANTI-BAC lamps which use Anti-bacterialtechnology. This bulb kills up to 85% bacteria and other microbes including fungi andmolds. This is an in-house innovation with Envirosafe Technology and is recognised by theIndian Medical Association (IMA) to provide a safe and healthy environment.
Lyor the first gives homogeneous diffused lighting. Theelegantly-curved surface of the diffuser and housing imparts a distinct character to theproduct. This has the highest efficacy of 120 lumen/watt.
A new range of innovatively and aesthetically designed office lightingand downlighter series have been launched to cater to the requirements of office spaces.
R&D efforts also helped the Company in providing the best inindustry solutions for customers in various projects of national significance and inbagging major orders in EESL Reliance Infra Phase I Odisha Green Field Dholera SmartCity NFR DRDA to name a few.
The entire Storage and Instant Water Heater range has been revampedwith the highest number of launches in the industry this season. Your Company launched 5models in storage and 2 models in Instant heaters. The new products are designed todeliver superior performance aesthetics energy-efficiency and best-in-class features.
In Air Coolers a unique model Optimus which stands out inperformance as compared to its peers was launched. It has features like Auto Drainageeasy cleaning humidity control thicker honey comb and highest air delivery in its class.This summer new range of plastic window and tower coolers were also introduced.
CONSERVATION OF ENERGY TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGO
As required by the Companies Act 2013 read with the Companies(Accounts) Rules 2014 the relevant data pertaining to conservation of energy technologyabsorption and foreign exchange earnings and outgo is given in the prescribed format asAnnexure 3 to this Report.
ENVIRONMENT HEALTH & SAFETY (EHS)
Your Company is greatly conscious of its responsibilities towardsHealth Safety and Environment Management and is in the process to fortify its currentresources. A Policy on
Occupational Health Safety and Environment is already in place. Duringthe year your Company complied and excelled with EMS 14001 and OHSAS 18001 standards andis moving towards upgradation with ISO 45001. Single IMS (Integrated
Management System) is in place which is the foundation of the overallhealth safety and environment framework at your Company. Internal Cross audits andExternal EHS and OHSAS audits were carried out to check the level of compliance and anydeviations from laid down policies and procedures tracked and reviewed through this auditsystem. As part of Plan Do Check Act (PDCA) this process ensured closure throughCorrective Action and Preventive Action
(CAPA) within a reasonable time frame.
A comprehensive EHS manual titled KAVACH 2.0 comprising thepolicies procedures and work instructions has been prepared. Deployment of KAVACH2.0 has been ensured across the organisation through rigorous trainings.
To ensure focussed delivery on EHS activities each plantcarried out Aspect Impact and HIRA (Hazard Identification and Risk Assessment) study forvarious activities and identified Controllable/Uncontrollable and Normal / Abnormal /Emergency scenarios in each operation.
A comprehensive EHS performance scorecard has been deployed and ismonitored on monthly basis. Regular cross functional quarterly EHS meets are conducted atvarious manufacturing units with the agenda to conserve natural resources reduceelectricity consumption industrial effluents water conservation air emissions wastegeneration and disposal. EHS improvement plans scorecard discussions and benchmarkingpractices are deployed at all plants. Suggestions to improve the existing scenario areimplemented within the stipulated timeframe.
A brief on EHS programmes of the Company is as under:
Environment a green pursuit
In addition to the focus on conserving finite resources together withreducing harmful emissions sustainable management at all stages of the value chain andthroughout the entire life cycle of the products is now an essential part of yourCompany's philosophy.
Your Company is committed to achieve its target by implementing besttechnology and management programmes through a combination of energy and waterconservation minimised air emissions rainwater harvesting and solid waste recycling. Allunits are complying with zero liquid discharge system minimum usage of petroleum productsby modifying boilers into bio-fuel boilers along with drastic reduction in air emissions.
In other environmental focus areas your Company has greatly reducedraw water consumption generation of effluents solid-waste hazardous waste and reductionin Green House Gases (GHG) emissions. This has helped to reduce the overall impact on thenatural resources and environment. Beside this all the manufacturing units have compliedand are being monitored online for all EHS-related legal-statutory requirements laid bythe Government from time to time.
During the year substantial investment was made to meet the newgovernmental regulations. The drive to achieve the best Environmental pollution controlmeasures on 3R's (Reduce Reuse & Recycle) was further strengthened.
Groundwater is one of the major sources of water for your
Company. Therefore we remain committed to significantly conserving itby installing water-efficienttechnology together with effluent treatment system likeReverse Osmosis (RO) plants to reutilise treated water into the system.
Recharged 100 lakh litres - Rainwater Harvesting Systems installed atVadodara Ahmednagar and Goa
Saved electricity of 360000 kWh yearly and reduced noise pollutionNew Technology Compressor installed at Ahmednagar Pumps Plant.
RO waste water re-used at Baddi Lighting Plant - 68 KL water re-used.
Installation of transparent sheets on the roof of Vadodara and Goaplants - reduced the usage of artificial light and thus save energy.
Green belt area in Bethora Goa plant increased by plantation of 60trees and 5000 sq. ft. area added in Ahmednagar for Green belt development.
Food waste composter installed for canteen waste and garden waste toutilise as fertiliser for garden at Ahmednagar Pumps Plant.
Solar panels of 5kW installed at Bethora Goa plant - electricitygeneration will be 6000 kWh/year.
Treated STP recycled water used for flushing reduced use of fresh waterfrom 26897 KL (2017-18) to 15846 KL (2018-19) saving 11051 KL (58%). 100% STP and ETPtreated water used for gardening in all plants.
New STP of capacity 730 KLD installed at Kundaim
Goa plant for recycling of waste water.
All units of your Company are complying with CPCB/MoEF (Ministry ofEnvironment and Forests) guidelines specially on waste water treatment. Trade and Domesticeffluents have been segregated completely through independent treatment system.
Authorisation of E-waste received from CPCB FTL and CFL Products areRoHS compliant. Further two of the three FTL lines have been converted from Liquid Dozinginto Pill Dozing in order to reduce the risk of Mercury (Hg) exposure in the environmentat Vadodara Plant.
Ahmednagar is switching to use eco-friendly water-based paint insteadof existing 2 pack PU paint. This is being done to reduce hazardous waste thereby creatinga positive impact on the environment.
Safety is accorded overriding priority by your Company. The businesshas ensured to achieve and maintain globally approved Fire-Safety Standards. All units arein the process to install best fire/smoke detection technology to get timely informationin case of any fire incident. To mitigate such incidents all units are 100% equipped 24x7with dedicated and trained firefighting team members.
EHS team identified all available fire hazards by conductingthird-party Fire-Safety audits / HAZOP study / Risk Assessment studies and made effectiveaction plans to close all findings. Your Company is committed to building a safety cultureby Implementing Behavior-Based Safety through trainings and workshops recording workplacehazards conducting scheduled Fire-Safety Audits (in-house) adopting on-line Work PermitSystem (WPS) and Daily Tool-box talks etc. Regular interaction is maintained throughSafety committee meetings with all associates. Fire-safety
Drills Safety Week celebration and continuous
Safety training to all employees begins with adequate induction.Internal and cross plant safety audits are conducted too. All actions and recommendationsare being recorded and evaluated by respective EHS leaders. This monitoring has a majorrole in reducing workplace hazards/incidents and making Crompton a Zero-accidentorganisation.
Your organisation has identified scenario-based emergency preparednessplans to counter specific emergency situations. On regular basis mock tests and drillsare planned and executed to ensure Emergency
Response Team members are quick to respond to any situation.
Safety standards are monitored through focus on appropriate safetycontrol elimination of unsafe activities providing better replacement methods andinstallation of foolproof engineering solutions (Poka-Yoke).
Key Safety programmes implemented during the year include:
Conducted cross plant safety audits based on IS:14489-1998 at all plantlocations and ensured closure of all improvement plans as per timelines.
Structural Stability & Fire audits were conducted by BVQI expertsfor all plants and 15 branch offices.
100% new joinees have been covered with behavioural based and technicalsafety training at all plant locations. Refresher safety trainings were conducted for allERT and new Safety Committee members.
New Safety PPE's were introduced viz. breathing apparatusautomatic fire nozzles mobile scaffolding tower with stairway for working safely atheights storage of flammable chemicals cans fire safe cabinets for lab storage andsimilar equipment.
Installed fire alarm and detection systems at all plant locations.
Safety signs visual displays highlighting safety messages have beenstandardised and displayed at all appropriate places.
Poka-Yoke (Mistake-Proofing) were installed at various equipments andmachines to ensure human safety and to eliminate risks in hazard prone areas.
LOTO (Lock-Out Tag-Out) concept deployed across all plants.
Periodic mock drill and fire drills were conducted at all plants toensure readiness and responsiveness of the system and employees.
Provided anti-fatigue mats to employees where work involves standingfor long hours at respective work locations.
Structural audit ergonomic study and ventilation survey was conducted.
Provided rack guards and corner guards to prevent harm to individualsand avoid structural damage.
Permanent roof stress lifeline installed on main buildings to preventfall hazard.
Mobile scaffolding is available for working at heights inside the plantto prevent fall hazards.
Visual Machine guards are installed on all moving machine under TPMdrive.
An individual's health and well-being is shaped by severalfactors: social economic and environmental. A range of workplace (e.g. physicalenvironment culture) and non-workplace issues (e.g. lifestyle choices living conditions)can impact the health of an employee. Towards this end structured initiatives have beenintroduced in stages.
Key health programmes as detailed below were rolled out during the yearto promote a healthy lifestyle among employees. This led to enhanced motivation:
Health education awareness trainings and motivational speeches wereorganised on mindful behaviour and emotional intelligence. (Initiated daily warm-upexercises at start of every shift).
Revisited employee health insurance coverage for appropriate preventivescreenings.
Executed medical surveillance plans and periodic medical checkups.
Ergonomics study through expert medical practitioners to identifyshort-term and long-term health injuries.
CORPORATE SOCIAL RESPONSIBILITY (CSR) FRAMEWORK & VISION
MAKING A DIFFERENCE
Drawn up on the basic principles of Responsible Business'and Shared Value' your Company's CSR strategy aims to provide youth withemployable vocational and life management skills and contribute to water neutrality byparticipating in water conservation initiatives.
Aptly named UJJVAL DEEP the CSR programme framework is both inline with the Company's long-term commitment to build positive value for thecommunities as well as address major developmental priorities as identified by theCompanies Act 2013:
In line with this framework our 4 thrust areas are:
Vocational and skills training.
Projects addressing environmental issues such as water and wastemanagement.
Projects impacting lives of people who live in the vicinity of ourmanufacturing / processing facilities.
Active employees volunteering through Corporate Social Responsibilityprogrammes.
Through 2018-19 the CSR activities were carried out with the followingimplementation partners.
Skill Training with: o Asmacs Skill Development Ltd. (ASMACS) o PanIITAlumni Reach for India (PARFI) o Kherwadi Social Welfare Association (Yuva Parivartan)
Water Conservation Projects with: o Akash Ganga Trust o Varshasookt oPandit Jagat Ram Memorial Force Trust (Force) o Vanarai o Anugami Lokrajya Mahabhiyan(Anulom) and Maharashtra Government
SKILL DEVELOPMENT INITIATIVES
The Skill Development centres are in the states of Himachal PradeshGujarat Maharashtra Tamil Nadu Odisha Jharkhand and Assam.
During the course of training candidates were exposed to a stringentcurriculum in which they were trained on current industry practices plumbing andtechniques in pipe fitment and fire-fighting systems. Candidates were also trained inaspects of safety measurement pipe fitting familiarisation with tools and fittings anddiscipline. Besides this the major focus is on technical training in electricalappliances.
Residential Multiskill Training - Implementation Partner - ASMACS
Your Company has sponsored residential skill training for 900 youth inBaddi - Himachal Pradesh Ahmednagar - Maharashtra Guwahati - Assam Coimbatore - TamilNadu Vadodara - Gujarat for training in Electrical & Plumbing trades.
30 training batches were run across all the locations and
80% of the youth were placed in reputed Companies.
Skills Training - Implementation partner - PARFI
The programme focusses largely on youth from underprivileged and tribalcommunities. 117 candidates were trained in the trades of Fire Protection Installation andPlumbing in three Gurukuls Bundu Sambalpur and Jamshedpur. 83% of the candidates weresuccessfully placed on an average at all the locations.
Home Appliance Repair Programme - Implementation Partner - YuvaParivartan
This programme is focussed on skilling youth through Yuva LivelihoodDevelopment Centres across Maharashtra. Training is imparted in repair of Home Appliances.In addition the students also participate in the Soch Ka Parivartan (AttitudeTransformation) module. This is designed to help students who come from different andoften tough backgrounds deal with harsh problems build their self-esteem andconfidenceand also help them develop a positive attitude.
108 Students have been enrolled within this programme.
WATER CONSERVATION INITIATIVES
Water is a valuable and increasingly scarce resource.
Awareness on water-related problems results in commitment among thecommunity and thus helps to promote better management of water resources.
Hence your Company has focused its intervention on three major areas:
1. Rainwater Harvesting (RWH) system at Institutional Level
2. Rainwater Harvesting (RWH) system at Community Level
3. Awareness and Training sessions to get the best results in waterconservation
Rainwater harvesting projects were supported at the followinglocations: Lady Siwaswamy Ayyar Girls Higher Secondary School Chennai P.S. HigherSecondary School Chennai OdaiKuppam Fishermen's Hamlet Chennai Christian MedicalCollege Vellore and three schools under Thane
Water Management and Awareness
Your Company collaborated with Force Trust to spread awareness on WaterManagement in areas of Delhi and
Himachal Pradesh regions. Under this programme community members wereeducated on the key RWH solutions and Government regulations. Training of Plumbers wasundertaken and schools were mobilised to conduct campaigns in Rain Water harvesting in thearea.
Total number of sessions conducted were 19 impacting
2302 beneficiaries across institutions and communities.
Watershed Development with Vanarai
To reduce the impact of natural calamities like drought and to make thevillage water secure your Company supported a watershed development initiative in JalnaMaharashtra. This is aimed at increasing the groundwater level and stabilise the watertable.
Increased employment options within agriculture and allied activitiesby impacting 608 landholdings and their families in the region.
Gaalmukt Dharan Gaalyukt Shivar Scheme with Maharashtra Government
Contributions were made to this scheme with an aim to conserve water byremoving silt from the water bodies in the drought prone areas of Ahmednagar Maharashtra.This will lead to the cleaning of 66 water bodies. Thus 999400 cubic meters of totalsilt will be distributed to farmers increasing their agricultural productivity.
Support to CM Fund Floods in Kerala:
On 8th August 2018 Kerala was hit by one of the worst floods inrecent times due to unusually high rainfall during the monsoon season. It was the worstflood in Kerala in nearly a century. Over 483 people died and more than 14 went missing.Your Company quickly rose to the occasion to extend its support in this terrible tragedyand donated an amount of र1 crore to the
Kerala Chief Minister's Distress Relief Fund. Of this roughly onethird was voluntarily contributed by the employees and the balance was donated by theCompany.
Way Forward: or material In 2019-20 your Company aims at threeinitiatives to enhance its CSR activities.
Your Company aims at deepening the impact within the Skill developmentarea and increase the number of beneficiaries to be trained. In the area of waterconservation it is planned to widen the approach by supporting more projects impactingas many landholdings as possible.
2. Effective monitoring and impact analysis:
The objective is to ensure transparency in fund utilisation and impact.A robust framework will be designed for planning and monitoring the activities.
3. Project completion and consolidation:
The third key focus area for the next year is to consolidate theongoing projects and to aim at maximising the
. outreachofthebeneficiaries within each programme Your Company'sCSR Policy statement and annual report on the CSR activities undertaken during thefinancial year ended 31st March 2019 in accordance with Section 135 of the CompaniesAct 2013 and Companies (Corporate Social Responsibility Policy) Rules 2014 are annexedto this report as Annexure 4.
Electronic copies of the Annual Report and Notice of the
5th Annual General Meeting (AGM) will be sent to all members whoseemail addresses are registered with the Company/ Depository Participant(s). For memberswho have not registered their email addresses physical copies of the
Notice and Annual Report will be sent in the permitted mode.
[Members requiring physical copies can send a request to the Company].Physical copies of the aforesaid documents will also be available at your Company'sRegistered Office for inspection during normal business hours on all working daysexcluding Saturdays till the date of AGM.
MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THECOMPANY
There are no material changes and commitments affecting the financialposition of your Company which have occurred between the end of the financial year of theCompany i.e. 31st March 2019 and the date of the Board Report.
MATERIAL ORDERS OF REGULATORS/COURTS/ TRIBUNALS ordersNosignificant were passed by the Regulators or Courts or Tribunals which impact the goingconcern status and Company's operations in future.
SHARE REGISTRAR & TRANSFER AGENT (R&T)
Pursuant to the Order of the Hyderabad Bench of the National CompanyLaw Tribunal (NCLT Order) the operations of Karvy Computershare Private Limited theRegistrar & Share Transfer Agent of your Company have been transferred to KarvyFintech Private Limited (Karvy Fintech) with effect from 17th November 2018.
M/s. Karvy Fintech Pvt. Ltd. is the R&T Agent of the Company. Theircontact details are mentioned in the Report on Corporate Governance.
No public deposits have been accepted by your Company during the yearunder review.
(a) Statutory Auditors:
M/s. Sharp & Tannan were appointed as Statutory
Auditors of your Company at the 2nd Annual General Meeting held on 11thAugust 2016 for a term of five consecutive years. The Auditors has issued unmodifiedopinion on audited financial statements the Company for the year ended 31st March 2019.The Report given by the Auditors on the financial statements of the Company is part of theAnnual Report. There has been no qualification reservation adverse remark disclaimergiven by the Auditors in their Report.
(b) Cost Auditors:
Your Company is required to maintain cost records as specified underSection 148(1) of the Companies Act 2013 and accordingly such accounts and records aremade and maintained in the prescribed manner.
M/s. Ashwin Solanki & Associates Cost Accountants carried out thecost audit during the year. The Board of Directors have appointed M/s. Ashwin Solanki&
Associates Cost Accountants as Cost Auditors for the financial year2019-20.
The remuneration proposed to be paid to the cost auditors for 2019-20is subject to ratification by members at the ensuing Annual General Meeting.
(c) Secretarial Auditors:
M/s. Mehta and Mehta Practicing Company Secretaries carried out thesecretarial audit during the year. The Board of Directors have appointed M/s. Mehta andMehta Secretarial Auditors for the financial year 2019-20. The Secretarial Audit reportis annexed herewith as Annexure 5 to the Report.
(d) Internal Auditors:
M/s. Grant Thornton India LLP conducted the internal audit of yourCompany for the financial year 2018-19 M/s. Grant Thornton India LLP have been appointedas Internal Auditors of your Company for the financial year 2019- 20 to review variousoperations of the Company.
PARTICULARS OF EMPLOYEES
There are 11 employees who were in receipt of remuneration of not lessthan र 10200000/- if employed for the full year or not less than र 850000/- per monthif employed for any part of the year.
Disclosures with respect to the remuneration of Directors
KMPs and employees as per Section 197(12) of the Companies Act 2013read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Rules 2014 is given in Annexure 6 to this Report. Your Directors affirm thatthe remuneration is as per the remuneration policy of the Company.
Details of employee remuneration as required under provisions ofSection 197(12) of the Companies Act 2013 read with Rule 5(2) & 5(3) of Companies(Appointment and Remuneration of Managerial Personnel) Rules 2014 are available forinspection at the Registered Office of your Company during working hours. Any memberinterested in obtaining such information may write to the Company
Secretary at the Registered Office of the Company.
BUSINESS RESPONSIBILITY REPORT
A Business Responsibility Report as per Regulation 34 of the Securitiesand Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations2015 detailing the various initiatives taken by your Company on the environmental socialand governance front forms an integral part of this report.
COMPLAINTS RELATING TO SEXUAL HARASSMENT
Your Company has in place an Anti-Sexual Harassment Policy in line withthe requirements of the Sexual Harassment of Women at Workplace (Prevention Prohibitionand Redressal) Act 2013. An Internal Complaints Committee (ICC) has been set up toredress complaints received regarding sexual harassment. All employees (permanentcontractual temporary trainees) are covered under this Policy. The Policy is genderneutral.
During the year under review one complaint was received which has beeninvestigated and resolved after taking an appropriate action.
Your Company has formulated a Vigil Mechanism and Whistle Blower Policywith a view to provide a mechanism . for employees to report violations. It also assuresthem of the process that will be observed to address the reported violation. The Policyalso lays down the procedures to be followed for tracking of complaints giving feedbackconducting investigations and taking disciplinary actions. It also provides assurances andguidelines on confidentiality of the reporting process and protection from reprisal tocomplainants. No personnel have been denied access to the Audit Committee.
The Policy also provides a mechanism to encourage and protect genuineWhistle blowing among the Vendors.
Any incident that is reported is investigated and suitable action istaken in line with the Policy.
The Whistle Blower Policy of your Company is posted on the website ofthe Company and can be accessed at the web link:https://www.crompton.co.in/media/Vigil-Mechanism-and-Whistleblower-Policy.pdf
The equity shares of your Company are listed on BSE Ltd. and NationalStock Exchange of India Ltd. The Non-Convertible
Debentures (NCDs) of the Company are listed on the Debt
Segment of National Stock Exchange of India Ltd.
Your Company has paid the Listing fees for both the Stock
Exchanges for the 2018-19 and 2019-20 for Equity shares and to NationalStock Exchange of India Ltd. for NCDs.
The details forming part of the extract of the Annual Return in FormMGT-9 is annexed herewith as Annexure 7.
Your Directors state that applicable Secretarial Standards i.e. SS-1and SS-2 relating to Meetings of the Board of Directors' and GeneralMeetings' respectively have been duly followed by the Company.
DIRECTORS' RESPONSIBILITY STATEMENT
Your Directors would like to assure the Members that the FinancialStatements for the year under review conform in their entirety to the requirements of theCompanies Act 2013 and guidelines issued by SEBI. Your Directors confirm that:
the Annual Accounts have been prepared in conformity with theapplicable Accounting Standards;
the Accounting Policies selected and applied on a consistent basisgive a true and fair view of the affairs of the Company and of the profit for 2018-19;
sufficientcare has been taken that adequate accounting records havebeen maintained for safeguarding the assets of the Company; and for prevention anddetection of fraud and other irregularities;
the Annual Accounts have been prepared on a going concern basis;
the internal financial controls laid down by the Company were adequateand operating effectively; and
the systems devised to ensure compliance with the provisions of allapplicable laws were adequate and operating effectively.
Your Directors state that no disclosure or reporting is required inrespect of the following matters as there were no transactions on these items during theyear under review:
1. Issue of equity shares with differential rights as to dividendvoting or otherwise;
2. The Company does not have any scheme of provision of money for thepurchase of its own shares by employees or by trustees for the benefit of employees;
3. Neither the Managing Director nor the Whole-time Directors of theCompany receive any remuneration or commission from any of its subsidiaries;
4. No fraud has been reported by the Auditors to the Audit Committee orthe Board.
Your Directors wish to convey their gratitude and appreciation to allthe employees of the Company posted at all its locations for their tremendous personalefforts as well as collective dedication and contribution to the Company'sperformance.
Your Directors would also like to thank the employee unionsshareholders customers dealers suppliers bankers Government and all other businessassociates consultants and all the stakeholders for their continued support extended tothe Company and the Management.
|For and on behalf of the Board of Directors |
|For Crompton Greaves Consumer Electricals Limited |
| ||H. M. Nerurkar |
|Place : Mumbai ||Chairman |
|Date : 21st May 2019 ||DIN: 00265887 |