Cummins India Ltd
Directors Reports
The Directors take pleasure in presenting the Sixty- second Annual Report together with
inter-alia its annexures and audited financial statements (including standalone &
consolidated along with respective Auditors Report thereon) for the year ended March 31,
2023. The consolidated performance of the Company and its subsidiaries has been referred
to wherever required.
1. FINANCIAL RESULTS:
On Standalone basis:-
During the Financial Year 2022-23, revenue from operations was Rs 7,744.43 Crores as
compared to Rs 6,140.40 Crores during the previous year (26% higher). Profit after tax
increased to Rs 1,129.82 Crores from Rs 886.65 Crores recorded for the previous year (27%
higher).
On Consolidated basis:-
During the Financial Year 2022-23, revenue from operations was Rs 7,772.09 Crores as
compared to Rs 6,170.92 Crores during the previous year (26% higher). Profit after tax
increased to Rs 1,228.15 Crores from Rs 933.74 Crores recorded for the previous year (32%
higher).
Financial Summary
|
Standalone |
Consolidated |
|
2022-23 |
2021-22 |
2022-23 |
2021-22 |
|
(Rs in Crores) |
(Rs in Crores) |
(Rs in Crores) |
(Rs in Crores) |
APPROPRIATION OF PROFIT: |
|
|
|
|
Profit before taxation |
1,492.07 |
1,159.45 |
1,591.29 |
1,206.98 |
Net Profit for the year after tax |
1,129.82 |
886.65 |
1,228.15 |
933.74 |
Dividend |
623.70 |
443.52 |
623.70 |
443.52 |
* Includes Exceptional Items amounting to f (14.30) Crores (FY 2021-22. Rs 132.36
Crores). Further details are mentioned in standalone financial statements note no. 47 and
48.
2. RESERVES:
The closing balance of reserves, including retained earnings, of the Company as at
March 31,2023 was Rs 5,312.54 Crores. During the Financial Year, there was no amount
proposed to be transferred to the Reserves.
3. BUSINESS UPDATE AND STATE OF COMPANY'S AFFAIRS:
The information on Company's affairs and related aspects is provided under Management
Discussion and Analysis Report, which has been prepared, inter-alia, in compliance with
Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
and forms part of the Annual Report.
4. DIVIDEND:
The Directors have recommended a final dividend of Rs 13 per equity share of Rs 2/-
each fully paid- up share in their meeting held on May 24, 2023, in addition to the
interim dividend of Rs 12/- per equity share of Rs 2/- each fully paid-up share declared
on February 08, 2023, aggregating to Rs 25/- (i.e. 1250%) per equity share of Rs 2/- each
fully paid-up share for the year ended March 31,2023 (previous year Rs 18.50/- per equity
share i.e. 925%). The final dividend is subject to approval of the Members at the ensuing
Annual General Meeting and shall be subject to deduction of income tax at source.
5. SHARE CAPITAL:
The paid-up share capital of the Company is Rs 554,400,000/- divided into 277,200,000
equity shares of Rs 2/- each as on March 31,2023. Your Company has not come out with any
issue (public, rights or preferential) during the year. There is no change in the share
capital during Financial Year 2022-23.
6. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES:
Your Board is pleased to provide details of the following subsidiary, joint ventures
and associates as on March 31, 2023 : -
a) Cummins Sales & Service Private Limited (CSSPL):
CSSPL, a wholly-owned subsidiary, of the Company focuses on sales of Cummins engines,
parts, accessories and providing service support to engines and generators in parts of
Northern India close to the National Capital Region (NCR). CSSPL generated a revenue of Rs
145.51 Crores from its operations for the year ended March 31,2023, as compared to Rs
101.59 Crore during the previous year (43% higher).
b) Cummins Research and Technology India Private Limited (CRTIPL):
CRTIPL is a 50:50 joint venture between Cummins Inc., USA and your Company, which was
formed in 2003 with an intent to provide Information Technology enabled Mechanical
Engineering development services primarily to Cummins Inc., USA, its subsidiaries and
joint ventures in all parts of the world. Since, April 01,2016, CRTIPL closed its
operations and your Board of Directors decided that the activity carried out by CRTIPL for
your Company, shall be undertaken in-house by absorbing the appropriate number of
employees from CRTIPL in your Company.
The Board of directors of Cummins Research and Technology India Private Limited at its
meeting held on March 21, 2016, had decided to cease operations of CRTIPL. Accordingly, it
ceased its operations from April 1, 2016. The shareholders of CRTIPL, in their
extra-ordinary general meeting held on April 1, 2022, passed a resolution to initiate
voluntary winding-up of CRTIPL under the Companies Act, 2013 and Insolvency and Bankruptcy
Code, 2016. The liquidator, appointed by the shareholders at the extra-ordinary general
meeting, completed all the procedures pertaining to the voluntary winding-up, and has
submitted the dissolution application with the Hon'ble National Company Law Tribunal,
Mumbai Bench (‘NCLT') on May 20, 2023.
c) Valvoline Cummins Private Limited (VCPL):
VCPL, a 50:50 joint venture between Valvoline International Inc., USA, a global leader
in lubricants and engine oils, and your Company, VCPL generated a revenue of Rs 2,150.25
Crores from its operations for the year ended March 31, 2023, as compared to Rs 1,694.88
Crores during the previous year (27% higher).
d) Cummins Generator Technologies India Private Limited (CGTIPL):
Your Company owns 48.54% shareholding in the Associate Company namely CGTIPL which is
in the business of design, manufacturing, marketing, sales and service of alternators and
related spare parts. CGTIPL generated revenue of Rs 1,803.26 Crores from its operations
for the year ended March 31, 2023, as compared to Rs 1,200.44 Crores during the previous
year (50% higher).
The Shareholders of CGTIPL at their Extra-ordinary General Meeting held on March 17,
2022, approved a scheme of reduction of the issued, subscribed and paid-up share capital
of the Company (the ‘Scheme') from Rs 16,070,010/- consisting of 1,607,001 equity
shares of Rs 10/- each to Rs 15,995,680/- consisting of 1,599,568 equity shares of Rs 10/-
each by paying off, cancelling and extinguishing, in aggregate, 7,433 equity shares of the
Company (‘Capital Reduction') as recommended by the Board of Directors in their
meeting held on February 11, 2022. The Company has filed a petition with Hon'ble National
Company Law Tribunal (‘NCLT'), Mumbai Bench, seeking approval for the said Scheme of
Capital Reduction on April 07, 2022. No effect of the scheme has been given in CGTIPL
financial statements as at and for the year ended March 31,2023, pending approval from
NCLT.
As required under the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, consolidated financial statements of the Company, its subsidiary, joint
ventures and associate companies, prepared in accordance with the applicable Indian
Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards)
Rules, 2015, as amended, form part of the Annual Report and are reflected in the
consolidated financial statements of the Company.
Further, a statement containing the salient features of the financial statement of
subsidiaries, associate companies and joint ventures in the prescribed Form AOC-1 is
appended as Annexure ‘1' which forms part of this Report.
The Company will make the said financial statements and related detailed information of
CSSPL available upon request by any Member of the Company. These financial statements will
also be kept open for inspection by any Member at the Registered Office of the Company and
of CSSPL. Pursuant to the provisions of Section 136 of the Companies Act, 2013, the
financial statements of the Company, consolidated financial statements along with relevant
documents and separate financial statements in respect of CSSPL, are available on the
website of the Company.
7. CHANGE IN THE NATURE OF THE BUSINESS:
During the year under review, there was no change in the nature of the business
pursuant to inter- alia Section 134 of the Companies Act, 2013 and Companies (Accounts)
Rules, 2014.
8. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:
No loan or guarantee was given, or investment was made by your Company during the
Financial Year 2022-23 pursuant to Section 186 of the Companies Act, 2013.
9. DEPOSITS:
Your Company has not accepted any Public Deposits under Chapter V of the Companies Act,
2013 read with the Companies (Acceptance of Deposits) Rules, 2014 during the Financial
Year 2022-23.
10. FUND RAISING BY ISSUANCE OF DEBT SECURITIES, IF ANY
Pursuance to SEBI Circular No. SEBI/HO/DDHS/CIR/P/2018/144 dated November 26, 2018, the
Directors confirm that the Company is not defined as a "Large Corporate" as per
the framework provided in the said Circular. Moreover, your Company has not raised any
fund by issuance of debt securities.
11. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:
During Financial Year 2022-23, no materially significant related party transactions
were entered into by the Company, that may have potential conflict with the interests of
Company, at large.
Particulars of contracts or arrangements with related parties referred to in Section
188(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 be
accessed on the Company's website at the link:
https://www.cummins.com/en/in/investors/india-corporate- governance .
As required under the SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, related party transactions have been disclosed under significant
accounting policies and notes forming part of the Financial Statements in accordance with
relevant accounting standards.
12. CONSERVATION OF ENERGY:
During the Financial Year 2022-23 your Company has strived to imbibe energy
conservation principles and initiatives across all its facilities.
Your Company at its Kothrud location (KEP) has installed Phase III 550 and Phase IV
1058 KWP grid connected PV Solar plant and this commissioning has led to increase in solar
energy utilization from 16% to 28% and the installation has resulted in generation of
40.18 lacs units of electricity and INR 427 lacs cost saving for energy. Pirangut Power
System Plant has generated 179475 kWh energy from solar. CPG SEZ plant has generated
533960 kWh electricity from their Solar Photovoltaic (PV) Plant in 2022-23.
Your Company has generated total 52.64 lacs units of electricity from onsite solar
installation.
The other initiatives taken by the Company for energy conservation are highlighted
below -
1. Compressed Air System: Installation of compressed air system for hot air exhaust
and IFC controller at one of the plant located at Phaltan which combinedly saved a total
15000 kWh of energy.
2. Lighting - This year also the Company has continued to take its initiatives for
replacement of fluorescent tube lights with LED lights.
3. Replacement of Non energy efficient fans and installation of sensors - Your
Company has installed occupancy sensors in washrooms and offices and 460 non-energy
efficient fans were replaced and both projects resulted into saving of 7.2 lacs units of
electricity.
4. Application of CCTV Camera for High Tension Installation 33 KVA for Daily Power
Consumption monitoring: Daily power consumption monitoring is required to be done by
the Company for calculation of power factor. To enhance the human safety in this process
at 33 KVA monitoring of daily power consumption is done through installed CCTV Camera at
one of the plant located at Phaltan.
5. Paint Booth Blower replaced with VFD Blower - Your Company has replaced Paint
Booth Blower with VFD Blower at one of the plants located at Phaltan which has resulted in
savings of Rs. 94,800/- per year and also saved total units of 6000 KWH.
13. RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION:
Your Company is committed to introducing new products and improving existing products
to have better performance levels, lower life cycle costs, excellent safety, recyclability
characteristics and meet stringent emission norms tailored for the specific needs of the
Indian industry.
Your Company continues this endeavour by developing the next generation of systems in
collaboration with the parent company - Cummins Inc., USA.
Improved technical productivity, through new methodologies and technologies, is being
continuously pursued to reduce the costs associated with new product development and
customer support. An example of this is the further enhanced use of analysis-led design
through computer models that help minimize hardware testing and therefore accelerate
product development cycle times with reduced product testing.
A. New Product Development: -
The following new Products were developed as part of the above initiatives during the
year: -
1. Rail engine product families to support the growing Rail Business;
2. Marine engine product families to support the increasing commercial Marine Business;
3. Further enhancements of non-diesel product development capability such as use of
alternative fuels are being explored in India;
4. Telematics and Analytics capabilities have been developed to improve uptime and fuel
efficiency performance of our products; and
5. To enhance the position of Cummins in the Low kVA segment, your Company has
introduced a 40 kVA genset with X2.7 litre engine.
Further, your Company continues to strengthen its channel presence through its GOEM
partners who have added 12 additional sales dealers across various geographies.
B. Benefits derived as a result of the above activities are:-
1. Enhanced product and service capabilities through use of electronic tools and
simulation software to deliver improved engine performance;
2. Enhanced capability to tailor engine designs to improve value proposition for
customers through delivering superior power output, fuel economy, transient response and
reduced emissions;
3. Enhanced product and service capabilities through use of electronic tools and
simulation software to control the engine performance and combustion process;
4. Enhanced capability to tailor engine designs to improve the value proposition for
customers through delivering superior power output, fuel economy, transient response and
reduced emissions;
5. Product and component availability to meet the new emission norms ahead of
implementation;
6. Safer, recyclable, reliable, durable and performance-efficient products and critical
components;
7. Component indigenization capability was improved through enhanced test capability,
rig test and flow bench development and availability; and
8. Significant enhancements in measurement capability were made to pursue business
opportunities in non-diesel applications to serve both the rural and international
communities.
C. Future plans include:-
1. Developing local ‘fit-for-market' solutions to meet upcoming emission
regulations and market needs on commercial off-highway and power generation segments;
2. Technological innovation to add value to products in the areas of alternate fuels,
fuel cells, power electronics, hybrid engines and recycle / re-use;
3. Continued expansion of the product range to serve the needs of both local and global
market;
4. Continued focus on indigenization and partnering with suppliers for waste
elimination initiatives; and
5. Focused engine development for the Power Generation segment for the upcoming
emissions norms.
D. Your Company continues to draw benefits from Cummins Inc.'s technology, advanced
engineering and research. With this support your Company is committed to develop advanced
fuel-efficient and emission-compliant products that use a variety of energy sources and
comply with future domestic emissions and carbon dioxide targets. These help to reduce
greenhouse gas emissions and improve air quality, whilst also enabling the products to
deliver superior performance, reliability, durability and recyclability.
E. Expenditure on Research & Development (R&D):-
The total expenditure on R & D was as follows:-
Particulars |
2022-23 |
2021-22 |
|
(Rs in Crores) |
(Rs in Crores) |
Capital |
7.42 |
20.93 |
Recurring |
19.05 |
44.51 |
Total |
26.47 |
65.44 |
Total R&D expenditure as a percentage of total sales turnover |
0.35% |
1.09% |
14. FOREIGN EXCHANGE EARNINGS AND OUTGO:
Your Company continues to be Net Foreign Exchange Earner. During the year under review,
your Company exported 6,904 engines and 9,952 generator sets. Foreign exchange earned in
terms of actual inflows during the year 2022-23 and foreign exchange outgo in terms of
actual outflows during the year 2022-23 were as follows:-
Particulars |
FY 2022-23 |
FY 2021-22 |
|
(Rs in Crores) |
(Rs in Crores) |
Foreign exchange earnings* |
2,276.87 |
2,490.11 |
Foreign exchange outgo* |
1,111.87 |
973.80 |
*Equivalent value of various currencies
15. MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE REPORT:
The Management Discussion and Analysis Report and the Corporate Governance Report which
forms part of this Report are appended as Annexure ‘3' and ‘4' respectively.
The Company has obtained a Certificate from Practicing Company Secretary confirming
compliance with conditions of the Code of Corporate Governance as stipulated in Schedule V
of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (including
amendments thereof) and the same is appended as Annexure ‘6' which forms part
of this Report.
The Company has received a Certificate from Practicing Company Secretary confirming
that none of the Directors on the Board of the Company have been debarred or disqualified
by MCA or SEBI or any such statutory authority from being appointed / continuing as
Director and the same is appended as Annexure ‘7' which forms part of this
Report.
16. ANNUAL RETURN:
As per the requirement under Section 92(3) of the Companies Act, 2013, the draft Annual
Return for Financial Year 2022-23 is available on the website of the Company at the link:
https://www.cummins.com/en/in/investors/india-annual-reports. Since the Annual General
Meeting is proposed to be held on August 03, 2023, the Company shall upload a copy of
Annual Return for Financial Year 2022-23 as soon it has filed the said Annual Return with
Registrar of Companies.
17. RISK MANAGEMENT:
Business Risk Evaluation and Management is an ongoing process within the Organization.
The Company has a robust Enterprise Risk Management Framework to identify, monitor and
minimize risks. As a process, the risks associated with the business are identified and
prioritized based on impact, probability of occurrence, organization's risk management
capability and velocity of risk. Such risks are reviewed by the Senior Management, Risk
Management Committee and the Board on a quarterly basis. The Company has a structured
governance mechanism where risks identified under the ERM Framework are categorized based
on level of oversight required. Subsequently, Risk Owners and appropriate review forum are
identified for each of the risk and metrics are developed for monitoring and reviewing the
risk mitigation efforts. The established comprehensive Risk Management Framework ensures
that risk areas having a potential impact on Company's continued existence as a going
concern and to its development are identified and addressed on timely basis.
The Risk Management Committee of the Board of Directors of your Company assists the
Board in (a) overseeing and approving the Company's enterprise wide risk management
framework including the risk management processes, systems and practices of the Company;
(b) overseeing that all existing risks and new risks that the organization faces including
cyber security risks have been identified and assessed, and (c) overseeing that adequate
resources have been allocated to effectively manage those risks. Further details on Risk
Management Committee are included in the Corporate Governance Report.
The details and process of Enterprise Risk Management implemented by the Company
through Risk Management Policy, are included in the Management Discussion and Analysis,
which forms part of Annual Report.
18. INTERNAL FINANCIAL CONTROL:
Your Company has established adequate internal financial controls for ensuring orderly
and efficient conduct of its business, including adherence to Company's policies,
safeguarding of its assets, prevention and detection of frauds and errors, accuracy and
completeness of the accounting records and the timely preparation of reliable financial
information.
Details of internal financial control and its adequacy are included in the Management
Discussion and Analysis Report which is appended as Annexure ‘3' and forms
part of Annual Report.
19. VIGIL MECHANISM/ WHISTLE BLOWER POLICY:
Your Company's leadership culture is to inspire and encourage all employees to reach
their full potential. A great leadership culture begins with outstanding leaders who
create an outstanding place to work, inspiring and encouraging all employees to achieve
their full potential. Leaders connect people and their work to the vision, mission,
values, brand promise and strategies of the company, motivating them and giving them a
higher sense of purpose. Leaders also build trust in our teams and in our organizations
and align on key goals and priorities. Leaders foster open communications and offer
various opportunities to employees to express their feedback through several ways.
Your Company has a ‘Vigil Mechanism Policy' which inter-alia provides adequate
safeguards against victimization of persons who may blow the whistle. Vigil Mechanism
Policy may be accessed on the Company's website at the link:
https://www.cummins.com/en/in/investors/india-corporate-governance.
In addition, your Company has complied with provisions relating to constitution of an
Internal Committee under the Sexual Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013 and has a stable well governed ethics investigations
process. Regular workshops and awareness programmes against sexual harassment are
conducted across the organization. During the year under review, one complaint pertaining
to sexual harassment of woman employee was reported to the Committee which was resolved.
No complaints remained unresolved as on March 31,2023.
The Company is committed to the highest possible standards of openness, integrity and
accountability in all its affairs and to providing a workplace conducive to open
discussion of its business practices. Your Company has laid out infrastructures and policy
through which the employees can voice their concerns about suspected unethical or improper
practice, or violation of Cummins Code of Business Conduct or complaints regarding
accounting, auditing, internal controls or disclosure practices of the Company. Protected
disclosures can be made by a whistle blower through an email or dedicated telephone line
or letter to the Managing Director of the Company or Letter to the Chairman of Audit and
Compliance Committee or via the Ethics helpline/ Webpage, details of which are available
on website www.cumminsindia.com.
20. COMPLIANCE WITH THE CODE OF CONDUCT:
All Directors on the Board and Senior Management have affirmed compliance to the Code
of Conduct and Cummins Code of Business Conduct respectively for the Financial Year
2022-23. A declaration signed by the Managing Director affirming compliance with the
Company's Code of Conduct by the Board of Directors and Senior Management for the
Financial Year 2022-23 as required under Regulation 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.
21. DIRECTORS' RESPONSIBILITY STATEMENT:
Based on the framework of internal financial controls and compliance systems
established and maintained by the Company, work performed by the internal, statutory, cost
and secretarial auditors and external consultant(s) including audit of internal financial
controls over financial reporting by the statutory auditors and the reviews performed by
Management and the relevant Board Committees, including the Audit and Compliance
Committee, the Board is of the opinion that the Company's internal financial controls were
adequate and effective during the Financial Year 2022-23.
Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the Board of
Directors, to the best of their knowledge and ability, confirm that:
(i) in the preparation of the annual accounts for the year ended March 31, 2023, the
applicable accounting standards have been followed and there was no material departure
from the same;
(ii) they have selected such accounting policies and applied them consistently and made
judgments and estimates that are reasonable and prudent so as to give a true and fair view
of the state of affairs of the Company as on March 31,2023 and of the profit for the
period April 01,2022 to March 31,2023;
(iii) they have taken proper and sufficient care for the maintenance of adequate
accounting records in accordance with the provisions of the Companies Act, 2013, for
safeguarding the assets of the Company and for preventing and detecting fraud and other
irregularities;
(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 Company and
that such internal financial controls are adequate and were operating effectively during
the year; and
(vi) they have devised proper systems to ensure compliance with the provisions of all
applicable laws and that such systems were adequate and operating effectively.
22. DIRECTORS:
a) Changes in the composition of the Board of Directors:
Appointments and Re-appointments
Mr. Ashwath Ram as (DIN: 00149501), Executive Director, was re-appointed as the
Managing Director of the Company in the 61st Annual General Meeting of the Company held on
August 10, 2022, effective August 17, 2022, for a term of three years. Ms. Rekha (DIN:
08501990) was appointed by the Board as an Additional Director w.e.f. August 11, 2022 and
regularized as a Director (Non-Executive and Independent) by way of Postal Ballot on
September 20, 2022, to hold office for a period of five (5) consecutive years effective
from August 11,2022 to August 10, 2027, not liable to retire by rotation.
Ms. Jennifer Mary Bush (DIN: 09777114) was appointed by the Board as an Additional
Director (Non-Executive and Non-Independent) effective November 05, 2022 and regularized
as a Director (Non-Executive and Non-Independent) by way of Postal Ballot ended on
December 27, 2022, effective November 05, 2022, liable to retire by rotation.
Ms. Bonnie Jean Fetch (DIN: 09791477) was appointed by the Board as an Additional
Director (Non-Executive and Non-Independent) effective November 25, 2022 and regularized
as a Director (Non-Executive and Non-Independent) by way of Postal Ballot ended on
December 27, 2022, effective November 25, 2022, liable to retire by rotation.
Ms. Lira Goswami (DIN: 00114636) was appointed as an Additional (Non-Executive
Independent) Director of the Company with effect from May 24, 2023. On recommendation of
the Nomination and Remuneration Committee, the Board of Directors have proposed
appointment of Ms. Lira Goswami as a Non-Executive and Independent Director, not liable to
retire by rotation, for a period of five (5) years from May 24, 2023. The resolution
seeking shareholder's approval for her appointment forms part of the Notice.
In accordance with the Companies Act, 2013 and Articles of Association of the Company,
Mr. Steven Chapman (DIN: 00496000), Director (Non-Executive and Non-Independent) of the
Company, retires by rotation and being eligible, offer himself for re-appointment. The
proposal seeking shareholder's approval for his re-appointment forms part of the Notice,
which is also approved by the Board on the recommendation of the Nomination and
Remuneration Committee.
As required under Regulation 36(3) of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 and Secretarial Standard 2, particulars of Directors
seeking appointment/re-appointment at this Annual General Meeting are given in the
Annexure to the Notice and the Board recommends the respective resolutions to the Members
for approval.
Cessation
During the year, Mr. Norbert Nusterer (DIN: 07640359) resigned as Director
(Non-Executive and Non- Independent Director) of the Company effective August 26, 2022 to
focus on family and personal interests, post his exit from Cummins Group. He had confirmed
that there were no other material reasons for his resignation.
Mr. P.S. Dasgupta (DIN: 00012552) resigned as Director (Non-Executive and Independent)
of the Company effective from close of business hours of May 24, 2023 on account of
professional exigencies. Consequently, he also ceased to be a Chairman of Stakeholders
Relationship Committee and Corporate Social Responsibility Committee & Member of Audit
and Compliance Committee, Risk Management Committee and Nomination and Remuneration
Committee with effect from close of business hours of May 24, 2023. He had confirmed that
there were no other material reasons for his resignation.
The Board places on record its appreciation for the outgoing Directors' invaluable
contribution and guidance during their respective tenure.
The details of Board composition, number of meetings held, details of directorships of
Directors etc. are provided in the Corporate Governance Report which is appended as Annexure
‘4' and forms part of this Report.
b) Committees of the Board:
The Board of Directors have constituted following Committees in order to effectively
cater its duties towards diversified role under the Companies Act, 2013 and the SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015:-
Audit and Compliance Committee;
Stakeholders Relationship Committee;
Nomination and Remuneration Committee;
Corporate Social Responsibility Committee; and
Risk Management Committee
Details of the constitution, broad terms of references of each Committee and number of
meetings attended by individual Director etc. are provided in the Corporate Governance
Report 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, including
criteria for determining qualifications, positive attributes, independence of the
Directors and other matters provided under Section 178 (3) of the Companies Act, 2013,
adopted by the Board viz. Nomination and Remuneration Policy, is appended as Annexure
‘8' which forms part of this Report.
Details of the remuneration paid to the Board of Directors are provided in the
Corporate Governance Report. It is affirmed that the remuneration paid to the Directors is
as per 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 17 of the SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried
out the annual performance evaluation of its own performance and the Directors, Chairman
individually, as well as the evaluation of the working of its Committees. Details of the
evaluation mechanism is provided in the Corporate Governance Report which is appended as Annexure
‘4' and forms part of this Report.
e) Inter-se relationships between the Directors:
There are no relationships between the Directors inter-se.
f) Familiarization Programme for Independent Directors:
During the year, various documents, background notes etc. were shared with to
Independent Directors to have a better insight in to state of affairs of the Company.
The Chairman and/or the Managing Director also have periodic discussions with the newly
appointed Directors to provide them, details of initiatives of the Company for better
understanding of the Company, its business and the regulatory framework in which the
Company operates and equip him/ her to effectively fulfil his/ her role and
responsibilities as a Director of the Company.
The details of familiarization programmes imparted are available at
https://www.cummins.com/en/in/investors/india-corporate-governance.
g) Declarations from the Independent Directors:
Pursuant to the provisions of Section 149 of the Companies Act, 2013 read along with
Rules framed thereunder and Regulation 16(1)(b) of the SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, as amended from time to time, the Independent
Directors have submitted inter-alia declarations that each of them meets the criteria of
independence as provided in Section 149(6) of the Companies Act, 2013 and the SEBI
Regulations.
Further, the Independent Directors have also confirmed that there has been no change in
the circumstances affecting their status as Independent Directors of the Company. The said
Certificates(s) were taken on record by Board after their requisite assessments.
23. NUMBER OF MEETINGS OF THE BOARD:
Six meetings of the Board of Directors were held during the year. The details of the
meetings held and attendance there at are provided in the Corporate Governance Report
which is appended as Annexure ‘4' and forms part of this Report. The maximum
interval between any two meetings did not exceed 120 days, as prescribed by the Companies
Act, 2013.
24. KEY MANAGERIAL PERSONNEL:
There were no changes in the Key Managerial Personnel(s) during the Financial Year
2022-23.
25. PARTICULARS OF EMPLOYEES:
The details in accordance with the provisions of Section 197(12) of the Companies Act,
2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial
Personnel) Amendment Rules, 2016, is appended as Annexure ‘10' which forms
part of this Report. Any shareholder interested in obtaining a copy of the statement, may
write to the Company Secretary at the Registered Office of the Company.
26. INDUSTRIAL RELATIONS:
Industrial relations at all the plants of the Company continue to be cordial. Multiple
initiatives have been rolled out for our shop, office and field technician employees under
‘Advancing our workforce Strategy' (AWS) at all sites across the globe. Key purpose
of AWS is to inspire and encourage ‘All Employees' to reach their full potential by
implementing similar talent management policies and processes for all the shop, office and
field technician employees like those implemented for our managerial employees. The
Company has introduced a performance management system for our shop, office &
technician employees. It will help in rewarding better performance, help employees to
create Individual Development Plans which will help them to grow in the organization. The
Company also enhances right environment by creating right spans of control so that it
helps manager to spend quality time on employees' developmental needs. The Company also
taking right steps to provide them access to technology with which employees can leverage
our online systems. Additionally, the Company has also introduced an internal job posting
system for all new positions across organization which helps us to grow talent from
non-exempt category. The Company has revised Domestic Relocation Policy in the FY 2021-22
thus enabling seamless movement of talent across all categories encouraging them to take
more learning opportunities. All these are steps in the right direction in our journey to
help employees reach their full potential. The unionized employees in Kothrud Engine Plant
Pune have completed one cycle of performance management process. HR & Line Managers
are putting all the right efforts in implementation. Voluntary Retirement Scheme which was
launched at Company's Kothrud Engine Plant, Pune on May 16, 2022 has concluded on June 15,
2022. Employees also participated in a grand "Family Day" function at the
Kothrud Engine Plant which was very well appreciated by the employees & their family
members. Employee participation in various Corporate Responsibility projects has been
commendable during the Financial Year. They joined hands with Company to drive some
critical social impact projects.
27. AUDITORS:
STATUTORY AUDITORS:
At the 60th Annual General Meeting held on August 12, 2021, M/s. Price Waterhouse &
Co, Chartered Accountants LLP, Chartered Accountants (Firm Registration No.:
304026E/E-300009) ("PWC"), was appointed as Statutory Auditor of the Company to
hold office till the conclusion of 65th Annual General Meeting.
Accordingly, PWC completed audit for Financial Year 2022-23 and issued Auditor's
Report. There are no qualifications, reservations, adverse remarks or disclaimers made by
the auditors in the Audit Report for the Financial Year 2022-23.
In terms of the Section 139(1) of the Companies Act, 2013 read with the Companies
(Audit and Auditors) Rules, 2014, the appointment of Statutory Auditors does not require
ratification by the shareholders in Annual General Meeting. Accordingly, the Board noted
the continued appointment of PWC as the Statutory Auditors of the Company for the
Financial Year 2023-24 in its meeting held on May 24, 2023. PWC have informed the Company
that their appointment is within the limits prescribed under Section 141 of the Companies
Act, 2013.
SECRETARIAL AUDITOR:
M/s Pramod Shah & Associates, (FCS 334), was appointed to conduct the secretarial
audit of the Company for the Financial Year 2022-23, as required under Section 204 of the
Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014. The Secretarial Audit Report in Form MR-3 and Secretarial Audit
Report pursuant to Regulation 24A of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 for Financial Year 2022-23 is appended as Annexure
‘5' which forms part of this Report. Both the reports do not contain any
qualification, reservation or adverse remark.
The Annual Secretarial Compliance Report has been submitted to the Stock Exchanges as
required under Regulation 24A of SEBI (Listing Obligation and Disclosure Requirements)
Regulations, 2015.
The Board on the recommendation of the Audit and Compliance Committee has re-appointed
M/s Pramod Shah & Associates to conduct the secretarial audit of the Company for the
Financial Year 2023-24 in its meeting held on May 24, 2023.
Further, during the Financial Year 2022-23 and two previous financial years, no
penalties, strictures were imposed on the Company by Stock Exchange(s) or SEBI or any
statutory authority, on any matter related to capital markets.
COST AUDITORS:
Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost
Records and Audit) Rules, 2014, as amended from time to time, the cost audit records
maintained by the Company in respect of its manufacturing activity is required to be
audited. The Directors, on the recommendation of the Audit and Compliance Committee, had
appointed M/s. C S Adawadkar & Co., Cost Accountants (Firm Registration Number:
100401), to audit the cost accounts of the Company for the Financial Year 2022-23 at a
remuneration of Rs 950,000/- plus taxes as applicable and re-imbursement of out of pocket
expenses. The remuneration was ratified by shareholders in the 61st Annual General Meeting
held on August 10, 2022.
Pursuant to recommendation of the Audit and Compliance Committee, the Board in its
meeting held on May 24, 2023 has appointed M/s C S Adawadkar & Co. (Firm Registration
No.: 100401), to audit the cost accounts of the Company for the Financial Year 2023-24 at
a remuneration of Rs 950,000/- plus taxes as applicable and re-imbursement of out of
pocket expenses. As required under the Companies Act, 2013, the shareholders ratification
for the remuneration payable to M/s. C S Adawadkar & Co, Cost Auditors, is being
sought at the ensuing Annual General Meeting.
M/s. C S Adawadkar & Co, Cost Auditors, under Section 139(1) of the Companies Act,
2013 read with the Companies (Audit and Auditors) Rules, 2014, have furnished a
certificate of their eligibility and consent for appointment.
28. CORPORATE SOCIAL RESPONSIBILITY POLICY AND ITS REPORT:
Your Company is an early adopter of the Corporate Social Responsibility (CSR)
initiatives. Corporate Social Responsibility continues to be the core value of your
Company embedded in the core value of caring, which focuses on ‘serving and improving
the communities in which we live'. Your Company works with ‘Cummins India Foundation'
towards three broad focus areas viz. Higher Education, Energy and Environment and Equality
of Opportunity. Additionally, Company also carries out other strategic initiatives.
Details about the CSR Policy and initiatives taken by the Company during the year are
available on our website
https://www.cummins.com/en/in/investors/india-corporate-governance. The Annual Report on
our CSR Activities is appended as Annexure ‘11' which forms part of this
Report.
29. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT :
As stipulated under the Regulation 34 of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 read with the SEBI Circular dated May 10, 2021, your
Company has introduced the Business Responsibility and Sustainability Report (‘BRSR')
for Financial Year 2022-23, which provides enhanced disclosures on Environment, Social and
Governance (ESG) practices and focused areas of the Company, is appended as Annexure
‘12' and forms a part of this Report.
30. SECRETARIAL STANDARDS:
The Company is in compliance with applicable Secretarial Standards issued by the
Institute of Company Secretaries of India, specifically Secretarial Standards on Meetings
of the Board of Directors (SS-1) and Secretarial Standards on General Meetings (SS-2).
31. DIVIDEND DISTRIBUTION POLICY:
The Board of Directors of the Company have formulated a Dividend Distribution Policy
which is appended as Annexure ‘9' and forms part of this Report. The policy is
also available on our website
https://www.cummins.com/en/in/investors/india-corporate-governance.
32. INVESTOR EDUCATION AND PROTECTION FUND (IEPF):
Pursuant to Section 124 and Section 125 of Companies Act, 2013 and IEPF Authority
(Accounting, Audit, Transfer and Refund) Rules, 2016, during the year under review, the
Company has transferred the following unclaimed and unpaid dividend and corresponding
shares to IEPF, upon completion of period of seven years:
Date of Declaration |
Type of Dividend |
Amount transferred (Rs) |
No of equity shares transferred |
August 06, 2015 |
Final Equity Dividend |
11,505,870 |
154,114 |
February 02, 2016 |
Interim Equity Dividend |
6,231,785 |
10,508 |
33. DETAILS OF INSOLVENCY AND BANKRUPTCY CODE:
During the year under review, your Company has neither made any application nor any
application is pending for or against the Company under the Insolvency and Bankruptcy
Code.
34. DETAILS REGARDING VALUATION REPORT:
During the year under review, your Company has not entered into any One-Time Settlement
with Bank's or Financial Institutions and therefore, no details of Valuation in this
regard is available.
35. GENERAL:
Further, the Directors state that no disclosure or reporting is required in respect of
the following items as there were no transactions or applicability with respect to these
items during the year under review:
a. Issue of equity shares with differential rights as to dividend, voting or otherwise;
b. Issue of shares (including sweat equity shares) by the Company to its employees;
c. The Managing Director of the Company did not receive any remuneration or commission
from any of its subsidiaries. Further, the Company had not appointed any other Whole-time
Director except the Managing Director;
d. No frauds were reported by Auditors under Section 143(12) of the Companies Act, 2013
and rules frame thereunder;
e. No equity shares were lying under unclaimed suspense account during the financial
year 202223;
f. No significant or material orders were passed by the Regulators or Courts or
Tribunals which impact the going concern status and Company's operations. However,
Members' attention is drawn to the Statement on Contingent Liabilities, commitments in the
notes forming part of the Financial Statement; and
g. No material changes and commitments occurred during April 01, 2023 till the date of
this Report which would affect the financial position of your Company.
ACKNOWLEDGEMENT:
The Directors would like to express their sincere appreciation for the assistance and
co-operation received from the financial institutions, banks, government authorities,
customers, vendors and members during the year under review. The Directors also wish to
place on record their deep sense of appreciation for the committed services by the
Company's executives, staff and associates.
|
For and on behalf of the Board of Directors, |
|
Steven Chapman |
Ashwath Ram |
Place : Pune |
Chairman |
Managing Director |
Date : May 24, 2023 |
DIN:00496000 |
DIN: 00149501 |
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