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Directors Report of Crompton Greaves Ltd.

Mar 31, 2016

The Directors are pleased to present their Seventy Ninth Annual Report on the business and operations of the Company (or "CG") along with the audited accounts for the financial year ended 31 March 2016.

THE YEAR IN RETROSPECT

The Stand-alone and Consolidated financials of the Company represents the continuing operations for the year ended 31 March 2016. The operations, assets and liabilities of the discontinued operations have been presented under separate head.

The continued consolidated net revenue of the Company during 2015–2016 de-grew by 4.2% at Rs.5272 crore, as compared with Rs.5505 crore last year. The Company has achieved a stand-alone net turnover from continued operations of Rs.3960 crore, during the year under review, as compared with Rs.4230 crore during the previous year, a decline of 6.4%.

Consolidated profit before tax from continuing operations decreased to Rs.87 crore, as compared with Rs.356 crore in the previous year, a decrease of 75.4% over last year. Stand-alone profit / (loss) before tax from continuing operations decreased from Rs.342 crore to Rs.(1150) crore, a decrease of 436.6%.

Consolidated loss before tax from discontinued operations increased to Rs.(343) crore from Rs.(182) crore, in the previous year, an increase of 88.7%.

Consolidated profit after tax from continuing operations is Rs.75 crore as compared with consolidated profit after tax of Rs.368 crore in the previous year, a decrease of 80%. The Company recorded a stand-alone profit / (loss) after tax from continuing operations of Rs.(1188) crore, a decrease of 444.3% from Rs.345 crore last year.

The Sales and Profit Before Interest and Tax (PBIT) of the respective Business Groups, compared with last year are given in Table 1.

A detailed review of the operations and performance of the Company and each of the Businesses including its International operations is contained in the Management

01 SALES AND PROFIT BEFORE INTEREST AND TAX (PBIT)

IN RS. CRORE

BU SALES PBIT

2015-2016 2014-2015 2015-2016 2014-2015

Power Systems (CG Stand-alone) 2290 2696 117 200

Industrial Systems (CG Stand-alone) 1611 1497 174 151

Automation Systems (CG Stand-alone) 75 51 (10) 10

Power Systems (including Inter national operations) 2495 2786 188 402

Industrial Systems (including International operations) 1929 1834 139 110

Automation Systems 864 900 (6) 7

Discussion and Analysis Report, which is given as a separate chapter in this Annual Report.

FINANCIAL HIGHLIGHTS

The financial performance of your Company for the continuing operations for the year ended 31 March 2016 is given in Table 2.

DEMERGER OF CONSUMER BUSINESS

Pursuant to the approval of shareholders of the Company accorded on 13 August 2015, for the Scheme of Arrangement (Scheme) between the Company and Crompton Greaves Consumer Electricals Limited (CGCEL), the Company has completed with the demerger of its Consumer Products Business, with effect from 1 October 2015 upon sanction of the Scheme by the Hon''ble High Court, Bombay on 20 November 2015 and filing the same with the Registrar of Companies on 31 December 2015 by the Company. Pursuant to the Scheme, the shareholders of the Company have been allotted one equity share of Rs.2/- in CGCEL for every equity share of Rs.2/- each held in the Company as on 16 March 2016 being the Record Date fixed for this purpose, which were listed on the BSE and NSE with effect from 13 May 2016.

DIVESTMENTS AND OTHER DEVELOPMENTS

With the strategic objective of debt reduction and focusing on its core operations in Power business in India and in its Industrial Systems business, the following divestments have been completed / undertaken by the Company:

- The Company has sold the Power Assets held by its subsidiary CG Power Systems Canada Inc, thereby exiting from the Power business in Canada.

- The Company has divested its entire stake in the Joint Venture CG Lucy Switchgear Limited (presently Lucy Electric India Private Limited) to W Lucy & Co Limited, UK-the Joint Venture Partner, while retaining its distribution and supply arrangements with Lucy Electric India Private Limited.

- The Company has signed a Share Purchase Agreement (SPA) for sale of its Power Businesses in Europe, North America and Indonesia. The completion of the SPA is envisaged by 31 October 2016, subject to requisite consents and regulatory approvals. Upon completion, the Company would exit completely from its overseas Power businesses.

- The Company has also initiated the process of identifying investors for its other international B2B businesses including Automation Business.

02 FINANCIAL HIGHLIGHTS

2016 2015 2016 2015

PARTICULARS STAND-ALONE CONSOLIDATED

Revenue from Operations (Net of Excise Duty) 3,960 4,230 5,272 5,505

EBIDTA 308 331 453 580

Less: Finance Cost (102) (21) 56 82

Less: Depreciation 108 113 256 245

Profit Before Exceptional Items & Tax 302 239 141 253

Exchange gain 57 (47) 57 (47)

Exceptional Items (1509) 150 (111) 150

Profit /(loss) Before Tax (1150) 342 87 356

Less: Tax Expense 38 (3) 14 (10)

Profit /(loss) After Tax (1188) 345 73 366

Share of profit / (loss) in associates - - 1 1

Less: Minority Interest - - 1 1

Profit / (loss) from continuing operations (1188) 345 75 368

Profit / (loss) from discontinued operations 157 371 (343) (182)

Tax expense from discontinued operations 61 127 128 163

Net Profit / (loss) from discontinued operations 96 244 (471) (345)

Net Profit / (loss) for the year attri butable to shareholders (1092) 589 (396) 23

The above steps will enable the Company to improve its Balance Sheet and enhance shareholders value by refocusing on operations and growth in India, considering the opportunities in India, in view of the emphasis of the Government on the Power sector and the growth in demand of the products in the Industrial Systems'' business in India and overseas.

During the year, the Distribution Franchisee Agreement (DFA) of the Company with Maharashtra State Electricity Distribution Company Limited (MSEDCL) for power distribution at Jalgaon in Maharashtra was terminated by MSEDCL exercising its step- in rights consequent to certain unresolved disputes. The Company is confident of arriving at an amicable settlement with MSEDCL on all pending issues under the DFA.

DIVIDEND

No dividend has been recommended or paid for the year ended 31 March 2016.

RESERVES

The Reserves, on stand-alone basis, at the beginning of the year were Rs.4490 crore. The Reserves at the end of the year are Rs.4003 crore.

SHARE CAPITAL

As at 31 March 2016, the authorised share capital of the Company was Rs.407,60,00,000-(Rupees four hundred seven crore sixty lacs) divided into 203,80,00,000 equity shares of Rs.2/-(Rupees Two) each.

As at 31 March 2016, the paid-up share capital of the Company stood at Rs.125,34,92,284 (Rupees one hundred twenty five crore thirty four lacs ninety two thousand two hundred eighty four only) consisting of 626,746,142 equity shares of Rs.2/-(Rupees Two) each.

DIRECTORS AND KEY MANAGERIAL PERSONNEL BOARD OF DIRECTORS

As on the date of this report, the Company''s Board comprises of ten Directors. The Chairman, Mr Gautam Thapar is a Non- Executive Director and represents the Promoter Group. Mr K N Neelkant is the CEO and Managing Director. Mr Madhav Acharya is the Executive Director — Finance and CFO. Five other Non-Executive Directors — Mr Shirish Apte, Mr Sanjay Labroo, Ms Meher Pudumjee,

Dr Valentin Von Massow and Ms Ramni Nirula are independent in terms of Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (''Listing Regulations'') and Companies Act, 2013. Two other Directors — Mr B Hariharan and Dr Omkar Goswami are Non-Executive Directors. The Directors are reputed professionals with diverse functional expertise, industry experience, educational qualifications, ethnicity and gender mix relevant to fulfilling the Company''s objectives and strategic goals.

Cessation

Mr Laurent Demortier resigned from his role as a CEO and Managing Director of the Company with effect from 3 February 2016, thereafter, he continued to serve as a Whole-time Director up to 31 March 2016.

Dr Colette Lewiner, Independent Director stepped down from her directorship of the Company, with effect from 14 March 2016.

The Board places on record its gratitude and appreciation for Mr Demo tier and Dr Lewiner for their guidance to the Company during their tenure as Directors.

Appointment

Mr K N Neelkant was appointed as the CEO and Managing Director with effect from 3 February 2016.

Mr Madhav Acharya was appointed as Executive Director — Finance with effect from 1 April 2016, in addition to his role as the CFO of the Company.

Ms Ramni Nirula was appointed on the Board as an Independent Non-Executive Director with effect from 6 April 2016.

Retirement by Rotation

In terms of the provisions of Section 152 of the Companies Act, 2013 and the rules made there under and Article 114 of the Articles of Association of the Company, Dr Omkar Goswami and Mr B Hariharan, retire by rotation at the ensuing Annual General Meeting of the Company and being eligible, have offered themselves for the re-appointment. The profile details of Dr Omkar Goswami and Mr B Hariharan are contained in the accompanying Notice of the forthcoming Annual General Meeting and in the Corporate Governance Report. The Board recommends their re-appointment.

CG has signed a Share Purchase Agreement (SPA) for sale of its Power businesses in Europe, North America and Indonesia.

Attributes, Qualification & Independence of Directors & their Appointment

The appointment and remuneration of Directors is governed by the Remuneration Policy of the Company which also contains the criteria for determining qualifications, positive attributes and independence of Directors. The Policy along with the CG Board Diversity Policy aims at attracting and retaining high caliber personnel from diverse educational fields and with varied experience to serve on the Board for guiding the Management team to enhance organizational performance. The detailed Remuneration Policy is contained in the Corporate Governance section of this Annual Report.

Independent Directors Declaration

All Independent Directors have submitted declarations that they continue to meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16 of the Listing Regulations.

Board Meetings

A calendar of meetings is prepared and circulated in advance to the Directors. The Board of Directors met 6 times during FY2016. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013 and the Listing Regulations. The details of the meetings and the attendance of the Directors are mentioned in the Corporate Governance Report.

The Board has established Committees as a matter of good corporate governance practice and as per the requirements of the Companies Act, 2013. The Committees are Risk and Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee and Stakeholders'' Relationship Committee. The composition, terms of reference, number of meetings held and business transacted by the Committees is given in the Corporate Governance Report.

Annual Board Evaluation

During the year, the Board has carried out the annual evaluation of its own performance as well as the evaluation of the working of its Committees and individual Directors, including Chairman of the Board. This exercise was carried out through a structured questionnaire prepared separately for Board, Committee and individual Directors. The questionnaire for Board evaluation was prepared taking into consideration various aspects of the Board''s functioning such as adequacy of the composition and role of the Board, Board meeting and reporting process, effectiveness of strategies, risk management systems, external relationships, ethics and governance framework. Committee performance was evaluated on the basis of its composition, effectiveness in carrying out its mandate, relevance of its recommendations and allocation of adequate time to fulfil its mandate.

Individual and peer assessment of Directors based on parameters such as knowledge, contribution, level of engagement, communication / relationship with Board and Senior Management were received by the Chairman for individual feedback. The Board acknowledged certain key improvement areas emerging through this exercise and action plans to address these are in progress. The performance evaluation of the Chairman was carried out by the Independent Directors. The Directors expressed their satisfaction with the evaluation process and its result.

Familiarization of Independent Directors

The Company has in place the practice of familiarizing the Independent Directors which inter-alia seeks to update the Directors, while their induction, on their roles, responsibilities, rights and duties under the Companies Act, 2013 and other statutes. This process helps the Independent Directors to take well informed decisions in a timely manner. The details of this program can be viewed under the following link on company''s website: http://www.cgglobal.com/frontend/ finalnonproduct.aspxRs,cnl2=yrnPqECUvhk=

KEY MANAGERIAL PERSONNEL

During the year under review Ms Minal Bhosale resigned from the position of Company Secretary w.e.f. 31 May 2015. The Board of Directors based on the recommendation of the Nomination and Remuneration Committee, appointed Mr Manoj Koul as the new Company Secretary of the Company w.e.f. 3 August 2015.

PROMOTER GROUP

The Company is a part of the Avantha Group, one of India''s leading diversified conglomerates. Led by Chairman Mr Gautam Thapar, the Avantha Group has a global footprint and operates in 90 countries with more than 25,000 employees worldwide.

As required under the Listing Regulations, CG periodically discloses its promoter group and persons acting in concert in the shareholding pattern and other filings with the Stock Exchanges.

SUBSIDIARY COMPANIES

As on 31 March 2016, the Company has three Indian subsidiaries and 31 foreign subsidiaries. The particulars are mentioned in Annexure 6 to this Report in Form No. MGT 9 (Extract of Annual Return).

Pursuant to Section 136 of the Companies Act, 2013 the audited accounts of each of the Company''s subsidiaries are placed on the website of the Company and not enclosed in this Annual Report. If any Member of the Company so desires, the Company will be happy to make available the Annual Accounts of the subsidiaries to him / her, on request. The physical copies of the aforesaid documents will also be available at the Company''s Registered Office for inspection during normal business hours on all working days, excluding Saturdays, up to the date of the Meeting.

In terms of Section 129(3) of the Companies Act, 2013, statement containing salient features of the financial statement of Subsidiaries / Associate companies / Joint Ventures is given in this Annual Report.

BRANCH OFFICE IN POLAND

The Company''s branch office in Poland i.e. Crompton Greaves Ltd SA is under the process of liquidation.

ADOPTION OF IND AS

The Central Government in consultation with the National Advisory Committee on Accounting Standards (NACAS) under Sectio 133 read with Section 469 of the Companies Act, 2013 has notified the Indian Accounting Standards (''Ind AS'') vide G.S.R. 111(E) dated 16 February 2015. The Company has decided for adoption of the aforesaid standards, voluntarily, as stated in the Companies (Indian Accounting Standards) Rules, 2015 with effect from 1 April 2015 and thereafter. The aforesaid Rules have been further amended by the Companies (Indian Accounting Standards) (Amendment) Rules, 2016 on 30 March 2016. In view of this notification / amendment and also as per the Regulation 33 of Listing Regulations, the Company has prepared the Financial Statements (both stand-alone and consolidated) for the year ended 31 March 2016 as per Ind AS, as amended.

RISK AND AUDIT COMMITTEE

As on the date of this Report, the Risk and Audit Committee is comprised of three Non-Executive Directors, of whom two are independent. The composition is as under:

- Mr Shirish Apte (Chairman, Independent Director)

- Dr Omkar Goswami (Non-Executive Director)

- Mr Sanjay Labroo (Independent Director)

All recommendations made by the Risk and Audit Committee during the year were accepted by the Board of Directors.

RELATED PARTY TRANSACTIONS

The Company''s Related Party Policy governs the norms for inter-company transaction pricing between the Company and its subsidiaries. Since the Company has a network of wholly-owned subsidiaries, manufacturing, as well as, engaged in sales of various products comprising the different businesses of CG, a substantial quantum of related party transactions comprise transactions with subsidiaries for purchase and sale of goods and services, in the ordinary course of business.

An omnibus approval has been granted by the Risk and Audit Committee of the Board for transactions which are of a foreseen and repetitive nature with other related parties. Such omnibus approvals are subjected to review by the Risk and Audit Committee every year and are monitored by the Risk and Audit Committee on a quarterly basis. All Related Party Transactions are presented to the Risk and Audit Committee every quarter.

All related party transactions that were entered into during the financial year were on an arm''s length basis and were in the ordinary course of business. There are no material related party contracts, arrangements or transactions undertaken by the Company during the year in terms of its India Related Party Transaction Policy of the Company and hence the disclosure of particulars of contracts / arrangements entered into by the Company with related parties referred to in sub-section (1) of Section 188 of the Companies Act, 2013 in Form AOC-2 (Annexure 1 to this Report) is nil.

The Company''s India Related Party Transactions Policy is uploaded on the website of the Company and the we blink is as under: http://www.cgglobal.com/pdfs/ policies/India%20Related%20Party%20 Transactions%20Policy.pdf

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of loans, guarantees given and investments made by the Company during FY2016, pursuant to the provisions of Section 186 of the Companies Act, 2013 and Schedule V of the Listing Regulations are given in the notes to the Financial Statements.

BUSINESS RISK MANAGEMENT

A risk management policy has been developed and implemented by the Company for identification of elements of risk, if any, which in the opinion of the Board may threaten the existence of the Company. In order to bring in more clarity on the objective, process and spell out the roles and responsibilities for an effective implementation of the Risk Management Process, the Board of Directors have adopted revised Risk Management Framework. The revised framework enables risk identification and its escalation and consolidation at unit level to business unit level, identification of risk mitigation process.

In terms of the framework, the Risk and Audit Committee shall review the adequacy of the risk management framework of the Company, the key risks associated with the businesses of the Company and the measures and steps in place to mitigate the same, from time to time. The assessment of the risks covers Strategy, Technology, Financial, Operations & Systems, Legal & Regulatory and Human Resources Risks. There is appropriate assurance and monitoring mechanism in place to monitor the effectiveness of the risk management framework including the mitigation plans identified by the Management for key risks identified through the risk management exercise.

INTERNAL FINANCIAL CONTROLS

CG has in place, adequate systems and procedures for implementation of internal financial control across the organization which enables the Company to ensure that these controls are operating effectively.

RESEARCH AND DEVELOPMENT

During the year, the Company''s R&D activities continued to focus on development of improved energy efficient and reliable products. Power transformers focused on research in cost competitiveness, oil tightness and validation of hot spot calculation. Research was also carried out in GAI3S 245 kV GIS with spring drive, 170 kV mobile GIS, 420 kV CT with Casting Tank, Composite Insulator CVTS, digital interface (digital surge counter) to the lightning arrester for condition monitoring of products, which is a vital communication link for smart substations and study of external withstand and flashover characteristics of air insulations for development of new and niche products. Other areas of research in power products included Inverter Duty 12 Pulse Transformer 3.2 MVA with foil winding,

Four Inverter Feed 4.25 MVA Transformer with foil winding and 2X12 Pulse Four Winding Transformers for solar application.

Automation business R&D activities, led by the R&D Centre of Excellence, together with the R&D teams at different locations, are mainly focused on new products and features to maintain its technological leadership in Protections and Control as well as in metering and communications.

Industrial systems business focused on control platform, new DSP technology for high performance DTC, SVPWN and FOC for AM, PMSM and SynRM and new UC technology for integrated connectivity and communication. CSA certified single phase motors up to 5HP 4P and 6P were developed. In Railways Signalling Division, R&D activity was carried out to design and develop two key products for railway and one customized product for Honda Motors such as 110Volts AC Fan with specially designed SS guard having better aesthetics to suit advanced interior of EMUs., 230 Volts AC BLDC Fan with special feature of speed regulation having customized design for Honda Motors and 380 Volts AC 3 Phase Point Machine for Metro rail.

The above R&D efforts would result in extended product range, increase in operating income and expansion in new markets.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required by the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014, the relevant data pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo is given in the prescribed format as Annexure 2 to this Report

ENVIRONMENT, HEALTH & SAFETY (EHS)

By and large, EHS Management system, programs and policies were enhanced and overhauled during the year. All CG manufacturing units in Asia, EMEA and Americas have maintained their ISO14001 and OSHAS18001 certifications.

CG''s EHS policy and guidelines are a reflection of CG''s strong EHS commitment. The EHS Guidelines prescribe responsibilities

and accountabilities of individual functions and the standards for adherence with the Guidelines. Behaviour Based Championship Model was introduced, resulting in increased overall EHS awareness. Additionally, bi- monthly regional EHS network conference calls were conducted for cross business and cross regional EHS knowledge sharing.

Smart EHS goals now form a part of KPI''s of individual leaders. Monthly online EHS Balanced Score Card concept was introduced under which all units set their annual targets towards EHS KPI''s and individual unit''s EHS performance against the set targets were evaluated. Corporate EHS audit process was revamped with the inclusion of skip level meeting and interview process. These audits were more focused on EHS implementation and performance, rather than EHS documentation, as a journey towards continuous improvement in EHS excellence. Corrective actions generated from these audits and various EHS events are captured and tracked for closure in Online Event Reporting System portal (ERS) as EHS one stop shop.

With the objective of rewarding individual and collective efforts towards EHS, EHS RECOGNIZE policy was introduced and aligned with organisational RECOGNIZE drive. Two units were awarded as Best EHS unit CEO annual award.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company''s undeterred commitment towards CSR initiatives endeavor to embrace responsibility for its corporate actions and achieve fruitful impact of its business actions not only on its stakeholders, but also the society at large. As part of its CSR initiatives, CG has undertaken projects in the areas of education, employability and health. CG supports Avantha Foundation on programs such as reduction of Malnutrition and Hunger and building capacities of stakeholders in small towns to ensure better delivery of services to citizens. The Annual Report on CSR activities of CG for FY2016 is stated at Annexure 3 to this Report.

GREEN INITIATIVES

Electronic copies of the Annual Report and Notice of the 79th Annual General Meeting are sent to all members whose email addresses are registered with the Company / Depository Participant(s) for communication purposes. For members who have not registered their email addresses, physical copies of the Notice and Annual Report are sent in the permitted mode. Members requiring physical copies can send a request to the Company. The physical copies of the aforesaid documents will also be available at the Company''s Registered Office for inspection during normal business hours on all working days, excluding Saturdays, up to the date of the Meeting.

MATERIAL CHANGES AND COMMITMENT AFFECTING FINANCIAL POSITION OF THE COMPANY

There are no material changes and commitments affecting the financial position of the Company which has occurred between the end of the financial year of the Company i.e., 31 March 2016 and the date of this Directors'' report.

MATERIAL ORDERS OF REGULATORS / COURTS / TRIBUNALS

No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company''s operations in future.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Directors would like to assure the Members that the financial statements for the year under review conform in their entirety to the requirements of the Companies Act, 2013. The Directors confirm that:

- the Annual Accounts have been prepared in conformity with the applicable Accounting Standards;

- the Accounting Policies selected and applied on a consistent basis, give a true and fair view of the affairs of the Company and of the profit for the financial year;

- sufficient care has been taken that adequate accounting records have been maintained for safeguarding the assets of the Company; and for prevention and detection of fraud and other irregularities;

- the Annual Accounts have been prepared on a going concern basis;

- the internal financial controls laid down in the Company were adequate and operating effectively;

- the systems devised to ensure compliance with the provisions of all applicable laws were adequate and operating effectively.

SHARE REGISTRAR & TRANSFER AGENT

The Company''s Registrar & Transfer Agents for shares is Datamatics Financial Services Ltd (DFSL). DFSL is a SEBI- registered Registrar & Transfer Agent. The contact details of DFSL are mentioned in the Corporate Governance Report.

investors are requested to address their queries, if any to DFSL; however, in case of difficulties, as always, they are welcome to contact the Company''s Investor Services Department, the contact particulars of which are contained in the Corporate Governance Report.

FIXED DEPOSITS

The Company has not accepted any deposits from public or its members during FY2016 under Section 73 of the Companies Act, 2013 and no deposits are subsisting as on date.

PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules forms part of this Report. However regard to the provisions of the first proviso to Section 136(1) of the Companies Act, 2013, the Annual Report excluding the aforesaid information is being sent to the members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any member interested in obtaining such information may write to the Company Secretary and the same will be furnished on request. Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is given at Annexure 4 to this report.

COMPLAINTS RELATING TO SEXUAL HARASSMENT

In terms of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act and Rules, 2013, it is mandatory to review status of sexual harassment related complaints in the Annual Report. There were no incidents of sexual harassment reported in the Company. For protection against sexual harassment, CG has formed an internal complaints committee to which employees can write in their complaints. The Company has a Prevention of Sexual Harassment Policy which has formalised a free and fair enquiry process for dealing with such issues, with clear timelines. During FY2016, a number of workshops and programs were conducted by the Company to spread awareness on sexual harassment related issues.

VIGIL MECHANISM

The Company has formulated CG Whistle Blower Policy with a view to providing a mechanism for CG employees to report violations and assure them of the process that will be followed to address the reported violation. The Policy also lays down the procedures to be followed by Senior Management for tracking of complaints,

giving feedback, conducting investigations and taking disciplinary actions. It also provides assurances and guidelines on confidentiality of the reporting process and protection from reprisal to complainants.

A Management Committee as nominated by CEO and Managing Director is formed upon completion of the investigation and requiring action by the Committee. Decisions taken by the Management Committee and actions taken by the Company or exoneration cases are informed by the Head of Internal Audit to the Risk and Audit Committee on a quarterly basis. Actions taken by the Management Committee are implemented subject to applicable law(s).

AUDITORS STATUTORY AUDITORS

In view of the mandatory rotation of auditor requirement and to ensure smooth transition, it is proposed to appoint M/s Chaturvedi & Shah as Joint Statutory Auditors along with M/s Sharp & Tannan, the existing Statutory Auditors of the Company. Both the Auditors will be jointly and severally responsible during FY2017.

M/s Chaturvedi & Shah are proposed to be appointed for a period of 5 continuous years i.e. from the conclusion of 79th Annual General Meeting till the conclusion of 84th Annual General Meeting of the Company. M/s Sharp & Tannan and M/s Chaturvedi & Shah, have informed the Company vide letters both dated 24 May 2016 respectively that their appointment, if made, would be within the limits prescribed under Section 141 of the Companies Act, 2013. M/s Sharp & Tannan and M/s Chaturvedi & Shah, have confirmed that they have subjected themselves to the peer review process of the Institute of Chartered Accountants of India (ICAI) and hold valid certificates issued by the Peer Review Board of the ICAI. M/s Sharp & Tannan and M/s Chaturvedi & Shah, have also furnished a declaration confirming their independence as well as their arm''s length relationship with the Company and declared that they have not taken up any prohibited non-audit assignments for the Company.

COST AUDITOR

The Company had appointed M/s Ashwin Solanki & Associates, Cost Accountants, to audit the cost accounts related to the Company''s products for 2015– 2016. The cost audit reports were filed within the statutory deadline.

Upon recommendation of the Risk & Audit Committee, the Board had appointed M/s Ashwin Solanki & Associates as Cost Auditors, for the financial year 2016-2017. At the ensuing Annual General Meeting, their remuneration is proposed to be approved and ratified by the shareholders.

SECRETARIAL AUDITOR

The Company has appointed Dr K R Chandratre, Practising Company Secretary to undertake the Secretarial Audit of the Company. The Report of the Secretarial Audit for FY2016 is annexed herewith as Annexure 5 to this Report.

There are no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditor or the Secretarial Auditor in their reports and hence do not call for any further comments.

During the year under review, neither the Statutory Auditor nor the Secretarial Auditor had reported any matter under Section 143(12) of the Companies Act, 2013, therefore no details are required to be disclosed under Section 134(3)(d) of the Companies Act, 2013.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in Form MGT 9 is annexed herewith as Annexure 6.

ACKNOWLEDGEMENTS

The Directors wish to convey their gratitude and appreciation to all of the Company''s employees at all its locations worldwide for their tremendous efforts as well as their collective dedication and contribution to the Company''s performance.

The Directors would also like to thank the employee unions, shareholders, customers, dealers, suppliers, bankers, government and all other business associates for their continued support extended to the Company and the Management.

On behalf of the Board of Directors

G THAPAR

Chairman

DIN (00012289)

Mumbai, 27 May 2016


Mar 31, 2013

To The Members,

The Directors are pleased to present their seventy Sixth Annual Report on the business and operations of the Company and the accounts for the financial year ended 31 March 2013.

THE YEAR IN RETROSPECT

The consolidated net revenue of the Company during 2012-2013 grew by 7.5% at Rs. 12,094 crore, as compared with Rs.11,249 crore last year. The Company has achieved a stand-alone net turnover of Rs.7135 crore, during the year under review, as compared with Rs.6485 crore during the previous year, a rise of 10%.

Consolidated profit before tax (after exceptional item) decreased to Rs.64 crore, as compared with Rs.550 crore in the previous year, a decrease of 88.4% over last year. Stand-alone profit before tax decreased from Rs.677 crore to Rs.596 crore, a decrease of 11.9%.

Consolidated loss aftertax (after exceptional item) was Rs.36 crore as compared with consolidated profit after tax of Rs.374 crore in the previous year, a decrease of 109.7%. The Company recorded a stand-alone profit after tax of Rs.446 crore, a decrease of 11.7%.

The Sales and Profit Before Interest and Tax (PBIT) of the respective Business Groups, compared with last year is given in Table 1 A detailed review of the operations and performance of the Company and each '' Business Group as well as the Company''s International operations is contained in the Management Discussion and Analysis Report, which is given as a separate chapter in the Annual Report.

ACQUISITION

On 27 July 2012, the Company acquired ZIV Group based in Spain, engaged in the design, engineering, manufacturing and support of Intelligent Electrical Devices (lEDs) and power automation systems for Utilities and Industries, for an Enterprise Value of €147 million.

ZIV’s offerings span from Substation and Distribution Automation, to Advanced Metering Infrastructure (AMI). ZIV has installed more than 1.4 million lEDs for Utilities and Industries across the world. This acquisition expands the CG portfolio for power system automation and protection and creates a strong platform for CG in the smart grid arena.

On 11 January 2013, the Company acquired the Compact Fluorescent Lamps (CFL) business of Karma Industries at Baddi, Himachal Pradesh, for an approximate value of Rs. 145 million. The acquisition will double the Company’s capacity in the fast-growing CFL lighting segment and reinforce its presence in the rapidly growing Indian consumer market.

AMALGAMATION

CG-ZIV Power Automation Solutions Ltd (CG-ZIV) is a Joint Venture Company between the Company and ZIV Spain. Post acquisition of ZIV Group, for simplification of the shareholding structure and operational synergies, the Board of Directors at their Meeting held on 13 April 2013, approved the amalgamation of CG-ZIV with the Company, A Scheme of Amalgamation will shortly be filed with the High Court of Judicature at Bombay.

JOINT VENTURE

On 2 May 2013, the Company entered into a Joint Venture Agreement with PT Prima Layanan Nasional Enjinring (PLNE) of Indonesia, for the manufacture of high voltage (HV) and extra high voltage (EHV) switchgear ranging from 70kV to 500kV in Indonesia. The Joint Venture will be owned 51 % by CG and 49% by PLNE.

RATIONALIZATION

The Company has been progressively evaluating opportunities for improving operational viability of the various businesses of CG. The transformer market in Western Europe is facing both over capacity and price pressure. Therefore, in order to have globally competitive and sustainable business operations in Europe, it was decided that CG''s Belgium operations be optimised for cost advantages, through administrative cost reduction measures and a right-sizing of its workforce at its Mechelen, Belgium site.

This rationalisation program was concluded on 14 December 2012 with the separation of approximately 200 employees. Job Search and other employee help programs were implemented to assist separated employees to find new jobs. Post the project, a "Fresh Start" program comprising communication and engagement initiatives was launched to reinforce Company''s strategy, vision and expectations, monthly updates on the business situation and weekly department meetings. Senior Management is actively involved through a Fresh Start Steering Committee which oversees the overall communication and employee involvement processes to sustain employee productivity commitment and morale after the rationalization.

DIVIDEND

The Company declared two interim dividends during the year:

- Rs.0.40 per equity share (20%) aggregating to a total dividend payout of Fis.30 crore (including dividend tax) declared on 20 July 2012; the Book Closure for this purpose was 28 July 2012 to 3 August 2012 and the Interim Dividend was paid on 8 August 2012.

- Rs.0.40 per equity share (20%) aggregating to a total dividend payout of Rs.30 crore (including dividend tax) declared on 2 November 2012; the Record Date for this purpose was 8 November 2012 and the Interim Dividend was paid on 20 November 2012.

The above mentioned dividend payout as a percentage of the share capital works out to 40%.

The Board of Directors have recommended a Final Dividend of 20%, declared on 24 May 2013; the Book Closure for this purpose is Monday, 29 July 2013 to Tuesday, 6 August 2013, both days inclusive.

RESERVES

The Reserves, on stand-alone basis, at the beginning of the year were Rs.2,573 crore. The Reserves at the end of the year are Rs.2,929 crore.

DIRECTORATE

Mr B Hariharan was appointed as an Additional Director on the Company''s Board of Directors with effect from 1 November

2012. Dr (Mrs) C Lewiner was appointed as an Additional Director on the Company''s Board of Directors with effect from 28 January 2013. Mr S Apte was appointed as an Additional Director on the Company''s Board of Directors with effect from 18 April 2013. Mr Hariharan, Dr Lewiner and Mr Apte hold office upto the date of the forthcoming annual general meeting, and considering that the Company will benefit from their continuance as a Director, their appointments are being recommended.

MrS Bayman, Independent Director stepped down from his directorship of the Company, with effect from 1 April 2013. The 3oard places on record its gratitude and appreciation for Mr Bayman''s guidance to the Company during his tenure as Director.

CG Non-India

CG Stand-aione Consolidated *@ : CG Consolidated"

Particulars 2013 2012 2013 2012 2013 2012

A Gross Sales 7,571 6,850 5,097 4,794 12,533 11,615

B Less: Excise Duty 43(3 365 439 366

C Net Sales 7,135 6,485 5,097 4,794 12,094 11,249

0 Less: Operating Expenses 6,540 5,764 5,324 4,726 11,711 10,445

E Operating Profit 595 721 (227) 68 383 804

F Add: Dividend and Other Income 53 50 39 16 76 52

G Profit before Interest, Depreciation, Amortisation and Taxes 648 771 (188) 84 459 856

H Less: Finance costs (20) 3 90 42 71 46

1 Profit before Depreciation, Amortisation and Taxes 668 768 (278) 42 388 810

J Less: Depreciation, Amortisation 72 91 125 169 203 260

K Profit before exceptional items and taxes 596 677 (403) (127) 185 550

L Less: Exceptional Items 121 121

M Profit Before Tax 596 677 (524) (127) 64 550

SI Less: Provision for Current Year Tax 143 193 40 23 185 217

0 Less: Provision for Deferred Tax 7 (21) (90) (14) (84) (35)

P Profit After Tax ,, 446 505 (474) (136) (37) 368

Q Minority Interest 1 0 1 1

A Share of Profit of Associate Companies (net) (2) 0 0 5

S Profit available for distribution 446 505 (475) (136) (36) 374

* Consolidated Accounts of CG International BV (CGIBV), the holding company for CG''s international operations. " Includes results of CG Stand-alone and Indian subsidiaries, Crompton Greaves Holdings Mauritius Limited, CG International Holdings Singapore PTE Ltd and CGIBV consolidated @ Figures have been regrouped for the purposes of consolidation.

CG Non-India

CG Stand-alone Consolidated *@ j CG Consolidated"

Particulars 2013 2012 2013 2012 2013 2012

A Gross Sales 1,080 1,035 727 724 1,788 1,755

B Less: Excise Duty 62 55 63 55

C Net Sales 1,018 980 727 724 1,725 1,700

D Less: Operating Expenses 933 871 759 714 1,670 1,578

E Operating Profit 85 109 (32) 10 55 122

F Add: Dividend and Other Income 7 8 6 2 10 8

G Profit before Interest, Depreciation, Amortisation and Taxes 92 117 (26) 12 65 130

H Less: Finance costs (3) 1 13 6 10 7

j Profit before Depreciation, Amortisation and Taxes 95 116 (39) 6 5 5 123

J Less: Depreciation, Amortisation 10 14 18 26 ,29 39

K Profit before exceptional items and taxes 85 102 (57) (20) 26 84

L Less: Exceptional Items 17 17

M Profit Before Tax 85 102 (74) (20) 9 84

J Less: Provision for Current Year Tax 20 29 6 3 26 33

0 Less: Provision for Deferred Tax 1 (3) (13) (2) (12) (5)

P Profit After Tax 64 76) (67) (21) (5) 56

Q Minority Interest 0 0 0 0

B Share of Profit of Associate Companies (net) 0 0 0 1

S Profit available for distribution 64 76 (67) (21) (5) 57

* Consolidated Accounts of CG International BV (CGIBV), the holding company for CG''s international operations. ** Includes results of CG Stand-alone and Indian Subsidiaries, Crompton Greaves Holdings Mauritius Limited, CG International Holdings Singapore PTE Ltd and CGIBV consolidated @ Figures have been regrouped for the purposes of consolidation. Note: Average exchange rate considered for 1 EURO in 2012-13 is Rs.70.1028 and in 2011-12 is Rs.66.1764

Mr SP Talwar, Independent Director stepped down from his directorship of the Company, with effect from 24 May 2013. The Board places on record its gratitude and appreciation for Mr SP Talwar''s guidance to the Company during his tenure as Director.

DrOGoswami, MsM Pudumjeeand MrS Prabhu are the Directors who retire by rotation at the forthcoming Annual General Meeting; and being eligible, offer themselves for re- appointment to the Board.

The details of the Directors being recommended for appointment and re-appointment are contained in the accompanying Notice of the forthcoming Annual General Meeting.

PROMOTER GROUP

The Company is a part of the USD 4 Billion Avantha Group, one of India''s leading business conglomerates, led by Chairman Mr Gautam Thapar. With a global footprint, the Avantha Group operates in 90 countries with more than 25,000 employees worldwide.

As required by the Listing Agreement with Stock Exchanges, CG periodically discloses its promoter group and persons acting in concert in the shareholding pattern and other filings with the Stock Exchanges.

RESEARCH AND DEVELOPMENT

CG''s continues its commitment and increased focus on R&D, since these efforts are important drivers for global competitiveness and growth.

Our business units were consolidated globally to reflect "One CG", and the offerings of CG have been re-aligned along "Global Product Lines". This has necessitated realignment of R&D initiatives globally. SBU R&D units and the Global R&D Centre have been suitably integrated to create internal and external synergies and extract better value from the new model for R&D.

Energy efficiencies and cost reduction were the main triggers for product innovation during the year. Extended range of IE3 motors, motors with regenerative drives, low loss, low noise transformers, extended range of LED based light sources, low energy consuming fans & appliances, lighting management systems for small buildings are salient examples in our drive to reach out to the market.

Some of these new products have been highlighted in the Annexure to the Report.

CG has been consistently leading technological innovations, fulfilling the evergrowing requirements of its customers in India and worldwide. CG continues to have a strong presence and has commercialized production of its 1200 kV offerings in India - Capacitive Voltage Transformer, Surge Arrester and Power Transformer. R&D continues to facilitate the indigenous design, development and manufacturing of 800 kV Power transformers, gas circuit breakers, instrument transformers and surge arresters.

CG''s R&D efforts have resulted in 15 R&D units which have received recognition from the Department of Scientific & Industrial Research, Ministry of Science &Technology, India. These recognitions further support CG in its quest for building a stronger foundation for innovativeness in development of technology as an important driver towards a stronger global presence, in future.

T Consolidated Accounts of CG International BV (CGIBV), the holding company for CG''s international operations. "Includes results of CG Stand-alone and Indian Subsidiaries, Crompton Greaves Holdings Mauritius

Limited, CG International Holdings Singapore PTE Ltd and CGIBV consolidated @ Figures have been regrouped for the purposes of consolidation. Note: Average exchange rate considered for 1 USD in 2012-13 is Rs.54.4316andin2011-12isRs.48.1233

Limited (CGPS).

In addition to the above, the Company has

41 foreign subsidiaries as under:

- Crompton Greaves Holdings Mauritius Ltd

- CG International Holdings Singapore PTE Ltd

- CG International B.V.

- PT. CG Power Systems Indonesia

- CG Holdings Belgium N.V.

- CG Power Holdings Ireland Ltd

- CG Power Systems Belgium N.V.

- CG Automation Systems UK Ltd

- CG Power Systems USA Inc

- CG Automation Solutions USA Inc

- CG Power Systems Ireland Ltd

- Viserge Ltd

- CG Sales Networks France SA

- Microsol Ltd

- CG Service Systems Curacao NV

- CG Service Systems France SAS

- CG Holdings Hungary Kft

- CG Holdings Germany GmbH

- CG Electric Systems Hungary Zrt » CG Sales Networks Americas Inc

- CG Power Solutions USA Inc

- CG Power Systems Canada Inc

- CG Power Solutions UK Ltd

- CG Power Solutions Saudi Arabia Ltd

- CG Sales Networks Singapore PTE Ltd

- CG Holdings USA Inc

- CG Power Systems Brazil Ltda

- CG Power County LLC

- CG Drives & Automation Germany GmbH

- Emotron Latin America Inc

- CG Industrial Holdings Sweden AB

- Crompton Greaves Holdings Sweden AB

- CG Drives & Automation Sweden AB

- CG Drives & Automation Netherlands BV

- ZIVI D Smart Energy Networks

- ZIVAplicacionesyTecnologiaSL

- ZIV Communications SA

- ZIV Metering Solutions SL

- ZIV USA Inc

- ZIV Grid Automation SL

- ZIVdoBrasilLtda

Pursuant to a general exemption granted by the Ministry of Corporate Affairs under Section 212 of the Companies Act, 1956, the Company is not required to annex to this Report, the Annual Reports of the abovementioned 4 Indian subsidiaries and 41 foreign subsidiaries, for the year ended 31 March 2013. However, if any Member of the Company or the respective

subsidiaries so desires, the Company will be happy to make available the Annual Accounts of the subsidiaries to them, on request. These will also be available for inspection at the Registered Office of the Company and of its subsidiaries, during working hours up to the date of the Annual General Meeting.

The details of each subsidiary with respect to capital, reserves, total assets, total liabilities, details of investment (except in case of investment in subsidiaries), turnover, profit before taxation, provision for taxation, profit after taxation and proposed dividend as prescribed by the Ministry of Corporate Affairs, are detailed in Information in respect of subsidary companies in the accounts section of this Report.

BRANCH OFFICE

The Company has established a branch office at Poland. The stand-alone financial statements of the Company includes the financial statements of its Poland branch i.e. Crompton Greaves Ltd SA.

CONSOLIDATION OF ACCOUNTS

As required by Accounting Standards AS- 21 and AS-23 of the Institute of Chartered

Accountants of India, the financial statements of the Company reflect the consolidation of the Accounts of the Company, its 45 subsidiaries mentioned above, and five Associate Companies. The Associate Companies are Avantha Power & Infrastructure Limited, CG Lucy Switchgear Limited, Pauwels Middle East Trading & Contracting Pvt Co. LLC, K.K. El Fi Japan and Saudi Power Transformers Company Ltd.

CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the relevant data pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo are given in the prescribed format as Annexure to this Report.

PARTICULARS OF EMPLOYEES

The statement of particulars required pursuant to Section 217(2A) of the Companies Act,

1956 read with the Companies (Particulars of Employees) (Amendment) Rules, 2011, forms a part of this Report. However, as permitted by the Companies Act, 1956, the Report and Accounts are being sent to all Members and other entitled persons excluding the above statement. Those interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office and the same will be sent by post. The statement is also available for inspection at the Registered Office, during working hours up to the date of the Annual General Meeting,

DIRECTORS'' RESPONSIBILITY STATEMENT

The Directors would like to assure the Members that the financial statements for the year under review conform in their entirety to the requirements of the Companies Act, 1956. The Directors confirm that:

- the Annual Accounts have been prepared in conformity with the applicable Accounting Standards;

- the Accounting Policies selected and applied on a consistent basis, give a true and fair view of the affairs of the Company and of the profit for the financial year;

- sufficient care has been taken that adequate accounting records have been maintained for safeguarding the assets of the Company; and for prevention and detection of fraud and other irregularities;

- the Annual Accounts have been prepared on a going concern basis.

AUDITORS

The Company''s Statutory Auditors, Sharp &Tannan, hold office up to the conclusion of the forthcoming Annual General Meeting; and, being eligible, are recommended for re-appointment on terms to be negotiated by the Audit Committee of the Board of Directors. They have furnished the requisite certificate to the effect that their re-appointment, if effected, will be in accordance with Section 224(1 B) of the Companies Act, 1956.

The Company had appointed Ashwin Solanki & Associates, Cost Accountants, to audit the cost accounts related to the Company''s products for 2011 -2012. The due date for filing the above cost audit reports was 28 February 2013; the actual date of filing was 27 December 2012. The Company has re-appointed Ashwin Solanki & Associates as Cost Auditors, for the financial year 2012-2013.

FIXED DEPOSITS

The Company has discontinued acceptance of fresh deposits and also renewal of existing deposits. One person has not claimed repayment of his matured deposit amounting to Rs. 10,000 as at 31 March 2013. At the date of this Report, an amount of Rs.4,27,000 has been claimed and repaid, or transferred to the Investor Education Protection Fund, on completion of seven years.

Link Intime India Pvt. Ltd (formerly Intime Spectrum Registry Limited) continues to be the Company''s Registrars for all matters related to the Company''s Fixed Deposit Scheme. The contact details of Link Intime India Pvt. Ltd are mentioned in the Report on Corporate Governance.

SHARE REGISTRARS TRANSFER AGENT

The Company''s Registrar & Transfer Agents for shares is Datamatics Financial Services Ltd (DFSL). DFSL is a SEBI-registered Registrar & Transfer Agent. The contact details of DFSL are mentioned in the Report on Corporate Governance.

Investors are requested to address their queries, if any to DFSL; however, in case of difficulties, as always, they are welcome to contact the Company''s Investor Services Department, the contact particulars of which are contained in the Report on Corporate Governance.

ENVIRONMENT. HEALTH 8 SAFETY

CG''s global initiative to review and monitor the energy, paper & water consumption as well as health & safety parameters at its various divisions/entities in India and abroad through an Environment, Health & Safety (EHS) scorecard is progressing well. Targets assigned to each division/entity to reduce the resource consumption for next year is regularly monitored through an EHS scorecard and reviewed at monthly business review meetings. The improved awareness for EHS and also the Key Performance Indicators identified by each division/entity for improvements has helped CG to reduce the number of accidents significantly. Water consumption has reduced by 15% and paper consumption has reduced by 17%.

To strengthen this initiative further, a new Key Performance Indicator of material waste reduction has been added for 2013-2014. All units have budgeted targets for reduction in material waste. This initiative of optimum utilization of materials will be an important contribution from CG, for environment protection activities.

During the year, CG has formed a core group for exchange of knowledge and to standardize the systems and procedures across all CG locations worldwide. This core group also assesses the various Units on safety and environment protection improvement activities. Audits were conducted by this core group twice during the year.

CG has implemented several company-wide processes at its Units, including improved awareness and communication programmes, safety audits, periodic health check-ups for its employees as well as accident prevention and investigation programs, to further improve its EHS track record. Safety Week was observed across all Units from 4 March 2013 to 10 March 2013 to create continuing awareness on safety.

28 manufacturing plants of CG worldwide have achieved certifications for ISO 140Q-1 - Environmental Management Systems and OHSAS 18001 - Occupational Health & Safety Assessment series. CG is pursuing similar Certification for its other remaining locations. Certifying authorities periodically conducts surveillance audits of both ISO 14001 and OHSAS 18001, to ensure continued conformity with these Standards.

ACKNOWLEDGEMENTS

The Directors wish to convey their gratitude and appreciation to all of the Company''s employees at all its locations worldwide for their tremendous personal efforts as well as their collective dedication and contribution to the Company''s performance.

The Directors would also like to thank the employee unions, shareholders, customers, dealers, suppliers, bankers, government and all other business associates for their continued support extended to the Company and the Management.

On behalf of the Board of Directors

G Thapar

Chairman

Mumbai, 24 May 2013


Mar 31, 2010

The Directors are pleased to present their Seventy Third Annual Report on the business and operations of the Company and the accounts for the financial year ended or iVlarcn zuiu,

OPERATIONS

After the world-wide economic and financial turmoil of 2008, the global economic outlook has improved with a positive growth of above 3% predicted for 2010 after a decline of 1.1% in 2009. Global trade showed signs of bouncing back in the second half of 2009. However, the sustainability of credit revival after the withdrawal of stimulus packages across the world is still to be tested.

Regarding the transmission and distribution (T&D) segment - to which your Company pre-dominantly belongs - the story is somewhat mixed. There are two clear positives. First, the power transformer business is seeing significant growth in India, China, South-East Asia and the Middle East. Second, there is a definite surge in demand for renewables, especially wind. This is true everywhere, but especially so in Europe, the USA and Canada. Equally, there is a negative factor. The housing sector in Europe and the

USA remains in doldrums. Consequently, the distribution transformers segment continues to be badly affected.

Overall, however, demand is growing, with power transformers, wind and renewables, and the business of providing end-to-end solutions doing well, and counteracting the decline in sale of distribution transformers. An over- riding focus on public as well as private investment in transmission systems by many countries, and the drive for energy efficiency, have so far kept the T&D market reasonably buoyant - although not as it was in 2006-07 and 2007-08.

In response to market conditions, your Company has enhanced its competitive momentum by forcefully targeting the growth oriented utility power transformer segment to offset the slowdown in industry demand for distribution transformers and motors. The Companys order backlog of Rs 6,370 crore is marginally lower than the position a year ago. However, a healthy order intake growth of 21 % in the last quarter suggests that the momentum is accelerating.

Your Company is also building competencies and pursuing new attractive segments such as renewable energy, ultra high voltage and energy automation. Its SLIM® transformers remain a market leader in wind farm installations. The Company secured major long term agreements from Siemens Wind Power, Enercon, Multibrid and other players in this market. Besides its product strengths, the Company made a successful foray into turnkey solutions for the renewable segment. Its maiden project of designing and building the transmission grid connection for a 165 MW offshore windpark Belwind, located 50 kilometers into the coastal waters of Belgium, in consortium with other reputed players is making good progress and will be commissioned in September 2010.

Emerging market economies including India have led the global recovery, driven by domestic demand and recovering exports. The reforms announced by the United Progressive Alliance Government in 2009-10 have set the agenda for Indias growth. Pushed to a low growth level of 6.7% in 2008-09 by the consequences of the worldwide slowdown, after averaging over 9% in the preceding three years, the Indian economy has grown more than 7% in 2009-10. During April-January 2009-10, Index of Industrial Production (IIP) growth was 9.6% compared to 3.3% during April- January 2008-09.

In the Eleventh Five Year Plan, the Government of India has fixed an ambitious target of 78,700 MW of power capacity addition. It is pursuing, through the Central Transmission Utility of India, the 765kV Ultra High Voltage (UHV) upgrading of the current infrastructure. For a couple of years now, your Company has been harnessing its technological competence in the UHV segment. In partnership with its Hungarian subsidiary and ZTR Ukraine, it has secured major orders from the Power Grid Corporation of India Limited (PGCIL) in this area. These projects - won against stiff global competition from Indian and multinational companies - denote a strategic entry of the Company in the UHV market. With the PGCIL orders, your

Company has become the first Indian corporation to firmly establish itself as a major and reliable player in the UHV segment.

For the Indian business, the most encouraging event was the recovery of capital goods industry with 11.1% growth and resurgence of the consumer durables industry with 12.5% growth - which resulted in growth for the Companys Industrial Systems and Consumer Products businesses. The Companys Industrial Systems SBU grew by 11.3% over previous year through introduction of new products for different markets, such as small motors for agro applications and extension of range up to 5 MW of large rotating machines for several industrial applications. Capacity expansion for several models of traction machines were undertaken during the year. Your Company became the largest supplier of alternators in the

To enhance its solutions capabilities, the CG Group acquired one more company towards the end of the year. On 29 March 2010, the Company acquired Power Technology Solutions Limited (PTS), located in the United Kingdom. domestic market for the smaller range. Specially designed Slip Ring alternators were introduced in the rural market, amidst stiff operating conditions.

The Companys Consumer Products SBU grew by 22%, growing 1.5 times the market. The business has made an entry into Integrated Security and Home Automation, Light Emitting Diode (LED) lighting systems, industrial fans and industrial pumps during the year. A focus area for the Consumer Products business is tapping the vast potential of the Indian rural markets, estimated at Rs.65,000 crore for FMCG products and Rs.5,000 crore for consumer durables. To implement this, changes have been made in the SBUs organisation structure, with a dedicated Head of Rural Marketing and his team of managers.

Margin expansion continued to be a thrust area. This has been driven by several factors: various value engineering initiatives, better product designs, higher efficiencies in supply chain management and cycle time reduction undertaken by the businesses during the year. The Company-wide global sourcing initiative for critical components, including renegotiation of prices with suppliers and approving new supply sources, resulted in substantial reduction in operations costs - thus ensuring the sustainability of the Companys margin expansion.

Through all these expansion activities, the Company retained its focus on quality. It implemented the One World Quality, Manufacturing Excellence and Project Unipower initiatives, with rigour. The Companys Consumer business renewed its thrust on enhanced after-sales service by commissioning its Customer Call Centre and a network of franchisee-based Authorised Service Centres in metro locations. It also formalised its service promise of "Respond in 6 hours and Resolve in 72 hours".

On 15 October 2009, the Company unveiled its new Brand Identity, CG. Today, CG is the common brand expression across all the Companys subsidiaries, operating in various businesses, in diverse geographies across the world. The new brand reflects the ability of the Company to provide "Smart solutions" and the value that is placed on "Strong relationships" across all its businesses, geographies and customers. The new brand identity is an important step in the integration of newly acquired companies, reflecting the effective transition of the Company from an India- based electrical equipment manufacturer to a global solutions organisation.

To enhance its solutions capabilities, the CG Group acquired one more company towards the end of the year. On 29 March 2010, the Company acquired Power Technology Solutions Limited (PTS), located in the United Kingdom. PTS is a high voltage electrical engineering company which provides consultancy, technical and engineering support to Regional Electricity Companies (RECs) including, but not limited to conceptual engineering/ system studies and also complete EPC detailed engineering, spanning electrical (relay/control, SCADA and sub-station automation) and civil/structural (site foundation, development and structural design).

The above initiatives have enabled the Company to achieve a stand-alone net turnover of Rs.5,284 crore, during the year under review, as compared with Rs.4,611 crore during the previous year 2008-09, a rise of 15%.

The consolidated net turnover of the Company increased from Rs.8,737 crore to Rs.9,141 crore, an increase of 5%.

The Company has recorded a noteworthy stand-alone Profit Before Tax (before extraordinary item) of Rs.870 crore, an increase of 42% as compared with last year. The consolidated Profit Before Tax (before extraordinary item) increased from Rs.867 crore to Rs.1,189 crore. The Company has also recorded a significant stand-alone Profit After Tax (before extraordinary item) of Rs.577 crore, an increase of 45% as compared with last year, and Profit After Tax (including an extraordinary item) of Rs.617 crore, an increase of 55% as compared with last year. The consolidated Profit After Tax (before extraordinary item) increased from Rs.563 crore to Rs.824 crore and Profit After Tax, minority interest, share of profit / loss in associate companies (including an extraordinary item) increased from Rs.560 crore to Rs.860 crore.

FINANCIAL HIGHLIGHTS

CG STAND-ALONE CGIBV CONSOLIDATED*@ CG-CONSOLIDATED**

PARTICULARS IN 31.3.2010 31.3. 2009 31.3. 31.3. 31.3 31.3 2010 2009 2010 2009 RS. CRORE

(a> Gross Sales 5516 4904 3824 4128 9375 9031

(b) Less: Excise Duty 232 293 0 0 234 294

(c) Net Sales 5284 4611 3824 4128 9141 8737

(d) Less: Operating Expenses 4427 3973 3442 3794 7864 7742

(e) Operating Profit 857 638 382 334 1277 995

(f) Add: Dividend and Other Income 69 36 32 22 94 59

(g) Profit before Interest, Depreciation, Amortisation and Taxes 926 674 414 356 1371 1054

(h)Less: Interest (net) 4 15 17 43 27 65

(i) Profit before Depreciation, Amorti sation and Taxes 922 659 397 313 1344 989

(j) Less: Depreciation, Amortisation and Impairment 52 45 97 71 155 122

(k) Profit Before Tax 870 614 300 242 1189 867

(1) Less: Provision for Current Year Tax 274 200 37 59 314 261

(m) Less: Provision for Deferred Tax 19 12 30 24 51 38

(n) Less: Provision for Fringe Benefit Tax 0 5 0 0 0 5

(o) Profit After Tax 577 397 233 159 824 563

(p) Minority Interest 0 0 0 1 (2) (2)

(g) Share of Profit/ (Loss) of Associate Companies 0 0 0 0 3 (1)

(r) Profit after tax, minority interest and share of profit/ (loss) of Associate Companies 577 397 233 160 825 560

(s) Extraordinary Item 40 0 0 0 35 0

(t) Profit available for distribution 617 397 233 160 860 560

(u) Balance brought forward from previous years 811 540 0 0 0 0

Appropriation/Distribution

(v) Transfer to General Reserve (62) (40) 0 0 0 0

(w) Interim Dividend (81) (73) 0 0 (81) (73)

(x) Corporate Tax on Dividend (13) (13) 0 0 (14) (13)

BALANCE CARRIED TO BALANCE SHEET 1272 811 233 160 765 474

Consolidated Accounts of CG International BV, the holding company for CGs international operations. ** Includes results of CG Stand-alone and CGIBV Consolidated. @ Figures have been regrouped for the purposes of consolidation.

The Profit Before Interest and Tax of the respective Business Groups, compared with last year is given below:

SBU IN R, CRORE 2009-2010 2008-2009

Power Systems (CG stand-alone) 462 349

Industrial Systems (CG stand-alone) 260 204

Consumer Products 230 146

Power Systems (including International operations) 769 625

Industrial Svstems (including International operations) 276 213

A detailed review of the operations and performance of each Business Group as well as the Companys International operations is contained in the Management Discussion and Analysis Report, which is given as a separate chapter in the Annual Report.

DIVESTMENT OF MALANPUR CAPTIVE POWER LIMITED

In the year 2006, to gain experience in the power generation and distribution business, the Company had acquired a 59% shareholding in Malanpur Captive Power Limited (MCPL), which was developing a 26.19 MW gas based captive power plant at Malanpur, Madhya Pradesh. This

CG STAND-ALONE CGIBV CONSOLIDATED*@ CG-CONSOLIDATED**

PARTICULARS IN 31.3.2010 31.3. 2009 31.3. 31.3. 31.3 31.3 2010 2009 2010 2009 EURO MILLION

(a) Gross Sales 817 748 567 630 1390 1378

(b) Less: Excise Duty 34 45 0 0 35 45

(c) Net Sales 783 703 567 630 1355 1333

(d) Less: Operating Expenses 656 606 510 579 1166 1181

(e) Operating Profit127 97 57 51 189 152

(f) Add: Dividend and Other Income 10 6 5 3 14 9

(g) Profit before Interest, Depreciation, Amortisation and Taxes 137 103 62 54 203 161

(h) Less: Interest (net) 0 2 3 6 4 10

(i) Profit before Depreciation, Amorti sation and Taxes 137 101 59 48 199 151

(j) Less: Depreciation, Amortisation and Impairment 8 7 14 11 23 19

(k) Profit Before Tax 129 94 45 37 176 132

(1) Less: Provision for Current Year Tax 40 31 6 9 46 40

(m) Less: Provision for Deferred Tax 3 2 4 4 8 6

(n) Less: Provision for Fringe Benefit Tax 0 1 0 0 0 1

(o) Profit After Tax 86 60 35 24 122 85

(p) Minority Interest 0 0 0 0 0 0

(q) Share of Profit/ (Loss) of Associate Companies 0 0 0 0 0 0

(r) Profit after tax, minority interest and share of profit/(loss) of Associate Companies 86 60 35 24 122 85

(s) Extraordinary Item 6 0 0 0 5 0

(t) Profit available for distribution 92 60 35 24 127 85

(u) Balance brought forward from previous years 135 94 0 0 0 0

Appropriation/ Distribution

(v) Transfer to General Reserve (9) (6) 0 0 0 0

(w) Interim Dividend (12) (11) 0 0 (12) (11)

(x) Corporate Tax on Dividend (2) (2) 0 0 (2) (2)

BALANCE CARRIED TO BALANCE SHEET 204 135 35 24 113 72

Consolidated Accounts of CG International BV, the holding company for CGs international operations.

** Includes results of CG Stand-alone and CGIBV Consolidated.

@ Figures have been regrouped for the purposes of consolidation.

Note: Average exchange rate considered for 1 EURO in 2009-10 is Rs.67.4706 and in 2008-09 is Rs.65.5385.

Investment was made at the face value of Rs 10/- per share.

Pursuant to the Companys investment in Avantha Power & Infrastructure Ltd. (APIL) last year, engaged in the business of generation, transmission and distribution of electricity, it was felt that it would be better aligned, if, in future, the business of MCPL was managed by APIL. The divestment to APIL was completed in March 2010 at a price of Rs 51.4 crore, which worked out to Rs 46.63 per share.

MERGER OF BROOK CROMPTON GREAVES LIMITED

In August 2009, the Company, acquired 81,60,000 equity shares comprising 51 % share capital of Brook Crompton Greaves Limited (BCGL), a joint venture between the

Company and BTR (European Holding) BV. BCGL thus became a 100% subsidiary of the Company.

Since opportunities for synergy and operational efficiencies existed between BCGL and the Companys LT Motors division, the Company and BCGL have entered into a Scheme of Amalgamation, in which all the assets and liabilities of BCGL will be transferred to the Company. The entire share capital of BCGL will be cancelled and the authorised share capital of the Company will be enhanced to the extent of the authorised share capital of BCGL.

Pursuant to the Scheme of Amalgamation, filed by BCGL with the High Court of Judicature at Bombay, the regulatory procedures are in an advanced

CG STAND-ALONE CGIBV CONSOLIDATED*@ CG-CONSOLIDATED**

PARTICULARS IN 31.3.2010 31.3. 2009 31.3. 31.3. 31.3 31.3 2010 2009 2010 2009 USD MILLION



(a) Gross Sales 1155 1054 801 887 1964 1941

(b) Less: Excise Duty 48 63 0 0 49 63

(c) Net Sales 1107 991 801 887 1915 1878

(d) Less: Operating Expenses 927 854 721 815 1647 1664

(e) Operating Profit 180 137 80 72 268 214

(f) Add: Dividend and Other Income 14 8 7 4 20 12

Profit before Interest, Depreciation,

(g) Amortisation and Taxes 194 145 87 76 288 226

(h) Less: Interest (net) 1 3 4 9 6 14

(i) Profit before Depreciation, Amorti sation and Taxes 193 142 83 67 282 212

(j) Less: Depreciation, Amortisation and Impairment 11 10 20 15 32 26

(k) Profit Before Tax 182 132 63 52 250 186

(1) Less: Provision for Current Year Tax 57 43 8 13 66 56

(m) Less: Provision for Deferred Tax 4 3 6 5 11 8

(n) Less: Provision for Fringe Benefit Tax 0 1 0 0 0 1

(o) Profit After Tax 121 85 49 34 173 121

(p) Minority Interest 0 0 0 0 (1) 0

(q) Share of Profit/ (Loss) of Associate Companies 0 0 0 0 1 0

(r) Profit after tax, minority interest and share of profit/(loss) of Associate Companies 121 85 49 34 173 120

(s) Extraordinary Item 8 0 0 0 7 0

(t) Profit available for distribution 129 85 49 34 180 120

(u) Balance brought forward from previous years 193 135 0 0 0 0

Appropriation/Distribution

(v) Transfer to General Reserve (13) (9) 0 0 0 0

(w) Interim Dividend (17) (16) 0 0 (17) (16)

(x) Corporate Tax on Dividend (3) (2) 0 0 (3) (2)

BALANCE CARRIED TO BALANCE SHEET 290 193 49 34 160 102

Consolidated Accounts of CG International BV, the holding company for GGs international operations

** Includes results of CG Stand-alone and CGIBV Consolidated.

@ Figures have been regrouped for the purposes of consolidation.

Note: Average exchange rate considered for 1 USD in 2009-10 is Rs.47.7446 and in 2008-09 is Rs.46.5363.

stage progress, and are expected to be completed by June, 2010.

INVESTMENT IN AVANTHA POWER & INFRASTRUCTURE LIMITED

As mentioned in last years Annual Report, CG holds 32% in Avantha Power and Infrastructure Limited (APIL). This translates to 206.36 million equity shares of APIL at Rs. 11 per share - or an investment of Rs.227 crore. APIL, an Avantha Group company, is engaged in the generation, transmission and distribution of electricity.

APIL has filed a draft Red Herring Prospectus with the Securities and Exchange Board of India (SEBI) for a public issue in the near future. As a significant investor, CG is supporting this IPO.

BONUS SHARES

In terms of Members approval accorded at its Extra-Ordinary General Meeting held on 24 February 2010, the Company issued Bonus Shares in the proportion of 3 (three) new equity shares for every 4 (four) equity shares of Rs.2/- each. The Record Date for the issue of Bonus Shares was 9 March 2010.

DIVIDEND

The Company declared two interim dividends during the year: o Rs.0.80 per equity share (40%) aggregating to a total dividend payout of Rs.34 crore (including dividend tax) declared on 27 October 2009; the Record Date for this purpose was 3 November 2009 and the Interim Dividend was paid on 16 November 2009.

O Rs.1.40 per equity share (70%) aggregating to a total dividend payout of Rs.60 crore (including dividend tax) declared on 28 January 2010; the Record Date for this purpose was 5 February 2010 and the Interim Dividend was paid on 16 February 2010.

The abovementioned dividend payout as a percentage of the share capital works out to 110%.

RESERVES

The Reserves at the beginning of the year were Rs.1,169 crore. The Reserves at the end of the year are Rs.1,636 crore.

DIRECTORATE

Mr. S Prabhu was appointed as an Additional Director on the Companys Board of Directors with effect from 28 January 2010. He holds office upto the date of the forthcoming Annual General Meeting, and considering that the Company will benefit from his continuance as a Director, his appointment is being recommended.

Dr. O Goswami and Ms. M Pudumjee are the Directors who retire by rotation at the forthcoming Annual General Meeting, and being eligible, offer themselves for re- appointment to the Board. The details of the Directors being recommended for appointment and re-appointment are contained in the accompanying Notice of the forthcoming Annual General Meeting.

PROMOTER GROUP

The Avantha Group is the promoter of the Company. For the purposes of the SEBI (Substantial Acquisition of Shares And Takeovers) Regulations, 1997, the names of the Promoter entities and other entities comprising the Group as defined under the Monopolies and Restrictive Trade Practices Act, 1969, are detailed in Annexure 1 to this Report.

RESEARCH AND DEVELOPMENT

The Companys Technology Vision 2015 envisions a scenario in which 25% of the Companys revenues would be achieved through new products. There would be 5 Breakthrough Platform Technologies, reduction in Product Development Cycle time by 75% of the existing cycle time and annual filing of 1000 IPRs. This Vision envisages an enhanced role for the Global R&D Centre wherein the R&D budget would progressively grow to 4% of the total revenues.

The above initiatives have resulted in a greater focus on development of new products. During the year, 20% of the turnover generated in India was through products less than 5 years old. The Company had also rolled out approvals for 6 platform technologies which will be pursued in the near future.

New products and processes developed during the year are detailed in Annexure 2 to this Report.

The Company has also entered into an agreement with New York State, to establish a US R&D facility and take advantage of a New York State funded public/private partnership at the Albany Nanotech Facility. This facility is considered as one of the most advanced silicone wafer R&D and prototype manufacturing facilities in the world and one of the most advanced Nanopower facilities in the US. The Companys facility will be located at the Energy and Environmental Technology Applications Center (E2TAC) of the Nanotech Facility and will be focused on R&D activities in the fields of smart grid technologies and renewable energy applications. The R&D Centre will provide the Company a brand exposure and recognition in the USA. At E2TAC, the Company will work side by side with industry leaders in smart grid technologies, alongwith reputed industrial entities, electrical utilities and universities. The Company will enjoy shared access to state-of-the-art world-class equipment for nanotechnology, electronics and advanced materials as well as a large pool of highly skilled workforce.

R&D as a function is undergoing a process of global integration. It has undertaken several projects by synergizing multi-functional teams of executives drawn from various geographies in which the Company operates. Initiatives on analytics and electronics design were extended to the global level, towards better integration in this area.

SUBSIDIARY COMPANIES

The Company has four Indian subsidiaries viz CG Energy Management Limited (CEM), CG Capital & Investments Limited (CG Capital), CG-PPI Adhesive Products Limited (CG PPI) and Brook Crompton Greaves Limited (BCGL). CEM, CG Capital and BCGL are subsidiaries of the Company, and CG PPI, being a subsidiary of CG Capital, in terms of the provisions of the Companies Act, 1956, is also the Companys subsidiary.

To reflect the new Brand Identity of the Company, names of its international subsidiaries acquired over the years, through various acquisitions were changed and now the legal entity names start with CG, to identify with the CG parentage.

The Netherlands-based CG International B.V, a 100% subsidiary of the Company, is the ultimate mother holding company of the 20 downstream subsidiaries, as under:

O CG HOLDINGS BELGIUM N.V. (formerly known as Pauwels International N.V.)

O CG POWER SYSTEMS BELGIUM N.V. (formerly known as Pauwels Trafo Belgium N.V.)

O PAUWELS TRAFO GENT N.V.

O CG POWER SYSTEMS IRELAND LIMITED

(formerly known as Pauwels Trafo Ireland Ltd)

O CG SALES NETWORKS FRANCE S.A.

(formerly known as Pauwels France S.A.)

O CG SERVICE SYSTEMS CURACAO N.V. (formerly known as Pauwels Trafo Service

N.V.)

O CG HOLDINGS HUNGARY KFT (formerly

known as Crompton Greaves Hungary Kft)

O CG ELECTRIC SYSTEMS HUNGARY ZRT

(formerly known as Ganz Transelektro Villamossagi Zrt)

O CG POWER SYSTEMS CANADA INC

(formerly known as Pauwels Canada Inc) o cg power systems USA inc (formerly known as Pauwels Transformers Inc)

O PT CG POWER SYSTEMS INDONESIA (formerly known as PT Pauwels Trafo Asia) O CG POWER HOLDINGS IRELAND LIMITED

(formerly known as Microsol Holdings Ltd)

O CG AUTOMATION SYSTEMS UK LTD

(formerly known as Microsol UK Ltd)

O CG AUTOMATION SYSTEMS USA INC

(formerly known as Microsol Inc.)

O VISERGE LTD

O MICROSOL LTD

O CG SERVICE SYSTEMS FRANCE SAS

(formerly known as Societe Nouvelle de Maintenance Transformateurs)

O MSE POWER SYSTEMS INC

O CG HOLDINGS GERMANY GMBH (formerly

known as Crompton Greaves Germany GmbH)

O CG SALES NETWORKS AMERICAS INC

(formerly known as Pauwels Americas Inc.)

In totality, the Company has 25 subsidiaries, 4 Indian and 21 foreign.

The Company has obtained an exemption under Section 212 of the Companies Act, 1956, from annexing to this Report, the Annual Reports of the abovementioned 4 Indian subsidiaries and 21 foreign subsidiaries, for the year ended 31 March 2010. However, if any Member of the Company or its subsidiaries so desires, the Company will make available, the Annual Accounts of the subsidiaries to them, on request. The same will also be available for inspection at the Registered Office of the Company and of its subsidiaries, during working hours upto the date of the Annual General Meeting. The details of accounts of the subsidiaries are also available on the Companys website.

The details of each subsidiary with respect to capital, reserves, total assets, total liabilities, details of investment (except in case of investment in subsidiaries), turnover, profit before taxation, provision for taxation, profit after taxation and proposed dividend are detailed at Page 119 of the Annual Report.

CONSOLIDATION OF ACCOUNTS

As required by Accounting Standards AS-21 and AS-23 of the Institute of Chartered Accountants of India, the financial statements of the Company reflecting the consolidation of the Accounts of the Company, its 25 subsidiaries mentioned above, and 5 Associate Companies, are annexed to this Report. The Associate Companies are Avantha Power & Infrastructure Limited, CG Actaris Electricity Management Private Limited, CG Lucy Switchgear Limited, International Components India Limited and Pauwels Middle East Trading and Contracting Limited.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

As required by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the relevant data pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo are given in the prescribed format as Annexure 2 to this Report.

PARTICULARS OF EMPLOYEES

The statement of particulars required pursuant to Section 217(2A) of the Companies Act, 1956 read with the Companies (Particulars of Employees) (Amendment) Rules, 2002, forms a part of this Report. However, as permitted by the Companies Act, 1956, the Report and Accounts are being sent to all Members and other entitled persons excluding the above statement. Those interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office and the same will be sent by post. The statement is also available for inspection at the Registered Office, during working hours upto the date of the Annual General Meeting.

DIRECTORS RESPONSIBILITY STATEMENT

The Directors would like to assure the Members that the financial statements for the year under review conform in their entirety to the requirements of the Companies Act, 1956.

The Directors confirm that: o the Annual Accounts have been prepared in conformity with the applicable Accounting Standards. O the Accounting Policies selected and applied on a consistent basis, give a true and fair view of the affairs of the Company and of the profit for the financial year. O sufficient care has been taken that adequate accounting records have been maintained for safeguarding the assets of the Company; and for prevention and detection of fraud and other irregularities. O the Annual Accounts have been prepared on a going concern basis.

AUDITORS

The Companys Auditors, Sharp & Tannan, hold office upto the conclusion of the forthcoming Annual General Meeting and, being eligible, are recommended for re- appointment on terms to be negotiated by the Audit Committee of the Board of Directors. They have furnished the requisite certificate to the effect that their re-appointment, if effected, will be in accordance with Section 224(1 B) of the Companies Act, 1956.

FIXED DEPOSITS

Currently, the Company has discontinued acceptance of fresh deposits and also renewal of existing deposits. 93 persons have not claimed repayment of their matured deposits amounting to Rs. 12,34,000 as at 31 March 2010. At the date of this Report, an amount of Rs.41,000 has been claimed and repaid therefrom, or transferred to the Investor Education Protection Fund, on completion of seven years.

Link Intime India Pvt. Ltd (formerly Intime Spectrum Registry Limited) continues to be the Companys Registrars for all matters related to the Companys Fixed Deposit Scheme. The contact details of Link Intime India Pvt. Ltd are mentioned in the Report on Corporate Governance.

SHARE REGISTRAR & TRANSFER AGENT

The Companys Registrar & Transfer Agents for shares continues to be Datamatics Financial Services Ltd (DFSL). DFSL is a SEBI-registered Registrar & Transfer Agent. The contact details of DFSL are mentioned in the Report on Corporate Governance.

Investors are requested to address their queries, if any to DFSL; however, in case of difficulties, as always, they are welcome to contact the Companys Investor Services department, the contact particulars of which are contained in the Report on Corporate Governance.

ENVIRONMENT, HEALTH & SAFETY

The Company is committed to ensuring the health and safety of all its employees, contractors, visitors and other persons at the Companys workplace and protecting the environment.

The Company has Health and Safety Committees at all locations which regularly monitor the divisions compliance with the Companys Health & Safety policy. The Company trains and motivates its employees to understand health and safety responsibilities and to participate actively in its health and safety programmes.

The Company conducts regular health check-ups for its employees engaged in handling hazardous materials. It also arranges several seminars and training sessions on AIDS awareness, cardiac awareness and other fatal diseases. Safety audits are undertaken by independent assessors to assess the safety effectiveness at locations.

The Company has also initiated a Group Life Insurance Policy for its Executives, through which, the family of deceased Executives will receive a pre-determined amount, in case of the Executives unfortunate and untimely death during service, due to any cause.

All the manufacturing units of the Company have received ISO 14001 Environmental Standards and Management Certification and OHSAS 18001 Certification for Occupational Health & Safety Assessment Systems. The Company periodically conducts surveillance audits of both ISO 14001 and OHSAS 18001, to ensure continued conformity with these standards.

Increasing focus is being placed on innovative, energy efficient and green products. The Company actively solicits opportunities in the renewable energy segment, which includes supplying products suitable for usage in windmills and solar power projects.

Disposal of hazardous waste is undertaken in compliance with the environmental policies and regulations.

The Company has identified Environment Protection as an important agenda in its Corporate Social Responsibility arena, and has undertaken many initiatives in the area of tree plantation, rain water harvesting etc.

ACKNOWLEDGEMENTS

The Directors acknowledge and are grateful for the encouragement and co-operation extended by the financial institutions, banks, government authorities, customers, vendors and members during the year under review and look forward towards continued support from them.

The Directors also wish to convey their sincere appreciation to the Companys employees, at all levels, for their continued dedication, hard work and commitment which has been a significant enabler in achieving the Companys performance.

On behalf of the Board of Directors

G THAPAR

Chairman

Mumbai, 13 May 2010



 
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