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Cummins India Ltd.

BSE: 500480 Sector: Engineering
NSE: CUMMINSIND ISIN Code: INE298A01020
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OPEN 544.00
PREVIOUS CLOSE 545.15
VOLUME 8105
52-Week high 799.50
52-Week low 498.05
P/E 22.36
Mkt Cap.(Rs cr) 14,855
Buy Price 530.30
Buy Qty 15.00
Sell Price 535.90
Sell Qty 10.00
OPEN 544.00
CLOSE 545.15
VOLUME 8105
52-Week high 799.50
52-Week low 498.05
P/E 22.36
Mkt Cap.(Rs cr) 14,855
Buy Price 530.30
Buy Qty 15.00
Sell Price 535.90
Sell Qty 10.00

Cummins India Ltd. (CUMMINSIND) - Director Report

Company director report

The Directors take pleasure in presenting the Fifty-Seventh Annual Report together withthe audited financial statements for the year ended March 31 2018. With the challengingeconomic conditions of the previous year continuing into 2018 your Company has focused onimproving productivity eliminating waste re-aligning the cost structure and increasingmarket share.

1. FINANCIAL RESULTS:

On Standalone basis:-

During the Financial Year 2017-18 revenue from operations was Rs 516106 Lacs ascompared to Rs 542875 Lacs during the previous year (4.9% lower). Profit after taxdecreased to Rs 70847 Lacs from Rs 73463 Lacs recorded for the previous year (3.6%lower).

On Consolidated basis:-

During the Financial Year 2017-18 revenue from operations was Rs 519045 Lacs ascompared to Rs 545779 Lacs during the previous year (4.9% lower). Profit after taxreduced to Rs 71182 Lacs from Rs 73627 Lacs recorded for the previous year (3.3% lower).

Financial summary

Standalone Consolidated
2017-18 2016-17 2017-18 2016-17
(Rs in Lacs) (Rs in Lacs) (Rs in Lacs) (Rs in Lacs)
APPROPRIATION OF PROFIT:
Profit before taxation 90840 90824 84077 84301
Net Profit for the year after tax 70845 73463 71182 73627
Tax on dividend 7901 7901 7901 7901
Dividend 38808 38808 38808 38808

2. DIVIDEND:

Your Directors have recommended a final dividend of Rs 10/- per equity share of Rs 2/-each fully paid-up in addition to the interim dividend of Rs 5/- per equity share of Rs2/- each fully paid-up share declared on February 01 2018 aggregating to Rs 15/- (i.e.750%) per equity share of Rs 2/- each fully paid-up share for the year ended March 312018 (last year Rs 14/- per equity share i.e. 700%). The final dividend payout is subjectto approval of the Members at the ensuing Annual General Meeting.

The paid up share capital of the Company is Rs 554400000/- divided in to 277200000equity shares of Rs 2/- each. Your Company has not come out with any issue (public rightsor preferential) during the year.

3. SUBSIDIARIES JOINT VENTURES AND ASSOCIATES:

Your Board is pleased to provide details of the following subsidiary joint venturesand associates as on March 31 2018:-

a) Cummins Sales & Service Private Limited (CSSPL):

CSSPL (formerly known as Cummins Svam Sales & Service Private Limited) awholly-owned subsidiary of the Company focuses on sales of Cummins engines partsaccessories and providing service support to engines and generators in parts of NorthernIndia close to the National Capital Region (NCR). CSSPL generated a revenue of Rs 8354.25Lacs from its operations for the year ended March 31 2018 as compared to Rs 7922.34Lacs during the previous year (5.5% higher).

b) Cummins Research and Technology India Private Limited (CRTI):

The revenue from the operations of Cummins Research and Technology India PrivateLimited (CRTI) a 50:50 joint venture between Cummins Inc. USA and your Company for theyear ended March 31 2018 was Nil previous year (Nil). CRTI was formed in 2003 with anintent to provide Information Technology enabled Mechanical Engineering developmentservices primarily to Cummins Inc. USA its subsidiaries and joint ventures in all partsof the world. Effective April 01 2016 CRTI closed its operations and your Board ofDirectors decided that the activity carried out by CRTI for your Company shall beundertaken in-house by absorbing the appropriate number of employees from CRTI in yourCompany. This has further enabled your Company to enhance efficiency optimize theresponse time reduce the administrative procedures and avoid duplication of efforts. Inshort there has been simplicity in running the same activities in a more effectivemanner.

c) Valvoline Cummins Private Limited (VCPL):

VCPL a 50:50 joint venture with Valvoline International Inc. USA a global leader inlubricants and engine oils generated a revenue of Rs 128006 Lacs from its operations forthe year ended March 31 2018 as compared to Rs 125374 Lacs during the previous year.

d) Cummins Generator Technologies India Private Limited (CGT):

Your Company owns 48.54% shareholding in the Associate Company namely CGT which is inthe business of design manufacturing marketing sales and service of alternators andrelated spare parts. CGT generated revenue of Rs 63807 Lacs from its operations for theyear ended March 31 2018 as compared to Rs 60245 Lacs during the previous year (5.91%higher).

Your Company announces consolidated financial results on an annual basis. As requiredunder the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015consolidated financial statements of the Company its subsidiary joint ventures andassociate prepared in accordance with the applicable Indian Accounting Standards (Ind AS)notified under the Companies (Indian Accounting Standards) Rules 2015 as amended formpart of the Annual Report and are reflected in the consolidated financial statements ofthe Company.

Further a statement containing the salient features of the financial statement ofsubsidiaries associate companies and joint ventures in the prescribed Form AOC-1 isappended as Annexure ‘1' which forms part of this Report.

The Company will make the said financial statements and related detailed information ofCSSPL available upon the request by any member of the Company. These financial statementswill also be kept open for inspection by any Member at the Registered Office of theCompany and of CSSPL. Pursuant to the provisions of section 136 of the Companies Act 2013the financial statements of the Company consolidated financial statements along withrelevant documents and separate financial statements in respect of CSSPL are available onthe website of the Company.

4. PARTICULARS OF LOANS GUARANTEES OR INVESTMENTS:

Other than the unsecured loan given to Cummins Technologies India Private Limited(which is a subsidiary of Cummins Inc. USA) in 2011 in compliance with the thenapplicable Companies Act 1956 and Rules thereunder no other loan or guarantee was givenor investment was made by your Company during the Financial Year 2017-18.

5. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

Particulars of contracts or arrangements with related parties referred to in Section188(1) of the Companies Act 2013 in the prescribed Form AOC-2 is appended as Annexure‘2' which forms part of this Report.

The Policy on materiality of related party transactions as approved by the Board may beaccessed on the Company's website at the link:https://www.cumminsindia.com/investors/corporate-goverance.

6. CONSERVATION OF ENERGY:

During the Financial Year 2017-18 your Company has strived to imbibe energyconservation principles and initiatives across all its facilities - Kothrud Engine Plant(Pune) Phaltan Midrange Upfit Centre (Phaltan) Power Generation Business Unit Plant(Phaltan) Distribution Business Unit Plants (Phaltan) and India Parts Distribution Centre(Phaltan).

A 635 kWp grid connected solar power plant was installed and made operational at theDistribution Business Unit Plant at Phaltan in Financial Year 2017-18. This installationhas helped save 60000 units of electricity every month and has resulted in a monthlysaving of Rs 4.5 Lacs in energy costs.

The other key initiatives across multiple areas are highlighted below –

HVAC – Your Company has undertaken initiatives such as installation of energyefficient air compressors cooling towers air conditioning units as well asHigh-Voltage-Low-Speed (HVLS) fans across the operation areas of key facilities.

Lighting – Your Company took the initiative to replace old lighting fittingswith new-age energy efficient LED fittings within and outside some of our facilities

Awareness Generation – This included employing an energy review tool andenergy balance tool to identify projects as well as improving awareness amongst employeesto switch off major energy consuming equipment or units when idle.

IMPACT OF THE ABOVE MEASURES:

These key initiatives resulted in annual energy savings of approximately 10.31 Lacunits of electricity and Rs 91.55 Lacs of saving in Energy costs

7. RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION:

Your Company is committed to introducing new products and improving existing productsto have better performance levels lower life cycle costs excellent safety recyclabilitycharacteristics meet stringent emission norms for the specific needs of the Indiancustomer. The Technical Center of your Company continues in this endeavour by indigenizingcomponents and developing the next generation of systems in collaboration with the parentcompany - Cummins Inc. USA.

Improved technical productivity through new methodologies and technologies beingintroduced is being continuously pursued to reduce the costs associated with new productdevelopment and customer support. An example of this is the further enhanced use ofanalysis-led design computer models that help minimize hardware testing and thereforeaccelerate product development cycle times.

To ensure the health and safety of employees the Technical Center also pursued severalinitiatives to help drive towards the goal of zero-recordable incidents.

A. New Product Development:-

The following new Products were developed as part of the above initiatives during theyear:-

1. Key Rail engine product families to support the growing Rail Business

2. Key Marine engine product families to support the increasing commercial MarineBusiness

3. Further enhancement of non-diesel product development capability as alternativefuels are being explored in India

4. Telematics capability has been developed to improve uptime and fuel efficiencyof our products

B. Benefits derived as a result of the above activities are:-

1. Enhanced development capabilities through use of electronic tools and simulationsoftware to control the engine performance and combustion process

2. Enhanced capability to tailor engine designs to improve the value propositionfor customers through delivering superior power output fuel economy transient responseand reduced emissions

3. Product and component availability to meet the new emission norms ahead ofimplementation

4. More safe recyclable reliable durable and performance-efficient products andcritical components

5. Component indigenization capability was improved through enhanced testcapability rig test and flow bench development and availability

6. Significant enhancements in measurement capability were made to pursue businessopportunities in non-diesel markets to serve both the rural and international communities

C. Future plans include:-

1. Developing local ‘fit-for-market' solutions to meet upcoming emissionregulations and market needs on commercial off-highway segment

2. Technological innovation to add value to the products in the areas of alternatefuels recycle / re-use and hybrid engines

3. Continued expansion of the product range to serve the local and global marketneeds

4. Continued focus on indigenization and partnering with suppliers for wasteelimination initiatives

5. Alternate source development for various components across the product line

6. Focussed engine development for the Power Generation market for the upcomingemissions norms

D. Your Company continues to draw benefits from Cummins Inc.'s technicalcapabilities and advanced technology.

With continued support from Cummins Inc. USA your Company is committed to developadvanced fuel-efficient and emission-compliant products that work on a variety of energysources and comply with upcoming domestic and global emission regulations. These help toreduce Greenhouse Gas emission and improve Air Quality whilst also enabling the productsto deliver superior performance reliability durability and recyclability.

E. Expenditure on R & D:-

The total expenditure on R & D was as follows:-
2017-2018 2016-2017
(Rs. Lacs) (Rs. Lacs)
Capital 26 395
Recurring 2892 3067
Total 2918 3462
Total R&D expenditure as a percentage of total sales turnover 0.4% 0.6%

8. FOREIGN EXCHANGE EARNINGS AND OUTGO:

Your Company continues to be Net Foreign Exchange Earner. During the year under reviewyour Company exported 6994 engines and 7998 generator sets thereby achieving totalexport earnings of Rs 144484 Lacs.

Foreign exchange earnings and outgo (including royalty dividend etc.) during the yearunder review were as follows:-

2017-2018 2016-2017
(Rs in Lacs) (Rs in Lacs)
(a) Earnings 161030 163131
(b) Outgo – 102543 93683
- Raw Materials/components 62578 56894
- Capital Equipment 1341 1712
- Others 38624 35077

9. MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE REPORT:

The Management Discussion and Analysis Report and the Corporate Governance Report whichforms part of this Report are appended as Annexure ‘3' and ‘4'respectively.

The Company has obtained a Certificate from Practicing Company Secretary confirmingcompliance with conditions of the Code of Corporate Governance as stipulated in Schedule Vof the SEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 and thesame is appended as Annexure ‘5' which forms part of this Report.

10. EXTRACT OF THE ANNUAL RETURN:

Extract of the annual return as prescribed under Section 92 (3) of the Companies Act2013 is appended as Annexure ‘6' which forms part of this Report.

11. RISK MANAGEMENT:

Business Risk Evaluation and Management is an ongoing process within the Organization.The Company has a robust risk management framework to identify monitor and minimize risksas also identify business opportunities. As a process the risks associated with thebusiness are identified and prioritized based on severity likelihood and effectiveness ofcurrent detection. Such risks are reviewed by the senior management on a quarterly basis.Process owners are identified for each risk and metrics are developed for monitoring andreviewing the risk mitigation through Six Sigma Projects.

Risk Management Committee of the Board of Directors of your Company assists the Boardin (a) overseeing and approving the Company's enterprise wide risk management framework;and (b) overseeing that all the risks that the organization faces such as strategicfinancial credit market liquidity security property IT legal regulatoryreputational other risks have been identified and assessed and there is an adequate riskmanagement infrastructure in place capable of addressing those risks.

12. INTERNAL FINANCIAL CONTROL:

Details of internal financial control and its adequacy are included in the ManagementDiscussion and Analysis Report which is appended as Annexure ‘3' and formspart of this Report.

13. VIGIL MECHANISM/ WHISTLE BLOWER POLICY:

Your Company is committed to fostering a physically and psychologically safe integritybased respectful inclusive high performance culture that breaks down hierarchies andorganizational boundaries and engages the full talents of our diverse employees todelight all our stakeholders (employees customers partners shareholders supplierscommunities) consistently.

The Company has a ‘Whistle Blower Policy' which inter alia provides adequatesafeguards against victimization of persons who may blow the whistle. In addition theCompany also has constituted an Internal Committee (under the Sexual Harassment of Womenat Workplace (Prevention Prohibition and Redressal) Act 2013) and an Ethics Committeecomprising of senior executives of the Company. Protected disclosures can be made by awhistle blower through an email or dedicated telephone line or letter to the ManagingDirector of the Company or Letter to the Chairman of Audit Committee. Whistle BlowerPolicy may be accessed on the Company's website at the link:https://www.cumminsindia.com/investors/corporate-goverance. Details of number ofcomplaints filed and resolved by the Internal Committee during the year are provided inthe Business Responsibility Report of the Company.

14. CODE OF CONDUCT COMPLIANCE:

All members of the Board and Senior Management have affirmed compliance to the Code ofConduct for the Financial Year 2017-18. A declaration signed by the Chairman &Managing Director affirming compliance with the Company's Code of Conduct by the Board ofDirectors and Senior Management for the Financial Year 2017-18 as required underRegulation 26(3) of the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015 is included in the Corporate Governance Report which is appended as Annexure‘4' and forms part of this Report.

15. DIRECTORS' RESPONSIBILITY STATEMENT:

Based on the framework of internal financial controls and compliance systemsestablished and maintained by the Company work performed by the internal statutory costand secretarial auditors and external consultant(s) including audit of internal financialcontrols over financial reporting by the statutory auditors and the reviews performed byManagement and the relevant Board Committees including the Audit Committee the Board isof the opinion that the Company's internal financial controls were adequate and effectiveduring the Financial Year 2017-18.

Accordingly pursuant to Section 134(5) of the Companies Act 2013 the Board ofDirectors to the best of their knowledge and ability confirm that:

(i) in the preparation of the annual accounts for the year ended March 31 2018the applicable accounting standards have been followed and there was no material departurefrom the same;

(ii) they have selected such accounting policies and applied them consistently andmade judgments and estimates that are reasonable and prudent so as to give a true and fairview of the state of affairs of the Company as on March 31 2018 and of the profit for theperiod April 01 2017 to March 31 2018;

(iii) they have taken proper and sufficient care for the maintenance of adequateaccounting records in accordance with the provisions of the Companies Act 2013 forsafeguarding the assets of the Company and for preventing and detecting fraud and otherirregularities;

(iv) they have prepared the annual accounts on a going concern basis;

(v) they have laid down internal financial controls to be followed by the Companyand that such internal financial controls are adequate and were operating effectivelyduring the year; and

(vi) they have devised proper systems to ensure compliance with the provisions ofall applicable laws and that such systems were adequate and operating effectively.

16. DIRECTORS:

a) Changes in the composition of the Board of Directors:

During the year Mr. Anant J. Talaulicar (DIN: 00031051) resigned as Chairman andManaging Director of the Company with effect from November 08 2017 and Mr. PradeepBhargava (DIN: 00525234) resigned as an Alternate Director of the Company with effectfrom February 23 2018.

During the year Mr. Sandeep Sinha (DIN: 02400175) was appointed as Managing Directorof the Company with effect from February 01 2018 and Mr. Mark Levett (DIN: 00368287) wasappointed as an Additional Director and Chairman of the Board with effect from March 022018.

The Board at its meeting held on August 3 2017 noted the presence of Mr. NorbertNusterer (DIN: 07640359) during July 31 2017 to August 5 2017 and Ms. Suzanne Wells(DIN: 06954891) during July 31 2017 to August 4 2017 in India and consequent cessationof Mr. J. M. Barrowman (DIN: 00668324) as an Alternate Director for Mr. Norbert Nustererand Ms. Nicole McDonald (DIN: 07369062) as an Alternate Director to Ms. Suzanne Wellseffective July 31 2017.

The Board confirmed appointment of Mr. J. M. Barrowman in terms of its resolution datedOctober 26 2016 as an Alternate Director to Mr. Norbert Nusterer effective August 52017 and appointment of Ms. Nicole McDonald in terms of its resolution dated November 52015 as an Alternate Director to Ms. Suzanne Wells effective August 4 2017 upon returnof Original Directors to U.S.A.

The Board at its meeting held on August 3 2017 appointed Mr. Mark Smith (DIN:06852777) as an Additional Director effective August 3 2017 and Mr. Pradeep Bhargava(DIN: 00525234) as an Alternate Director to Mr. Mark Smith.

The Board at its meeting held on October 26 2017 noted the presence of Mr. NorbertNusterer (DIN: 07640359) during October 23 2017 to October 27 2017 in India andconsequent cessation of Mr. J. M. Barrowman (DIN: 00668324) as an Alternate Director forMr. Norbert Nusterer effective October 23 2017. The Board confirmed appointment of Mr.J. M. Barrowman in terms of its resolution dated October 26 2016 as an AlternateDirector to Mr. Norbert Nusterer effective October 27 2017 upon return of OriginalDirector to U.S.A.

The Board noted the presence of Mr. Norbert Nusterer (DIN: 07640359) and Ms. SuzanneWells (DIN: 06954891) during January 29 2018 to February 2 2018 in India and consequentcessation of Mr. J. M. Barrowman and Ms. Nicole McDonald as Alternate Directors effectiveJanuary 29 2018. The Board confirmed appointment of Mr. J. M. Barrowman in terms of itsresolution dated October 26 2016 as an Alternate Director to Mr. Norbert Nusterereffective February 2 2018 and appointment of Ms. Nicole McDonald in terms of itsresolution dated November 5 2015 as an Alternate Director to Ms. Suzanne Wells effectiveFebruary 2 2018 upon return of Original Directors to USA.

In accordance with the Companies Act 2013 and Articles of Association of the CompanyMr. Antonio Leitao (DIN: 05336740) Director of the Company retires by rotation and iseligible for re-appointment.

Additional information as required under the Companies Act 2013 and Regulation 36 ofthe SEBI (Listing Obligations and Disclosure Requirements) 2015 in respect of thedirectors' appointment/ reappointment is provided below:

Particulars Mr. Mark Levett Mr. Sandeep Sinha Mr. Antonio Leitao
Age (years) 69 47 54
Qualification BA from Hanover College & MBA from Michigan State University Bachelor's degree- Production Engineering Manipal Institute of Technology (India) and Master's degree from Kelly School of Business Holds a degree in Electrical Engineering from the University of Brittany in France and an executive MBA from Stanford University
Experience/ Expertise/ Brief Resume Refer item no. 6 of the explanatory statement of the Notice convening this Meeting. Refer item no. 5 & 7 of the explanatory statement of the Notice convening this Meeting. Refer item no. 4 of the explanatory statement of the Notice convening this Meeting.
Relationship with other Directors / Key Managerial Personnel (KMP) Not related to any Director / KMP Not related to any Director / KMP Not related to any Director / KMP
Directorships/ Membership of Committees in listed entities as on March 312018 NIL NIL NIL
Shareholding as on March 31 2018 NIL NIL NIL

The details of number of meetings of the Board etc. are provided in the CorporateGovernance Report which is appended as Annexure ‘4' and forms part of thisReport.

b) Committees of the Board:

The Board of Directors have constituted following committees in order to effectivelycater its duties towards diversified role under the Companies Act 2013 and the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015:-

• Audit Committee;

• Stakeholders Relationship Committee;

• Nomination and Remuneration Committee;

• Corporate Social Responsibility Committee; and

• Risk Management Committee

Details of the constitution terms of references of each Committee and number ofmeetings attended by individual Director etc. are provided in the Corporate GovernanceReport which is appended as Annexure ‘4' and forms part of this Report.

c) Policy on Director's Appointment and Remuneration:

The Policy of the Company on Director's Appointment and Remuneration includingcriteria for determining qualifications positive attributes independence of thedirectors and other matters provided under Section 178 (3) of the Companies Act 2013adopted by the Board is appended as Annexure ‘7' which forms part of thisReport. Details of the remuneration paid to the Board of Directors are provided in theCorporate Governance Report. We affirm that the remuneration paid to the Directors is asper the terms laid down in the Nomination and Remuneration Policy of the Company.

d) Board Performance Evaluation Mechanism:

Pursuant to the provisions of the Companies Act 2013 and Regulation 34 of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015 the Board has carriedout the annual performance evaluation of its own performance and the Directorsindividually as well as the evaluation of the working of its Committees. Details of theevaluation mechanism is provided in the Corporate Governance Report which is appended as Annexure‘4' and forms part of this Report.

e) Familiarization Programme for Independent Directors:

The Independent Directors of the Company are associated with the Company for many yearsand are very familiar with the Company. During the year the Management provided variousdocuments background notes etc. to have a better insight of the Company. The Chairman andthe Managing Director also has a one-to-one discussion with the newly appointed Directors.Details of initiatives for the Director to understand the Company its business and theregulatory framework in which the Company operates and equips him/ her to effectivelyfulfil his/ her role as a Director of the Company. The details of familiarisationprogrammes imparted are available athttps://www.cumminsindia.com/investors/corporate-goverance.

f) Declarations from the Independent Directors:

The Company has received declarations from all the Independent Directors of the Companyconfirming that they meet the criteria of independence as prescribed both under of theCompanies Act 2013 and the SEBI (Listing Obligations and Disclosure Requirements)Regulations 2015.

17. PARTICULARS OF EMPLOYEES:

The details in accordance with the provisions of Section 197(12) of the Companies Act2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of ManagerialPersonnel) Amendment Rules 2016 is appended as Annexure ‘9' which forms partof this Report.

A statement containing the details as prescribed under Rule 5(2) and Rule 5(3) of theCompanies (Appointment and Remuneration of Managerial Personnel) Rules 2014 as amendedfrom time to time forms part of this Report. Any shareholder interested in obtaining acopy of the statement may write to the Company Secretary at the Registered Office of theCompany.

18. INDUSTRIAL RELATIONS:

Industrial relations at the Company's plants continue to be cordial. Many initiativeshave been rolled out providing development and growth opportunities to our shop employeese.g. B. Tech program has been launched in partnership with BITS Pilani.

19. AUDITORS:

SECRETARIAL AUDITOR:

Dr. K. R. Chandratre Company Secretary in Practice was appointed to conduct thesecretarial audit of the Company for the Financial Year 2017-18 as required under Section204 of the Companies Act 2013 and the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2014. The Secretarial Audit Report in Form MR-3 for FinancialYear 2017-18 is appended as Annexure ‘10' which forms part of this Report. TheSecretarial Audit Report does not contain any qualification reservation or adverseremark.

COST AUDITORS:

Pursuant to Section 148 of the Companies Act 2013 read with the Companies (CostRecords and Audit) Rules 2014 as amended from time to time the cost audit recordsmaintained by the Company in respect of its manufacturing activity is required to beaudited. Your Directors on the recommendation of the Audit Committee appointed M/s. AjayJoshi and Associates Pune to audit the cost accounts of the Company for the FinancialYear 2018-19 on a remuneration of Rs 950000 plus taxes as applicable and re-imbursementof out of pocket expenses. As required under the Companies Act 2013 the Members'ratification for the remuneration payable to M/s. Ajay Joshi and Associates Cost Auditorsis being sought at the ensuing Annual General Meeting.

20. CORPORATE SOCIAL RESPONSIBILITY POLICY AND ITS REPORT:

Your Company is an early adopter of the Corporate Social Responsibility (CSR)initiatives. Corporate Responsibility continues to be the core value of your companyembedded in the core value of caring which focuses on ‘serving and improving thecommunities in which we live'. Your Company works with ‘Cummins India Foundation'towards three broad focus areas viz. Higher Education Energy and Environment and Equalityof opportunity.

Details about the CSR Policy and initiatives taken by the Company during the year areavailable on our website https://www.cumminsindia.com/investors/corporate-goverance. TheAnnual Report on our CSR Activities is appended as Annexure ‘11' which formspart of this Report.

21. BUSINESS RESPONSIBILITY REPORT:

As stipulated under the Regulation 34 of the SEBI (Listing Obligations and DisclosureRequirements) Regulations 2015 the Business Responsibility Report describes theinitiatives taken by the Company from environmental social and governance perspectivewhich forms part of the Annual Report.

22. SECRETARIAL STANDARDS:

The Company is in compliance with the Secretarial Standards on Meetings of the Board ofDirectors (SS-1) and Secretarial Standards on General Meetings (SS-2) issued by theInstitute of Company Secretaries of India.

23. GENERAL:

Your Directors state that no disclosure or reporting is required in respect of thefollowing items as there were no transactions on these items during the year under review:

a. Details relating to deposits covered under Chapter V of the Companies Act 2013;

b. Issue of equity shares with differential rights as to dividend voting or otherwise;

c. Issue of shares (including sweat equity shares) by the Company to its employees;

d. Neither the Managing Director nor the Whole-time Directors of the Company receivedany remuneration or commission from any of its subsidiaries;

e. No frauds were reported by auditors under Section 143(12) of the Companies Act2013;

f. No significant or material orders were passed by the Regulators or Courts orTribunals which impact the going concern status and Company's operations (However Membersattention is drawn to the Statement on Contingent Liabilities commitments in the notesforming part of the Financial Statement); and

g. No material changes and commitments occurred during April 01 2018 till the date ofthis Report which would affect the financial position of your Company.

ACKNOWLEDGEMENT:

Your Directors would like to express their sincere appreciation for the assistance andco-operation received from the financial institutions banks government authoritiescustomers vendors and members during the year under review. Your Directors also wish toplace on record their deep sense of appreciation for the committed services by theCompany's executives staff and associates.

On behalf of the Board of Directors

Mark Levett Sandeep Sinha
Place : Mumbai Chairman Managing Director
Date : May 24 2018 DIN: 00368287 DIN: 02400175