TO THE MEMBERS,
The Board of Directors take pleasure in presenting the Sixty-Third
Annual Report including inter-alia DirectorsRs. Report, its annexures and audited
financial statements (including standalone & consolidated financial statements along
with respective AuditorsRs. Report thereon) for the year ended March 31,2024. 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 2023-24, revenue from operations was Rs.
8,958.60 Crores as compared to Rs. 7,744.43 Crores during the previous year (16% higher).
Profit after tax increased to Rs. 1,660.62 Crores from Rs. 1,129.82 Crores recorded for
the previous year (47% higher).
During the Financial Year 2023-24, revenue from operations was Rs.
9,000.20 Crores as compared to Rs. 7,772.09 Crores during the previous year (16% higher).
Profit after tax increased to Rs. 1,720.58 Crores from Rs. 1,228.15
Crores recorded for the previous year (40% higher).
| FINANCIAL SUMMARY |
STANDALONE |
CONSOLIDATED |
|
2023-24 |
2022-23 |
2023-24 |
2022-23 |
|
(Rs. in Crores) |
(Rs. in Crores) |
(Rs. in Crores) |
(Rs. in Crores) |
| APPROPRIATION OF PROFIT: |
|
|
|
|
| Profit before taxation |
2,143.05 |
1,492.07 |
2,204.61 |
1,591.29 |
| Net Profit for the year after tax |
1,660.62 |
1,129.82 |
1,720.58 |
1,228.15 |
| Dividend |
859.32 |
623.70 |
859.32 |
623.70 |
| V |
|
|
|
J |
* Includes Exceptional Items amounting to f (1.70) Crores (F.Y.
2022-23: f (14.30) Crores)
2. RESERVES:
The closing balance of reserves, including retained earnings, of the
Company as at March 31,2024 was Rs. 6,107.65 Crores. During the Financial Year, no amount
was proposed to be transferred to the Reserves.
3. BUSINESS UPDATE AND STATE OF COMPANYRs.S AFFAIRS:
The information on CompanyRs.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. 20/- (i.e.
1000%) per equity share of Rs. 2/- each fully paid-up share in their meeting held on May
29, 2024, in addition to the interim dividend of Rs. 18/- (900%) per equity share of Rs.
2/- each fully paid-up share declared on February 07, 2024, aggregating to Rs. 38/- (i.e.
1900%) per equity share of Rs. 2/- each fully paid-up share for the year ended March
31,2024 (previous year Rs. 25 /- per equity share i.e. 1,250%). 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 as per applicable laws.
The final dividend recommended, and the interim dividend paid is in
accordance with the principles and criteria as set out in the dividend distribution
policy.
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, 2024. Your Company has not
come up with any issue (public, rights or preferential) during the year. There is no
change in the share capital during Financial Year 2023-24.
6. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES:
Your Board is pleased to provide details of the following subsidiary,
joint ventures and associates as on March 31,2024 : -
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 mainly in parts of Northern India close to the National Capital Region (NCR).
CSSPL generated a revenue of Rs. 199.02 Crores from its operations for the year ended
March 31,2024, as compared to Rs. 145.51 Crore during the previous year (37% higher).
b) Cummins Research and Technology India Private Limited (CRTIPL):
The Board of directors of CRTIPL 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 Members 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 Members at the extra-ordinary general meeting, completed all the procedures pertaining
to the voluntary winding-up, and submitted the dissolution application with the Mumbai
Bench of The National Company Law Tribunal (Rs.NCLTRs.) on May 20, 2023. The final order
of dissolution (voluntary liquidation) has been passed by NCLT on December 13, 2023 and
accordingly, CRTIPL ceases to exist effective from that date.
c) Valvoline Cummins Private Limited (VCPL):
VCPL, a 50:50 joint venture between Valvoline International Inc., USA,
one of the global leaders in lubricants and engine oils, and your Company, VCPL generated
a revenue of Rs. 2,255.59 Crores from its operations for the year ended March 31,2024, as
compared to Rs. 2,150.25 Crores during the previous year 5% 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. 1,805.38 Crores from
its operations for the year ended March 31,2024, as compared to Rs. 1,803.26 Crores during
the previous year (0.12% higher).
The Members 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 Rs.SchemeRs.) 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 (Rs.Capital ReductionRs.) as recommended by the Board of Directors
in their meeting held on February 11, 2022. The Company has filed a petition with
HonRs.ble National Company Law Tribunal, Mumbai Bench, (Rs.HonRs.ble NCLTRs.) 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
31,2024, pending approval from HonRs.ble NCLT.
As required under the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, consolidated financial statements of the Company, its
subsidiary, joint venture 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.
Further, a statement containing the salient features of the financial
statement of subsidiary, associate company and joint venture in the prescribed Form AOC-1
is appended as Annexure Rs.1Rs. which forms part of this Report.
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 on https://www.cummins.com/en/in/investors/india-financials.
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.
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 2023-24 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 2023-24.
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, read with SEBI Circular No. SEBI/HO/DDHS/DDHS-RACPOD1/P/CIR/2023/172
dated October 19, 2023, the Directors the Directors confirm that the Company is not
defined as a "Large Corporate" as per the framework provided in the said
Circular. Further, your Company has not raised any funds by issuance of debt securities.
11. PARTICULARSOFCONTRACTSORARRANGEMENTSWITH RELATED PARTIES:
During Financial Year 2023-24, 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 Rs.2Rs. which forms part of this Report.
The Policy on materiality of related party transactions as approved by
the Board can be accessed on the CompanyRs.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.
Pursuant to SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, the resolution for seeking approval of the Members on material related
party transactions is being placed at the ensuing Annual General Meeting scheduled on
August 07, 2024.
12. CONSERVATION OF ENERGY:
During the Financial Year 2023-24 your Company has strived to imbibe
energy conservation principles and initiatives across all its facilities.
Your Company generated a total of 65,02,276 KWH of electricity from
onsite solar installations. Details of the same are mentioned below:
At CPG plant 121 kWP Solar power plant installed in Feb 2024. Per year
140400 kWh units will be generated by this solar plant.
Overall energy conservation from existing as well as new solar PV
installations:
| Site |
Solar PV installation
capacity |
On-site solar energy
generation in kWh |
| KEP |
3,850 kWp |
47,63,014 kWh |
| CPG |
521kWp |
5,45,410 kWh |
| Common Facility (ABO + IPDC+HHP RC+ DBU TTC) |
835 kWp |
10,13,748 kWh |
| PPSP |
150kWp |
1,80,104 kWh |
Apart from the solar energy projects, your company also undertook
various other energy conservation initiatives. Details of the same are mentioned below:
Kothrud Engine Plant of the Company undertook initiatives such as
replacement of non-energy efficient fans (460 Nos), installation of occupancy sensors for
offices & washrooms (60 Nos), NK warehouse
and took focused efforts to arrest compressed air leakages (Leakage
reduction from 976 to 664 cfm). The Plant also continued implementation of the existing
initiatives such as installation of LED Lights, replacement of chillers, panel &
office ACs, and implementation of other low cost no cost projects. All these initiatives
resulted in savings of 4.62 lakh units of electricity.
At CPG Phaltan plant of the Company, 4 HVLS were installed which led to
conservation of around 78,500 kWh units in replacement of AHU. Also, shop floor florescent
lamp replaced with 120-watt LED lamps. Now CPG shop floor is with 100% LED lamps. Energy
saving achieved 45,000 kwH units annually.
At High Horsepower plant of the Company at Phaltan Rebuild Centre,
fluorescent tube lights were replaced with LED lights at paint booth area leading to
energy saving of 1,742.4 kWh. Additionally, new room heater On Off operation on timer at
HT room was installed that led to energy savings of 2,880 kWh.
At CompanyRs.s registered office, various initiatives were undertaken
for replacement of fluorescent tube lights with LED lights leading to a total saving
around 35,100 kWh. The site also installed sensor for ramp lights that led to energy
saving around 480 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 endeavor 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. Hotel load converter developed for Rail business to enter in Rail
electrification space;
2. Entire range of CPCBIV+ products (engine & gensets) was
certified and launched;
3. New product range for Exports (20-330 kVA) was launched;
4. Marine engine product families to support the increasing commercial
Marine Business;
5. Further enhancements of non-diesel product development capability
such as use of alternative fuels is being explored in India; and
6. Telematics and Analytics capabilities have been developed to improve
uptime and fuel efficiency performance of our products.
Further, your Company continues to strengthen its channel presence
through its Genset Original Equipment Manufacturers 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 Rs.fit-for-marketRs. solutions to meet export
emission requirements.
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 its parent company,
Cummins Inc.Rs.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 |
2023-24 |
2022-23 |
|
(Rs. in Crores) |
(Rs. in Crores) |
| Capital |
6.69 |
7.42 |
| Recurring |
3.21 |
19.05 |
| Total |
9.90 |
26.47 |
| Total R&D expenditure as a percentage of
total sales turnover |
0.11% |
0.35% |
14. FOREIGN EXCHANGE EARNINGS AND OUTGO:
Your Company continues to be Net Foreign Exchange Earner. During the
year under review, your Company exported 5,851 engines and 5,862 generator sets. Foreign
exchange earned in terms of actual inflows during the year 2023-24 and foreign exchange
outgo in terms of actual outflows during the year 2023-24 were as follows:-
| Particulars |
FY 2023-24 |
FY 2022-23 |
|
(Rs. in Crores) |
(Rs. in Crores) |
| Foreign exchange earnings* |
1,810.90 |
2,276.87 |
| Foreign exchange outgo* |
1,262.23 |
1,111.87 |
* 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 Rs.3Rs. and
Rs.4Rs. 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
Rs.6Rs. 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 Rs.7Rs. 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 2023-24 is available on the website of the
Company at the link: https://www.cummins.com/en/in/investors/india-annual-reports. The
Annual General Meeting is proposed to be held on August 07, 2024. The Company shall upload
a copy of Annual Return for Financial Year 2023-24 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,
organizationRs.s risk management capability and velocity of risk. Such risks are reviewed
by the Senior Management, Risk Management Committee and the Board on a regular basis. We
have 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 forums 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 CompanyRs.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 CompanyRs.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 CompanyRs.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 Rs.3Rs. and
forms part of Annual Report.
19. VIGIL MECHANISM/ WHISTLE BLOWER POLICY:
Your Company has a Rs.Vigil Mechanism PolicyRs. which inter-alia
provides adequate safeguards against victimization of persons who may blow the whistle.
Vigil Mechanism Policy may be accessed on the CompanyRs.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, no
complaint pertaining to sexual harassment of woman employee was reported to the Committee
and consequently, no complaints remained unresolved as on March 31,2024.
Your CompanyRs.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.
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 Head of
Legal Department 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 2023-24. A declaration signed by the Managing Director affirming
compliance with the CompanyRs.s Code of Conduct by the Board of Directors and Senior
Management for the Financial Year 2023-24 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 Rs.4Rs. and forms part of this
Report.
Pursuant to regulation 26(5) of the SEBI Listing Regulations, senior
management has made periodical disclosures to the Board relating to all material financial
and commercial transactions, where they had (or were deemed to have had) personal interest
that might have been in potential conflict with the interest of the Company.
21. DIRECTORSRs. 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/or 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 CompanyRs.s internal financial
controls were adequate and effective during the Financial Year 2023-24.
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, 2024, 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 31,2024 and
of the profit for the period April 01,2023 to March 31,2024;
(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
Ms. Lira Goswami (DIN: 00114636) was appointed by the Board as an
Additional (Non-Executive and Independent) Director with effect from May 24, 2023 and was
regularized as a Director (Non-
Executive and Independent) in 62nd Annual General Meeting of
the Company held on August 03, 2023, to hold office for period of five (5) consecutive
years effective from May 24, 2023 to May 23, 2028, not liable to retire by rotation.
Ms. Jennifer Mary Bush (DIN: 09777114) Non-Executive Non-Independent
Director of the Company was appointed as the Chairperson of the Board with effect from
November 07, 2023.
Mr. Sekhar Natarajan (DIN: 01031445) was appointed by the Board as an
Additional Director (NonExecutive Independent) with effect from May 29, 2024. On
recommendation of the Nomination and Remuneration Committee, the Board of Directors have
proposed appointment of Mr. Sekhar Natarajan as a Non-Executive and Independent Director,
not liable to retire by rotation, for period of five (5) consecutive years effective from
May 29, 2024 to May 28, 2029 to the Members of the Company in the upcoming Annual General
Meeting. The resolution seeking MemberRs.s approval for his appointment including
continuance of Mr. Natarajan beyond December 14, 2028 on account of his attaining the age
of 75 years on that date forms part of the Notice.
Mr. Farokh Nariman Subedar (DIN: 00028428) was appointed by the Board
as an Additional Director (Non-Executive Independent) with effect from May 29, 2024. On
recommendation of the Nomination and Remuneration Committee, the Board of Directors have
proposed appointment of Mr. Farokh Subedar as a Non-Executive and Independent Director,
not liable to retire by rotation, for period of five (5) consecutive years effective from
May 29, 2024 to May 28, 2029 to the Members of the Company in the upcoming Annual General
Meeting. The resolution seeking MemberRs.s approval for his appointment forms part of the
Notice.
In accordance with the Companies Act, 2013 and Articles of Association
of the Company, Mr. Donald Jackson (DIN: 08261104), Director (Non-Executive and
Non-Independent) of the Company, retires by rotation and being eligible, offer himself for
re-appointment. The proposal seeking MemberRs.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 on the recommendation of Nomination and
Remuenration Committee, recommends the respective resolutions further to the Members for
approval.
Cessation
During the year, 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 vide his resignation letter that there were no other material
reasons for his resignation.
Mr. Steven Chapman (DIN: 00496000) resigned as a Chairman,
Non-Executive and Non-Independent Director of the Company effective from close of business
hours of September 30, 2023, on account of pre-occupation and other personal reasons.
Consequently, he also ceased to be a Member of Nomination and Remuneration Committee with
effect from close of business hours of September 30, 2023. He had confirmed vide his
resignation letter that there were no other material reasons for his resignation.
The Board places on record its appreciation for the outgoing
DirectorsRs. invaluable contribution and guidance during their tenure.
Retirement
The Board at its meeting held on May 29, 2024 took note of Mr. Nasser
MunjeeRs.s (DIN: 00010180) and Mr. Rajeev BakshiRs.s (DIN: 00044621) upcoming retirement
as a Non-Executive Independent Director effective from July 31,2024, upon completion of
their second term.
The Board placed on record the deepest appreciation and gratitude for
the valuable contributions made by them during their tenure on the Board.
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 Rs.4Rs. 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 Rs.4Rs. and forms part of this
Report.
c) Policy on DirectorRs.s Appointment and Remuneration:
The Policy of the Company on DirectorRs.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
Rs.8Rs. 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, Chairperson individually, as well as the evaluation of working of its
Committees. Details of the evaluation mechanism is provided in the Corporate Governance
Report which is appended as Annexure Rs.4Rs. 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 the Independent Directors to have a better insight into 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) and Regulation 25 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 (Listing Obligations and Disclosure Requirements) Regulations,
2015.
The Independent Directors have also confirmed compliance with the
provisions of the rule 6 of Companies (Appointment and Qualifications of Directors) Rules,
2014, as amended, relating to inclusion of their name in the databank of Independent
Directors.
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.
The Board took on record the declaration and confirmation submitted by
the Independent Directors regarding their meeting the prescribed criteria of independence,
after undertaking due assessment of the veracity of the same as required under Regulation
25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.
23. NUMBER OF MEETINGS OF THE BOARD:
Five 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 Rs.4Rs. 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
year.
25. PARTICULARS OF EMPLOYEES AND REMUENRATION:
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 Rs.10Rs. which forms
part of this Report.
Statement containing particulars of top 10 employees and particulars of
employees as required under Section 197(12) of the Act read with Rule 5(2) and (3) of the
Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014 is a separate Annexure in terms of
proviso to Section 136(1) of the Act, the Report and Accounts are being sent to the
Members, excluding the aforesaid Annexure. The said Statement is also open for inspection.
Any Member interested in obtaining a copy of the same may write to the Company Secretary
at Cil.Investors@cummins.com. None of the employees listed in the said Annexure are
related to any Director of the Company.
26. INDUSTRIAL RELATIONS:
Industrial Relations at all the plants of the Company continue to be
cordial with minimal labour issues. Multiple initiatives have been rolled out for shop
employees to ensure better management & governance, career growth to associates
working on shop floor at Megasite. Our unionized plant, KEP concluded long term wage
settlement with Union in December 2023, settlement inclusive of productivity increase,
linkage to new performance categories along with wage rise was signed off and implemented
amicably. This settlement will help us to reward better performance, help employees to
grow in the organization. We have introduced a performance management system for our shop,
office & technician employees with updated performance categories which shall help us
to differentiate and recognize with employees contribution in business success. We are
taking right steps to provide them access to technology with which employees can leverage
our online systems for better learning and bringing effectiveness in their daily work. We
have also introduced an internal job posting system for all new positions across
organization which helps us to grow talent from non-exempt category. Our emphasis on
"Right Environment" for all our employees is continued as earlier to ensure that
all our employees feel comfortable and secure at their workplace. We ensured our employees
are engaged through various sports activities and family functions such as cricket
tournaments for all our employees/ Family Day celebration etc. 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 2023-24 and issued
AuditorRs.s Report. There are no qualifications, reservations, adverse remarks or
disclaimers made by the auditors in the Audit Report for the Financial Year 2023-24.
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 Members in Annual General Meeting. Accordingly, the Board
noted the continued appointment of PWC as the Statutory Auditors of the Company for the
Financial Year 2024-25 in its meeting held on May 29, 2024. PWC have informed the Company
that they are eligible to continue and their appointment is within the limits prescribed
under Section 141 of the Companies Act, 2013.
SECRETARIAL AUDITORS:
M/s Pramod Shah & Associates, (FCS 334), was appointed to conduct
the secretarial audit of the Company for the Financial Year 2023-24, 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 2023-24 is appended as Annexure Rs.5Rs. 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.
Further, during the Financial Year 2023-24 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.
The Board on the recommendation of the Audit and Compliance Committee
has appointed M/s MMJB & Associates LLP, Practicing Company Secretaries, (LLPIN:
AAR-9997) to conduct the secretarial audit of the Company for the Financial Year 2024-25
in its meeting held on May 29, 2024.
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 2023-24
at a remuneration of Rs. 950,000/- plus taxes as applicable and re-imbursement of out of
pocket expenses. The remuneration was ratified by Members in the 62nd Annual
General Meeting held on August 3, 2023.
Pursuant to recommendation of the Audit and Compliance Committee, the
Board in its meeting held on May 29, 2024 has appointed M/s C S Adawadkar & Co. (Firm
Registration No.: 100401), to audit the cost accounts of the Company for the Financial
Year 2024-25 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
Members 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 Rs.serving and improving
the communities in which we liveRs.. Your Company works with Rs.Cummins India
FoundationRs. 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 inter-alia including the amount spent, unspent together with reasons
thereof is appended as Annexure Rs.11Rs. 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
(Rs.BRSRRs.) for Financial Year 2023-24, which provides enhanced disclosures on
Environment, Social and Governance (ESG) practices and focused areas of the Company, is
appended as Annexure Rs.12Rs. and forms a part of this Report.
In terms of SEBI Listing Regulations, the Company has obtained, BRSR
Reasonable assurance on BRSR Core Indicators from Price Waterhouse & Co Chartered
Accountants LLP on a standalone basis for the FY 2023-24.
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 Rs.9Rs. 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 08, 2016 |
Final Equity Dividend (FY
2015-16) |
1,15,89,363 |
22,720 |
| February 01,2017 |
Interim Equity Dividend (FY
2016-17) |
62,99,520 |
14,122 |
33. DETAILS OF INSOLVENCY AND BANKRUPTCY CODE:
During the year under review, your Company has neither made any
application nor any application is pending 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 BankRs.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 2023-24;
f. No significant or material orders were passed by the Regulators or
Courts or Tribunals which impact the going concern status and CompanyRs.s operations.
However, MembersRs. attention is drawn to the Statement on Contingent Liabilities,
commitments in the notes forming part of the Financial Statement;
g. No material changes and commitments occurred during April 01,2024
till the date of this Report which would affect the financial position of your Company;
and
h. Details as prescribed under section 134 of the Companies Act, 2013
and Rules made thereunder, applicable to the Company, have been specifically given in this
Report, wherever applicable.
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 CompanyRs.s executives, staff and associates.
|
For and on behalf of the Board
of Directors, |
|
Jennifer Mary Bush |
Ashwath Ram |
| Place : Pune |
Chairperson |
Managing Director |
| Date : May 29, 2024 |
DIN: 09777114 |
DIN: 00149501 |
|