Corporate - Morningstar

Crompton Greaves Limited

Corporate

Board of Directors

Chief FinancialOfficer

Company Secretary

Registered Office

Auditors

Solicitors

Bankers

K. K. Nohria, ChairmanS. M. Trehan, Managing DirectorS. BishtP. C. GuptaG. ThaparK.Thapar

B. R.Jaju

W. Henriques

6th Floor, CG House, Dr. Annie Besant Road,Worli, Mumbai 400 030.

Sharp & Tannan

Crawford Bayley & Co.

ABN -Amro Bank N.V.Bank of Baroda

Bank of India

Bank of Maharashtra

BNP Paribas

Canara Bank

Corporation Bank

ICICI Bank Ltd.

Oriental Bank of Commerce

Standard Chartered Bank Ltd.

State Bank of India

UCO Bank

Union Bank of India

Vijaya Bank

02

Information

Global Reports LLC

At Crompton Greaves, we are proud topresent to you the story of how wefought back from the brink. When theCompany reported stupendous lossesto the order of Rs.220 crores in1999-2000 and 2000-01, mostindustry analysts and lenders wereskeptical of its sustainability.

However, Crompton Greaves assumed control of its destiny, initiatedtough measures and rebounded with a modest profit in 2001-02.

In 2002-03 - the year under review in this Annual Report - we arepleased to report that Crompton Greaves strengthened thisturnaround with an 8% increase in its topline and a 582% increasein its profit after tax.

Crompton Greaves credits this turnaround, achieved in a shortspan of less than two years and considered as one of the mostsignificant in recent times in Corporate India, to a single word.

Focus.

It is remarkable how a single 'Focus' concept can inspire a dramatictransformation.

At Crompton Greaves, 'Focus' assumed a relevant manifestation,capturing value-enhancing initiatives.

As a result, our people cut costs in ingenious ways. They exercisedstricter fiscal control. They got more out of their machines. Theirresearch translated into better customer-serving products. Theymarketed not just within India but aggressively across a numberof international geographies. All this, with the conviction that itwould translate into tangible results. More importantly, theysuccessfully planned the Company's prudent shift and even exit,wherever necessary, from non-remunerative locations andbusinesses.

In doing so, Crompton Greaves is transforming itself from a survival-focused outlook into sustainable growth-centric organisationalmindset.

03


The power of focus

Global Reports LLC

A Productivity focus

All jobs were now measured - in terms of how much time theyshould take and the amount of people resources that they wouldrequire.

A number of learnings emerged from this exercise which contributedto a leaner and lower cost organisation.

It doubled productivity capability on an average.

It translated into prudent organisational rightsizing from 9965permanent employees (1999-2000) to 5707 permanent employees(2002-03).

04

Global Reports LLC

At Crompton Greaves, it was imperative to get more out of less.To enhance productivity, the Company implemented the CromptonGreaves Production System, based on the scientifically-proven andnumerically-driven Maynard Operations Sequence Technique.

A Productivity focus

It generated meaningful value engineering, which translated intolower costs and a reduced material input, without any qualitycompromise.

It shrank customer delivery schedules from months to weeks atcertain locations.

As a result, Crompton Greaves strengthened its competitive edgein local and international markets.

05

Global Reports LLC


At Crompton Greaves, it wasimperative to counter decliningprofit margins with an even quickercost reduction.

Besides better management of borrowings and working capital,reduction of material costs was a thrust area, since these costsaccount for nearly two-thirds of the Company's total expenditure,where even a marginal improvement translates into potentiallysizeable profits.

Intelligent product substitution and low cost process automationtranslated into waste reduction and material cost savings.

The Company continued to capitalise on attractive discounts fromlong-term vendor agreements to rationalise purchase costs.

A Cost focus

Global Reports LLC


A progressive substitution of high cost LPG fuel with naturalgas and the increased usage of natural gas for heating, lightingand air conditioning was undertaken.

Efforts were made to maintain the power factor closer to unity.

E-sourcing through cost-effective international bidding translatedinto economical purchases across several items, the benefit ofwhich will be realised in the coming years.

The Company successfully rationalised material consumptionas a proportion of its net sales from 73% in 2000-01 to 68% in2002-03.

As a result of initiatives taken by the Company towardsrightsizing its employee strength and rationalising its employeecosts structure, the Company pruned its employee cost by 23%from Rs.177 crores in 2000-01 to Rs.137 crores in 2002-03.

A Cost focus

Global Reports LLC

For a number of years, Crompton Greaves viewed itself as a domesticcompany, which understandably translated to a predominantcommitment of its resources to the Indian market. With changingpriorities over the last few years, the Company has progressivelypositioned itself as an international company with a greaterallocation of its corporate attention to the global markets.

This change was not only advisable for the sake of visibility, butabsolutely necessary for long-term sustainability, considering themarginal and even flat growth within certain segments withinIndia.

A Global focus

Although exports represent higher margin prospects, it requiredthe Company to focus its initiatives on aggressive cost reductionand enhance quality to achieve global competitiveness. To maintainand increase its international presence, the Company made judiciousinvestments in acquiring superior technology, graduating tointernational quality accreditations and best-in-class facilities.

The Company took steps to make its products comply with stringentand diverse industry norms and certification methodologies -Euro/EC norms ruling in Europe, Africa and Australasia; ANSI andNEMA standards for America; KEMA and CESI certifications topenetrate prestigious Power Transformers and Switchgear markets.These standards and certifications helped the Company earn arecognition among discerning international customers.

Global Reports LLC

I Crompton Greaves Limited

In its low voltage package - Fans, Motors, Automation and Controlproducts, the Company established a vital product differentiationin price-sensitive markets, established branding linkages withinternational names of repute and also strengthened its distributionnetwork. Certain key international approvals like UL (USA), CSA(Canada), CE (Conformite Europienne) and VDE, TUV (for Germanyand Europe), BASEEFA (British Approval Services for ElectricalEquipment in Flammable Atmosphere), SABS (South Africa), SAA(Australia) helped the Company towards this preferred status.

A Global focus

Presently, at least 60 countries feature annually in the Company'sexport sales. More than half the Company's exports were derivedfrom the developed world including G7 countries. Its PowerTransformer package accounted for more than half of India's exportswithin this segment, undoubtedly a result of being a preferredutilities supplier in many countries. The Company's ceiling fans wereuniquely the only Indian ceiling fans sold in West Europe,Australia and North America.

09

Global Reports LLC


Traditionally, Corporate R&D's role was to provide analytical supportand develop materials and processes to support the productdevelopment work in the various Technology Centres for ProductGroups.

Over the last few years, R&D has emerged at the heart of theCompany's competitive enablers. The focus of the entire R&Dactivity is now directed towards product development withbest-in-class benchmarks to make the highest quality at the most

Crompton Greaves has a two-tiertechnology development structure -an R&D team at the Corporate Leveland independent Technology Centresin each Product Group.

A Research focus

reasonable price. Consultancy agreements with experts and researchorganisations were arranged. The joint effort of the Divisions'Product Technologists, together with Analysts and MaterialSpecialists at the Corporate R&D helped the Company developseveral new products in existing and emerging market segments.

The Company backed its research commitment with a Rs.14.59

crores investment in 2002-03, which is approximately 39% of itsprofit before tax for the year.

This R&D focus translated into a number of achievements, mostsignificant of which were:

Introduction of high-efficiency motors for the American market,Static VAR Compensation Scheme for the Power Quality market.

10

Global Reports LLC


Introduction of Cast Resin Transformers and Polymeric clad LightningArresters.

In 2002-03, the Company developed 12 new/improvedproducts/processes in the Power Systems segment; 14 in theIndustrial Systems segment; 10 in the Consumer Products segmentand 3 in the Digital business segment.

Every year, several of these efforts fructify into patents for long-term Company benefits.

A Research focus

The synergised working of the Corporate R&D with DivisionTechnologists translated into a faster commercialisation of products.

The Company's research-led innovations prepare it to respondeffectively to domestic and international market demands for newand improved products.

11Global Reports LLC

I Crompton Greaves Limited Corporate Information contd...

At Crompton Greaves, in the past, the concept of quality wasrestricted mainly to the end product. In the transformed organisation,the Company instituted a number of processes, checks and balancesto ensure that quality became an every-time phenomenon, a visiblewatermark across all the Company's products and processes.

A Quality focus

This quality focus was reflected in a number of initiatives:

The start of an organisation-wide six-sigma initiative for identifiedproducts to deliver a "Product Quality As Perceived By Customer".

The receipt of the ISO 9001 Certification across 26 Divisions / Regionsof which 14 are accredited for ISO 9001:2000 version and the restfor 1994 version. Three Divisions have been accredited for ISO 14001Certification. The Baroda-based Light Sources Division emerged asone of the few in India to possess the ISO 9001 and ISO 14001Certifications.

12

Global Reports LLC


As a raw material quality-protecting initiative, a continuing vendor-assistance programme to assist vendors obtain ISO Certification.

Quality of Power Transformers and Switchgear meeting internationalEuro/EC norms and ANSI/NEMA Standards for greater receptivenessin foreign markets.

The Company's approvals from CSA, BASEEFA and CE for Fans,Motors, Automation and Control products testified to aninternationally-acceptable quality.

A Quality focus

Global Reports LLC


In the renewed organisation, there is a greater emphasis towards lowgearing and a modest cost of funds as this represents the Company'sbiggest shock absorber in a highly volatile market.

A Fiscal focus

Realising the above, the Company embarked on the following initiativesto rationalise its finance costs and improve its leverage:

It rationalised its borrowings through efficient treasury and working capitalmanagement.

It undertook more stringent inventory and debtors management togetherwith better negotiations with creditors for a favourable current assetposition.

It leveraged a credit rating of F1 (Ind) - which indicates the Highest CreditQuality and Strongest Capacity for timely payment of financialcommitments- by FITCH Ratings India to issue Rs.30 crores of CommercialPaper at attractively low rates.

It swapped high cost rupee working capital loans to low cost foreigncurrency loans; it renegotiated with banks to improve borrowing rates.

It leveraged other financial products / exports to strengthen its cash flow.

14

Global Reports LLC

A Fiscal focus

By virtue of these initiatives:

Debt reduced from Rs.627 crores in 2000-01 to Rs.459 crores in 2002-03.

The debt-equity ratio improved from 2.36 in 2000-01 to 1.58 in 2002-03.

The interest outflow in respect of debts as well as other trade creditswhich was Rs.87 crores in 2000-01 and represented a high of 6.9% of theCompany's net sales, is now Rs.64 crores, representing 4.06% of theCompany's net sales.

Interest cover, which was negative in 2000-01, is 2.74 in 2002-03.

As a result of the financial re-engineering, the Company is now moreliquid and viable.


15

Global Reports LLC

Towards concentrating on its core competencies, the Companyinitiated the following measures:

Divested its stake in SkyCell Communications Ltd, CG Glass Ltd,CG Newage Electrical Ltd, CG CoreEl Programmable Solutions PvtLtd and CG Igarashi Motors Ltd (through its 100% subsidiary).

It also sold its Low Tension Control Gear unit in Nashik.

It recently suspended operations of its Capacitors Division at Pune,Informatics Division at Bangalore and Industrial Electronics Divisionat Nashik.

The above actions generated approximately Rs.250 crores in cashflow, providing the much needed stimulus to enable the Companyto retire its debt and strengthen its gearing.

These measures have also liberated management time for greaterinvolvement in core areas.

16

Core Competence focus

Global Reports LLC

The Company's adverse financial position in 2000 required it to urgentlyaddress its presence in unrelated businesses and joint ventures whichdid not align themselves with the Company's business priorities.

Core Competence focus

Global Reports LLC


At Crompton Greaves, it was imperative to restructure the inheritedorganisational pyramid in the face of an increasingly competitiveexternal environment. The Company responded with courage anddecisiveness, convinced that however unpleasant the measuresappeared in the short-term, they were inevitable and wouldstrengthen the Company's viability in the long-term.

Despite a market position of importance, to address the handicapof high operational cost and low productivity, the Companyrelocated some of its manufacturing facilities.

Re-structuring focus

The production facilities for Ceiling Fans, Low Tension Motors,Fractional Horse Power Motors and Pumps were shifted fromMumbai - a high cost and low productivity zone - to Goa andAhmednagar which are low cost, high productivity areas. Therelocated units have started achieving increased productivity levelswith a significantly reduced workforce. This single initiative hascontributed in strengthening the financial results in these Divisions.

In its efforts to cut costs across board, austerity assumed a newdimension and these measures continue in all areas in the Company.

Global Reports LLC


These efforts helped the Company evolve from a cumulative lossof Rs.220 crores incurred during 1999-2000 and 2000-01, to arespectable profit after tax of Rs.28 crores for 2002-03.

The introduction of tough measures have helped re-direct the corporatefocus from survival to sustainable growth.

Re-structuring focus

Global Reports LLC


Who we are

Crompton Greaves, a Company in theBM Thapar Group, is one of India'slargest private sector enterprises in thebusiness of electrical engineering.

Business

Incorporated in 1937, Crompton

Greaves is engaged in the business

of manufacturing and marketing

of products related to generation,

transmission, distribution and

utilisation of power, and execution

of turnkey projects. Headquartered

in Mumbai, the Company enjoys a

business presence in four segments

- Power Systems, Industrial

Systems, Consumer Products and

Digital Products.

As at 31st March, 2003, 52.44% of

the Company's shares were owned

by the promoters (38.69% by the

Indian promoters and 13.75% by

the foreign promoter); 13.79% by

Mutual Funds; 9.78% by Indian

Institutional Investors; 3.19% by

foreigners and the rest by bodies

corporate and public.

Products

The Company offers a wide range

of products, systems and services

and has a market presence in the

following product lines.

Power Systems: Transformers,

Switchgear and Engineering

Projects.

Industrial Systems: Motors,

Alternators and Rail Transportation

Consumer Products: Fans, Lighting

and Pumps

Digital: Telecommunications.

Locations

The Company possesses 20

operational facilities across 14

locations viz: Mumbai, Nashik,

Ahmednagar, Aurangabad, Pune,

Malanpur, Mandideep, Pithampur,

Bethora, Kundaim, Tivim,

Bangalore, Chennai, Baroda.

Exports

The Company's export presence is

spread across more than 60

countries. It emerged as the largest

Indian exporter for Power

Transformers in 2002-03 with a

share exceeding 50% of the total

exports of this product from the

country. It exports to G7 developed

countries and is a preferred supplier

in many countries.



Crompton Greaves, a Company in theBM Thapar Group, is one of India'slargest private sector enterprises in the

business of electrical engineering.

PerformanceThe Company reported a turnover

growth of 8% from Rs.1601.85

crores in 2001-02 to Rs.1726.39

crores in 2002-03 and a 582%

growth in profit after tax from Rs.4.13 crores in 2001-02 to Rs.28.17

crores in 2002-03.

Quality26 Divisions/Regions of the

Company have received the ISO

9001 certification; three divisions

received the ISO 14001

accreditation. The Company's LightSources Division at Baroda is

among the few companies within

the country to possess both the

ISO 9001 and ISO 14001

certification. The Company

embarked on the six-sigma

initiative to achieve "ProductQuality As Perceived By Customer"

The Company has also received

approvals from the CESI, CSA,

BASEEFA and CE for some of its

products.

CustomersThe Company has a large customer

base comprising electricity boards,

government bodies and large

private sector companies. Some of

the reputed customers comprise anumber of State Electricity Boards,

Indian Railways, Municipal

Corporations, Siemens, ABB, Jindal

Steel, Tata companies, BHEL, BSES,

Larsen & Toubro, Alstom Power

India, Whirlpool India, Mather &

Platt (India), BSNL and LIC.

StrengthsCrompton Greaves has established

a reputation for:

- Modern manufacturing

facilities across the country.

- Joint ventures with technology

leaders.

- Customised responses tomanufacturing and marketing

needs supported through

strong in-house R&D efforts.

- Stringent quality standards.

- Deep distribution network to

service Indian and

international customers.

- Diversified product portfolio.


An 8% increase

in turnover from

Rs.1601.85 crores

in 2001-02 toRs.1726.39

crores.

A 582% increase

in profit after tax

from Rs.4.13crores in 2001-02

to Rs.28.17

crores.

An increase inoperating margin

from 9.65% in

2001-02 to

9.88%.

An increase in

the return on

capital employedfrom 10.05% in

2001-02 to

13.54%.

A reduction in

borrowings fromRs.571 crores in

2001-02 to

Rs.459 crores.

Landmarks of 2002-03Drop in interestoutflow in

respect of debtsas well as other

trade creditsfrom Rs.74 crores

to Rs.64 crores.

A 16% turnover

growth in the

Power Systemsbusiness group.

The largest IndianPower

Transformer

exporter for the

year, accounting

for more than

half of the total

exports from

India in this

segment.

The IndustrialSystems Business

Group, as a result

of making

inroads into

competitors'

market share andexpansion of

product range

recorded a

heartening

turnover growth

of 9% in a

scenario ofde-growth in this

business

segment.

The globally

pioneering

development ofcompact polymer

concrete

encapsulated

single piecevacuum

interrupter for

12kV

applications,

more compact

and cost-

effective thanthe conventional

porcelain clad

circuit breaker.

CompleteElectrical System

for 1400 HP

Diesel Electric

Multiple Units

(DEMU) includingDC Traction

Motor (225 kW)

Type C1005TM,

Traction

Alternator

(1000 kVA) TypeC1012TA.


Global Reports LLC


The pioneering

development ofFlameproof

Motors in GasGroup IIC for

hazardous

applications,

certified by the

Central MiningResearch

Institute.

Landmarks of 2002-03A credit rating of

F1 (Ind) by FITCH

Ratings India fora Rs.30 crores

commercialpaper

programme,reflecting the

Highest Credit

Quality and

Strongest

Capacity for

timely payment

of financialcommitments.

Divestment ofthe Company's

shareholding in

CG Newage

Electrical Ltd.,CG CoreEl

ProgrammableSolutions Pvt Ltd.

and CG Igarashi

Motors Ltd.

(through its

100% subsidiary).

Thecommencement

of the six-sigma

methodology

across theorganisation for

identifiedproducts to

achieve "Product

Quality as

Perceived By

Customer".

Doubledproductivity

capability on an

average, at all

majormanufacturing

facilities.

Suspension of

operations at the

CapacitorsDivision at Pune,

InformaticsDivision at

Bangalore andIndustrial

Electronics

Division at

Nashik.

The introduction

of 70 MVA,

220/6.9-6.9/6.9

kV split winding

transformers,

the largest toundergo the

short circuit test

in India.

The development

of a 245 kV SF6

Gas CircuitBreaker

successfully

tested by CESI

(Italy) and CPRI

(India) and

approved by

reputedinternational

agencies.

Advanced stage

of establishing

facilities for

manufacture ofnew generation

Gas Insulated

Switchgear with

the latest in

switchgear

technology from

Hyundai HeavyIndustries Co.

Ltd., Korea.

An upgradation

of quality

certification for

eight of the

Company's

divisions toISO 9001: 2000

version.

Global Reports LLC


Directors' Report for the Year ended 31st March, 2003

To,

The Members,

The Directors present their Sixty-sixth Report with the audited accounts for the year ended 31st March, 2003.

OperationsDespite the Industry's slow pace of growth and competitive market forces, from both within and outside India,the Company's efforts in various directions towards improved performance indicators have yielded the desiredresults. The profit after tax has increased by 582% as compared with last year. The restructuring initiatives, costcontrol measures and actions for sustainable growth will further enable the Company to consolidate its financialposition.

Financial Highlights

Particulars

(a) Gross Sales/Income(b) Less: Excise Duty

(c) Less: Operating Expenses(d) Operating Profit(e) Add: Dividend and Other Income(f) Profit before Interest, Depreciation,

Amortisation, Exceptional Items and Taxes(g) Less: Interest(h) Profit before Depreciation, Amortisation,

Exceptional Items and Taxes(i) Less: Depreciation(j) Less: Miscellaneous Expenditure Amortised(k) Profit Before Exceptional Items And Taxes(I) Add: Exceptional Items(m) Profit Before Tax(n) Less: Provision for Current Year Tax(o) Less: Provision for Deferred Tax(p) Profit After Tax

carried to Profit & Loss Account(q) Transfer to/from General Reserve(r) Balance brought forward from previous year

Balance Carried To Balance Sheet

31.3.2003

Rs.Crores

1726.39139.37

1587.021430.21

156.8113.46

170.27

64.43

105.8445.2529.5931.00

6.2037.20

0.25

8.78

28.17

-2.76

-38.90-13.49

31.3.2002

Rs.Crores

Growth %

1601.85123.28

1478.571335.89

142.6813.99

156.67

74.40

82.2744.2627.5610.45-3.57

6.88

0.25

2.50

4.13

94.84-137.87

582%

- 38.90

The improvement is more significant in the Power Systems and Industrial Systems Business Groups, asreflected by the Profit Before Interest and Tax, as under:

Strategic Business Units

Power SystemsIndustrial SystemsConsumer ProductsDigital

2002-03

63.0423.3742.95

3.65

2001-02

53.2919.88

41.75

8.99

A detailed review of the operations and performance of each Business Group is contained in the ManagementDiscussion & Analysis Report, which forms a part of this Report.

24

Growth %

8%

Global Reports LLC

Dividend

Despite the improved profits, considering the carriedforward losses, the Directors regret their inability to

recommend a dividend for the year under review.

ReservesThe Reserves at the beginning of the year were

Rs.364.90 crores. The Reserves at the end of the year

are Rs.389.65 crores, which includes Rs.81.12 crores

due to Deferred Tax Credit.

The Board of Directors has approved a Scheme of

Capital Reduction, as permitted by the Companies Act,

pursuant to which the balance in the Share/Securities

Premium Account would be utilised to adjust the

unamortised miscellaneous expenditure, Deferred Tax

Asset and carried forward debit balance in the Profit

& Loss Account, for which a separate proposal iscontained in the accompanying Notice of the

forthcoming Annual General Meeting. If approved by

the Members and Regulatory Authorities, as necessary,

the Share/Securities Premium Account will stand

reduced.

Directorate

Mr S Bisht has been nominated by ICICI Bank Ltd to

represent its interests on the Company's Board of

Directors, as its Nominee Director, in place ofMrs R Nirula. Mr Bisht was appointed a Director on

28th August, 2002, and will not be subject to retirementby rotation.

Mr J Shaw was a Director on the Board, as a

representative of the Company's foreign promoter.

Mr Shaw has resigned from the Board with effect from22nd May, 2003, consequent to transfer of shares by

the foreign promoter in favour of its subsidiary, Penbryn

International Ltd.

The Board places on record its appreciation for the

guidance, support and valuable contributions ofMrs Nirula and Mr Shaw during their tenure as Directors

of the Company.

Mr KK Nohria retires by rotation at the forthcoming

Annual General Meeting, and being eligible, offers

himself for re-appointment to the Board. In terms ofClause 49 of the Listing Agreement with Stock

Exchanges, the details of the Director to be re-appointed

are contained in the accompanying Notice of theforthcoming Annual General Meeting.

Research and Development

The pursuit of transforming Research and Development

(R&D) into a value transferring business unit continues.

R&D's thrust is on developing new products and

technologies benchmarked with the best in the world,

to help increase the competitiveness of the Company.

The Company will continue to progressively increase

its investment in R&D to establish a base of high

quality manpower with adequate infrastructure.

Subsidiary Companies

CG-PPI Adhesive Products Ltd and CTR ManufacturingIndustries Ltd are subsidiaries of CG Capital &

Investments Ltd, which is a 100% subsidiary of the

Company. Hence, in terms of the provisions of the

Companies Act, 1956, these companies are also the

Company's subsidiaries. Pursuant to Section 212 of

the Companies Act, 1956, the Annual Reports of thesethree companies for the year ended 31st March, 2003

are annexed to this Report.

Consolidation of Accounts

As required by Accounting Standards AS-21 and AS-

23 of the Institute of Chartered Accountants of India,the financial statements of the Company reflecting

the consolidation of the Accounts of the Company, its

3 subsidiary companies mentioned above, and 6

associate companies, are annexed to this Report. The

associate companies are Brook Crompton Greaves Ltd,CG Lucy Switchgear Ltd, CG Maersk Information

Technologies Pvt Ltd, CG Smith Software Pvt Ltd,

International Components India Ltd and Hitachi CG

Motor Engineering Pvt Ltd.

For the purposes of this disclosure, all joint venture

companies have been treated as associate companies.These consolidated financial statements conform to

the requirements of both these Accounting Standards.

Foreign Promoter Shareholding

During the year, Crompton Parkinson Ltd, the Company's

foreign promoter, has transferred its 13.75%

shareholding to its subsidiary, Penbryn International

Ltd, Mauritius.

Conservation of Energy, Technology Absorption and

Foreign Exchange Earnings and OutgoAs required by the Companies (Disclosure of Particulars

in the Report of Board of Directors) Rules, 1988, the

relevant data pertaining to conservation of energy,

technology absorption and foreign exchange earnings

and outgo are given in the prescribed format as an

Annexure to this Report.

Particulars of Employees

The statement of particulars required pursuant to

Section 217(2A) of the Companies Act, 1956 read with

the Companies (Particulars of Employees) (Amendment)Rules, 2002, forms a part of this Report. However, as

permitted by the Companies Act, 1956, the Report

and Accounts are being sent to all Members and other

entitled persons excluding the above statement. Those

interested in obtaining a copy of the said statement

Global Reports LLC

.Crompton Greaves Limited Directors Report

may write to the Company Secretary at the Registered

Office and the same will be sent by post. The Statementis also available for inspection at the Registered Office

during working hours upto the date of the AnnualGeneral Meeting.

Auditors' Report & Certificate

The Company's explanations to the Auditors'

observations in their Report have been detailed inNote Nos. 1, 28 and 31 (a) in the Notes on Accounts

contained in Schedule B to the Accounts, which forms

part of the Annual Report. The Auditors have also

certified the Company's compliance of the requirementsof Corporate Governance in terms of Clause 49 of the

Listing Agreement and the same is enclosed as an

Annexure to the Report on Corporate Governance.

Directors' Responsibility Statement

The Directors would like to assure the Members that

the financial statements for the year under review

conform in their entirety to the requirements of theCompanies Act, 1956.

The Directors confirm that:

• the Annual Accounts have been prepared inconformity with the applicable Accounting

Standards;

• the Accounting Policies selected and applied on

a consistent basis, give a true and fair view of theaffairs of the Company and of the profit for the

financial year;

• sufficient care has been taken that adequateaccounting records have been maintained for

safeguarding the assets of the Company; and forprevention and detection of fraud and other

irregularities;

• the Annual Accounts have been prepared on a

going concern basis.

Auditors

The Company's Auditors, Sharp & Tannan, hold office

upto the conclusion of the forthcoming Annual General

Meeting and, being eligible, are recommended for re-appointment on terms to be negotiated by the Audit

Committee of the Board of Directors. They have

furnished the requisite certificate to the effect that

their re-appointment, if effected, will be in accordance

with Section 224(1B) of the Companies Act, 1956.

Fixed Deposits

Currently, the Company has discontinued acceptanceof fresh deposits and has also stopped renewal of

existing deposits under its present Fixed Deposit

Scheme. 1,187 persons had not claimed repayment

of their matured deposits amounting to Rs.121.76 lacs

as at 31st March, 2003. At the date of this Report, an

amount of Rs.41.62 lacs therefrom has been claimed

and repaid and/or renewed.

Effective 1st March, 2003, the Company has appointed

Intime Spectrum Registry Limited as its Registrars to

deal with all matters relating to the Company's Fixed

Deposit Scheme. Depositors are requested to address

their queries, if any, in this regard, to the Registrars at

the address mentioned in the Report on Corporate

Governance annexed hereto.

Share Registrar & Transfer Agent

The Securities and Exchange Board of India (SEBI) has

directed that listed companies centralise all share

registry activities related to both physical and electronic

share transactions, at a single point, either in-house

or at a SEBI-registered Registrar & Transfer Agent.

In view of this directive, with effect from 31st March,

2003, the Company's entire share registry function in

both physical and electronic form is being looked after

by Sharepro Services, which is a SEBI-registered

Registrar & Transfer Agent. The contact details of

Sharepro Services are mentioned in the Report on

Corporate Governance annexed hereto.

Investors are requested to address their queries, if any,

in this regard, to Sharepro Services; however, in case

of difficulties, they are welcome to contact the

Company's Investor Services Department, the contactparticulars of which are contained in the accompanying

Notice of the forthcoming Annual General Meeting.

Health & Safety Policy

The Company has a Health & Safety Policy for its

factories and establishments, which addresses the

Regulatory requirements and also preventive measures

as regards safety, health and environment. Constitution

of Health & Safety Committees, Safety audits and

training of employees forms an integral part of the

systems and processes implemented in this area.

Listing Arrangements

The Company's shares are listed on the Mumbai,

Calcutta, Delhi and Madras Stock Exchanges as well

as on the National Stock Exchange. The Company's

Global Depository Receipts are listed on the London

Stock Exchange. The Listing fees to all Stock Exchanges

have been paid upto date.

SEBI has recently issued Guidelines permitting a

Company to voluntarily delist its securities without

giving an exit opportunity to shareholders, if its shares

are listed on Stock Exchanges having nationwide

trading terminals. Since the Company's shares are

listed on the Mumbai and National Stock Exchanges,

which have nationwide trading terminals, the Company

proposes to voluntarily delist its shares from the

26

Global Reports LLC

Crompton Greaves Limited Directors' Report

Calcutta, Delhi and Madras Stock Exchanges. A proposal

in this respect is contained in the accompanying Noticeof the forthcoming Annual General Meeting.

AcknowledgmentsThe Directors express their gratitude to all the Members,dealers, customers, suppliers, financial institutions,bankers and other business associates for theircontinued loyalty and support to the Company.

The Directors also wish to place on record their deepappreciation for the spirit of dedication and the

immense contributions made by employees at all levels,

who through their competence, diligence and hardwork have helped the Company to achieve betterperformance during the year.

On behalf of the Board of Directors

Mumbai, 22nd May, 2003.KK NOHRIA

Chairman

Global Reports LLC


Annexure to Directors' Report Under Section 217(1)(e) of the Companies Act. 1956

A. CONSERVATION OF ENERGY

(a) Energy Conservation Measures taken:

The thrust on energy conservation continues

with increasing usage of natural gas for

heating, smart switching of lighting & air

conditioning loads, efficient lighting systems

and maintenance of power factor closer to

unity.

The typical initiatives taken in changing over

to energy efficient manufacturing processes

are:

• Installation of low cost heating systems

with an optimal mix of electrical and

thermic heating;

• Use of speciality steels to reduce heat

treatment cycle time;

• Redesign of autoclave vacuum pumping

systems and wideband winding machine

heating systems;

• Replacement of TIG/MIG welding machines

by energy efficient welding machines

• Change in stator technology for reduction

in curing time.

(b) Additional investments and proposals, if

any, being implemented for reduction in

consumption of energy:

Total investment in Energy Conservation

Projects is proposed to be Rs.300 lacs in year

2003-04.

(c) Impact of the measures at (a) and (b) for

reduction of Energy consumption and

consequent impact on the cost of

production:

Through better energy efficient manufacturing

process and better power quality management,

saving over Rs.270 Lacs has been achieved

and the impact is expected to be greater next

year. This saving, however, has no appreciable

impact on cost of goods, as the production

processes are not energy intensive.

B. TECHNOLOGY ABSORPTION

Research and Development (R & D)

1. Specific areas of significance in which R&D is

carried out by the Company

During the year under review, R&D activities were

focused on cost competitiveness, value re-

engineering, enhanced reliability, improvement in

the performance of existing products, development

of new products & processes, and greater use of

analytical tools and software to aid optimisation

and productivity.

2. Benefits derived as a result of the above R&D

New products developed

Power Systems

� Cast Resin dry type transformers upto 1000

kVA

� 70 MVA, 220/6.9 - 6.9/6.9 kV split winding

transformers, largest transformer to undergo

short circuit test in India

� Sealed type distribution transformer with

corrugated tank upto 1250 kVA, 11/0.433 kV

� 300 kV & 145 kV current transformers as per

ANSI standards

� 12 kV, 13.1 kA indoor draw-out, horizontal &

vertical isolation vacuum circuit breakers

� SF6 circuit breakers with spring mechanism

for 145 kV, 40 kA & gas circuit breakers with

spring mechanism for 245 kV system

� 145 kV, 12 kA SF6 circuit switch for low

temperature application

� Class 2 polymeric lightning arresters upto

96 kV

� 52 kV, 200 A; 1 kV, 400 A and 15 kV with

breaking current upto 25 kA vacuum

interrupters

� Polycrete encapsulated outdoor 12kV vacuum

interrupters with breaking current upto 25 kA

� Smart VAR - low power, intelligent, completely

self-protected soft-switched capacitors for

stand-alone or integrated operation

� 1.1 MVAR thyristor switched capacitor panel

Industrial Systems

• Complete electrical system for 1400 HP Diesel

Global Reports LLC


Annexure to Directors' Report Under Section 217(1)(e) of the Companies Act. 1956

Electric Multiple Units (DEMU) including DC

Traction Motor (225 kW) Type C1005TM,

Traction Alternator (1000 kVA) type C1012 TA

> 290 kW Traction Motor with modified design

for 3100 HP diesel electric locomotives of

Indian Railways suitable for both passenger

and goods application

> Auxilliary Mill Duty DC motor in 812 frame

with laminated yoke

> Flameproof Gas Group II C Motors upto 600

kW, 6.6 kV for hazardous areas with presence

of hydrogen

> Large energy efficient surface cooled motors

upto 6.6 kV, 1000 kW

> 750kW, 18 Pole, 6.6kV large motors with slow

speed for compressor applications

> 6.6 kV increased safety motors suitable for

solid state drives for refinery application for

Zone 2 hazardous areas

> LT motors to US NEMA MG1 standard for

efficiency, dimensions and performance upto

frame size 400 (Equivalent IEC Frame 250)

> High efficiency LT motors to European CEMEP

standard and IEEMA standard 19:2000 with

EFF1

> Fractional HP single phase motors for washing

machines, employing fuzzy logic & front

loading features

> 2000 kVA, 415/690 V, 4 Pole synchronous

machine to work both as motor and generator,

with cylindrical rotor

> 2 x 2265 kVA, 4 Pole, 3.3 kVA brushless

alternator with solid pole rotor for hydel

application

> 250 kVA - 625 kVA intermediate range

brushless alternators

> 5 kVA - 15 kVA, 2 Pole, high speed brushless

alternators

Consumer Products

* Ceiling fans - improved version of Hugger

Petite, Deluxe version of High Speed &

Whirlwind, and Mini Aura 900 mm &

1050 mm

* Pedestal fan - Farrata 20"

* Plastic wall fan, 16" table fan and 8" Classic

exhaust fan

* 20" Eco cooler kit

* Electronic ballasts for a new range of T5/14W

& 28W lamps; and CFL9-11-13-18W lamps

* Luminaires for industrial high bay, medium

bay and volumetric illumination application -

with better aesthetics, ingress protection and

serviceability (Round Highbay & Volumina

Refractor)

* Luminaires for new generation slim fluorescent

energy efficient lamps (T5) with iridescence

free optics, higher efficiency and aesthetics

(Symetria, Techlita & Aesthetica)

* GLS 200 W Lamps; long life Mushroom lamps;

Metal Halide lamps

* Pumps - Eco Model - Mini Marvel II (0.5 HP),

Mini Star III (0.25 HP), Mini Star I (1 HP),

Monobloc and 4" & 8" submersible pumps

* Tank compressors for auto garages & spray

painting booths

Digital

* New Telephone Models: CG-07 and CG-09

* Interface converters: G703 - V.35/V.11 Data

Interface product

* Optical Modem: Copper - Fiber interface

converter for LAN/WAN networks, works on

single mode/multimode optical fibre

New Processes Implemented

# Infiltration process for manufacturing of

contact tips for vacuum interrupters

# 'Wrap' process technology for manufacturing

of high voltage motor coils

# Coating process to reduce rusting of steel shaft

of motors

# Modified heat treatment cycle for low carbon,

high phosphorous steel for motors

29

Global Reports LLC

Crompton Greaves Limited Annexure to Directors' Report

Riveted core pack for lower magnetisation

current

Pure aluminium rotor integral die cast with

LM24 end shield for fans

Process for achieving an improved conductivity

of die cast fan rotors

Conversion process for reuse of rejected

fluorescent glass tubes

the areas of significance already reported. In

keeping with the global and domestic thrust on

energy conservation, environment-friendly

products and efficient asset management of capital

equipment, focus will be on the development of

energy efficient products, oil-less and more reliable

products, and intelligent power apparatus and

electrical devices.

4. Expenditure on R & D 31 st March, 2003

Rs. Crores

1.51

13.08

14.59

(a) Capital

(b) Revenue

(c) Total (a + b)

(d) Total R&D expenditure:

• as a percentage of total turnover 0.84%

• as a percentage of profit 39.00%

before tax

Technology Absorption, Adaptation and Innovation

1. Efforts and Benefits

In-house Research and Development efforts,

supplemented by technological tie-ups and

consultancy arrangements, where necessary, have

led to product and process upgradation and has

resulted in significant enhancement of product

quality, cost reduction and material substitution.

Engineers are trained in new technologies in

manufacturing and design. In keeping with the

Company's emphasis on exports, product designs

are upgraded to meet international standards.

Import Substitution during the year

30

Technology Competence Achieved

Thermal and fluid-flow coupled analysis for

design of transformers

3D modeling of power transformer tank and

generation of fabrication drawings

Design of yoke shunt to control stray loss in

large transformers

Polyurethane and polycrete encapsulated

vacuum interrupters

Design of single ceramic 15 kV vacuum

interrupter

Prediction technique for dynamic effect of

short circuit on transformers

Segmental stampings for wind, hydro &

thermal generators to different international

standards

Motors with extremely low shaft vibration for

application in compressors

Design of magnetising fixture using FEM for

ring magnets for BLDC motors

Patents

In addition to the six patents, which were pending

registration last year, the Company has filed

applications for registration for three more patents,

which are also pending registration during the

year.

3. Future Plan of Action

The Company plans to intensify its activities in

Indigenisation of Molybdenum Sheets

fabrication for "heat zone of vacuum furnace"

Flameproof Gas Group II C Motors

Low vibration, high speed motors for

compressors

Over load relay application (600 - 900A) for

Diesel Electric Drives application.

Global Reports LLC

Crompton Greaves Limited Annexure to Directors' Report

2. Imported Technology

Year of Import

1998-1999

1999-2000

2001-2002

Product

Metalclad SwitchgearPanels

Amorphous CoreTransformers

Gas InsulatedSwitchgear

Imported From

Mitsubishi ElectricElectric Corpn. Japan

Allied Signal TechnologiesInc., USA

Hyundai Heavy IndustriesCo. Ltd., Korea

Status of Absorption

absorbed

absorbed aftermodification by theCompany's R&D andTechnology

in progress

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

(a) Activities relating to exports; initiatives

taken to increase exports; development of

new export markets for products and

services; and export plans:

The Company's activities and initiatives relating

to Exports are contained in the Management

Discussion and Analysis Report which forms

a part of the Annual Report.

(b) Total Foreign Exchange Earned and Used :

Rs. Crores

Total Foreign Exchange Earned 261.60

Total Foreign Exchange Used 119.66



Chairman



Report on Corporate Governance

1. Company's Philosophy on Corporate GovernanceThe Company's philosophy on CorporateGovernance harmonises the need to strike abalance between enhanced shareholder value,without detriment to the interests of otherstakeholders. Towards fulfillment of thisphilosophy, all Company systems and practices,whether related to shareholder protection,management control, disclosures or otherwise,reflect transparency in operations andcommunication, as well as clarity andaccountability beyond the Regulatory stipulationsThese practices translate into a performance-based, productivity-oriented culture leading tohigher operational efficiencies.

2. Board of DirectorsAs on 31st March, 2003, the Board of Directorscomprised the Managing Director and 6 Non-Executive Directors.

During the year, 6 Board Meetings were held, on29th April, 2002; 28th May, 2002; 8th July, 2002;28th August, 2002; 22nd October, 2002; and 30thJanuary, 2003. The Company's last Annual GeneralMeeting was held on 28th August, 2002.

The particulars of Directors, their attendance duringthe financial year 2002-2003 and also otherDirectorships (including Private Limited Companies,but excluding Alternate Directorships) and BoardCommittee Representations of Public LimitedCompanies, of Directors on the Board as at 31st

March, 2003, are as under:

Name of Director

Mr KK NohriaChairman

Mr SM TrehanManaging Director

Mr PC Gupta

Mrs R Nirula*

Mr S Bisht*

Mr G Thapar

Mr K Thapar

Mr J Shaw

Particulars

Non- Executive;Independent

Executive

Institutional Nominee;Non-Executive;Independent



Indian PromoterNominee;Non-Executive

Indian PromoterNominee;Non-Executive

Foreign PromoterNominee;Non-Executive

Attendance

BoardMeetings

5

6

5

2

3

5

5

~

LastAGM

•

•

X

X

•

•

•

X

Other Board Re

Directorships

16

5

2

NA

3

10

11

~

presentations

Committees

3

-

1

NA

2

5

2

~

* For part of the year



Report on Corporate Governance

3. Audit CommitteeThe Audit Committee comprises three IndependentNon-Executive Directors. Mr S Bisht replacedMrs R Nirula on the Committee with effect from28th August, 2002. The Chief of Internal Auditattends the meetings of the Audit Committee,and the Company Secretary is Secretary to theCommittee.

The role and terms of reference of the AuditCommittee fulfill the requirements of the ListingAgreement with Stock Exchanges, besides dueemphasis on financial reporting processes,accounting policies and risk management systemsDuring the year, the Committee also reviewed theactual benefits from the SAP R3 ERP package

4.

compared with management expectationstherefrom. A rating system for the Company'sDivisions by the Internal Audit Department, withobjective parameters and a systems focus has beeninitiated. Special attention was placed on systemsfor awarding contracts, as well as for health andaging of inventories and debtors for correctivemeasures, where necessary. The Committee heldregular interactions with external Auditors tobenefit from their professional views on theCompany's Accounts.

During the financial year 2002-2003, 6 AuditCommittee Meetings were held on 29th April, 2002,28th May, 2002, 8th July, 2002, 22nd October, 2002,30th January, 2003 and 27th March, 2003.

The composition and details of attendance of the Audit Committee are as under:

Name of the

Mr KK Nohria

Mr PC Gupta

Mrs R Nirula*

Mr S Bisht*

Status

Chairman

Member

Member

Member

No of Meetings

5

5

2

1


Remuneration Committee & Directors'RemunerationAlthough not mandatory in terms of the ListingAgreement with Stock Exchanges, the Companyhas a Remuneration Committee comprising 3Independent Non-Executive Directors - Mr KKNohria (Chairman), Mr PC Gupta and Mr S Bisht.Although the Listing Agreement and theCompanies Act require the RemunerationCommittee to only review the remuneration paidto Executive Directors, the Committee also reviews

the remuneration of Senior Executives. During thefinancial year, the Committee met on 19th April2002 and 30th January, 2003, at which all theMembers were present.

Executive Directors

The remuneration structure of the ManagingDirector for the year under review consisted ofsalary and perquisites. The present remunerationpackage of the Managing Director does not providefor a commission based on performance/profits.

The details of remuneration paid to the Managing Director for the financial year 2002-03 is as under :

In respect of the above, a service contract existswith the Managing Director which contains hisservice terms and conditions includingremuneration, notice period, severance fees etc,as approved by the Members.

Non-Executive DirectorsThe remuneration paid to Non-Executive Directorsfor the financial year ended 31st March, 2003consisted only of sitting fees for attending Boardand Committee Meetings. The details of paymentsare as under:

33

Mr SM Trehan, Managing Director

Perquisites

Rs.8,00,000

Retirement

Benefits

Rs.

13,88,517

Total

Rs.

67,75,614

Salary

Rs.45,87,097

Global Reports LLC

Crompton Greaves Limited Report on Corporate Governance

Name of the Director

Mr KK Nohria

Mr PC Gupta

Mrs R Nirula*

AmountRs.

70,000

60,000

25,000

Name of theDirector

Mr G Thapar

Mr K Thapar

Mr S Bisht*

AmountRs.

55,000

55,000

25,000


Non-Executive Directors are collectively entitled

to Commission upto 1% of Net Profits of the

Company for each financial year; however, no

payment in this regard was made during the year.

The Company presently does not have any Stock

Option Plans or Schemes thereunder.

Shareholders/Investors Grievance CommitteeThe Committee comprises Mr KK Nohria (Chairman)

and Mr SM Trehan, Managing Director.

Mr W Henriques, Company Secretary, has been

designated by the Board as the Compliance Officer.

The Committee reviews the redressal of share-

holders' and investors' complaints related totransfers and transmission of shares, non-receiptof annual reports, dividends and other share relatedmatters In addition to review by this Committee,the Company continues its existing practice ofreporting to the Directors at each Board Meeting,the number and category of shareholder complaintsreceived and the status of their resolution.

The Company has received only one shareholder

complaint during the financial year, which wassatisfactorily resolved; there are no outstandingcomplaints or shares pending transfer as on 31st

March, 2003.

6. General Body MeetingsThe details of the last three Annual General Meetings are as under:

Financial Year

1999-20002000-20012001-2002

Location

Patkar Hall, Mumbai 400 020

Patkar Hall, Mumbai 400 020Patkar Hall, Mumbai 400 020

Date

10th August, 200024th July, 200128th August, 2002

Time

4.00 p.m.

4.00 p.m.3.30 p.m.

Special Resolutions transacted at the last three Annual Genera! Meetings held on :

10th August, 2000Commission to Non-Executive Directors notexceeding 1% of the net profits of the Companyper annum computed in accordance withSection 309(5) of the Act, for each of the fivefinancial years commencing from 1st April,2000; this was a renewal of the earlierResolution.

24th July, 2001Location of the Register and Index of Membersand Debenture Holders and the other documentsmentioned in Section 163 of the CompaniesAct, 1956, being shifted from the Company'sRegistered Office to any office of a ShareTransfer Agent registered with Securities andExchange Board of India, within Mumbai, ifappointed.

28th August, 2002* Re-appointment of Mr SM Trehan as

Managing Director for a period of three yearsfrom 3rd May, 2002 to 2nd May, 2005, as perterms and conditions set out in the

Explanatory Statement annexed to theResolution.

Location of the Register and Index of Members

and Debenture Holders and other documentsmentioned in Section 163 of the CompaniesAct, 1956, at the Company's AdministrativeOffice situated at Kanjur Marg (East) Mumbai400 042, instead of at its Registered Office.

No Special Resolutions were implemented throughpostal ballot during the year under review, norare any Resolutions presently proposed.

7. DisclosuresConsidering the size and nature of operations,there were no related party transactions of amaterially significant nature in terms of theListing Agreement with Stock Exchanges, thatmay have a potential conflict with the interestsof the Company at large.

The Company has complied with all requirementsof of the Listing Agreement with StockExchanges as well as the Regulations andGuidelines prescribed by SEBI. There were no



penalties or strictures imposed on the Companyby any statutory authorities for non-complianceon any matter related to capital markets, duringthe last three years.

8. Means of CommunicationThe Company's quarterly results in the formatprescribed by the Stock Exchanges are approvedand taken on record by the Board within theprescribed time frame, and sent immediately toall Stock Exchanges on which the Company's sharesare listed. These results are published in leadingnewspapers - The Economic Times, Financial Expressand Business Standard in English and the

9. General Shareholder Information

Annual General MeetingDate, time and venue

Financial CalendarFirst Quarter ResultsSecond Quarter ResultsThird Quarter ResultsLast Quarter Results and Annual Audited ResultsPayment of Dividend

Date of Book Closure

Dividend Payment Date

Listing Details

Maharashtra Times in vernacular, and are alsouploaded on the Electronic Data Information FilingAnd Retrieval System, as required by the ListingAgreement with Stock Exchanges.

Information about the Company in general, itsfinancial results, and other information includingofficial press releases can be accessed at theCompany's internet home page www.cglonline.com

Meetings are held with institutional investors andresearch analysts, as necessary.

The Management Discussion & Analysis Reportforms an integral part, of the Annual Report.

Tuesday, 22nd July, 2003 at 3.30 p.m.Patkar Hall, Nathibai Thackersey Road,New Marine Lines, Mumbai 400 020

End JulyEnd OctoberEnd JanuaryMayIf declared, immediately after the AGM

12th July, 2003 to 22nd July, 2003

Not applicable

The details of the Stock Exchanges on which the Company's shares are listed are as under:

Name

The Stock Exchange, Mumbai

Calcutta Stock Exchange Association Ltd

The Delhi Stock Exchange Association Ltd

Madras Stock Exchange Ltd

National Stock Exchange of India Ltd

Address

Phiroze Jeejeebhoy Towers,Dalal Street, Mumbai 400 001

7 Lyons Range, Kolkata 700 001

DSE House, 3/1 Asaf AN Road,New Delhi 110 002

Exchange Building, Post Box 183,11 Second Line Beach,

Chennai 600 001

Exchange Plaza, Bandra-KurlaComplex, Bandra (E),

Mumbai 400 051.

Stock Code

500093

13027

03114

CROMPGREV

CROMPGREAV

Listing Fees for financial year 2003-04 to all the Stock Exchanges have been paid in time.

International Securities Identification Number (KIN)INE067A01011 (NSDL & CDSL.)



* Market Price Data - The Stock Exchange, Mumbai

Month

April 2002May 2002June 2002July 2002August 2002September 2002October 2002November 2002December 2002January 2003February 2003March 2003

Highest (Rs)of the Month

49.5554.7556.8060.4043.5042.6045.2048.4049.8055.8563.7062.70

Lowest (Rs.)of the Month

41.0038.7043.2036.4536.6036.8037.5540.2043.6044.1048.7551.00

Closing (Rs.)1st trading day

of the Month

47.6540.9544.7554.1036.9038.5538.8042.8047.0547.7050.1561.95

# Share Performance Vs BSE Sensex

Sensex

1/4/02 2/5/02 3/6/02 1/7/02 1/8/02 2/9/02 1/10/02 1/11/02 2/12/02 1/1/03 3/2/03 3/3/03 31/3/03

4500

4000

3500

3000

2500

Registrars and AgentsFor SharesThe Securities and Exchange Board of India (SEBI)had advised listed companies, that by 31st March,2003, all activities related to share registry interms of both physical and electronic form,should be maintained at a single point, eitherin-house by the Company or by a SEBI-registeredRegistrar & Transfer Agent

Whilst the Company's physical share registry

activities were handled in-house by the Company'sInvestor Services Department, the activitiesrequiring electronic connectivity had already beensuccessfully out-sourced to Sharepro Services, aSEBI-registered Registrar & Transfer Agent.

In view of the above requirement of SEBI, theCompany has now out-sourced its entire shareregistry activities to Sharepro Services; contactdetails are as under:

Sen

sex

Clo

sing

Sha

re P

rices

(Rs.

)

36

Crompton

Global Reports LLC


Sharepro ServicesUnit: Crompton Greaves Ltd

912, Raheja CentreFree Press Journal Road

Nariman Point, Mumbai 400 021

Tel: 22881568/69,22825163

Fax: 22825484

Email: sharepro_servi [email protected]

Sharepro ServicesUnit: Crompton Greaves LtdSatam Estate, 3rd Floor,

Above Bank of Baroda,

Chakala, Andheri (E), Mumbai 400 099

Tel: 28215168/69

Fax: 28375646Email: [email protected]

For Fixed DepositsThe contact details are as under:Intime Spectrum Registry LimitedC-13 Pannalal Silk Mills CompoundLBS Marg Bhandup (West)

Mumbai 400 078.Tel: 25923837

Fax: 25672693Email: [email protected]

Share Transfer System

The Company's shares are compulsorily traded

in dematerialised form. In the case of transfersin physical form which are lodged at the

Registrar & Transfer Agent's Office, these are

# Distribution of Shareholding as on 31st March, 2003

processed within a maximum period of 30 days

from the date of receipt, if all the requisite

documentation is submitted, after giving the

shareholder the option for concurrent

dematerialisation.

All share transfers and other share related issues

are approved by a Director authorised by the Board;

approvals are obtained at intervals not exceeding

1 5 days; during the financial year 2002-03, 46

approvals were obtained.

The total number of shares in physical form

transferred during the year under review was

86,754.

No of Shares

Up to 500

501 - 1000

1001 - 2000

2001 - 3000

3001 - 4000

4001 - 5000

5001 - 1000010001 and above

No of Shareholders

40,942

1,800

638176804988

10943,882

%> of Shareholders

93.31

4.10

1.45

0.40

0.18

0.11

0.200.25

100.00

# Categories of Shareholders on 31st March, 2003

Category

Promoters• Indian (Including persons

acting in concert)• Foreign

Indian Institutional InvestorsBodies CorporateForeign Institutional InvestorsNRIs, OCBs, GDRsMutual FundsGeneral PublicDirectors

No of Shares %of Rs. 10/-each

2,02,59,360

72,00,00051,18,51721,84,867

20,20016,48,96372,17,86683,32,017

3,84,866

5,23,66,656

'"38.69

13.759.784.160.04

3.1513.79

15.910.73

100.00


mailto:sharepro_servi [email protected]

mailto:[email protected]

mailto:[email protected]


Dematerialisation of SharesAs on 31st March, 2003, 94.47% of the total sharesof the Company have been dematerialised.Considering the Promoters' shareholding of 1.06%in physical form, this percentage can be consideredto constitute 95.53%.

Outstanding GDRs/Warrants or any ConvertibleInstrumentsThe outstanding GDRs are represented byunderlying equity shares that are part of theexisting equity capital. No convertible instrumentsare outstanding as on 31st March, 2003, andtherefore there will be no consequential impacton equity.

Plant LocationsDetailed information on Plant locations, products,establishments and service centres with theircontact details, is provided at the end of the AnnualReport.

Address for CorrespondenceCorporate Secretarial DepartmentThe Corporate Secretarial Department is locatedat the Company's Registered Office situated at 6th

Floor, CG House, Dr Annie Besant Road, Prabhadevi,Mumbai 400 025.

Investor Services DepartmentIn addition to the Share Registrar & Transfer Agent,our Investor Services Department, which is locatedat the Company's Registered Office, will assist incase Investors experience any difficulties in theirinteraction with Sharepro Services.

Contact Person : Mr AR Patil, Sr SecretarialExecutive

Time : 2.00 pm to 5.00 pm

(Mondays to Fridays)

Tel : 24237804,24237805

Fax : 24237788

E-mail : [email protected] Requirements

The Company has implemented the following non-mandatory requirements recommended underClause 49 of the Listing Agreement:

Chairman's OfficeA Chairman's Office with requisite facilities isprovided and maintained at the Company'sexpense for use by its Non-Executive Chairman.The Company also reimburses all expensesincurred in furtherance of the Company'sbusiness interests

Remuneration CommitteeA Remuneration Committee comprising threeNon-Executive Independent Directors is alreadyfunctional, for review and decisions onremuneration packages of Executive Directorsand Senior Executives of the Company.

Financial results as published in the newspapersare made available to the Members on request.



Chairman



To

The MembersCrompton Greaves LimitedCG HouseDr Annie Besant RoadPrabhadeviMumbai 400 025

Dear Sirs,

We have reviewed the implementation of the requirements of Corporate Governance by the Company, asprescribed by the Listing Agreement with Stock Exchanges, for the year ended 31st March, 2003, with the relevantrecords and other documents maintained by the Company, furnished to us for our review and the report onCorporate Governance as approved by the Board of Directors.

On the basis of the above and according to the information and explanations given to us, in our opinion, theCompany has complied with Clause 49 of the Listing Agreement with Stock Exchanges, in respect thereof.

For Sharp & TannanChartered Accountants

Mumbai, 22nd May, 2003.

L VAIDYANATHAN

Partner


The unprecedented losses for the years ended March2000 and March 2001, presented the Company withone of its toughest challenges in recent times, thechallenge of survival. Since then, the aggressive pursuitin various directions to reduce costs, improve revenuesand concentrate on sustainable businesses, has beenthe multi-pronged thrust to overcome the uncertaintyof survival.

These efforts have yielded positive results; the turnoverof the Company has increased by 8% from Rs.1601.85croresto Rs.1726.39 crores. The small but positiveprofit after tax of Rs.4.13 crores for the year 2001-02has increased to Rs.28.17 crores for the year under

review, an increase of 582%

With a view to sustain this momentum of profitability,and also change course from a survival to a growthmode, all actions during the year under review centredaround the following:

•»• Increase in turnover through concentration onexports and improved market share throughintroduction of new products, improvements inexisting products and quality improvements;

•»• Better management of borrowings and workingcapital, towards reduction in interest costs;

Productivity enhancement and a better input:output ratio;

•f Reduction in material costs, through more intensivenegotiations and e-sourcing as well as betterinventory management;

•f Exit from business areas and joint ventures notaligned with the Company's business priorities;

•f Continuation of austerity measures.

The Company's main business areas being in theengineering and industrial sector, growth in thedomestic market is influenced by the overall economicgrowth as well as the performance of the agriculturaland industrial sectors of the economy. The growthrecorded for the current year in respect of theengineering and industrial sector continued to belistless.

In view of the financial and operational unviability ofthe Company's Capacitors Division at Pune, InformaticsDivision at Bangalore and Industrial Electronics Divisionat Nashik, it has been decided to suspend operationsof these Divisions, and evaluate the Company's exposurein these business areas. The aggregate turnover ofthese three Divisions for the year under review is lessthan 4% of the Company's turnover. This decision willhave an inconsequential impact on the Company'sfuture operations.

40


Management Discussion And Analysis Report

Global Reports LLC

Business Segment AnalysisThe Company's business is organised into four Strategic Business Groups. The summarised sales and % share,SBU-wise is as under:

The SBU-wise performance indicators for last year have been recast wherever necessary, to make them comparablewith those of the year under review.

41



% Sales

Digital

40% Power Systems

Industrial Systems

Consumer Products

2002-03

% Sales

Consumer Products 31%

Digital

37% Power Systems

Industrial Systems

2001-02

22%

10%

31%

22%

7%

SBU 2002-03 2001-02Rs. Crores % Share Rs. Crores % Share

Power Systems 690.28 40 596.66 37

Industrial Systems 376.54 22 345.25 22

Consumer Products 533.35 31 491.89 31

Digital 126.22 7 168.05 10

1726.39 100 1601.85 100

Global Reports LLC

Crompton Greaves Limited Management Discussion And Analysis Report

Power Systems

The summarised performance of the SBU is as follows:(Rs. Crores)

Sales

Net Sales (excl Excise)

PBIT

Net Capital Employed

Total Unexecuted Order Book (UEOB)

Export Sales (including deemed exports)

2002-03

690.28

640.20

63.04

279.19

567.93

229.46

2001-02

596.66

564.63

53.29

257.67

592.81

318.83

This SBU is engaged in the business of Power and

Distribution Transformers, Switchgear and Turnkey

Projects.

Last year, the Company had initiated a redirection of

its marketing efforts towards the private sector and

export markets, in its endeavour to move away from

the predominance of the Electricity Board component

of its market share. These efforts have resulted in the

turnover of this Group increasing by 16%, as comparedwith a market growth in this area of approx 6%, which

has yielded a PBIT growth of 18% over last year. The

PBIT to Net Sales, which was 9.4% last year, has

improved to 9.8% on the increased sales volumes.

Although the export orders initially showed a higher

potential than the previous year, the war situation

coupled with a highly recessionary environment

resulted in an overall reduction in exports (including

deemed exports) from Rs.318.83 crores to Rs.229.46crores. Out of this, the physical exports account forRs.168.06 crores as compared with Rs.180.03 croresof last year. The total exports as a percentage of salesis 33%.

The Company is in an advanced stage of establishing

facilities for manufacture of new generation GasInsulated Switchgear with the latest in switchgeartechnology from Hyundai Heavy Industries Co. Ltd.,Korea. Besides, Indoor Draw Out Vertical IsolationVacuum Circuit Breakers have also been introduced.

The Engineering Projects Division, besides itsconcentration on transmission and distribution projects,has also expanded its activities in power plant lighting,cabling and earthing packages and has extended itsterritorial presence to Bhutan and Nepal.

It is anticipated that future growth will emergesignificantly from the Power Systems Group

42

Global Reports LLC


Power Systems

During the year, the SBU successfully executed several orders, notable among them:

Customer

State Electricity Boards

Indian Railways

Government of Maharashtra,Irrigation Department

Siemens Ltd.

Alstom Power India Ltd.

Bharat Heavy Electricals Ltd.

Asea Brown Boveri Ltd.

Larsen & Tourbro

Tata Companies

Jindal Steel Ltd.

Bombay Electric Supply &Transport Undertaking

BSES Ltd.

Aptransco

Exports to USA, Latin America,Middle-East, Sri Lanka, West Asia and Africa

Product

Current Transformers and Circuit Breakers

Traction and Loco Transformers

Generator Transformers

System and Auto Transformers

Vacuum Interrupters, Generators andInstrument Transformers

Vacuum Interrupters and Circuit Breakers

System & Auto Transformers and Switchgear

Circuit Breakers

Vacuum Circuit Breakers

Power and Distribution Transformers

Distribution Transformers and Bulk Oil Circuit Breakers

Distribution Transformers and Bulk Oil Circuit Breakers

Power Transformers and Porcelain CladVacuum Circuit Breakers

Power Transformers and Switchgear

The orders received during the year aggregated to Rs.720 crores versus Rs.635 crores in the previous year.

To facilitate growth in this Business Group, the net working capital has increased from Rs.125.51 crores toRs.149.86 crores. The PBIT to net capital employed is 22.60% as compared with 20.70% last year. Net sales tonet capital employed is 2.30 times as compared with 2.20 times last year.

The number of permanent employees with this SBU, which was 2267 at the beginning of the year, has decreasedto 2157 at the year-end.

43

Global Reports LLC

Crompton Greaves L imi ted Management Discuss ion and Analys is Repor t

Industrial Systems

The summarised performance of the SBU is as follows:

(Rs. Crores)

Sales


PBIT



Export Sales (incl deemed exports)

2002-03

376.54

324.55

23.37

134.21

112.85

16.14

2001-02

345.25

300.14

19.88

159.20

70.20

12.07

This SBU is engaged in the business of Electric Motors - Fractional Horse

Power Motors, LT Motors, Alternators, HT Motors; DC Machines and RailTransportation.

The growth in this sector has not been encouraging, despite which the

Company's market share remained stable. The exports of this SBU till date

have not progressed sufficiently. However vigorous implementation of

productivity standards and better working capital management havemaintained operational efficiency.

The market in all categories of motors continues to be depressed; the LT

and HT motors segment registering a decline of approx 5% as comparedwith last year, and FHP motors recording a marginal growth of approx

1%. High installed capacities with stagnant demand and consequent

pressure on price realisations, continue to affect this industry. Despite

the adverse market conditions, this Business Group has succeeded in

recording a turnover growth of 9% over last year, as a result of capturing

competitor market share and expanding the range of products.

Vigorous implementation of productivity standards and better working

capital management has enabled this Business Group to improve operational

efficiencies resulting in an improvement of 18% in PBIT over last year.

The PBIT to net sales has shown an advancement from 6.6% to 7.2% on

the increased turnover. The PBIT to net capital employed is 17.4% ascompared with 12.5% last year, an improvement of 39%. Net sales to

net capital employed is 2.40 times as compared with 1.90 times last year,

an improvement of 26%.

The exports of this Business Group were insignificant; this area will howeverbe one of increased attention during the coming year. To prepare itself

for the export market and also higher end domestic customers, approvals

from Canadian Standards Association, British Approval Services for Electrical

44

Global Reports LLC


Industrial Systems

Equipment in Flammable Atmosphere and the Conformite Europienne have already been obtained for the

Company's products. The Company has also developed highly specialised Flameproof Gas Group II C Motors forhazardous applications and increased safety and High Voltage Motors suitable for solid state drives, both of

which have received Central Mining Research Institute (CMRI) certification. Motors with higher standards of

efficiency, dimensions and performance to meet the American National Electrical Manufacturers' Association

Standards and the European Committee of Manufacturers of Electrical Machines & Power Electronics Standards

have also been developed in readiness for acceptability of the Company's motors in the international market.

The Company's actions taken last, year to shift operations in respect of LT motors from Mumbai to Ahmednagar,

and FHP motors from Mumbai to Goa, have delivered the expected reduction in costs and improved margins.

Despite the increased growth in turnover, the net working capital of this Group has reduced from Rs.34.55 crores

to Rs.24.62 crores.

The number of permanent employees with this SBU, which was 1499 at the beginning of the year, has decreased

to 1438 at the year-end.

During the year, the SBU successfully executed several orders, notable amongst them are:

Customer

Indian Railways

Diesel Locomotive Works

Chittaranjan Locomotive Works

Whirlpool India Ltd., Godrej

GE and Matshushita Washing

Machines (India] Ltd.

Bharat Heavy Electricals Ltd and

Larsen & Toubro Ltd.

Mather & Platt (India) Ltd.

Asea Brown Boveri Ltd.

Videocon International,

Hitachi Amtrex Ltd and

United Comfort Products Ltd.

VA Tech Hydro India Pvt Ltd.

Neyveli Lignite Corpn Ltd.

KSB Pumps

Product

Signalling Relays

Traction Motors

Control Electronics & Auxiliary Converters

Washing Machine Motors

Flame Proof Motors

Totally Enclosed Tube Ventilated Motors

HT Motors

Airconditioner Motors

Horizontal Synchronous Generators

Type E Motors

Nuclear Radiation Zone Motors

The orders received during the year aggregated to Rs. 363 crores versus Rs. 278 crores in the previous year.

International Certifications will help ourexports thrust

45

Global Reports LLC


Consumer Products


(Rs. Crores)

Sales

NetSales(excl Excise)

PBIT




2002-03

533.35

504.08

42.95

105.69

0.84

13.13

2001-02

491.89

463.10

41.75

122.28

1.47

13.00

This SBU is engaged in the business of Fans, Luminaires,

Light Sources and Agricultural & Domestic Pumps.

The products in this Business Group continue to be

susceptible to competition from the unorganised sector

in the domestic market and also from imports. The

growth of this Business Group is centred around

encashing the Company's brand image within the

country and hence exports is not a thrust area. Thequantum of exports however has been maintained at

the previous year's level. Despite the above and the

narrowing of margins, the turnover of this Group

improved by 8% over last year. The increasedcompetition with lower prices and cost saving initiatives

enabled the Group to show an improvement of PBITof 3% over last year. The shifting of the fans operations

of this Business Group from Mumbai to Goa, as well

as agricultural and domestic pumps from Mumbai to

Ahmednagar, has helped improve productivity andoperating margins.

The increased operations have resulted in an increase

in the net working capital from Rs.19.13 crores to

Rs.27.37 crores. The PBIT to net capital employed is40.6% compared with 34.1% last year. Net sales to

net capital employed works out to 4.80 times as

compared with 3.80 times last year.

The number of permanent employees with this SBU,

which was 1073 at the beginning of the year, has

decreased to 957 at the year-end.

The response to the market's needs will be through

introduction of new models

46


Global Reports LLC

Crompton Greaves Limited Management Discussion and Analysis Report

Consumer Products

During the year, the SBU successfully executed several orders, notable

amongst them are:

Customer

South Central Railways

Haryana Urban Development Authority;

Thane Municipal Corpn and

Jharkhand State Electricity Board

BPCL & HPCL Retail Outlets

Singareni Collieries

Product

Sodium VapourPlatform Lighting

Sodium Vapour Street

Lights

Metal Halide Canopy

Lighting

Domestic Light Fittings

The orders received during the year aggregated to Rs.533 crores versus

Rs.480 crores in the previous year.

To respond to the market's continuous need for new models, variousnew models of ceiling fans, table fans and exhaust fans in both the

economy as well as deluxe range were introduced, together with

several new models of energy efficient light sources and high

efficiency luminaires for specialised applications. The Pumps Division

continues to respond to the demands of the agricultural sector in terms

of high efficiency, economically priced new models.

47

Global Reports LLC



(Rs. Crores)

Sales


PBIT




2002-03

126.22

118.19

3.65

36.83

9.24

2.19

2001-02

168.05

150.70

8.99

50.43

44.87

0.25

This SBU is engaged in the business of EPABXs, telephone instruments, telecommunication - switching,transmission and access products.

The major customers for this SBU are Bharat Sanchar Nigam Ltd (BSNL), Mahanagar Telephone Nigarn Ltd (MTNL),Railways and Defence Services.

Despite the telecom sector witnessing a phenomenal growth during the year, the market demand has been formobile communications, and this Business Group has not been able to adequately respond to the marketrequirements. Although efforts have been made to broad base its customers and increase its presence in theprivate sector, the turnover of this Business Group has de-grown by 25% as compared with last year. The reducedbusiness volume has resulted in a decrease in net working capital from Rs.36.33 crores to Rs.25.47 crores. PBITto net sales has reduced from 6% to 3.1% and the PBIT to net capital employed has reduced from 17.8% to9.9% Net sales to net capital employed is 3.2 times as compared with 3 times last year.

The number of permanent employees with this SBU, which was 331 at the beginning of the year, has decreasedto 305 at the year-end.

During the year, the SBU successfully executed several orders, notable amongst them are:

Customer

Neyveli Lignite Corpn Ltd.

Centre for Artificial Intelligence and Robotics

LIC

BSNL

South Central Railways

Product

EPABX Systems

Networking and Computing

Computer network for their offices across India

National Internet Backbone upgradation; Optical equipment,Switching upgradation, Kits and servicing C-Dot cards

Voice Networking

Digital

Management Discussion and Analysis Report

Global Reports LLC

Crompton Greaves Limited Management Discussion and Analysis Report

Exports

Joint Venturesand Divestments

Credit Rating

Borrowings

Human Resources

Total exports during the current year was Rs.261 crores (including deemed

exports of Rs64 crores) compared with Rs.344 crores (including deemed exportsof Rs.139 crores) during the previous year. Deemed exports, a function ofdomestic projects considered as exports, decreased due to an overall reductionduring the year, in this category of projects in India. However, the Company,by expanding into several new territories, maintained its physical exportsvolume, despite the highly recessionary international market environmentaggravated further by uncertainty of war conditions, which has resulted inexecution of many orders being deferred, particularly in the traditionally largeMiddle East segment. The higher Order Input Volume this year for physicalexports has resulted in an unexecuted export order book at the year-end forphysical exports of Rs.160 crores, an increase of 23% over Rs.130 crores as atlast year-end, substantiating expectations of significant growth in physicalexports next year.

In furtherance of the Company's decision to exit from Joint Ventures whichdo not align themselves with the Company's business priorities and relatedmanagement involvement, the Company during the year has divested itsshareholding in CG Newage Electrical Ltd and CG CoreEl Programmable SolutionsPvt Ltd. The brief particulars of the Company's Joint Ventures as at 31st March,2003 are annexed, as information to the Members.

The Company has successfully achieved a credit rating of F1 (Ind) by FITCHRatings India in respect of its Commercial Paper programme for an amountof Rs.30 crores. The rating indicates Highest Credit Quality and StrongestCapacity for timely payment of financial commitments Pursuant to this creditrating, the Company has re-commenced its Commercial Paper Programme andduring the year, has already issued Commerical Paper of Rs30 crores at attractiverates.

Various initiatives were taken by the Company towards improvement of financialleverage:

I Swapping of high cost Rupee Working Capital Loans to low cost ForeignCurrency Loans;

I Increasing utilisation of packing credit at concessional rates;

I Renegotiations with banks to improve borrowing rates;

I Reduction in utilisation of borrowings through efficient cash and workingcapital management;

I Leveraging of other financial products/exports;

I Induction of new banks into the Consortium.

The above initiatives have resulted in reduction of borrowings from Rs.571crores to Rs.459 crores, a net reduction of Rs.112 crores, and interest costfrom Rs.74 crores to Rs.64 crores. This has been achieved as a result ofefficient working capital management, improved operating performanceand several financial restructuring initiatives taken during the year underreview.

Initiatives continue towards creation of a more energetic, performance drivenorganisation. Performance standards are being perceptibly raised to realisethe Company's objective of profitability and growth. The methodologies for


Quality Initiatives

ProductivityEnhancementInitiatives


the scrutiny of sub-optimal performance and career development opportunitiesfor the high performers have been strengthened.

Divisional performance criteria have been evolved to link individual performancewith Divisional performance. The Company has initiated an approach towardsdifferentiation in opportunities based on complexity of roles. Role-focussedbusiness interviews are an integral part of the evaluation system for careeradvancement of executives To further its thrust on nurturing and developinga talent pool at a young age, the Company has shifted its emphasis to providinglarger responsibilities to executives with professional qualifications at progressivelyyounger ages

Further, to build its strengths in engineering and technology, the Company hasinducted more than 60 engineers from premier institutes, as an investment infuture talent. These executives are being exposed to a rigorous practical-project based orientation programme to prepare them for higher responsibilities

The monitoring and review of application projects in respect of the SkillDevelopment Programmes for manufacturing, industrial marketing and materials,provide continuity to the earlier training in these areas.

The coming year will further concentrate on consolidating the performanceculture across the Company, and developing employee capability at all levelsto ensure a higher quality of managerial skills for greater business presence.

Six Sigma: The Company has adopted the Six Sigma methodology with thespecific purpose of achieving "Product Quality As Perceived By Customer". Keyproduct areas have been selected and Critical to Quality characteristics asperceived by the customer identified for long-term remedial measures Thisinitiative has made considerable progress and is now being further extendedinto the service and testing areas related to these products for a better responseon customer feedback. It is believed that the desired attention in this area willresult in improved customer perception of the Company's products in the longterm and resultant growth in market shares.

ISO Certification: During the year, eight of the Company's Divisions haveupgraded their Quality Standards Certification to the new ISO 9001:2000version taking the number of such Divisions to fourteen. After the realignmentof the Company's manufacturing locations, in all, twenty-six Divisions/Regionsof the Company are accredited with ISO 9001 Certification, out of which threeDivisions are also accredited with ISO 14001 Certification. Our Light SourcesDivision at Baroda is amongst one of the few companies in India which haveestablished a unified system, incorporating both ISO 9001 and ISO 14001.

The advancement in productivity through the Crompton Greaves ProductionSystem (CGPS) based on the Maynard Operations Sequence Technique, hasbeen adequately established at all the Company's Divisions, with a remarkableimprovement in productivity capability. This augmentation of capability willpositively influence the Company's ability to respond to the enhanced marketingefforts for growth.

In addition to CGPS, the Company is concentrating on strengthening ofengineering methods and low cost automation, to further elevate productivitylevels. Considering the financial position of the Company, investments towardsnew plant & machinery, as well as replacements, were deferred. However, witha positive shift in the Company's financials, it is planned that, in the coming



Cost ManagementInitiatives "

IT Initiatives

InternalControl Systems

Future Outlook

year, the capital expenditure on plant & machinery will be considerably increasedfor long-term improvement of operations.

As indicated in last year's Report, towards further cost efficiencies and reliabilityin procurement of materials, the Company has, through concerted efforts,embarked on its e-sourcing initiative. The Company has already tied up withan international consultant specialised in e-procurement, to facilitate theCompany's progress in this area. During the year, 7 categories of items weresourced through an international bid process Orders for these items havebeen finalised and the effective savings will be realised in the ensuing years.

Acknowledging the need for IT enablement for business and real time availability,the Company has already initiated steps for unification of its SAP implementationacross the Company's Divisions, Regions and Branches. The Company's ITinitiatives in the coming year will concentrate on improved customer relationshipmanagement, including e-commerce and sales force automation; better supplychain management; superior connectivity between the Company and its keybusiness partners; human resources management as well as information sharingand knowledge management.

The Company has in place an adequate system of internal controls commensuratewith the size of the Company and the nature of its business to ensure efficacyof operations and compliance with applicable legislation. There exists anadequate management reporting system comprising managerial reporting andanalysis on various performance indicators, for corrective action as necessary.Through adequate Internal Audit coverage, the systems and processes areperiodically reviewed at the Company's Divisions/Regions and the effectivenessof the Internal Audit function is examined by the Audit Committee of theBoard of Directors which has met six times during the year. The Company hasalso initiated a rating system for its Divisions/Regions, on agreed financialparameters to assess the strengths and areas of improvement at eachDivision/Region.

Given the domestic market conditions, the Company sees its future growththrough increase in exports and aggressive efforts towards launch of newproducts in both the domestic and global markets. To improve its competitivenessinternationally, efforts at cost reduction will further intensify. The actions inthe coming year will centre around the various initiatives already launched inthe areas of the CGPS and other productivity improvement measures, six sigma,e-sourcing, IT enablement and imbibing a higher level of performance acrossthe Company.

It is anticipated that future growth will emerge significantly from the PowerSystems Group, and the Company will concentrate its efforts in this direction.Towards its continuance in sustainable and profitable businesses, the Companywill be evaluating its presence in different business areas on an on-going basis,for suitable actions.

Mumbai, 22nd May, 2003


KK NOHRIAChairman


Joint Ventures April 2002 to March 2003

Sr. No

12345

Name of Company

Brook Crompton Greaves LtdCG Lucy Switchgear LtdHitachi CG Motor Engineering LtdPaxonet Communications Inc, USA+**Power Equipment Limited, Dubai

Turnover

27.2212.08

0.113.88

#

PBT

5.963.68

(0.11)(17.22)

#

SubscribedCapital

16.001.201.606.95

#

CG %

Holding

49.0050.0049.0021.00

#

+ Investment in US$ @ US$ : Rs. 47.48 ** Provisional # Activities suspended

52

Global Reports LLC


Ten Years' Financial Highlights Year ended 31st March

Rs. Crores

(#) 170.27

37.20

28.17

%

-

156.67

6.88

4.13

-

-

-43.57

-72.91

-73.16

-

-

35.35

-146.32

-146.57

-

-

165.02

24.12

23.12

25

13.05

135.07

20.62

21.52

25

13.05

149.40

30.76

30.76

25

12.55

166.21

80.04

64.04

50

22.16

114.38

59.08

42.58

35

14.51

92.98

37.99

29.99

30

10.40

What the Company Owed

Borrowings

Net Worth of the Company

Share Capital

Reserves & Surplus

Profit and Loss Account

Shareholders' Funds

Tangible Net Worth

Ratios

Book Value Per Share

Earnings Per Share

Cash Earnings Per Share

Current Ratio

Debt Eguity Ratio

EBIDTA/ Net Sales

Return On Tangible Net Worth

Fixed Assets Turnover Ratio

@ 459.22

52.37

403.14

-13.49

442.02

(##) @ 291.19

Rs. 55.61

Rs. 5.38

Rs. 21.40

1.49:1

1.58:1

% 10.73

% 9.67

Times 4.03

570.71

52.37

403.80

-38.90

417.27

238.06

45.46

0.79

15.03

1.54:1

2.40:1

10.60

1.73

3.56

627.32

52.37

410.33

-137.87

324.83

266.10

50.81

-13.97

-0.74

1.62:1

236:1

-3.47

-27.49

2.78

851.01

52.37

410.96

-62.77

400.56

365.56

69.81

-27.99

-14.77

2.04:1

2.33:1

2.32

-40.09

3.19

734.62

52.15

522.01

0.00

574.16

548.30

105.15

4.43

16.48

2.47:1

1.34:1

10.61

4.22

3.27

648.53

52.15

518.69

0.00

570.84

557.70

106.93

4.13

13.21

2.37:1

1.16:1

9.26

3.86

3.21

474.29

52.03

529.81

0.00

581.84

567.90

109.13

5.91

13.79

2.23:1

0.84:1

10.71

5.42

3.59

435.93

45.39

366.34

0.00

411.73

396.44

87.33

14.11

23.93

1.93:1

1.10:1

11.99

16.15

4.31

218.79

44.26

343.29

0.00

387.55

370.35

83.63

9.62

17.50

1.81:1

0.59:1

11.41

11.50

4.28

223.10

38.90

212.87

0.00

251.77

235.41

60.31

7.68

13.32

1.88:1

0.95:1

11.20

12.74

4.72

( # ) EBIDTA = Earnings Before Depreciation, Interest, Tax, Amortisation and Exceptional Items.( # # ) Tangible Net Worth = Shareholders' Funds - Miscellaneous Exps. (Unamortisedj - Deferred Tax Asset@ Remittances in transit and Technical know-how (unamortised) have been re-grouped.

53

Earnings

Total Income

Gross Sales

Net Sales

EBIDTA

PBT

PAT

Dividend

Dividend Pay-out

What the Company Owned

Gross Block (Incl. Capital WIP)

Net Block (Incl. Capital WIP)

Investments

Net Current Assets, Loans & Advances

Net Assets Employed

791.96

393.93

73.96

282.52

750.41

773.44

415.69

94.86

298.22

808.77

768.88

450.65

119.57

323.20

893.42

770.04

479.02

116.57

620.98

1216.57

712.12

475.01

111.26

696.65

1282.92

648.81

455.02

100.07

651.14

1206.23

543.99

388.05

79.36

574.78

1042.19

445.62

321.45

73.19

437.73

832.37

338.36

234.16

68.15

286.83

589.14

265.14

176.06

38.15

244.30

458.51

2003 2002 2001 2000 1999 1998 1997 1996 1995 1994

1739.85 1615.84 1383.19 1690.54 1693.91 1594.55 1517.69 1496.22 1080.81 889.58

1726.39 1601.85 1378.33 1674.56 1682.46 1583.53 1508.81 1480.73 1078.23 885.58

1587.02 1478.57 1254.34 1525.83 1554.91 1459.14 1394.99 1386.12 1002.34 830.44

Global Reports LLC


Auditors' Report to the Shareholders of Crompton Greaves Limited

We have audited the attached Balance Sheet ofCrompton Greaves Limited, as at 31st March, 2003 andalso the related Profit and Loss Account for the yearended on that date annexed thereto and the cash flowstatement for the year ended on that date. Thesefinancial statements are the responsibility of theCompany's management. Our responsibility is toexpress an opinion on these financial statements basedon our audit.

We conducted our audit in accordance with auditingstandards generally accepted in India. Those Standardsrequire that we plan and perform the audit to obtainreasonable assurance about whether the financialstatements are free of material misstatement. Anaudit includes examining, on a test basis, evidencesupporting the amounts and disclosures in the financialstatements. An audit also includes assessing theaccounting principles used and significant estimatesmade by management, as well as evaluating the overallfinancial statement presentation. We believe that ouraudit provides a reasonable basis for our opinion.

(1) As required by the Manufacturing and OtherCompanies (Auditor's Report) Order, 1988 issuedby the Central Government of India in terms ofSection 227(4A) of the Companies Act, 1956, weenclose in the Annexure A statement on the mattersspecified in paragraphs 4 and 5 of the said Order.

(2) Further to our comments in the annexure referredto in paragraph (1) above we report that:

(i) We have obtained all the information andexplanations, which to the best of ourknowledge and belief were necessary for thepurposes of our audit ;

(iij In our opinion, proper books of account asrequired by law have been kept by theCompany so far as appears from ourexamination of those books ;

(iii) The said Balance Sheet and the Profit & LossAccount dealt with by this report are inagreement with the books of account;

(iv) In our opinion, and based on the informationgiven to us the said Balance Sheet and Profitand Loss Account comply with the AccountingStandards referred to in Section 211 (3C) ofthe Companies Act, 1956 ;

(v) On the basis of the written representationsreceived from the Directors of the Companyas at 31st March, 2003, and taken on recordby the Board of Directors, we report that noneof the Directors is disqualified as at 31st March,2003 from being appointed as a Director of thecompany under Clause (g) of sub-section (1) ofSection 274 of the Companies Act, 1956 ;

(3) (i) No provision has been made in the accountsin respect of

(See Note No.1 of Schedule B)Rs. Crores

(a) Income tax demands 1.95

(b) Excise demands 8.51(net of tax)

(c) Sales tax demands 1.83(net of tax)

We report that, had the observations made by usin item (i) above been considered, the Profit BeforeTax for the year would have been Rs.24.91 crores(as against the reported profit before tax ofRs.37.20 crores), debit balance in the Profit & LossAccount before effect of deferred tax adjustmentwould have been Rs.25.78 crores (as against thereported figure of Rs.13.49 crores), the CurrentLiabilities & Provisions would have been Rs586.20crores (as against the reported figure of Rs.573.91crores.

Subject to the foregoing, in our opinion and tothe best of our information and according to theexplanations given to us, the said accounts, readtogether with the Significant Accounting Policiesas per Schedule A and

(a) Note No.28 of Schedule B regarding non-creation of Debenture Redemption Reserve inview of the cumulative losses

(b) Note No.31(a) of Schedule B regardingdisclosurebwith related partiesis given based on legal opinion on which wehave placed reliance and

other notes appearing in Schedule B, give theinformation required by the Companies Act, 1956in the manner so required and give a true and fairview in conformity with the accounting principlesgenerally accepted in India:

(a) In the case of the Balance Sheet, of the stateof the Company's affairs as at 31st March,2003;

(b) In the case of the Profit & Loss Account, ofthe profit for the year ended on that date; and

(c) In the case of the cash flow statement, of thecash flows for the year ended on that date.

SHARP&TANNANChartered Accountants

By the hand of

Mumbai, 22 nd May, 2003 Membership No.: 16368

L. VaidyanathanPartner



Annexure to Auditors' Report

(Refer paragraph (1) of our Report of even date)

1 The Company is maintaining proper records to

show full particulars including quantitative detailsand situation of all fixed assets acquired duringthe last thirty-six years (for thirty years in respectof furniture and fixtures). We are informed that

these fixed assets have been physically verified bythe Management. Discrepancies noticed on suchverification, which were not material, have been

properly dealt with in the books of account.

2 Fixed Assets of the Company have not beenrevalued during the year.

3 As explained to us, stocks of finished goods, tradinggoods, components, raw materials and stores &spare parts of the Company have been physicallyverified by the Management at reasonable intervalsduring the year.

4 In our opinion, the procedures of physicalverification of stocks followed by the Managementare reasonable and adequate in relation to the sizeof the Company and the nature of its business.

5 The discrepancies between physical stocks andbook stocks, which were not material, have beenproperly dealt with in the books of account.

6 In our opinion, the valuation of these stocks is fairand proper, and in accordance with the normallyaccepted accounting principles. The valuation ofstocks is on the same basis as in the precedingyear.

7 The Company has not taken any loans, secured orunsecured, from Companies, Firms or Other Partieslisted in the Register maintained under Section

301 of the Companies Act, 1956, or fromCompanies under the same management referredto in the Section 370(1B) of the Companies Act,1956.

8 In our opinion, the rate of interest charged, where

applicable, and the terms and conditions on whichloans have been granted to companies, firms orother parties listed in the register maintained

under Section 301 of the Companies Act, 1956are not prima facie prejudicial to the interest ofthe Company. The Company has not granted any

loans to Companies under the same managementreferred to in the Section 370(1 B) of the CompaniesAct, 1956.

9 The parties, including employees, to whom loansand advances, in the nature of loans, have beengiven are repaying the principal amount asstipulated and are also regular in payment ofinterest where applicable, except for certain parties

where we are informed that reasonable steps arebeing taken by the Company for the recovery of

the principal and interest.

10 In our opinion and according to the informationand explanations given to us, there are adequateinternal control procedures commensurate with

the size of the Company and the nature of itsbusiness for the purchases of trading goods, stores,raw materials including components, plant andmachinery, equipment and other assets and forsale of goods of the Company.

11 According to the information and explanationsgiven to us, purchases of goods and materials andsale of goods, materials and services made inpursuance of contracts or arrangements enteredin the Register maintained under Section 301 ofthe Companies Act, 1956 and aggregating duringthe year to Rs.50,000 or more in value in respectof each party have been made at prices which arereasonable having regard to the prevailing marketprices for such goods and materials or the pricesat which transactions, for similar goods, materialsor services have been made with other parties.

12 As explained to us, the Company determinesunserviceable or damaged trading goods, rawmaterials and imported stores and spares andadequate provision for loss has been made inaccounts.

13 The Company has accepted deposits from publicand the provisions of Section 58A of the CompaniesAct, 1956 and the rules framed thereunder,wherever applicable, have been complied with.

14 In our opinion, the Company is maintainingreasonable records for sale and disposal of realisablescrap. We are informed that the Company has norealisable by- products.

15 We are of the opinion that the Company has aninternal audit system commensurate with its sizeand the nature of its business.

16 In our opinion and according to the information

and explanations given to us, the Company ismaintaining accounts and records as prescribedby the Central Government under Section 209(1)(d)of the Companies Act, 1956 in respect of electricfans, motors, power driven pumps and electriclamps but the contents of these accounts andrecords have not been examined by us.

17 The Company has generally, regularly deposited

during the year Provident Fund and EmployeesState Insurance dues with the appropriateauthorities.


Crompton Greaves Limited Annexure to Auditors' Report

18 According to the information arid explanationsgiven to us, there are no undisputed amountspayable in respect of income tax, wealth tax, salestax, customs duty and excise duty, which wereoutstanding as at 31st March,2003, for a periodof more than six months from the date theybecame payable by the Company.

19 In our opinion and according to the information

and explanations given to us, and the records ofthe Company examined by us no personal expenseshave been charged to revenue account during theyear, other than those payable under contractualobligation or in accordance with generally acceptedbusiness practices.

20 The Company is not a sick industrial companywithin the meaning of Clause (o) of Sub section(1) of Section 3 of the Sick Industrial Companies(Special Provisions) Act, 1985.

21 In our opinion, in respect of its service activities,the Company commensurate with its size andnature of its business, has a reasonable system of;

(a) recording receipts, issues and consumptionof materials and stores and allocatingmaterials consumed and man-hours utilizedto the relative jobs.

fbj authorisation at proper levels with adequate

internal controls on issue and allocation ofstores and labour to jobs.

22 In respect of the trading activity of the Company,damaged goods have been determined andadequate provision has been made in the accounts

for the loss arising on the items so determined.

SHARP ft TAN NANChartered Accountants

By the hand of

Mumbai, 22nd May, 2003L. Vaidyanathan

Partner


CROMPTON GREAVES LIMITED ANNUAL REPORT 2002-2003

I 58

Mumbai, 22nd May, 2003As per our report attached.

SHARP & TANNANChartered Accountants

By the hand of B. R. JajuChief Financial Officer

L. Vaidyanathan W. HenriquesPartner Secretary

Profit & Loss Account for the year ended 31st March, 2003

Schedule As at As at31-3-2003 31-3-2002

Rs. Crores Rs. CroresINCOME

Gross Sales [Refer Note No.5] 1726.39 1601.85Less: Excise Duty 139.37 123.28

Net Sales 1587.02 1478.57Other Income 1 13.46 13.99

1600.48 1492.56

EXPENDITUREMaterials 2 1084.39 983.98Staff and Welfare 3 136.71 152.29Manufacturing, Selling and Administration 4 209.11 199.62Interest and Commitment Charges 64.43 74.40Depreciation 9 45.25 44.26Amortisation of Miscellaneous Expenditure 29.59 27.56

1569.48 1482.11

Profit Before Exceptional Items and Taxes 31.00 10.45Exceptional Items (Net) (Refer Note No.29) 6.20 -3.57

Profit Before Taxes 37.20 6.88Provision for Taxation

Current Tax -0.25 -0.25Deferred Tax -8.78 -2.50

Profit After Tax 28.17 4.13Transfer from General Reserve 0.24 2.44Doubtful Debts Reserve -3.00 0.00Brought Forward Loss from Previous Year -38.90 -137.87Deferred Tax Reserve at 1-4-2001 0.00 92.40

Balance Carried to Balance Sheet -13.49 -38.90

Earning per Share (Basic and Diluted) Rs. 5.38 0.79

Significant Accounting Policies [A]

Notes on Accounts [B]


S. M. TrehanManaging Director

K. K. NohriaChairman

Global Reports LLC

ANNUAL REPORT 2002-2003CROMPTON GREAVES LIMITED

I 59

Balance Sheet as at 31st March, 2003

Schedule As at As at31-3-2003 31-3-2002

Rs. Crores Rs. Crores Rs. CroresSOURCES OF FUNDSShareholders’ Funds

Capital 5 52.37 52.37Reserves and Surplus 6 403.14 403.80

455.51 456.17Loan Funds

Secured Loans 7 315.56 462.30Unsecured Loans 8 143.66 108.41

459.22 570.71

914.73 1026.88

APPLICATION OF FUNDSFixed Assets

Gross Block 9 785.02 764.61Less : Depreciation 398.03 357.75

Net Block 386.99 406.86Capital Work-in-Progress 6.94 8.83

393.93 415.69Investments 10 73.96 94.86Current Assets, Loans & Advances

Inventories 11 193.15 178.24Sundry Debtors 12 475.06 470.46Cash and Bank Balances 13 54.74 61.20Loans and Advances 14 133.48 144.55

856.43 854.45

Less: Current Liabilities & ProvisionsLiabilities 15 560.88 538.50Provisions 16 13.03 17.73

573.91 556.23

Net Current Assets 282.52 298.22Deferred Tax Asset 17 81.12 89.90Miscellaneous Expenditure(to the extent not written off or adjusted) 18 69.71 89.31Profit and Loss Account 13.49 38.90

914.73 1026.88

Significant Accounting Policies [A]Notes on Accounts [B]

The Schedules referred to above and the notes attached,form an integral part of the Accounts.Mumbai, 22nd May, 2003As per our report attached.


By the hand of B. R. JajuChief Financial Officer

L. Vaidyanathan W. HenriquesPartner Secretary


S. M. TrehanManaging Director

K. K. NohriaChairman

Global Reports LLC


I 60

Schedules Forming Part of Profit & Loss Account

SCHEDULE 1 As at As at31-3-2003 31-3-2002

Rs. Crores Rs. CroresOther IncomeIncome from Premisesa) Lease Rent 1.63 1.34b) Income from Business Service Centres 6.51 4.98

8.14 6.32(TDS deducted Rs. 0.18 crores;Previous year Rs. 0.19 crores)Income from Investments 0.35 7.59Miscellaneous Income (Refer Note No. 40) 4.97 0.08

13.46 13.99


Rs. Crores Rs. Crores Rs. CroresMaterialsOpening Stock

Raw materials 46.49 45.72Work-in-Process

Manufacturing 47.67 45.08Contracts 19.16 21.83

Finished Goods 44.83 49.02

158.15 161.65Add: Purchases 1096.40 992.80

(including Trading Goods Rs. 278.39crores; Previous year Rs. 244.81 crores)

Less:Scrap Sales 13.54 12.32

1082.86 980.48

1241.01 1142.13Less: Closing Stock

Raw Materials 51.26 46.49Work-In-Process



156.62 158.15

1084.39 983.98


Rs. Crores Rs. CroresStaff & WelfareSalaries, Wages and Bonus 107.53 111.80Provident Fund and Family Pension Scheme Contributions 7.88 8.53Superannuation Fund Contributions 1.98 1.82Gratuity (including contribution to Fund 6.86 17.00Rs. 6.32 crores, Previous year Rs. 15.96 crores)Workmen and Staff Welfare 12.46 13.14

136.71 152.29

Global Reports LLC


I 61


Rs. Crores Rs. Crores Rs. CroresManufacturing, Selling and AdministrationStores and Spare Parts 12.63 11.10Power and Fuel 19.93 18.97Repairs

Buildings 2.18 1.27Plant and Equipment 5.89 4.76Others 3.45 3.64

11.52 9.67Forwarding, Godown and Packing 50.38 50.10Advertising 7.33 3.26Auditors’ Remuneration

Statutory audit fees 0.28 0.24Tax audit fees 0.06 0.06Taxation (Rs. 15,000; Previous year Rs. 8,874) 0.00 0.00Certification 0.03 0.07Other Services 0.08 0.00Expenses Reimbursed (including Service Tax) 0.10 0.10

0.55 0.47Rent 4.43 7.74Rates and Taxes 8.08 13.66Insurance 3.59 3.10Bad Debts 1.56 0.02Vehicle Expenses 1.33 1.29Travelling 14.84 13.28Professional Charges 7.65 4.49Technical Service Fees 1.64 3.21Exchange Premium / Difference 2.42 4.40Miscellaneous Expenses 61.20 54.84Directors’ Fees 0.03 0.02

209.11 199.62

Schedules Forming Part of Balance SheetSCHEDULE 5 As at As at

31-3-2003 31-3-2002Rs. Crores Rs. Crores

CapitalAuthorised

6,00,00,000 Equity Shares of Rs.10 each 60.00 60.00

Issued and Subscribed5,23,75,116 Equity Shares of Rs.10 each 52.37 52.37

Paid up5,23,66,656 Equity Shares of Rs.10 each 52.37 52.37

8,460 Forfeited Equity shares of Rs.10 each 0.00 0.00Rs. 32175 partly paid

52.37 52.37

Of the above, following equity shares were allotted:3,87,200 pursuant to a contract without

payment being received in cash1,62,00,000 as fully paid up Bonus Shares by capitalisation of

General Reserve and Share Premium Account14,76,566 as fully paid up pursuant to schemes of amalgamation66,13,750 as underlying shares to an international offering of

Global Depository Receipts (GDRs) in US Dollars

Global Reports LLC


I 62

SCHEDULE 6 As at Additions Deductions As at31-3-2002 31-3-2003

Reserves & Surplus Rs. Crores Rs. Crores Rs. Crores Rs. Crores

General Reserve 0.00 0.24 0.24 (a) 0.00Revaluation Reserve 17.92 0.52 (b) 17.40Share Premium Account 379.82 379.82Government Subsidy 0.00 0.10 0.10Investment Allowance(Utilised) Reserve 1.02 0.24 (c) 0.78Debenture RedemptionReserve 5.00 5.00Deferred Tax Reserveas on 1.4.2001 92.40 0.00 0.00Less: Transferred to

Profit & Loss Accountas on 31.3.2002 -92.40 0.00 0.00

Doubtful Debts Reserve 21.00 3.00 0.00 24.00Less: Doubtful Debts

per contra -20.96 -3.00 0.00 -23.96

Total 403.80 0.34 1.00 403.14

Previous year 410.37 92.40 98.97 403.80

Notes:

(a) Transferred to Profit & Loss Account.

(b) Depreciation on revaluation of fixed assets, recouped from Revaluation Reserve Rs. 0.34 croresand Revaluation Reserve written back on assets disposed off Rs.0.18 crores.

(c) Transferred to General Reserve.


Rs. Crores Rs. CroresSecured LoansDebentures:

(Privately placed with Financial Institutions)13.50% Secured Non-Convertible Debenturesof Rs. 100 each(a) 50,00,000 (VIII Series) redeemable in 18 equal

quarterly instalments due from 15th June, 2000 16.67 27.78(b) 50,00,000 (IX Series) redeemable in 3 equal

semi-annual instalments due from1st September, 2002 16.67 50.00

Term Loans1 From Banks

Rupee Loans 98.73 90.802 From Financial Institutions

Rupee Loans 1.45 16.66

Cash Credit/Working Capital Demand LoansFrom Banks:-(a) Rupee Loans / Cash Credit 53.33 240.92(b) Foreign Currency Loans 128.71 36.14

315.56 462.30

Global Reports LLC


I 63


Rs. Crores Rs. CroresUnsecured LoansFixed Deposits 72.53 36.42(Repayable within a year: Rs. 20.52 crores;Previous year Rs. 17.91 crores)

Commercial Paper 10.00 0.00(Maximum amount outstanding at any time duringthe year Rs. 30.00 crores; Previous year Nil)

Inter-Corporate Deposit from Subsidiaries 3.65 0.70(Maximum amount outstanding at any time during theyear Rs. 3.65 crores; Previous year Rs. 0.70 crores)

Other Deposits

(a) Interest free Sales Tax Loans and SpecialIncentive Loans from Central / State Governments 56.00 49.95

(b) Arrears of Preferential Dividend 0.05 0.10(Due within one year Rs. 0.05 crores; Previous year Rs. 0.05 crores)

(c) From Others 1.43 21.24(including inter-corporate deposits Rs. Nil;Previous year Rs. 21.05 crores)

143.66 108.41

SCHEDULE 9

Fixed Assets & Depreciation Rs. Crores

Gross Block (at Cost/Professional Valuation) Depreciation Net Block

At Additions Deductions At At On For the At At At1-4-2002 31-3-2003 1-4-2002 Deductions Year 31-3-2003 31-3-2003 31-3-2002

LandFreehold 15.19 0.00 0.00 15.19 0.00 0.00 0.00 0.00 15.19 15.19Leasehold 14.75 0.00 0.00 14.75 2.13 0.00 0.17 2.30 12.45 12.62

Buildings 194.60 4.03 1.31 197.32 37.19 0.35 4.95 41.79 155.53 157.41Plant & Equipment 440.13 16.87 2.07 454.93 244.06 1.72 33.54 275.88 179.05 196.07Railway Siding 0.02 0.00 0.00 0.02 0.01 0.00 0.00 0.01 0.01 0.01Furniture & Fixtures 91.09 3.29 1.60 92.78 67.75 1.24 5.93 72.44 20.34 23.34Vehicles 8.83 3.86 2.66 10.03 6.61 2.00 1.00 5.61 4.42 2.22

Sub-total 764.61 28.05 7.64 785.02 357.75 5.31 45.59 398.03 386.99 406.86

Capital Work-in-progressBuildings 3.02 0.51 1.39 2.14 2.14 3.02Plant & Equipment 5.81 2.22 3.23 4.80 4.80 5.81

Sub-total 8.83 2.73 4.62 6.94 6.94 8.83

At 31-3-2003 773.44 30.78 12.26 791.96 357.75 5.31 45.59 398.03 393.93

At 31-3-2002 768.88 72.09 67.53 773.44 318.23 5.11 44.63 357.75 415.69

1. Buildings include cost of shares in Co-operative Societies.2. Gross Block includes Cost of Land and Buildings Rs. 26.61 crores (Previous year Rs. 26.79 crores) added on revaluation

of these assets on 30-6-1985.

Depreciation 31-3-2003 31-3-2002Rs. Crores Rs. Crores

Depreciation on fixed assets 45.59 44.63Less: Transferred from revaluation reserve 0.34 0.37

45.25 44.26

Global Reports LLC


I 64

SCHEDULE 10No of Shares/Debentures/ As at As at

INVESTMENTS Units Fully paid up of 31-3-2003 31-3-2002Rs. 10 each unless Rs. Crores Rs. Croresotherwise specified

LONG TERM (At Cost)Government and Trust Securities

1. Central Government Securities Bondsof Rs. 10000 Each 390 0.49 0.00

2. State Guaranteed Bondsof Rs. 1000 Each 2200 0.25 0.00

3. Unit Trust of India-Unit Scheme 1964 1630000 1.63 2.31

2.37 2.31

Trade InvestmentsSubsidiary companies1(a) CG Capital & Investments Limited 9500000 9.50 9.50

1(b) CG Capital & Investments Limited(7% Non-Convertible, Non-CumulativeRedeemable Preference Shares) 43928044 43.93 53.43(Previous Year 53428044 Shares)

53.43 62.93

Joint Ventures1. Brook Crompton Greaves Limited 7840000 7.84 7.84

(Formerly CG Brook Hansen ElectricMotors Limited)

2. CG Lucy Switchgear Limited 599993 0.60 0.60

3. CG Maersk Information Technologies 131803 0.16 0.16Private Limited

4. CG Newage Electrical Limited 0 0.00 0.76(Previous Year 760000 Shares)

5. CG Smith Software Pvt. Limited 9600 0.01 0.01

6. Hitachi CG Motor Engineering 784000 0.78 0.78Private Limited

7. International Components India Limited 85500 0.09 0.09

8. PAXONET Communications INC. USA 3000000 1.08 1.08of US $ 0.10 each(Formerly Core El Microsystems Inc. USA)

9. Power Equipment Limited of US $ 10 each 20600 0.84 0.84

11.40 12.16

Associate Companies1 CG Comnet Limited 0 0.00 0.00

(Previous Year 30 Shares Rs.300)

2 CG Global Limited 0 0.00 0.00(Previous Year 30 Shares Rs.300)

3 CG Hometech Limited 0 0.00 0.00(Previous Year 30 Shares Rs.300)

0.00 0.00

Global Reports LLC


I 65

Others1 Ballarpur Industries Limited 1119459 4.05 13.99

2 CG CoreEl Programmable Solutions 0 0.00 0.01Private Limited(Previous year 9700 Shares)

3 CG CoreEl Logic Systems Limited 1810000 1.81 1.81(7% Non-Convertible, Non-CumulativeRedeemable Preference Shares)

4 English Indian Clays Limited 120000 0.60 0.00

5 Kale Consultants Limited 4200 0.00 0.00(Current year Rs. 6,000; Previous year Rs. 6000)

6 Nicco Corporation Limited 66078 0.01 0.43

6.47 16.24

Other Investments1 Dinette Exclusive Club Private Limited 5500 0.06 0.06

(Share of Rs. 100 each)

2 IDBI Limited 142720 0.23 1.16(Including 53520 Bonus Shares)

0.29 1.22

Total 73.96 94.86

31-03-2003 31-03-2002

Book Value Market Value Book Value Market ValueRs. Crores Rs. Crores Rs. Crores Rs. Crores

Quoted Investments 6.67 6.75 17.89 6.50

Unquoted Investments 67.29 76.97

Total 73.96 6.75 94.86 6.50

31-3-2003 31-3-2003 31-3-2002 31-3-2002Nos. Rs. Crores Nos. Rs. Crores

Notes:1 SHARES/SECURITIES

ACQUIRED DURING THE YEARUnits Under Unit Scheme, 1964 0 0.00 153116 0.22

CG Capital & Investments Ltd.(Preference Shares) 0 0.00 360610 0.36

CG Maersk InformationTechnologies Pvt. Ltd. 0 0.00 31803 0.06

CG CoreEl Logic Systems Ltd.(7% Non-Convertible,Non-Cumulative RedeemablePreference Shares) 0 0.00 181000 1.81

SCHEDULE 10 (Contd.)No of Shares/Debentures/ As at As at

Investments Units Fully paid up of 31-3-2003 31-3-2002Rs. 10 each unless Rs. Crores Rs. Croresotherwise specified

Global Reports LLC


I 66

SCHEDULE 10 (Contd.) 31-3-2003 31-3-2003 31-3-2002 31-3-2002Nos. Rs. Crores Nos. Rs. Crores

Central Government Securities Bondsof Rs. 10000 each 390 0.49 0 0.00State Guaranteed Bondsof Rs. 1000 each 2200 0.25 0 0.00English Indian Clays Limited 120000 0.60 0 0.00HDFC Liquid Fund — Growth 4192028 5.00 0 0.00

6.34 2.45

2 SHARES/SECURITIES DISPOSED OFFDURING THE YEAREnsave Devices Pvt Ltd 0 0.00 77420 0.08CG Glass Ltd (15.50% CumulativeNon-convertible Preference Shares) 0 0.00 10000000 10.00LEC India Software Centre Pvt. Ltd.(Merged with CG Maersk InformationTechnologies Pvt. Ltd.) 0 0.00 38510 0.06CG Sewraz Telecom Ltd. 0 0.00 2900 0.05Karamchand Thapar(AFRICA) Ltd. 0 0.00 100000 0.36CG Elin Power Systems Pvt. Ltd. 0 0.00 6250000 6.25CG Glass Ltd. 0 0.00 5182243 10.36CG Capital & Investments Ltd. 9500000 9.50 0 0.00(Preference Shares)CG-Newage Electricals Ltd. 760000 0.76 0 0.00CG Comnet Ltd. 30 0.00 0 0.00CG Global Ltd. 30 0.00 0 0.00CG Hometech Ltd. 30 0.00 0 0.00CG CoreEl Programmable 9700 0.01 0 0.00Solutions Pvt. Ltd.HDFC Liquid Fund — Growth 4192028 5.00 0 0.00

15.27 27.16


Rs. Crores Rs. Crores Rs. Crores Rs. CroresInventories(At lower of Cost or Net Realisable Value)Stores, spare parts and packing materials 3.18 2.20Raw materials 51.26 46.49Work-in-Process — Manufacturing 50.88 47.67Finished goods 40.13 44.83

145.45 141.19Work-in-Process — Contracts

At Cost 14.35 19.16At Realisable sales value 109.71 43.54Less: Progress payments 76.36 25.65

33.35 17.89

47.70 37.05

193.15 178.24

Global Reports LLC


I 67


Rs. Crores Rs. Crores Rs. CroresSundry DebtorsUnsecured

Debts outstanding for a period exceedingsix months

Considered good 129.59 121.54

Considered doubtful 23.96 20.96

Less: Doubtful debts reserve per contra -23.96 -20.96

0.00 0.00Other Debts


475.06 470.46


Rs. Crores Rs. CroresCash and Bank Balances

Cash on hand 0.21 0.16

Current accounts with banks (including 0.76 4.73Unclaimed Dividend Account of Rs. 0.14crores; Previous year Rs. 0.14 crores)

Remittances in transit 43.72 56.31

Term Deposits with Scheduled Banks 10.05 0.00(including interest accrued thereon)

54.74 61.20


Rs. Crores Rs. CroresLoans and Advances(Unsecured, Considered Good, unless otherwise stated)

Advances recoverable in cash orin kind or for value to be received 119.95 131.74

Balances with excise, customs, etc. 6.50 5.77

Inter-corporate deposits with subsidiary 7.03 7.04companies (Including interest accrued Rs. 0.03 Crores;Previous year Rs. 0.04 crores)

133.48 144.55

Global Reports LLC


I 68


Rs. Crores Rs. Crores Rs. CroresCurrent Liabilities

Sundry Creditors:

(a) Due to Small Scale Industrial Undertaking (s) 90.10 84.29

(b) Due to Others 424.17 420.61

(c) Due to Subsidiaries 1.99 2.61

516.26 507.51Other Liabilities:

(a) Security Deposit 5.04 4.32

(b) Unclaimed Dividend 0.14 0.14

(c) Unclaimed Matured Fixed Deposit 1.22

(d) Interest accrued but not due on loans 0.77 1.05

(e) Others 37.45 25.48

44.62 30.99

560.88 538.50


Rs. Crores Rs. CroresProvisionsGratuity 5.25 11.51

Leave encashment on retirement 7.78 6.22

13.03 17.73


Rs. Crores Rs. CroresDeferred Tax Asset(Refer Note No.30)Deferred tax asset as at 1.4.2002 89.90 92.40

Less:Charge for the year 8.78 2.50

81.12 89.90


Rs. Crores Rs. CroresMiscellaneous Expenditure(To the extent not written off or adjusted)

Voluntary Retirement Scheme 59.48 79.02

Testing fees 5.23 3.68

Technical know-how 5.00 6.61

69.71 89.31

Global Reports LLC


I 69

SCHEDULE [ A ]SIGNIFICANT ACCOUNTING POLICIES1 BASIS OF PRESENTATION

The accounts have been prepared using historical cost convention except for the revaluation ofcertain fixed assets, in accordance with the Generally Accepted Accounting Principles (GAAP)on the accrual basis and in accordance with the Accounting Standards referred to in Section211(3C) and other requirements of the Companies Act 1956. Insurance and other claims areaccounted for as and when admitted by the appropriate authorities.

2 FIXED ASSETS(a) Fixed assets are stated at cost, except for land and buildings added prior to 30th June 1985

which are stated at revalued cost as at that date based on technical expert’s evaluation report.(b) Expenditure relating to existing fixed assets is added to the cost of the assets where it

increases the performance / life of the assets as assessed earlier.(c) Fixed assets are eliminated from financial statements, either on disposal or when retired

from active use. Such assets are removed from fixed asset records on disposal. Generally,such retired assets are disposed off soon thereafter.

(d) Pre-operative expenses, including interest on borrowings for the projects incurred till theprojects are ready for commercial production, are capitalised.

(e) Internally manufactured / constructed fixed assets are capitalised at factory cost includingexcise duty wherever applicable.

(f) Lumpsum fees paid for acquisition of technical knowhow relating to Plant and Machinery iscapitalised

(g) (i) Machinery spares which are specific to particular item of Fixed Assets and whose use isirregular are capitalised as part of the cost of machinery.

(ii) Machinery spares which are not specific to a particular item of Fixed Assets but can be usedgenerally for various items of Fixed Assets are treated as inventory and charged to Profitand Loss Account as and when issued for consumption in the ordinary course of operation.

3 INVESTMENTSCurrent Investments are carried at lower of cost or market value. The determination of carrying costsof such investments is done on the basis of specific identification. Long term investments are carriedat cost after providing for any diminition in value, if such diminition is of a permanent nature.

4 INVENTORIESInventories are valued at the lower of cost or net realisable value after providing for obsolescenceand damage as under.(a) Raw materials, packing materials, : At Cost, on FIFO/Weighted Average basis

stores and spares(b) Work-in-Process : At Cost plus appropriate production overheads(c) Construction Work-in-Progress : Percentage completion method.(d) Finished goods : At Cost, plus appropriate production overheads,

including excise duty paid/payable on such goods.5 RESEARCH AND DEVELOPMENT

(a) Revenue Expenditure on research and development is charged to Profit and Loss Accountin the year of incurrence except in case of development of new products undertaken wherethe same are deferred and expensed out over a reasonable period for which the benefit isreceived after commercial development of the products.

(b) Capital expenditure on research and development is included as part of fixed assets anddepreciated on the same basis as other fixed assets.

6 FOREIGN CURRENCY TRANSACTIONS(a) Foreign currency transactions are recorded at the exchange rate prevailing at the time of

transactions.(b) Foreign currency current assets and liabilities are converted at the contracted / year end

rate, as applicable.

Global Reports LLC


I 70

(c) Exchange difference on account of acquisition of fixed assets are adjusted to carrying costof fixed assets. Other exchange differences are adjusted in the Profit & Loss Account.

(d) The cost of forward exchange contracts is spread over the period of the contract.7 CONSTRUCTION CONTRACTS

Revenues are recognised as under :(a) With respect to divisible contracts, material on the basis of supply of goods being made and

erection on percentage completion method.(b) With respect to indivisible contracts on the basis of percentage completion method.

8 RETIREMENT BENEFITS(a) Provident fund and superannuation contributions are accrued each year in terms of contracts

with the employees.(b) Provisions for gratuity and leave encashment are determined and accrued on the basis of

actuarial valuation.9 DEPRECIATION

(a) Depreciation on the fixed assets is provided at the rates and in the manner specified inSchedule XIV of the Companies Act, 1956, on written down value method other than onbuildings and plant and equipment which are depreciated on a straight line method.

(b) Buildings constructed on leasehold land are depreciated at normal rate as prescribed inSchedule XIV to the Companies Act, 1956 where the lease period of land is beyond the lifeof the building.

(c) Lumpsum amounts paid for leasehold land are amortised and charged to depreciation overthe respective lease periods except where the option of refund is available.

(d) In the case of revalued assets the difference between the depreciation based on revaluationand the depreciation charged on historical cost is recouped out of revaluation reserve.

10 MISCELLANEOUS EXPENDITUREThe expenses disclosed under this head are amortised as follows:(a) Testing fees and Payment under voluntary retirement scheme over a period of five years.(b) Lumpsum fee for technical know-how other than those relating to Plant and Equipment is

amortised over a period of six years from the year of commencement of commercialproduction.

11 BORROWING COSTS(a) Borrowing costs that are attributable to the acquisition, construction or production of qualifying

assets are capitalised as part of the cost of such assets. A qualifying asset is an asset thatnecessarily takes a substantial period of time to get ready for its intended use or sale.

(b) All other borrowing costs are recognised as expense in the period in which they are incurred.

12 TAXES ON INCOME(a) Tax on income for the current period is determined on the basis of estimated taxable income

and tax credits computed in accordance with the provisions of the Income Tax Act, 1961 andbased on the expected outcome of assessments / appeals.

(b) Deferred tax is recognised on timing difference between the accounting income and theestimated taxable income for the period and quantified using the tax rates and laws enactedor substantively enacted on the balance sheet date.

(c ) Deferred tax assets which arise mainly on account of unabsorbed loss or unabsorbeddepreciation are recognised and carried forward only to the extent that management isvirtually certain that sufficient future taxable income will be available against which suchdeferred tax assets can be realised.

13 CONTINGENCIES AND EVENTS OCCURRING AFTER THE BALANCE SHEET DATE(a) Accounting for contingencies (gains and losses) arising out of contractual obligations, are

made only on the basis of mutual acceptances.(b) Where material events occurring after the date of balance sheet are considered upto the

date of approval of the accounts by the Board of Directors.

Global Reports LLC


I 71

SCHEDULE [B] 31-3-2003 31-3-2002Rs. Crores Rs. Crores

NOTES ON ACCOUNTS1 No provision has been made for

(a) Income tax demands against which the Companyhas preferred appeals. Similar matters involved inthe appeals have been decided in favour of theCompany in the past. 1.95 0.40

(b) Excise Duty demands which have been disputedby the Company (Net of income tax) 8.51 11.21

(c) Sales tax demands which have been disputed by 1.83 1.78the Company (Net of income tax)

2 Contingent liability, not provided for, in respect of(a) Claims against the Company not acknowledged as

debts (Net of income tax) 0.65 1.12(b) Show Cause Notice issued by the Custom

Authorities for levy of penalty under Section 127of the Customs Act which have been disputed by Amount not Amount notthe Company Ascertainable Ascertainable

(c) Bills discounted 65.70 69.11(d) Guarantees by the Company for obligations to

other persons 13.49 22.93(e) Guarantees to bankers, financial institutions and

others on behalf of(i) Subsidiaries NIL 4.50(ii) Other Associate Companies 9.62 33.17

(f) Income tax appeals/reference applications madeby the income tax department against the orderspassed by the Appellate Authorities in favour of theCompany in case the ultimate decision is againstthe Company 9.36 9.36

(g) Excise matters in dispute decided in favour of theCompany at Appellate Level for which the Departmentis in Appeal before CEGAT. 6.22 4.58

3 Provision for tax for the year represents wealth taxprovision made under Wealth Tax Act, 1957 0.25 0.25

4 Estimated amount of contracts remaining to beexecuted on Capital Account and not provided for(Net of advances) 2.71 1.85

5 Sales includea) Increase / Decrease (-) in construction

work-in-progress:(i) Closing work-in-progress 109.71 43.54(ii) Less: Opening work-in-progress 43.54 164.07

66.17 -120.53

and are net of:b) Brokerage and commission 10.22 13.58c) Cash discount 7.34 6.20

6 Following expenses have been capitalised during the Year:(a) Materials 0.44 0.54(b) Staff and welfare 1.14 1.12(c) Manufacturing expenses 1.05 0.98

7 Amortisation of miscellaneous expenses relates to:(a) Testing Fees 1.86 1.29(b) Payments under Voluntary Retirement Schemes 25.21 24.13(c) Technical Know-How Fees 2.52 2.14

29.59 27.56

Global Reports LLC


I 72

8 Effects of changes in foreign exchange rates:(a) Exchange difference charged to Profit & Loss 2.42 4.40

Account(b) Exchange difference adjusted in the carrying

amount of fixed assets 0.00 0.00(c) Exchange difference on account of forward contracts 0.04 0.42

9 Interest and commitment charges include interest on(a) Fixed loans 30.07 30.95(b) Debentures 8.17 11.38(c) Others 28.11 35.80

66.35 78.13(d) Less: Interest income (including tax deducted at

source Rs. 0.20 crores; Previous year Rs. 0.11 crores) 1.92 3.73

64.43 74.40

10 Borrowing cost capitalised during the year 0.00 0.0011 Advances recoverable in cash or in kind or for

value to be received include(a) Advances against allotment of shares 1.16 1.16(b) Rent deposit with Director 0.20 0.20(c) Due by an Officer Rs NIL (Previous year

Rs. 7170) (Maximum amount outstanding at anytime during the year Rs. 7170, 0.00 0.00Previous year Rs. 15210)

12 Value of imports (On C.I.F. basis)(a) Raw materials 79.90 90.97(b) Spare parts 0.74 0.39(c) Capital goods 1.45 0.68(d) Trading goods 24.81 20.21

13 Expenditure in foreign currency(a) Technical assistance/Service fee 0.62 1.96(b) Professional charges 0.14 0.07(c) Interest 0.21 0.91(d) Others 11.79 9.78

14 Earnings in foreign currency(a) Export of goods on F.O.B. basis

including deemed exports Rs. 63.94 crores(Previous year Rs. 138.80 crores) 260.92 344.15

(b) Service Revenue 0.37 0.68(c) Others 0.31 0.65

15 Arrears of preferential dividend of an amalgamatedcompany payable in nine equal installments in terms ofBIFR Order and the Scheme of Amalgamation. 0.05 0.10

16 Excise duty included in the value of closing finishedgoods inventory 2.99 4.36

17 Interest on delayed payments to small scale industrialundertakings (gross) 0.53 0.21

18 Expenditure on Research & Development(a) Capital 1.51 0.17(b) Revenue 13.08 7.58


Global Reports LLC


I 73

31-3-2003 31-3-2002Unit Quantity Rs. Crores Quantity Rs. Crores

19 Raw Materials Consumed:Ferrous Metals Ton 35164 181.86 32708 142.90Non-ferrous Metals Ton 11659 161.61 9129 121.48Chemicals, Oils and Paints K.Ltr 8345 30.02 5261 19.86Wires, Pipes,Tubes and Cables K.Mtr 13691 15.01 18176 35.02Components M.Pc 549 408.04 540 361.50Others 16.70 66.46

813.24 747.22

20 Consumption of Raw Material Percentage 31-3-2003 Percentage 31-3-2002and Spare Parts: of total of total

Consumption Rs. Crores Consumption Rs. CroresRaw Materials:Imported 11.56 94.01 14.39 107.53Indigenous 88.44 719.23 85.61 639.69

813.24 747.22

Spare Parts:Imported 25.66 0.29 38.22 0.60Indigenous 74.34 0.84 61.78 0.97

1.13 1.57

21 Sales Unit 31-3-2003 31-3-2002Quantity Rs. Crores Quantity Rs. Crores

(a) Transformers,Reactors andAccessories thereof Nos 7338 337.71 6051 266.20

(b) Switchgears, ControlEquipmentand Accessoriesthereof Nos 110516 227.43 73649 204.17

(c) Motors, Alternatorsand Pumps Nos 1112656 355.28 1024908 322.35

(d) Electrical steelStampingsand Laminates M.Ton 2205 12.16 1218 10.00

(e) Electric Fans,VentilationControl Systems Nos 1893562 206.86 2366449 207.69

(f) Electric Lamps M.Nos 36 78.42 35.15 70.32

(g) Communication,Computersystem Software andAccessories 108.69 140.45

(h) Service Revenue 46.94 35.90

(I) Others 352.90 344.77

1726.39 1601.85

Global Reports LLC


I 74

22 Details of licensed capacity, installed capacity and actual production during the year of eachclass of goods manufactured :

Sl. Products Unit Licensed Capacity *Installed Capacity @Actual Production

No. 2002-03 2001-02 2002-03 2001-02 2002-03 2001-02

1 Transformers, KVA 90,00,000+(l) 90,00,000+(l) 1,85,00.000 1,85,00.000 1,13,60,460 1,03,32.965Reactors and Nos 19,687 19,687 50,750 50,400 6,765 7,006Accessories +(c)+(f)+(l) +(c)+(f)+(l) +(c)+(f) +(c)+(f)thereof

2 Switchgear, Nos 72,000 72,000 201550 1,74,550 118,417 78,240Control + (l) + (l)Equipment &Accessoriesthereof

3(a) Motors, HP 14,39,250+(l) 14,39,250+(l) 42,07,104 37,68,550 19,42,261 15,95,430Alternators Nos 1,98,835+(l) 1,98,835+(l) 16,76,500 23,55,835 9,18,907 8,73,094and Pumps MW 120 120 120 120 nil **

3(b) Electrical Steel MT 7,500+(l) 7,500+(l) 10,000 10,000 9,593 9,427Stamping &Laminates

4 Electric Fans, Nos 10,00,000 10,00,000 28,56,000 24,00,000 17,45,368 21,53,021Ventilation, & +(l)+(r) +(l)+(r)Pollution ControlSystems

5 Lighting - M.Pcs 19.46+(l) 19.46+(l) 88 88 32 33Electric Lamps

6 Communication, Rs. 4 Crores 4 Crores 4 Crores 4 Crores Nil NilComputerSystems, Software Nos. 4,75,000+(l) 4,75,000+(l) 3,83,000 3,82,100 27,269 74,810& Accessories Lines 1,20,000+(l) 1,20,000+(l) 3,80,000 3,80,000 1,13,500 3,31,184

7 Other Items Rs. (l) (l) 10 Crores 10 Crores Nil 68,66,000Nos. 24,00,350 24,00,350 24,05,970 24,03,970 9,18,164 75,461Systems 700 700 700 700 Nil Nil

*Installed Capacities are as certified by the Managing Director on which Certificate the Auditors have placed reliance. @ The production figures are as perreturns submitted to Deptt. Of Industrial Development. (c) To the extent required for Switchgear manufactured and supply to Associates. (f) To the extentrequired for captive use. (g) To the extent required to meet the needs of HT and LT Switchgear manufacture. (h) Within the overall existing licenced capacityof Motor Control Gear. (r) Registered ; Capacity not specified. (l) Under the liberalised Industrial Policy of Government of India, the company got the capacitiesapproved by way of Acknowledgements against the IEMs submitted by it. ** Not ascertainable.

Global Reports LLC


I 75

23 INVENTORIES

Products Unit 31-3-2003 31-3-2002 31-3-2001Quantity Value Quantity Value Quantity Value

Rs. Crores Rs. Crores Rs. Crores

(a) Transformers,Reactors andAccessoriesthereof Nos 80 2.26 44 1.22 146 1.03

(b) Switchgears,ControlEquipmentandAccessoriesthereof Nos 837 0.88 587 1.49 24261 1.09

(c) Motors,AlternatorsandPumps Nos 11787 6.33 32267 12.38 25998 12.11

(d) ElectricalsteelStampingsandLaminations M.Ton 406 2.68 483 2.70 397 2.11

(e) Electric fansVentilationcontrolsystems Nos 85193 7.48 117849 9.20 96277 9.11

(f) ElectricLamps M.Nos 1.93 4.32 1.85 2.70 1.65 1.77

(g) CommunicationComputersystem,SoftwareandAccessories 3.41 2.81 2.84

(h) Others 12.77 12.33 18.96

40.13 44.83 49.02

Global Reports LLC


I 76

24 Secured Loans - Securities are as under :-

(a) The Debentures (VIII Series) aggregating Rs.16.67 crores (Previous year Rs.27.78 crores)are secured by first charge / mortgage over specific movable / immovable properties of theCompany.

(b) The Debentures (IX Series) aggregating Rs.16.67 crores (Previous year Rs.50.00 crores)are secured by first charge on specific immovable properties of the company and specificmovable assets of the company.

(c) Term loans from banks amounting to Rs.98.73 crores (Previous year Rs.90.80 crores) aresecured by way of equitable mortage of land and bullding and by way of hypotheciation ofspecific plant and equipment.

(d) Term loans from financial institutions amounting to Rs.1.45 crores (Previous year Rs. NIL) aresecured by way of hypothecation of vehicles.

(e) Term Loans from Financial Institutions amounting to Rs.Nil (Previous year Rs.16.66 crores)are secured by way of equitable mortgage of Land and Builidings and by way of hypothecationof specific plant and equipment.

(f) Cash Credit / Working Capital Demand Loans aggregating to Rs. 182.04 crores(Previous year Rs.277.06 Crores) includes Rs.128.71 crores Foreign Currency Loans(Previous year Rs.36.14 crores) from banks are secured by hypothecation of stocks andbook debts.

25 Names of suppliers being Small Scale Industrial Undertakings to whom the Companyowes a sum which is outstanding for more than thirty days, are as per the annexure.The Information regarding small scale industrial undertaking has been determined to theextent such parties have been identified on the basis of information available with theCompany.

26 During the year the Company has transferred its Zero Coupon Debentures of Solaries ChemtechLimited amounting to Rs.8.00 Crores to its wholly owned subsidiary CG Capital & InvestmentsLimited at par.

27 The Company has charged to the Profit and Loss Account Rs.20.95 crores (Previous yearRs.20.75 crores) under voluntary retirement scheme (VRS) in respect of closed units. TheCompany, based on legal opinion, has not considered this amount as deduction for the purposeof computation of net profits for managerial remuneration.

28 In view of the cumulative losses incurred ,the debenture redemption reserve for the years endedup to 31st March 2003, recomputed at Rs.3.34 crores in accordance with the circular no. 9/2002dated 18.04.2002 issued by the Department of Company Affairs has not been created. Thesame will be created in the year the company makes an adequate profit.

29 Exceptional items in the Profit & Loss Account pertain to :

31.3.2003 31.3.2002

Rs. Crores Rs. Crores

(a) Advances written off being overdue Inter Corporate depositsand interest due thereon from Bharat Starch Industries Ltd.(BSIL) in terms of a consent to a scheme of arrangementfiled by BSIL with the Hon’ble High Court of Gujarat pursuantto which BSIL would cease to exist. 0.00 -17.27

(b) Advances written off being overdue Inter Corporate depositand overdue interest thereon from JCT Ltd. In terms of ascheme of arrangement filed by the Company dulyapproved by the Hon’ble High Court of Punjab and Haryana. 0.00 -17.25

Global Reports LLC


I 77

31.3.2003 31.3.2002

Rs. Crores Rs. Crores

(c) Profit on sale of Land and Building situated at Worli, Mumbai 0.00 30.95

(d) Profit on sale of investment in CG Newage Electrical Ltd. andlumpsum in lieu thereof 20.90 0.00

(e) Diminition in value of Advances -2.73 0.00

(f) Decline in the value of certain Long Term Investments -11.97 0.00

6.20 -3.57

30 (a) No provision for income tax has been made, since the company does not have taxableincome. Though the Company has book profit and is governed by Section 115JB (MinimumAlternate Tax) of the Income Tax Act, 1961, provision for tax is not considered necessary inview of the carried forward set off of the business losses / depreciation in accordance withthe provisions of the above section.

(b) From the year 2001-2002; in order to comply with the requirements of Section 211(3C) ofthe Companies Act, 1956; consequent to Accounting Standard 22 “Accounting for taxes onIncome” issued by the Institute of Chartered Accountants of India and made mandatory inrespect of accounting year commencing on or after 1st April 2001, the company has followedthe deferred tax method of accounting. Accordingly, the Company has accounted for DeferredTax Asset amounting to Rs.92.40 crores as at 1st April 2001. Deferred Tax Liability forCurrent Year amounting to Rs.8.78 crores (Previous year Rs.2.50 crores) has been chargedto Profit & Loss Account.

(c) Deferred Tax assets & liabilities are attributable to the following items :

Particulars Deferred tax Charge/ Deferred taxassets/ Credit assets /

(liabilities) as (liabilities) asat 1.4.2002 at 31.3.2003

Deferred Tax Asset

Expenses allowable for tax purposes

when paid/on payment of TDS 1.18 3.16 4.34

Unabsorbed carried forward tax

losses / depreciation 166.57 -35.87 130.70

Others 2.80 1.40 4.20

170.55 -31.31 139.24

Deferred Tax Liability

Difference between Tax and Bookwritten down value -70.36 13.80 -56.56

Expenditure under Voluntaryretirerement scheme of earlier years -8.93 7.05 -1.88

Others -1.36 1.68 0.32

-80.65 22.53 -58.12

89.90 -8.78 81.12

(d) The Company has accounted for deferred tax asset based on management projection offuture profitability. These projections have been made on a reasonable basis and management

Global Reports LLC


I 78

is virtually certain that sufficient future taxable income will be available against which suchdeferred tax asset can be realised.

31 (a) In respect of disclosure under “Accounting Standard 18” regarding reporting under relatedparty transactions, the Company has obtained legal opinion for matters required to bedisclosed under the said Standard and accordingly information required under the Standardhas been given.

(b) Disclosures as required by Accounting Standard AS 18 “Related Party Disclosure” in respectof transactions for the year ended 31st March, 2003 are as under:

1 Relationships:

(i) Subsidiaries:

(a) CG Capital & Investments Limited is the 100% subsidiary of the company.

(b) CG PPI Adhesive Products Limited.CG Capital & Investments Limited holds 81.42% of Equity Share Capital in thisCompany.

(c) CTR Manufacturing Industries Limited.CG Capital & Invesments Limited holds 82.06% of Equity Share Capital in thisCompany.

(ii) Associates:

(a) Brook Crompton Greaves Limited

(b) CG Actaris Electricity Management Limited, New Delhi(Formerly CG Schlumberger Electricity Management Limited)

(c) CG Igarashi Motors Limited ( relationship ceased from 19.09.2002)

(d) CG Lucy Switchgear Limited

(e) CG Maersk Information Technologies Private Limited

(f) CG Newage Electrical Limited (relationship ceased from 05.07.2002)

(g) CG Smith Software Private Limited

(h) Hitachi CG Motor Engineering Private Limited

(i) International Components India Limited

(j) Karamchand Thapar (Africa) Limited, Mauritius

(k) Paxonet Communications Inc. USA

(l) Power Equipment Limited, Dubai

(iii) Key Management PersonnelSM Trehan - Managing Director

(iv) Relatives of Managing Director :

(a) Mrs. Mira Trehan

(b) Mr. Amitoj Trehan

(c) Ms. Ritambhara Trehan

(d) Dr. Om Prakash Trehan

(e) Mrs. Vimla Trehan

(f) Mrs. Navnidhi Nagrath

(g) Mrs. Madhur Chopra

Global Reports LLC


I 79

2 The following transactions were carried out with the related parties in the ordinary course ofbusiness:

Rs. in Crores

31.03.2003 31.03.2002

Sl Transactions Subsidiaries Associate Subsidiaries AssociateNo Companies Companies

1 Sales and service revenue 0.02 10.79 0.01 7.81

2 Commission received 0.00 0.02 0.00 1.15

3 Interest income 0.76 0.00 0.19 0.00

4 Dividend received 0.00 0.00 0.00 3.99

5 Rent income 0.00 0.06 0.03 0.00

6 Purchases 6.56 8.18 5.79 12.97

7 Interest expense 0.00 0.50 0.00 1.88

8 Loans / Inter corporatedeposits takenBalance as at year-end 3.65 0.00 0.70 16.54

9 Loans / Inter corporatedeposits placedBalance as at year-end 7.03 0.00 7.04 0.00

10 Due to related partiesas at year-end 1.99 7.73 3.27 21.59

11 Due from related partiesas at year-end 0.06 0.36 7.72 0.40

3 Remuneration to Managing Director, Key Managerial Personnel Rs.0.68 crores (Previousyear Rs.0.39 crores).

32 The following are the disclosures in respect of the calculation of earning per share for the yearended 31st March 2003.

Particulars 31.03.2003 31.03.2002

a. NumeratorProfit/(loss) after tax Rs. 281735038 41276218

b. DenominatorWeighted average number of equity shares Nos. 52366656 52366656

c. Earnings per Share (Basic & diluted)= Numerator / Denominator Rs. 5.38 0.79

Global Reports LLC


I 80

33 The disclosure in respect of Segment information for the year ended 31st March, 2003 are asfollows:

31-3-2003A. Business Segments Rs.Crores

Particulars Power Consumer Industrial Digital Unallocable TotalSystem Products System Corporate

Assets *Segment Revenue 690.70 532.94 376.54 126.21 0.00 1726.39Add:Inter segment

Revenue 0.02 0.98 15.89 0.03 -16.92 0.00Total 690.72 533.92 392.43 126.24 -16.92 1726.39Segment Results 63.04 42.95 23.37 3.65 0.00 133.01Less: Interest 64.43Less:OtherUnallocableExpenditure Net ofUnallocable Income 31.38Profit Before Tax 37.20Capital Employed:Segment Assets 508.85 233.70 247.97 87.46 316.05 1394.03Segment Liabilities 229.66 128.01 113.76 50.63 51.85 573.91Net Assets 279.19 105.69 134.21 36.83 264.20 820.12Capital Expenditure 12.81 -0.13 7.12 0.66 3.55 24.01Depreciation 15.00 9.56 13.96 2.60 4.13 45.25Non CashExpenditure 6.73 11.88 8.99 1.20 0.79 29.59

A. Business Segments 31-3-2002Rs.Crores

Particulars Power Consumer Industrial Digital Unallocable TotalSystem Products System Corporate

Assets *Segment Revenue 596.66 491.89 345.25 168.05 0.00 1601.85Add: Inter segment

Revenue 0.22 1.40 13.51 1.05 -16.18 0.00Total 596.88 493.29 358.76 169.10 -16.18 1601.85Segment Results 53.29 41.75 19.88 8.99 0.00 123.91Less: Interest 74.40Less: OtherUnallocableExpenditure Net ofUnallocable Income 42.63Profit Before Tax 6.88Capital Employed:Segment Assets 474.01 250.46 254.21 118.58 357.72 1454.98Segment Liabilities 216.34 128.18 95.01 68.15 49.22 556.90Net Assets 257.67 122.28 159.20 50.43 308.50 898.08Capital Expenditure -0.36 2.52 3.43 0.35 7.49 13.43Depreciation 14.31 8.84 13.56 1.25 6.30 44.26Non CashExpenditure 5.03 11.72 8.79 1.33 0.69 27.56

* Unallocable Corporate Assets comprise Assets and Liabilities which cannot be allocated to the segments. TaxCredit Asset not considered in Capital Employed above.

Global Reports LLC


I 81

B. Secondary Segment Reporting (Geographical Segments)

(a) The distribution of the company’s sales by geographical market is as under:

Rs. in Crores

Sales Revenue 31.3.2003 31.3.2002

India 1519.40 1390.05

Outside India 206.99 211.80

Total 1726.39 1601.85

(b) The company’s tangible fixed assets are located entirely in India.

Segment Revenue and Results

The expenses which are not directly attributable to any business segment are shown asunallocable expenditure

Segment Assets and Liabilities

Segment assets include all operating assets used by the business segment and mainlyconsist of fixed assets, debtors and inventories. Segment liabilities primarily includecreditors and other liabilities. Common Assets and Liabilities which cannot be allocatedto any of the segments are shown as a part of unallocable assets / liabilities.

Primary Segment

In the opinion of the management, the business segments comprise the following :

(a) Power System : Transformer, Switchgear, Turnkey Projects

(b) Consumer Products : Fans, Luminaires, Light Sources and Pumps

(c) Industrial systems : Electric Motors and Alternators

(d) Digital : Networking and Telecommunication

34 The Company has not entered into any Finance / Operating Lease as specified in AS-19“Leases”. The Company has taken various Residential Premises under Cancellable OperatingLeases. These Lease Agreements are normally renewed on expiry.

35 Remuneration to Managing Director / Whole Time Director charged to accounts :


(a) Salaries 0.46 0.24

(b) Contribution to Provident and other funds 0.14 0.07

(c) Other perquisites 0.08 0.08

0.68 0.39

Global Reports LLC


I 82

36 Managerial Remuneration :

Computation of Net Profits in accordance with the provisions of Section 349 of the CompaniesAct, 1956

Particulars 31.03.2003 31.03.2002Rs. Crores Rs. Crores

Computation of Net Profits in accordancewith the provisions of Section 349 of theCompanies Act, 1956.

Net Profit / Loss (-) Before TaxAs per Profit & Loss Account 37.20 6.88

Add : VRS for Closed Units (Refer Note No. 27) 20.95 20.75Profit(-) / Loss(+) on Sale of Investments -8.93 4.26(Net of diminution in value of InvestmentsRs.11.97 crores)Directors Emoluments:Added in view of Sec 198(1)Managing Director and Whole Time Directors 0.68 0.39

Non Executive Directors 0.03 12.73 0.02 25.42

49.93 32.30

Less : Profit on Sale of Assets(Proviso to Sec.349(3)(d)) 0.00 25.58

49.93 6.72

Less : Net Loss as per Sec. 349 of theCompanies Act, 1956 for the Previous Year 209.93 216.81

Net Profit / Loss (-) in terms of Section 349 -160.00 -210.09

In view of the computation under Section 309(5) of the Companies Act, 1956 resulting in a loss,remuneration to Managing Director has to be restricted to the limits specied in Schedule XIII ofthe Companies Act, 1956 and is subject to approval by the Central Government.

As approved by the members of the Company, the Company has obtained necessary Approvalfrom the Central Government U/s 198(4)/309(3) of the Companies Act, 1956, for payment ofremuneration to Managing Director in excess of the limits prescribed under Schedule XIII of theabove Act.

37 The Management has since decided to suspend the operations w.e.f. 22nd April 2003, inrespect of the following divisions:

(1) Capacitor - Pune; (2) Industrial Electronics - Satpur, Nasik and (3) Digital 1 - Bangalore.

However, in the opinion of the Management, there will not be any material impact on the futureoperations of the Company and the fair value of fixed assets.

38 Leasehold land includes land taken on lease from State Industries Promotion Corporation ofTamilnadu Limited (SIPCOT) for a period of 99 years from 30th May 1995 for which a refundabledeposit of Rs.0.27 crores was given, out of which Rs.0.11 crores is outstanding as on

Global Reports LLC


I 83

31.3.2003. No amortisation of the lease amount has been made in the accounts as the depositgiven is fully recoverable.

39 There are no amounts due and outstanding to be credited to Investor Education and ProtectionFund.

40 Miscellaneous income includes profit on sale of fixed assets of Rs.3.19 crores (Previous yearRs.1.99 crores) and loss on sale of investment Rs. NIL (Previous year loss Rs.4.26 crores).

41 Prior year figures have been reclassified where necessary to confirm with the current year’spresentation.

Global Reports LLC


I 84

Additional information, as required under Part IV of Schedule VI to The Companies Act, 1956.

Balance Sheet Abstract and Company’s General Business Profile

I Registration Details:Registration Number 2641State Code 11Balance Sheet Date 31st March, 2003

II Capital Raised during the year: Rs.’000Public issueRights issueBonus issuePrivate placementOn amalgamation for consideration other than cash

III Position of Mobilisation and Deployment of Funds: Rs.’000Total Liabilities 9147321Total Assets 9147321Sources of Funds:

Paid up capital 523699Reserves and surplus 4031412Secured loans 3155642Unsecured loans 1436568

Application of Funds:Net fixed assets 3939250Investments 739650Net current assets 2825145Miscellaneous expenditure 697141Deffered Tax Asset 811200Accumulated losses 134935

IV Performance of the Company : Rs.’000Turnover (including Other Income) 17398539Total expenditure 17088525Profit before extraordinary items and taxation 310014Profit before tax 372035Profit after tax 281735Earning per share (Rs.) 5.38Dividend rate %

V Generic names of the principal products, services of the Company:Product description Item Code No.

(ITC Code)Transformers 85.04Switchgears and power control equipment 85.35Fans, light sources and luminaire s 84.14Electrical motors and alternators 85.01Telecom and Networking 85.17

Mumbai, 22nd May, 2003. Mumbai, 22nd May, 2003.As per our report attachedSHARP & TANNANChartered Accountants

By the hand of B. R. Jaju S. M. TrehanChief Financial Officer Managing Director

L. Vaidyanathan W. Henriques K. K. NohriaPartner Secretary Chairman

Global Reports LLC


I 85

Annexure to Schedule B (Refer Note No.25) : List of Small Scale Industrial Undertakings

1 A J SERVICES2 ABHYUT ENGG PVT LTD3 ACCURA ENGINEERS4 AERIAL ENGG5 AHMEDNAGAR POLYMERS PVT LTD6 AKASH INDUSTRIES7 AL-AZIZ PLASTICS PVT LTD.8 ALCAST FOUNDRY PVT LTD9 ALERT ENGG10 ALERT ENGINEERING ENTERPRISES11 ALFA MICRON GAUGES & TOOLS12 AMIT INDUSTRIES13 AMOD ENTERPRISES14 ANAND PACKINGS15 ANANT ENGG WORKS16 ANCO MOTORS17 ANJALI ENTERPRISES18 APEX LUMINAIRES PVT LTD19 APTE & APTE20 AQUA FLOW21 ARIHANT ELECTRONICS22 ASHAVI INDUSTRIES23 ASHOKA ELECTRONICS24 ASHWINI INDUSTRIES25 ASKA CONDUCTORS26 ASSOCIATED ENGG CO27 AUDULER & MANUFACTURING CO28 AUTOMECH INDUSTRIES29 AVM ENGINEERING30 BARODA BUSHINGS31 BARODA BUSHINGS & INSULATIONS32 BCPL CONDUCTORS P LTD33 BEST ENGINEERS34 BESTLITE ELECTRICALS P.LTD.35 BHAGWATI STEEL WORKS36 BHAGYANAGAR SWITCHES37 BHARADWAJ ELECTRICAL INDUSTRIES38 BHARAT CORRUB INDUSTRIES39 BHAVSAR FOUNDRIES40 BHAWANI INDUSTRIES41 BHOGAL INDUSTRIES42 BIMBH MECH WORKS43 BLAZE ENTERPRISES44 BLAZE RUBBER45 BOOST ELECTRONICS46 BRIGHT ELECTRICALS47 BUNTS TOOLS48 C D FOUNDRY49 CAPS & CAPS PVT. LTD.50 CASILON POLYMERS PVT LTD51 CHAMUNDA ENTERPRISES52 CHETAK INDUSTRIES53 CHETNA ENGINEERING COMPANY54 CHURI ENGINEERING WORKS55 CHURI ENGINEERING WORKS56 CMC COMMUTATOR PVT LTD57 COMET INDUSTRIES58 CONCENTRATE59 CONSOLIDATED COMMUTATOR WORKS60 CONWELD ENGINEERING SERVICES61 CORTICA MEG I PVT LTD62 COSMIC ENGINEERING63 CREATIVE GRAPHICS64 CRYSTAL PLASTICS65 D N ENGINEERS66 DABSONS ENTERPRISES67 DASHMESH ENGG WORKS68 DDK PRODUCTS69 DDK PRODUCTS70 DEEPAK ENGINEERING WORKS

71 DELUX SPRINGS P LTD72 DESAI & BROTHERS73 DEV ENTERPRISES74 DHAKANE TRANSPORT PVT LTD75 DHANANJAY METAL76 DIAMOND ENGINEERS77 DIGIANA ELECTRONICS78 DIKSHIT INDUSTRIES79 DO ALL ENGINEERING80 ELCA CARBON LORRAINE PVT LTD81 ELECTRO MECHANICALS82 ELECTROCRAFT ENTERPRISES83 ELECTROMECHNICAL84 ELEMEX CONTROLS85 ELITE INDUSTRIES86 EMJAY INDUSTRIES87 ENN KAY ENNG88 ENSAVE DEVICES PVT LTD89 ENVEE SUPERCOAT90 ESSEN DEINKI91 EVERGREEN ENGINEERING LTD92 EVONNE93 FORM METAL PRESS PVT. LTD.94 FORWARD ENGG INDUSTRIES95 FORWARD ENGINEERING IND.96 FOUNTAIN WIRE INSUTRIES P. LTD97 GAJA KESARI98 GAJANAN INDUSTRIES99 GAJANAN INDUSTRIES100 GEE CEE OSWAL ENTERPRISES101 GLASS FIBRE102 GLASSFIBRE & ALLIED IND103 GLOBAL PACKAGING104 GLOSTAR ELECT PVT LTD105 GOA EPS PRODUCTS (P) LTD106 GOA PRECISION STAMPINGS P.LTD107 GOA WIRES & ALLIED PRODUCT108 GOMANTAK PRESS TOOLS PVT109 GOVIK ELECTRICALS110 GOVINDA AUTOTECH111 GREENFIELD ELET P LTD112 GUPTA IND CORP113 HARDWARE CORPORATION114 HEMANT ENGG115 HIGH TECH SINTERED116 HIND TOOLS117 HINDUSTAN FORGING & STEEL118 HINDUSTAN FORGING &ENG WORKS119 HOSEMAN GOA PVT LTD120 HRC ENGINEERS121 I CON INDUSTRIES122 IDEAL INSULATIONS123 INDIA SUPER PAINTS124 INDIAN METAL & ALLOYS125 INDL GLASS INSULATION126 INDUSTRIAL ENTERPRISE127 INSTA CONTROLS128 INTIMATE ENTERPRISES129 J S ENGINEERING WORKS130 JAGRUTI PRECISION131 JAI JAGDAMBA132 JAIHIND THREAD WORKS133 JAYANTI CASTINGS PVT LTD134 JAYKAY ENTERPRISES135 JINENDRA INDUSTRIES136 JK ENGINEERING137 JN INDUSTRIES138 JOY ENGINEERING139 JUMANA EXPORTS140 JUPITER ENGG WORKS

Global Reports LLC


I 86

141 JYOTI RUBBER ENGINEERS142 K C FIXTURES143 KAPOOR INSULATION PVT LTD144 KAPOOR INSULATIONS P LTD.145 KAPPOR INSULATIONS P LTD146 KAPSONS INDUSTRIES LTD147 KARNATAKA ENGINEERING ENTERPRISES148 KAY FLURO ELECTRONICS149 KAYLITE ELECTRICALS150 KAYVEE RUBBER PRODUCTS151 KENA METAL152 KHANDELWAL MACHINING153 KIRAN UDYOG154 KLICKING GANGA KONNECTECUT155 KONKAN PAPER PRODUCTS156 KOTHARKAR BROTHERS INDUSTRIES157 KRISH INDUSTRIES158 KRISHNA METAL WORKS159 KRISHNA TECHNOCRAFTS160 KUSTSTOFF161 KWALITY METAL162 KYM ASSEMBLERS163 LAXMI ENTERPRISES164 LAXMI PACKING INDUSTRIES165 LE GRAND ENGINEERING PVT LTD166 LEOTECH167 LETTER EMPORIUM168 LIBERTY INDUSTRIES169 M.G.M. INDUSTRIES170 M/S RITIKA PACKAGING PVT.171 MAA BHAWANI ENTERPRISES172 MACHINE HOUSE173 MACHINE WELL ENGINEERING174 MAGNA INDUSTRIES175 MAHALASA INDUSTRIES176 MAHALAXMI INDUSTRIES177 MAHARASHTRA MAGNET WIRES178 MAHENDRA ELECTRICALS WORKS179 MAHESH ENGG INDUSTRIES180 MALWA STRIPS PVT LTD181 MANIXON INDUSTRIAL CORP182 MARDIA TUBESY183 MASCOT INDUSTRIES184 MAYUR INDUSTRIES185 MECH INDIA ENGINEERS186 MECHMAN187 MEENAL ENGINEERING188 MEET ENGG PVT.LTD.189 MEHTA ELECTRONICS190 META PLAST IND191 METAPLAST INDUSTRIES192 MICRO PRECISION TOOLS193 MILEEN ENGINEERS194 MODERN PAPER PRODUCTS195 MUTHIYAN CASTINGS196 N.S.PACKAGING197 NALAVADE INDUSTRIES198 NAMOHA FOUNDRIES PVT LTD199 NANUBHAI & CO200 NASIK ALLOYS201 NASIK WOOD PACKERS202 NATIONAL PATTERN WORKS203 NAVNATH FABR204 NEELAY INDUSTRIES205 NEO ENGG WORKS206 NEW KRISHNA METAL ARTS207 NEXO INDUSTRIES208 NIKHIL INDUSTRIES209 NISHITA INDUSTRIES210 NKM211 NORSON ENGINEERING

212 OKAY TOOLS P LTD213 OLYMPIA ENGINEERING214 OM ENTERPRISES215 OMKAR INDUSTRIES216 OMKAR INDUSTRIES217 OMNIL GRAPHICS218 P BEERSAIN JAIN219 PACWOOD INDUSTRIES220 PALLAVI ENTERPRISES221 PAN INTERNATIONAL222 PARAGON ASSOCIATES223 PARAS ENTERPRISE224 PARGE MACHINE TOOLS225 PARINAMITRA ELECTRICALS P LTD226 PARMOUNT SEALS & PACKINGS227 PATIDAR PACKERS228 PATIL ENGINEERING229 PATIL INSULATING CO PVT LTD230 PAWAN INDUSTRIES231 PEARL ENGINEERING COMPANY232 PEARL METAL PRODUCTS233 PERFECT ENGG WORKS234 PERFECT ENGG. CO.235 PERMALI WALLACE236 PLATE PROFILE237 POLY DYNAMICS238 POPULAR RUBBER PRODUCT239 PRAKASH CORUGATED PRODUCTS240 PRAMILA PLASTICS241 PRANALI INDUSTRIES242 PRANAV ENGG WORKS243 PRASAD ENTERPRISES244 PRASHANSA ENGINEERING WORKS245 PRASHANSA INDUSTRIES246 PRASHANT CASTINGS PVT LTD247 PRECIMEASURE CONTROL P LTD.248 PRECIOUS COMPONENTS249 PRECIOUS DIE WORKS250 PRECIOUS PLASTICS251 PRECITECH COMPONENTS252 PREMIER WINDING WORKS253 PREMINER AUTOMATS254 PRESIGN ENGG255 PRESSMECH256 PRINTA CHEM257 PRISTAGE LIGHTS LTD258 PROCESS CONTROL259 PROMOD INDUSTRIES260 PROMPT ENGINEERS261 PUJA PLASTICS262 R K ENTERPISES263 R K ENTERPRISES264 R K LIGHTING PVT LTD265 RA ENGINEERING266 RAHUL TECHNOCRAFT267 RAINBOW COATS268 RAJDEEP ENG269 RAJDEEP WIRES PVT LTD270 RAJESH INDUSTRIES271 RAJESH INDUSTRIES272 RAJ-OM ENGG273 RENOWN ENGG. CO274 RIMA TRANSFORMER & CONDUCTORS275 RP ENGG WORKS276 RUBBER CENTRE277 S M ENGINEERING CO278 S M INDUSTRIES279 S S SUPPLIERS280 S V INDUSTRIES281 S.K.ENGINEERING WORKS282 S.S. ENGINEERING


Global Reports LLC


I 87

283 SAGAR ENGG IND284 SAI INTERNATIONAL285 SAI WINDING WORKS286 SAIPRASAD ENGRSLTD287 SAIPRASAD PACKAGING INDUSTRIES288 SAMEER PAINTS289 SAMEER UDYOG290 SANDHYA ENTERPRISES291 SANGHVI INDUSTRIES292 SANKHYA SHAFTS & SPINDLES P LTD293 SANT ENGG WORKS294 SANTOSH ENTERPRISES295 SARAS PLASTICS PVT LTD296 SARNAIK BROTHERS PVT LTD297 SATISH INDUSTRIES298 SAVITHA ENGINEERING299 SCRAM INDUSTRIES300 SEAGULL ENGINEERS301 SERVOCARE ENTERPRISES302 SHAILESH ENGG.303 SHAKTI ENTERPRISES304 SHANKAR BRAZING WORKS305 SHARADA ELECTRICALS306 SHEETAL ART PRINTERS307 SHERATRON ELECTRONICS308 SHIV SHAKTI INDUSTRIES309 SHIVAM INSULATION310 SHIVMANGAL FABR311 SHIVRAM FOUNDERS312 SHQNKAR ENGINEERS313 SHRADDHA ENGINEERS314 SHRADDHA PLAST315 SHREE GAJANAN ENTERPRISES316 SHREE INDUSTRIES317 SHREE LAKSHMI INDUSTRIES318 SHREE PLASTICS319 SHREE RAMPURUSH INDUSTRIES320 SHREE SHANTADURGA ENTERPRISES321 SHREE SHIV VIJAY SAW MILL322 SHRI KRISHNA ENGG. & CONT.323 SHRI KRISHNA ENGG. & CONT.324 SHRI KRISHNA GEARS P LTD325 SHRI RAMVIJAY ENGR326 SHRI SADHANA ENGINEERS327 SHRI VISHNU INDUSTRIES328 SIGMA HEAVY ENGINEERING INDUS.329 SKP ENTERPRISES330 SKYLARK ENTERPRISES331 SNUSH ENTERPRISES332 SONAMINA INDUSTRIES333 STANDARD ELASTOMERS334 STANRO RUBBER - ENGINEERS335 STANRO RUBBER ENGINEERS336 STAR CASTINGS PVT LTD337 STAR INDUSTRIES338 SUCHIRA ELECTROPLATES339 SUDESH ENTERPRISES340 SUDHA VENTILLATING SYSTEMS341 SUKRUT UDYOG342 SUMEETA GRAPHICS343 SUMMIT ENGINEERING TECH344 SUNDARA INDUSTRIES345 SUNDEEP PRODUCTS346 SUPER TECH ENGINEERS347 SUPRA ENGG WORKS348 SUPREME ELECTRICALS349 SURAJ FOUNDRIES350 SURENDRA ENGG351 SURYODAYA ENGG. INDUSTRIES352 SUYASH ENGINEERING WORKS353 SUYASH ENTERPRISES

354 SUYASH METAL PRESSING PVT LTD355 SWITRON DEVICES356 TALCO INDIA357 TELECRAFT, BANGALORE358 THE TURNING POINT359 THERMAL TRANSFER PRODUCTS360 TRINITRON DISTRIBUTING361 TWIN PLAST362 UJWAL ELECTRICAL STAMPING363 UNIFORGE BEARINGS PVT LTD364 UNIQUE ENTERPRISES365 UNIQUE TREATMENT366 UNITED ENGINEERS367 UNITED IND COMP[ONENTS368 UNIVERSAL METALLURGICALS369 VARSA INDUATRIES370 VICRAJ INDUSTRIES371 VICTORY LUMINAIRES372 VIDCAST ENGG373 VIJAYA ENGINEERING WORK374 VIJAYA ENTERPRISE375 VIKAS FOUNDRY & ENGINEERIS376 VILECO ELECTR IND377 VINSUR ENGINEERING378 VINTECH ENGRS379 VISHGRAL INDUSTRIES380 VISHNOO BALLAL & CO.381 VISHWAJEET IND382 VIVEK ENGINEERING383 VNMECH INDUSTRIES384 YASH TRADING CO385 YOGYA ENTERPRISES386 ZARHAK MOULDERS PVT. LTD.387 ZEN ELECTRIC COMPANY


Global Reports LLC


I 88

CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH, 2003(Pursuant to Amendment to Clause 32 of Listing Agreement)

31-3-2003 31-3-2002Rs.’000 Rs.’000

[A] CASH FLOWS FROM OPERATING ACTIVITIES

Net profit before tax and exceptional items 310,014 104,535

Depreciation 452,596 442,560

Interest Net 644,281 744,006

Investment income -3,463 -75,917

Miscellaneous Expenditure written off 43,794 4,324

Profit(-)/Loss(+) on sale of investments 0 42,559

Exchange Premium 24,214 43,971

Profit(-)/Loss(+) on sale of fixed assets -31,928 -19,863

Employee Voluntary Retirement Scheme 252,057 241,286

1,381,551 1,422,926

Operating profit before working capital changes 1,691,565 1,527,461

Adjustments for:Trade and other receivables -17,133 130,118

Inventories -149,051 63,505

Trade and other payables 161,231 330,337

Leave encashment provision 15,642 15,818

10,689 539,778

Cash generated from (+)/Used in (-) operations 1,702,254 2,067,239

Direct taxes Paid (-) / Refund received (+) 25,032 -19,400

Cash flow before exceptional items 1,727,286 2,047,839

Advance written off -27,300 -345,278

Employee Voluntary Retirement Scheme Incurred -56,606 -574,986

Miscellaneous Expenditure Incurred -43,270 0

-127,176 -920,264

Cash generated from / (Used in) operations [A] 1,600,110 1,127,575

[B] CASH FLOW FROM INVESTING ACTIVITIES

Add: Inflows from investing activities

Sale of fixed assets 53,499 358,093

Sale of investments (Gross) 361,678 229,100

Government Subsidy Received 1,000 0

Investment income 3,463 75,917

419,640 663,110

Less: Outflows from investing activities

Purchase of fixed assets -261,655 -163,048

Purchase of investments -63,495 -24,527

-325,150 -187,575

Net cash used in investing activities [B] 94,490 475,535

Global Reports LLC


I 89

[C] CASH FLOW FROM FINANCING ACTIVITIES

31-3-2003 31-3-2002Rs.’000 Rs.’000

Add: Inflows from financing activitiesSecured loans 0 0Unsecured loans 533,495 0

533,495 0Less: Outflows from financing activities

Secured Loans -517,181 -513,403Unsecured Loans 0 -53,988Interest paid (net) -644,281 -793,478

-1,161,462 -1,360,869

Net cash generated from financing activities [C] -627,967 -1,360,869

NET CHANGES IN CASH AND CASH EQUIVALENT(A+B+C) 1,066,633 242,241

Cash and cash equivalents - Opening balance -2,376,156 -2,618,397

Cash and cash equivalents - Closing balance -1,309,523 -2,376,156

ANNEXUREBREAK UP OF CASH AND CASH EQUIVALENTS

Cash and bank balances 547,429 611,955Bank overdraft -1,820,452 -2,770,611Inter corporate deposits payable -36,500 -217,500

-1,309,523 -2,376,156

NOTES:1 The cash flow statement has been prepared under the indirect method as set out in Accounting

Standard - 3 “Cash Flow Statements” issued by The Institute of Chartered Accountants of Indiaexcept in case of dividend, purchase and sale of investments which have been considered onthe basis of actual movements of cash and cash equivalents with corresponding adjustments inassets and liabilities.

2 Additions to fixed assets are stated inclusive of movements of capital work-in-progress betweenthe beginning and the end of the year and treated as part of investing activities.

3 Figures for the previous year have been re-grouped/re-classified wherever necessary.


B. R. Jaju W. Henriques S. M. Trehan K. K. NohriaChief Financial Officer Secretary Managing Director Chairman

AUDITORS’ CERTIFICATE

We have examined the attached cash flow statement of Crompton Greaves Limited for the yearended 31st March, 2003. The statement has been prepared by the Company in accordance with therequirements of Clause 32 of the Listing Agreement with the Stock Exchanges and is based on andin agreement with the corresponding Profit and Loss Account and Balance Sheet of the Companycovered by our report of 22nd May, 2003 to the members of the Company.

Mumbai, 22nd May, 2003. SHARP & TANNANChartered Accountants


Membership No.16368

Global Reports LLC


I 90

STATEMENT IN ACCORDANCE WITH THE PROVISIONS OF SECTION 212 OF THE COMPANIES ACT, 1956.

Name of the Subsidiary CG Capital CG-PPI CTRand Adhesive Manufacturing

Investments Products IndustriesLimited Limited Limited

1 Financial year of the subsidiary ended on 31.03.2003 31.03.2003 31.03.2003

2 Extent of the interest of the Company inthe subsidiary at the end of theFinancial Year of each

(a) Face value Rupees 10 10 100

(b) Number of shares held by:

i) Crompton Greaves Ltd 9500000 — —

ii) CG Capital and Investments Ltd — 3175520 228098

(c) Shareholding percent

i) Crompton Greaves Ltd % 100 — —

ii) CG Capital and Investments Ltd % — 81.42 82.06

3 (a) Net aggregate amount of profits lesslosses so far as they concernmembers of the Company and notdealt with, in the Company’s account

(i) For the Financial Year ended31.03.2003 Rs. Crores (2.04) 0.54 0.26

(ii) For the previous financial yearssince it became a subsidiary Rs. Crores (0.01) 3.81 3.18

(b) Net aggregate amount of profits lesslosses so far as they concernmembers of the Company and dealtwith, in the Company’s account

(i) For the Financial Year ended31.03.2003 Rs. Crores NIL NIL NIL

(ii) For the previous financial yearssince it became a subsidiary Rs. Crores NIL 1.75 NIL


B. R. Jaju W. Henriques S. M. Trehan K. K. NohriaChief Financial Officer Secretary Managing Director Chairman

Global Reports LLC

CG Capital & Investments Limited

Board of Directors B.M.Thapar, ChairmanW. Henriques, Managing DirectorG. Thapar,K. Thapar,

Company Secretary R.R. Suvarna

Registered Office 6th Floor, CG House, Dr. Annie Besant Road,Prabhadevi, Mumbai 400 025

Auditors Narkar & Associates

Bankers Bank of Maharashtra

Global Reports LLC

I 92

CG CAPITAL & INVESTMENTS LIMITED ANNUAL REPORT 2002-2003

Directors’ Report for the year ended 31st March, 2003

ToThe Members,Your Directors present their Report and Audited Accounts for the year ended 31st March, 2003.

Year ended Year ended31st March, 2003 31st March, 2002

Rs. Rs.

Profit (Loss) for the year (2,04,17,950) 1,33,37,056

PERFORMANCEThe income from operations for the year was Rs. 2.05 crores as compared with Rs.1.86 crores lastyear. However, after considering the loss on sale of investments, the net loss for the year underreview is Rs. 2.04 crores as compared with the net profit of Rs. 1.33 crores last year.

SHARE CAPITALDuring the year, the Company bought back 95,00,000 7% Non-Convertible Non-CumulativeRedeemable Preference Shares of Rs. 10/- each, at par. Consequently, the Company’s paid-upcapital as at the year-end is Rs. 53,42,81,240/- comprising Equity Capital of Rs. 9,50,00,800/- andPreference Capital of Rs. 43,92,80,440/-.

DIRECTORATEMr. G. Thapar retires by rotation at the forthcoming Annual General Meeting, and being eligible,offers himself for re-appointment to the Board.Mr. W. Henriques was appointed to the Board during the year. Pursuant to the provisions of Section260 of the Companies Act, 1956, he holds office upto the date of the forthcoming Annual GeneralMeeting, and is eligible for appointment.Mr. Thapar and Mr. Henriques are eligible for re-appointment and appointment respectively, and aproposal in this regard is being submitted for the approval of the Members.Consequent to the retirement of Mr. B. M. Suri as the Managing Director, the Board of Directorshas appointed Mr. W. Henriques as the Company’s Managing Director for a period of two yearswith effect from 28th August, 2002. A proposal for his appointment as Managing Director is alsobeing submitted for the approval of the Members.

SUBSIDIARY COMPANIESPursuant to Section 212 of the Companies Act, 1956, the Annual Reports of the subsidiary companies– CG-PPI Adhesive Products Ltd and CTR Manufacturing Industries Ltd for the year ended 31stMarch, 2003, are annexed.

CONSOLIDATION OF ACCOUNTSIn terms of the revised view in respect of Accounting Standards AS-21 and AS-23 of the Institute ofChartered Accountants of India, endorsed by the Statutory Auditors, since Crompton Greaves Ltd,the Company’s Holding Company, will be presenting consolidated Accounts, the Company will notbe consolidating accounts, as required by Accounting Standard AS-21. The applicability of AS-23in respect of Associate Companies, is also being addressed by Crompton Greaves Ltd, which willinclude the Associate Companies of this Company as well.

JOINT VENTURESThe brief particulars of the Joint Ventures as at 31st March, 2003, are annexed. During the year,the Company has divested its equity shareholding in CG Igarashi Motors Ltd.

FIXED DEPOSITSThe Company has not, and also does not plan to accept any fixed deposits from the public. Hence,in the opinion of the Company, the provisions of the Non-Banking Financial Companies (ReserveBank) Directions, 1998 in respect of disclosures to be made in the Directors’ Report, do not apply.

Global Reports LLC

I 93

ANNUAL REPORT 2002-2003CG CAPITAL & INVESTMENTS LIMITED

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGOThe Company is an Investment Company and the requirements of Disclosure in respect ofConservation of Energy and Technology Absorption as required by the Companies (Disclosure ofParticulars in the Report of Board of Directors) Rules, 1988, are therefore not applicable.

There were no foreign exchange earnings and outgo during the year.

PARTICULARS OF EMPLOYEES

The Company does not have any employee who was in receipt of remuneration aggregating to thesum prescribed under Section 217(2A) of the Companies Act, 1956 read with the Companies(Particulars of Employees) (Amendment) Rules, 2002.

AUDIT COMMITTEEThe Audit Committee comprises the three Non-Executive Directors on the Board. The requirementsof the Companies Act with respect to the functioning of the Audit Committee have been fulfilled.

DIRECTORS’ RESPONSIBILITY STATEMENTThe Directors would like to assure the Members that the financial statements for the year underreview conform in their entirety to the requirements of the Companies Act, 1956.The Directors confirm that:• the Annual Accounts have been prepared in conformity with the applicable Accounting Standards;• the Accounting Policies selected and applied on a consistent basis, give a true and fair view of

the affairs of the Company and of the loss for the financial year;• sufficient care has been taken that adequate accounting records have been maintained for

safeguarding the assets of the Company; and for prevention and detection of fraud and otherirregularities;

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

AUDITORSThe Company’s Auditors, Narkar & Associates, hold office till the conclusion of the forthcomingAnnual General Meeting, and being eligible, are recommended for re-appointment on terms to benegotiated by the Board of Directors. They have furnished the requisite certificate to the effect thattheir re-appointment, if effected, would be in accordance with Section 224(1B) of the CompaniesAct, 1956.


W. HENRIQUES K. THAPARMumbai, 22nd May, 2003 Managing Director Director

JOINT VENTURESFinancial Year 2002-2003

(Rs. Crores)

SR NO NAME OF COMPANY TURNOVER P B T SUBSCRIBED CGC%CAPITAL HOLDING

1 International ComponentsIndia Ltd. 5.81 (2.51) 8.55 49.00

2 CG - PPI Adhesive Products Ltd 9.24 1.00 3.90 81.423 CG Actaris Electricity Mgt. Ltd @ 28.27 1.36 8.70 49.004 CG Smith Software Pvt Ltd. 14.37 (1.10) 0.96 49.005 CG Maersk Information

Technologies Pvt Ltd. ** 7.27 (4.11) 13.18 49.00(Equity)

3.00 50.00(Preference)

@ Provisional ** Financial Year — January 2002 to December 2002.

Global Reports LLC

I 94


Auditors’ Report to the members of CG Capital & Investments Limited

We have audited the attached Balance Sheet of CG Capital & Investments Limited as at 31st March, 2003and also the Profit and Loss Account for the year ended on that date, annexed thereto. We have to state thatthese financial statements are the responsibility of the Company’s management and our responsibility toexpress our opinion on these financial statements is complied with by this report based on our audit.

As for the scope and basis for our opinion, we state that we have conducted audit in accordance with theauditing standards generally accepted in India and obtained reasonable assurance about the financial statementsbeing free of material misstatements. Our audit includes, wherever necessary, examining, on a test basis, theevidence supporting the amounts and disclosures in the financial statements and also includes assessingadherence to the accounting principles and significant estimates made by management, as well as evaluatingthe overall financial statement presentation.

As required by the Manufacturing and Other Companies (Auditor’s Report) Order, 1988 issued by theCentral Government of India in terms of sub-section (4A) of section 227 of the Companies Act, 1956 and on thebasis of such checks of books and records that were considered appropriate and the information and explanationsgiven to us during the course of the audit, we further report as under on matters specified in paragraphs 4 and5 of the said order :

(a) As the Company has no fixed assets, the reporting requirements referred to in paras (A) (i) and (ii) ofthe order are not applicable.

(b) The Company does 1not carry on any manufacturing activity and, accordingly, has no purchases ofraw materials as well as stocks of raw materials, finished goods, stores and spare parts. Theprovisions of paras 4(A)(iii), (iv), (v), (vi), (x), (xi), (xii) and (xiv) of the Order are, therefore, notapplicable.

(c) In our opinion, no loans have been taken by the Company from companies, firms or other parties listed in the Register maintained under section 301 of the Companies Act, 1956 or from Companiesunder the same management as defined under sub-section (1B) of Section 370 of Companies Act,1956.

(d) The Company has granted loan to company under the same management as defined under sub-section (1B) of Section 370 of the Companies Act, 1956 and the rate of interest and other terms andconditions of such loan are not, prima facie, prejudicial to the interest of the company. In view ofsection 370(1B) of the Companies Act, 1956 being made inapplicable, the loans from companiesunder the same management as defined under the said section have not been commented upon.

(e) We have been informed that there is proper arrangement for repayment of loan given as per agreedterms and conditions and necessary confirmation in respect thereof has been obtained. In view ofsection 370(1B) of the Companies Act, 1956 being made inapplicable, the loans to companies underthe same management as defined under the said section have not been commented upon.

(f) The Company has not accepted any deposits from the public.

(g) We are of the opinion that the Company has an internal audit system conducted by the internal auditdepartment of the holding company, which is commensurate with its size and the nature of its business.

(h) Maintenance of cost records under section 209(1)(d) of the Companies Act, 1956 is not applicable to theCompany.

(i) The Company has generally been regular in depositing Provident Fund dues with the appropriateauthorities. The Employees’ State Insurance Scheme is not applicable to the Company.

(j) According to the books and records examined by us, there were no undisputed amounts outstanding in respect of Income-tax, Wealth-tax, Sales-tax, Customs Duty and Excise Duty which have remainedoutstanding as at March 31, 2003 for a period exceeding six months from the date those becamepayable.

(k) No personal expenses of directors or employees have been charged to the revenue account.

(l) The Company is not a sick industrial company within the meaning of clause (o) of sub-section (1) ofSection 3 of the Sick Industrial Companies (Special Provisions) Act, 1985.

(m) Since the Company has not granted any secured loans and advances, the reporting requirementreferred to in clause (ii) of paragraph 4(D) are not applicable.

Global Reports LLC

I 95


(n) The Company has maintained proper records and timely entries have been made therein in respect ofdealings in shares and other investments. Further, all the investments have been held by the Companyin its own name.

Further to our comments referred to above, we report that:

(1) We have obtained all the information and explanations, which to the best of our knowledge and beliefwere necessary for the purposes of our audit;

(2) In our opinion, proper books of account as required by law have been kept by the company so far asappears from our examination of the books.

(3) The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement with thebooks of account.

(4) In our opinion, the Balance Sheet and Profit and Loss Account dealt with by this report comply with theAccounting Standards referred to in sub-section (3C) of Section 211 of the Companies Act, 1956.

(5) On the basis of our review of the confirmations received from companies or written representationsreceived from the directors, as on March 31st, 2003 and taken on record by the Board of Directors, wereport that none of the Directors of the company are disqualified as on March 31st, 2003 from beingappointed as Directors of the company in terms of clause (g) of sub-section (1) of section 274 of theCompanies Act, 1956.

(6) In our opinion and to the best of our information and according to the explanations given to us, thesaid accounts read together with the notes thereon, give the information required by the Companies,Act, 1956, in the manner so required and give a true and fair view:

(a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2003;and

(b) in the case of the Profit and Loss Account, of the profit for the year ended on that date.

As regards the reporting required under NBFC AUDITORS REPORT (RB) DIRECTION 1998, we state that

(a) The Company is a Registered NBFC

(b) (i) The Board of Directors have passed a resolution for non-acceptance of Public Deposits and,accordingly, the Company has not accepted any public deposits during the year.

(ii) As regards the compliance of NBFC Prudential Norms (RB) Directions, we state that theCompany has not accepted any Public Deposits during the year and has, through a BoardResolution, identified the group/holding/subsidiary companies.

For NARKAR & ASSOCIATES

Chartered Accountants

Place: Mumbai V. D. Narkar

Date: 22nd May, 2003 Proprietor

Global Reports LLC

I 96


Profit and Loss Account for the year ended 31st March, 2003

Schedule 31.03.2003 31.03.2002

Rs. Rs.

INCOME 1 2,05,36,680 1,86,45,757

PROFIT / (LOSS) ON SALE OF INVESTMENTS 2 -3,07,60,221

-1,02,23,541 1,86,45,757

EXPENDITURE

Administration 3 14,14,409 28,08,701

14,14,409 28,08,701

Profit / (Loss) before Tax -1,16,37,950 1,58,37,056

Provision for Tax 8780000 25,00,000

Profit / (Loss) after Tax -2,04,17,950 1,33,37,056

Balance of Loss brought forward -1,39,686 -1,34,76,742

Profit / (Loss) carried forward to Balance Sheet -2,05,57,636 -1,39,686

Significant Accounting Policies 10

Notes on Accounts 11

Mumbai, 22nd May, 2003 Mumbai, 22nd May, 2003

As per our report attached

NARKAR & ASSOCIATESChartered Accountants

By the hand of

V. D. Narkar R. R. Suvarna W. HenriquesProprietor Secretary Managing Director

G. Thapar } DirectorsK. Thapar

Global Reports LLC

I 97


The Schedules referred to above form an integral part of the Balance Sheet.


Schedule 31.03.2003 31.03.2002

Rs. Rs.

SOURCES OF FUNDS

Shareholder’ Funds

Share Capital 4 53,42,81,240 62,92,81,240

TOTAL 53,42,81,240 62,92,81,240

APPLICATION OF FUNDS

Investments 5 40,06,16,049 54,20,25,840

Current Assets, Loans and Advances

Cash and Balance Balances 6 1,09,353 18,79,676

Loans and Advances 7 13,00,65,757 9,35,26,055

13,01,75,110 9,54,05,731

Less: Current Liabilities and Provisions

Liabilities and Provisions 8 1,70,67,555 82,90,017

Net Current Assets 11,31,07,555 8,71,15,714

Profit and Loss Account 9 2,05,57,636 1,39,686

TOTAL 53,42,81,240 62,92,81,240






By the hand of



Global Reports LLC

I 98


Schedules Forming Part of Profit and Loss Account

SCHEDULE 1 31.03.2003 31.03.2002Rs. Rs.

IncomeInterest Income from Investments (Gross including Income Tax deducted atsource Rs. 15,54,000; Previous year Rs. 18,07,487) 74,00,000 88,71,094Dividend from Companies (Gross including Income Tax deducted atsource Rs. 13,79,351; Previous year Rs. Nil) 1,31,36,680 97,31,372Interest on Income Tax Refund 43,291

Total 2,05,36,680 1,86,45,757

SCHEDULE 2 31.03.2003 31.03.2002Rs. Rs.

Profit / (Loss) on Sale of Investments

Profit on Sales of 3099993 Shares of CG Igarashi Motors Ltd. 9,42,39,779Loss on Sale of Other Investments -12,50,00,000

-3,07,60,221

SCHEDULE 3 31.03.2003 31.03.2002Rs. Rs.

Administration ExpensesDirectors Fees 42000 22000Directors Remuneration 1046400 1341000PF & SAF Contributions 81000 243000Gratuity 50000Professional Fees 8000 2500Filing Fees 6500 1053500Audit fees 15000 15000Tax Audit Fees 3000 3000Miscellaneous 163466 277903Excess Sundry Creditors Provision of Earlier Years -957 -149202

Total 1414409 2808701

Schedules Forming Part of Balance Sheet

SCHEDULE 4 31.03.2003 31.03.2002Rs. Rs.

Share CapitalAuthorised

1,00,00,000 Equity Shares of Rs 10 each 10,00,00,000 10,00,00,0007,50,00,000 7% Non-convertible, Non CumulativePreference Shares of Rs. 10 each 75,00,00,000 75,00,00,000

Total 85,00,00,000 85,00,00,000

Issued, Subscribed and Paid up95,00,080 Equity Shares of Rs 10 each fully paid 9,50,00,800 9,50,00,8004,39,28,044 7% Non Convertible, Non cumulativePreference Shares of Rs. 10 each, fully paid,issued for consideration otherwise than in cash 43,92,80,440 53,42,80,440(Previous year 5,34,28,044 Preference Shares of Rs. 10 each)(All the shares, except 80 Equity shares are held byCrompton Greaves Limited, the Holding Company)

Total 53,42,81,240 62,92,81,240

Global Reports LLC

I 99


SCHEDULE 5 No. of fully paid upEquity Shares

Investments of Rs. 10 eachunless otherwise 31.03.2003 31.03.2002

specified Rs. Rs.

Long Term Investments :Fully paid Equity Shares of subsidiary Companies 5,33,19,723 5,33,19,723

Other fully paid Equity Shares 34,72,96,326 28,87,06,117

Other Investements 20,00,00,000

40,06,16,049 54,20,25,840

NOTE :

Book ValueQuoted InvestmentsLong term 2,57,08,043 12,21,17,834

Unquoted InvestmentsLong term 37,49,08,006 21,99,08,006

40,06,16,049 34,20,25,840

Market ValueQuoted InvestmentsLong term 2,65,11,677 13,69,88,722

Particulars of Investments held :

Long Term Investments (At Cost) :

Investment in Subsidiary Companies (Quoted) :

CTR Manufacturing Industries Limited (of Rs. 100 each) 228098 2,15,64,523 2,15,64,5232,15,64,523 2,15,64,523

Investment in subsidiary companies (Unquoted)

CG PPI Adhesive Products Limited 3175520 3,17,55,200 3,17,55,200

3,17,55,200 3,17,55,200

Trade Investments (Quoted) :

Asea Brown Boveri Limited 66 30,407 30,407

Alstom Power India Limited 66 — —

Bajaj Electricals Limited 75 5,808 5,808

Bharat Bijlee Limited (of Rs. 100 each) 5 7,878 7,878

Bharat Heavy Electricals Limited 100 11,715 11,715

Bharati Teletech Limited 30 9,395 9,395

CG Igarashi Motors Limited 9,64,09,791

EMCO Transformers Limited 50 5,555 5,555

GEC Alsthom India Limited 100 6,765 6,765

Global Tele-systems Limited 100 10,100 10,100

HCL Infosystems Limited 50 5,253 5,253

Global Reports LLC

I 100


SCHEDULE 5 (Contd.) No. of fully paid upEquity Sharesof Rs. 10 each

unless otherwise 31.03.2003 31.03.2002specified Rs. Rs.

HMT Limited 100 1,515 1,515

Hyderabad Lamps Limited 50 228 228

ICICI Bank Limited

(In lieuof 31996 Shares of ICICI Limited) 15998 28,61,882 28,61,882

JCT Electronics Limited 250000 10,62,500 10,62,500

Jay Electric Wire Corporation Limited 50 455 455

Khaitan Electricals Limited 35 440 440

Kirloskar Brothers Limited 50 5,555 5,555

Larsen & Toubro Limited 50 12,473 12,473

Philips India Limited 100 14,390 14,390

Polar Industries Limited 50 4,798 4,798

Siemens Limited 62 28,913 28,913

Surya Roshini Limited 100 5,050 5,050

Tata Infotech Limited 150 18,685 18,685

Wipro Limited ( of Rs. 2 each ) 750 22,725 22,725

Xerox Modi Corp Limited 33 9,720 9,720

Zenith Computers Limited 200 1,315 1,315

41,43,520 10,05,53,311

Trade Investments (Unquoted) :

APJ Financial Services Private Limited

(Unsecured Zero Coupon Optionally

Convertible Bonds of Rs. 100 each) 750000 7,50,00,000

CG Core EL Logic Systems Limited 136500 18,90,000 18,90,000

CG Maersk Information Technologies Private Limited 6458027 7,84,27,986 7,84,27,986

CG Maersk Information Technologies Private Limited

(Preference Shares of Rs.100 each) 150000 1,50,00,000 1,50,00,000

CG Actaris Electricity Management Limited

(Formerly CG Schlumberger Electricity Management Limited) 4262979 4,26,29,790 4,26,29,790

CG Smith Software Private Limited 470400 47,04,000 47,04,000

International Components India Limited 4189493 4,18,94,930 4,18,94,930

Karamchand Thapar (Africa) Limited, Mauritius

(of US $ 1 each) 100000 36,06,100 36,06,100

Solaris Chemtech Limited

(Optionally Convertible, Zero Coupon, Non-Marketable,

Transferable Debentures of Rs. 100 each) 800000 8,00,00,000

34,31,52,806 18,81,52,806

Other Investments

Share Application Money

JCT Electronics Limited 20,00,00,000

40,06,16,049 54,20,25,840

Global Reports LLC

I 101


SCHEDULE 6 31.03.2003 31.03.2002Rs. Rs.

Cash and Bank BalancesWith Scheduled Bank

On Current Accounts 1,09,353 18,79,676

SCHEDULE 7 31.03.2003 31.03.2002Rs. Rs.

Loans and AdvancesUnsecured – Considered Good :Advances recoverable in cash or in kind or for value to be received :

GE Capital Services India 8,00,00,000 8,00,00,000

Crompton Greaves Ltd. 3,65,00,000 70,00,000

Advance Tax 1,32,29,409 61,87,155

Interest accrued on Investments 3,36,348 3,38,900

Total 13,00,65,757 9,35,26,055

SCHEDULE 8 31.03.2003 31.03.2002Rs. Rs.

Liabilities and Provisions

Creditors 22,555 25,017

Provision for Taxation 1,70,45,000 82,65,000

Total 1,70,67,555 82,90,017

SCHEDULE 9 31.03.2003 31.03.2002Rs. Rs.

Profit and Loss Account 2,05,57,636 1,39,686

SCHEDULE 10

SIGNIFICANT ACCOUNTING POLICIES

1. Basis of Presentation

The Accounts have been prepared using historical cost convention and on the basis of a going concern,with revenues recognised and expenses accounted on accrual, including for committed obligations and arein accordance with the requirements of the Companies Act, 1956 and the Accounting Standards.

2. Investments

Long Term Investments are valued at cost of acquisition.

Current Investments (held for less than 12 months) are valued at lower of cost or market value as at theBalance Sheet date.

3. Contingencies and Events Occurring after the Balance Sheet Date

Events occurring after the date of the Balance Sheet are considered upto the date of adoption of theaccounts where material.

Global Reports LLC

I 102


SCHEDULE 11

NOTES ON ACCOUNTS1. The investments held by the Company are long term in nature.

2. Contingent Liability not provided for :Income Tax demand against which the company has preferred appeals, Rs. 3,25,736 for A.Y. 1998-99. Inview of the management, there are fair chances of winning the Appeal and as such no Contingent Liabilityfor the interest on the disputed income tax liability has been quantified.

3. The Company does not have any borrowings, hence AS - 16 disclosure on Borrowing costs has not beenreported.

4. The company is neither having any of its equity or debt securities listed on any of the Recognised StockExchange in India nor has turnover exceeding Rs. 50 crores, hence AS - 17 “Segment Reporting” and AS– 18 “Related Party Disclosures” are not applicable.

5. There being no deferred tax asset nor liability, AS - 22 “Taxes on Income” is not applicable.6. Additional information as required under Part IV of Schedule VI to the Companies Act, 1956.

Balance Sheet Abstract and Company’s General Business Profile :i. Registration Details :

Registration No. 20308State Code 11Balance Sheet Date 31st March, 2003

ii. Capital raised during the year : Rs. ’000

Public Issue NilRights Issue NilBonus Issue NilBuy Back of Preference Shares -95000

iii. Position of mobilisation and deployment of funds : Rs. ’000

Total Liabilities 534281Total Assets 534281Sources of Funds :Paid up capital 534281Reserves & Surplus NilSecured Loans NilUnsecured Loans NilApplication of Funds :Net Fixed Assets NilInvestments 400616Net Current Assets 113108Miscellaneous Expenditure -Accumulated Losses 20558

iv. Performance of the Company : Rs. ’000

Income -10224Total Expenditure 1414Profit / (Loss) before Extraordinary item and taxation -11638Profit / (loss) before tax -11638Profit / (loss) after tax -20418Earnings per share (Rs.) NilDividend rate Nil

v. Generic names of Principal products, services of the Company :Item Code No (ITC Code) NilProduct description Investments

7. Figures for the previous year have been regrouped / reclassified wherever necessary.




By the hand of



Global Reports LLC

I 103


Cash Flow Statement for the year ended 31st March, 2003.

A CASH FLOW FROM OPERATING ACTIVITIES 31-03-2003 31-03-2002Rs. Rs.

Net profit before tax and extraordinary items –1,16,37,950 1,56,87,854

Interest 74,00,000 89,14,385Dividend income 13136680 97,31,372Profit(–)/Loss(+) on sale of investments –3,07,60,222 —

–10223542 1,86,45,757Operating profit before working capital changes –14,14,408 -29,57,903Adjustments for :

Trade & Other Receivables 2,551 56,15,039Trade & Other Payables –2,462 15,017Direct Taxes Paid(-)/Refund Received(+) –7042254 -31,58,111

–70,42,165 24,71,945

Cash generated from (+) / Used in (-) operations –84,56,573 -4,85,958

B CASH FLOW FROM INVESTING ACTIVITIESAdd: Inflows from investing activitiesAdd : Sale of Investments (Gross) 26,56,49,570 200Add : Dividend income 1,31,36,680 97,31,372Add : Investment (Maturity Proceeds) 8,30,00,000Add : Interest 74,00,000 89,14,385

28,61,86,250 10,16,45,957

Less: Outflows from investing activitiesInvestments 18,45,00,000 46,56,100Inter Corporate Deposits 10,02,70,000

18,45,00,000 10,49,26,100

Net cash used in investing activities 10,16,86,250 -32,80,143

C CASH FLOW FROM FINANCING ACTIVITIES

Issue of shares (+) / Buy Back of Shares (-) –9,50,00,000 36,06,100

Net increase in cash & cash equivalent (A+B+C) –1770323 -1,60,001Cash and cash equivalent at the begining of the period 18,79,676 20,39,677

Cash and cash equivalent at the end of the period 1,09,353 18,79,676




By the hand of



Global Reports LLC

I 104


STATEMENT IN ACCORDANCE WITH THE PROVISIONS OF SECTION 212 OF THE COMPANIES ACT, 1956.

Name of the Subsidiary CG-PPI CTRAdhesive ManufacturingProducts IndustriesLimited Limited

1 Financial year of the subsidiary ended on 31.03.2003 31.03.2003

2 Extent of the interest of the Company in thesubsidiary at the end of the Financial Yearof each subsidiary

(a) Face value Rupees 10 100

(b) Number of shares held 31,75,520 2,28,098

(c) Shareholding percent 81.42 82.06

3 (a) Net aggregate amount of profits lesslosses so far as they concernmembers of the Company and notdealt with, in the Company’s account

(i) For the Financial Year ended31.03.2003 Rupees 53,67,677 26,02,046

(ii) For the previous financial yearssince it became a subsidiary

Rupees 20,66,350 60,59,818

(b) Net aggregate amount of profits lesslosses so far as they concernmembers of the Company and dealtwith, in the Company’s account

(i) For the Financial Year ended31.03.2003 Rupees NIL NIL

(ii) For the previous financial yearssince it became a subsidiary

Rupees 47,89,380 0


R. R. Suvarna W. Henriques B. M. ThaparSecretary Managing Director G. Thapar } DirectorsK. Thapar

Global Reports LLC

I 105

ANNUAL REPORT 2002-2003CG-PPI ADHESIVE PRODUCTS LIMITED

CG-PPI Adhesive Products Limited

Board of Directors

W. HenriquesR. G. KeswaniK. K. NohriaA. B. Pankar (Nominee of EDC)H. PollmeierS. M. TrehanJ. T. Wadhwani (Alternate to H. Pollmeier)

S. K. Arora — Chief Executive Officer

Registered Office & Works

215, GIDC Industrial Estate,Kundaim, Goa 403 115

Auditors

Sharp & Tannan

Bankers

Bank of Baroda

Global Reports LLC

I 106

CG-PPI ADHESIVE PRODUCTS LIMITED ANNUAL REPORT 2002-2003

ToThe Members,

The Directors present their fifteenth Report with the Audited Accounts for the year ended 31st March 2003.

FINANCIAL HIGHLIGHTS

31.3.2003 31.3.2002Rs.Lacs Rs.Lacs

(a) Gross Sales/Income 923.60 901.72

(b) Less: Excise Duty 124.51 108.50

799.09 793.22

(c) Less: Operating Expenses 667.42 657.30

(d) Operating Profit 131.67 135.92

(e) Add: Other Income 43.31 16.82

(f) Profit before Interest, Depreciation, Amortisation,Exceptional Items and Taxes 174.98 152.74

(g) Less: Interest 39.37 13.67

(h) Profit before Depreciation, Amortisation,Exceptional Items and Taxes 135.61 139.07

(i) Less: Depreciation 35.21 33.25

(j) PROFIT BEFORE EXCEPTIONAL ITEMS AND TAXES 100.40 105.82

(k) Add: Exceptional Items — 18.38

(l) Profit Before Tax 100.40 124.20

(m) Less: Provision for Current Year Tax 38.20 37.50

(n) Less: Provision for Deferred Tax (3.73) 3.21

(o) PROFIT AFTER TAX

Carried to Profit & Loss Account 65.93 83.49(p) Doubtful Debts Reserve (27.25) —(q) Transfer to/from General Reserve (10.00) (10.00)(r) Proposed Dividend including Tax (44.00) (58.50)(s) Balance brought forward from previous year 120.67 105.68

BALANCE CARRIED TO BALANCE SHEET 105.35 120.67

OPERATIONSDuring the year, inspite of difficult market conditions and slow pace of industrial growth, salesincreased from Rs.901.72 lacs to Rs.923.60 lacs. Highly competitive market forces resulted inmargins continuing to be under severe pressure throughout the year. However, due to effectiveimplementation of various cost cutting and value engineering measures, profitability could bemaintained resulting in profit before tax of Rs.100.40 lacs which is about 13% of Net Sales.Your Company enjoys a steady order book position for its products. It is expected that marketscenario will improve, and with addition of new range of products, and additional market penetrationcoupled with better customer services, your Company is confident of achieving higher growth insales & profitability in the coming years.ISO 9001:2000 ACCREDITATIONYour Company was an ISO-9002 certified organization. During the year, your Company has beencertified by the International Certifications Services (Asia) Pvt. Ltd. for ISO 9001:2000 accreditedby Joint Accreditation System of Australia and New Zealand.


Global Reports LLC

I 107


CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGEEARNINGS AND OUTGOAs required by Company’s (Disclosure of Particulars in the Report of Board of Directors) Rules1988, the relevant data pertaining to Conservation of Energy, Technology Absorption and ForeignExchange Earnings & Outgo is given in the prescribed form as an Annexure to this Report.DIVIDENDYour Directors recommend a dividend of Rs.1.00 per share on 39,00,000 equity shares of Rs. 10/- each.PARTICULARS OF EMPLOYEESThe Company does not have any employee who was in receipt of remuneration aggregating to thesum prescribed under Section 217 (2A) of the Companies Act, 1956 read with the Companies(Particulars of Employees) (Amendment) Rules, 2002.INDUSTRIAL & EMPLOYEE RELATIONSIndustrial & Employee relations continued to be cordial and normal during the year.DIRECTORATEMr. K. K. Nohria and Mr. H. Pollmeier retire by rotation at the forthcoming Annual General Meetingand being eligible, offer themselves for re-appointment to the Board.Mr. S.M.Trehan was appointed to the Board to fill the casual vacancy caused by the resignation ofMr. R. Dasgupta. Pursuant to the provisions of Section 262 of the Companies Act, 1956, he holdsoffice upto the date of forthcoming Annual General Meeting and is eligible for appointment, forwhich a proposal in this regard is being submitted for Members’ approval.Mr. B.M.Suri resigned from the Board with effect from 24th July, 2002. Mr. W. Henriques wasappointed on the Board of Directors to fill the casual vacancy caused by the resignation of Mr. Suri.Pursuant to the provisions of the Companies Act, 1956, Mr. Henriques will hold office upto the dateof Annual General Meeting to be held in the year 2005.The Board places on record its deep appreciation for the dedication, advice, and valuablecontributions made by Mr. Suri during his tenure as Director.DIRECTORS’ RESPONSIBILITY STATEMENTThe Directors would like to assure the Members that the financial statements for the year underreview conform in their entirety to the requirements of the Companies Act,1956.The Directors confirm that:• The Annual Accounts have been prepared in conformity with applicable Accounting Standards;• The Accounting Policies selected and applied on a consistent basis, give a true and fair view of

the affairs of the Company and of the profit for the financial year;• Sufficient care has been taken that adequate accounting records have been maintained for

safeguarding the assets of the Company; and for prevention and detection of fraud and otherirregularities;

• The Annual Accounts have been prepared on a going concern basis.AUDITORSThe Company’s Auditors Sharp & Tannan, Chartered Accountants, hold office until the conclusionof the forthcoming Annual General Meeting, and being eligible, are recommended for re-appointmenton terms to be negotiated by the Board of Directors. They have furnished the requisite Certificateto the effect that their re-appointment , if effected, would be in accordance with Section 224 (1B) ofthe Companies Act 1956.ACKNOWLEDGEMENTSThe Directors thank the Promoter Company – Crompton Greaves Ltd., Co-promoter and Collaborators– PPI Adhesive Products Ltd., Ireland, Holding Company – CG Capital & Investments Limited,Bankers, Customers, Dealers, Suppliers and Employees for their continued and valuable support.


K.K.Nohria R.G.KeswaniMumbai, April 23, 2003 Director Director

Global Reports LLC

I 108


Annexure to Directors’ ReportUnder Section 217(1)(e) of the Companies Act 1956.

A. CONSERVATION OF ENERGY:

(a) Energy Conservation measures taken:

• Installed new fuel efficient Hot Air Generator having higher heat output capacity forhigher productivity due to increased speed on Coater.

• Serviced and calibrated fuel injectors of the D.G.Set to reduce fuel consumption.

(b) Additional investment and proposals, if any, being implemented for reduction ofconsumption of energy.

• Conversion of fuel from High Speed Diesel to Light Diesel Oil for Hot Air Generator.

• Installation of common voltage stabilizer for low voltage problems leading to higherpower consumption and breakdowns.

(c) Impact of measures at (a) and (b) for reduction of Energy Consumption andconsequent impact on the cost of production.

The various measures taken by the Company are contributing to reduction in cost ofproduction and upgradation of product quality.

B. TECHNOLOGY ABSORPTION:

Research and Development (R&D)

1. Specific areas where R&D was carried out by the Company:

• Development of synthetic resin based polyester tape for general application for electricalinsulation at low cost.

• Development of printed fire retardant cotton adhesive tape for traction motor industry.

• Development of special banding tape for picture tube industry.

• Development of varnish resistant tape for small transformer industry.

• Development of laminated polyethylene and non-woven synthetic resin based adhesivetape for small transformer industry.

• Development of additional six colours in rubber based polyester tapes for DeflectionYoke assembly manufactured by picture tube industry.

• Development of synthetic resin based cotton tape for amorphous transformer industry.

• Development of synthetic resin based cotton tapes for leather garment industry.

2. Benefits derived as a result of the above R&D efforts.

• R&D efforts have brought out an improvement in processes, addition of new productsand product upgradation.

• R&D work has also resulted in higher stability of specific products, reduction of complaintsand improved customer satisfaction.

3. Future Plan of action:

• Procurement of new machinery for quality upgradation.

• Development of specialty polyolefin based products for cable insulation.

• Development of cotton based specialty tape for Deflection Yoke assembly for picturetube industry.

• Development of Mica based electrical insulation tapes/laminates.

• Development of new range of specialty varnish resistant tapes.

• Development of tapes for shoe uppers and leather garments.

Global Reports LLC

I 109


4. Expenditure on R&D - Rs. 3.12 lacs [absorbed in operational cost]

TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION:

1. Efforts, in brief, made towards technology absorption, adaptation and innovation:

• Import substitution of specialty synthetic resin adhesive with indigenously formulatedadhesive for transformer oil resistance application.

• Launching of pigment compatible synthetic resin tape for class “B” application forgeneral insulation as a substitute for imported natural rubber based adhesive tape.

2. Benefits derived as a result of the above efforts:

The benefits derived are in the areas of customer satisfaction, cost reduction andquality improvement as detailed below :-

• Elimination of cross linking agent in the manufacture of pigment compatible syntheticresin product.

• Processing speed for the manufacture of above product could be doubled.

• Elimination of the “priming” process for the same.

3. Imported technology

The Company has not imported technology during the last five financial years andhence, disclosure as regards this item is not applicable.

C. FOREIGN EXCHANGE EARNINGS AND OUTGO:

a. The Company has not been able to generate substantial sales by exports due to pricefactor.

b. Total foreign exchange earned and used :

i. Total foreign exchange earned Rs. 0.13 lacs

ii. Total foreign exchange used Rs. 84.02 lacs


K.K.Nohria R.G.KeswaniMumbai, April 23, 2003 Director Director

Global Reports LLC

I 110


Auditors’ ReportWe have audited the attached Balance Sheet of CG-PPI Adhesive Products Limited as at 31stMarch, 2003 and also the annexed Profit and Loss Account of the Company for the year ended onthat date. These financial statements are the responsibility of the Company’s management. Ourresponsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. ThoseStandards require that we plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financial statements. An audit alsoincludes assessing the accounting principles used and significant estimates made by management,as well as evaluating the overall financial statement presentation. We believe that our audit providesa reasonable basis for our opinion.

In accordance with the provisions of Section 227 of the Companies Act, 1956, we report as under:

1. As required by the Manufacturing and other Companies (Auditors’ Report) Order, 1988 issuedby the Central Government of India under Section 227 (4A) of the Companies Act, 1956, weenclose in the Annexure, our report on the matters specified in paragraphs 4 and 5 of the saidOrder.

2. Further to our comments in the Annexure referred to in paragraph 1 above, we report that :

(a) We have obtained all the information and explanations, which to the best of our knowledgeand belief were necessary for the purposes of our audit;

(b) In our opinion, proper books of account as required by law have been kept by the Company,so far as appears from our examination of those books;

(c) The Balance Sheet and the Profit and Loss Account dealt with by this report are in agreementwith the books of account;

(d) In our opinion, the Balance Sheet and Profit and Loss Account dealt with by this reportcomply with the Accounting Standards referred to in Section 211(3C) of the Companies Act,1956;

(e) On the basis of the written representations received from the directors of the Company as at31st March, 2003 and taken on record by the Board of Directors, we report that no directoris disqualified from being appointed as a director of the Company under clause (g) of sub-section (1) of Section 274 of the Companies Act, 1956;

3. In our opinion and to the best of our information and according to the explanations given to us,the said accounts, read together with the Significant Accounting Policies and the Notes onAccounts appearing in Schedule 17 and 18 respectively, give the information required by theCompanies Act, 1956, in the manner so required and give a true and fair view in conformity withthe accounting principles generally accepted in India :

(i) in the case of the Balance Sheet, of the state of the Company’s affairs as at 31st March,2003; and

(ii) in the case of the Profit and Loss Account, of the profit for the year ended on that date.

SHARP & TANNANChartered AccountantsBy the hand of

Date : 23rd April, 2003 MILIND P. PHADKEPlace: Mumbai Partner

Global Reports LLC

I 111


Annexure to Auditors’ Report(Refer paragraph 1 of our Report of even date)

On the basis of such checks, as we consider appropriate and according to the information and

explanations given to us, we further report as under :

1. The Company is maintaining proper records to show full particulars, including quantitative

details and situation of all fixed assets. The fixed assets have been physically verified by the

management at reasonable intervals during the year and no material discrepancies were

noticed on such verification.

2. None of the fixed assets of the Company have been revalued during the year.

3. As explained to us, the management at reasonable intervals during the year has physically

verified stocks of finished goods, components, stores and raw materials except for stocks lying

with third parties in respect of which confirmations have been received.

4. In our opinion, the procedures for physical verification of stocks followed by the management

are reasonable and adequate in relation to the size of the Company and the nature of its

business.

5. No material discrepancies were noticed on physical verification of stocks of finished goods,

stores, spares parts, components and raw materials as compared to book records.

6. On the basis of our examination of the stock records, in our opinion, the valuation of stocks is

fair and proper and is in accordance with the normally accepted accounting principles. The

valuation of stocks is on the same basis as in the preceding year.

7. During the year the Company has not taken any loans, secured or unsecured, from Companies,

firms or other parties listed in the register maintained under Section 301 of the Companies Act,

1956. We have been informed that there are no companies under the same management as

defined under sub-section (1B) of Section 370 of the Companies Act, 1956.

8. During the year the Company has not granted any loans, secured or unsecured to companies,

firms or other parties listed in the register maintained under Section 301 of the Companies Act,

1956. We have been informed that there are no companies under the same Management as

defined under sub-section (1B) of Section 370 of the Companies Act 1956.

9. The parties, including employees to whom loans or advances in the nature of loans have been

given are repaying the principal amounts as stipulated and are also regular in payment of

interest, where applicable.

10. In our opinion and according to the information and explanations given to us, there are

adequate internal control procedures commensurate with the size of the Company and the

nature of its business for the purchase of stores, raw materials, including components, plant

and machinery, equipment and other assets and for the sale of goods.

Global Reports LLC

I 112


11. We are of the opinion, that the transactions for the purchase of goods and materials and the

sale of goods, materials or services made in pursuance of contracts or arrangements entered

in the register maintained under Section 301 of the Companies Act, 1956, and aggregating to

Rs.50,000 or more in value during the year in respect of each party, have been made at prices

which are reasonable having regard to the prevailing market prices for such goods, materials

or services or the prices at which transactions for similar goods, materials or services have

been made with other parties.

12. As explained to us, the Company has a regular procedure for determination of unserviceable

or damaged stores, raw material and finished goods. Adequate provision has been made in

the accounts for the loss arising on items so determined.

13. The Company has not accepted deposits from the public to which the directives issued by the

Reserve Bank of India and the provisions of Section 58A of the Companies Act, 1956 and the

Rules framed thereunder apply.

14. In our opinion, the Company is maintaining reasonable records for the sale and disposal of

realisable scrap. We are informed that the Company has no realisable by-products.

15. The Company has appointed an independent firm of Chartered Accountants to conduct their

internal audit function, which in our opinion is commensurate with the size of the Company and

the nature of its business.

16. According to the information and explanations given to us, the Central Government has not

prescribed maintenance of cost records under Section 209 (1) (d) of the Companies Act, 1956,

for any of the products manufactured by the Company.

17. The Company has regularly deposited during the year Provident Fund and Employees State

Insurance dues with the appropriate authorities.

18. According to the information and the explanations given to us, there were no undisputed

amounts payable in respect of Income tax, Wealth tax, Sales tax, Customs Duty and Excise

Duty which were outstanding as at 31st March, 2003 for a period of more than six months from

the date they became payable by the Company.

19. According to the information and explanations given to us and the records of the Company

examined by us, no personal expenses have been charged to revenue account other than

those payable under contractual obligations or in accordance with the generally accepted

business practices.

20. The Company is not a sick industrial company within the meaning of Section 3 (1) (o) of the

Sick Industrial Companies (Special Provisions) Act, 1985.

21. In our opinion, in respect of its service activities, the Company commensurate with its size and

nature of its business, has a reasonable system of :

Global Reports LLC

I 113


a. Recording receipts, issues and consumption of raw materials and stores and allocating

materials consumed and man-hours utilised to the relative jobs.

b. Authorisation at proper levels with adequate internal controls on issue and allocation of

stores and labour to jobs.

SHARP & TANNAN

Chartered Accountants

By the hand of

Date : 23rd April, 2003 MILIND P. PHADKE

Place: Mumbai Partner

Global Reports LLC

I 114


Schedule 31.03.2003 31.03.2002Rs. Rs.

INCOMESales 9,23,59,592 9,01,72,194Less: Excise Duty Recovered 1,24,50,749 1,08,50,143

Sales (Net) 7,99,08,843 7,93,22.051Others 1 43,31,262 16,82,125

8,42,40,105 8,10,04,176

EXPENDITUREMaterials 2 4,27,65,995 3,92,47,620Staff and Welfare 3 95,30,214 95,28,752Manufacturing, Selling and Administration 4 1,44,44,385 1,69,54,261Depreciation 35,21,421 33,24,539Interest 39,37,483 13,66,804

7,41,99,498 7,04,21,976

Profit Before Tax 1,00,40,607 1,05,82,200

Provision for Tax

Current Tax (38,20,000) (37,50,000)

Deferred Tax 3,72,615 (3,21,598)

Profit After Tax 65,93,222 65,10,602Taxation adjustments of earlier years (Net) (644) 18,38,454

Profit After Tax and Taxation Adjustments of earlier years 65,92,578 83,49,056

Balance brought forward [Profit / (loss)] 1,20,66,646 1,05,67,590

Profit Available for Appropriation 1,86,59,224 1,89,16,646

Appropriation

Doubtful debts Reserve 27,25,000 —

General Reserve 10,00,000 10,00,000

Proposed Dividend 39,00,000 58,50,000Tax on Dividend 4,99,688 —

Balance carried to Balance Sheet 1,05,34,536 1,20,66,646

1,86,59,224 1,89,16,646



Profit and Loss Account for the year ended 31st March, 2003

The Schedules referred to above and the notes attached form an integral part of the accounts

Mumbai, 23rd April, 2003

As per our report attachedSHARP & TANNANChartered Accountants

By the hand of

Milind P. PhadkePartner


K. K. NohriaS. M. TrehanR. G. Keswani

Directors

J. T. Wadhwani}

Global Reports LLC

I 115



SOURCES OF FUNDS Schedule 31.03.2003 31.03.2002Rs. Rs. Rs.

Shareholders’ FundsCapital 5 3,90,00,000 3,90,00,000Reserves and Surplus 6 2,65,01,086 2,70,80,591

6,55,01,086 6,60,80,591Loan Funds

Secured Loans 7 — —Unsecured Loans 8 4,00,00,000 4,00,00,000

10,55,01,086 10,60,80,591

APPLICATION OF FUNDSFixed Assets 9

Gross Block 5,55,68,776 5,41,85,943Less: Depreciation 2,20,76,351 1,85,93,661

Net Block 3,34,92,425 3,55,92,282Capital work-in-Progress 21,28,782 19,64,146

3,56,21,207 3,75,56,428

Current Assets, Loans and AdvancesInventories 10 89,01,765 1,10,13,973Sundry Debtors 11 3,15,35,305 4,22,82,761Cash and Bank Balances 12 1,42,43,134 6,43,302Loans and Advances 13 4,86,56,388 5,47,65,611

10,33,36,592 10,87,05,647

Less: Current Liabilities and Provisions Current Liabilities 14 1,47,88,517 1,57,44,840 Provisions 15 1,24,13,214 1,78,09,046

2,72,01,731 3,35,53,886

Net Current Assets 7,61,34,861 7,51,51,761Deferred Tax 16

Deferred Tax Asset 1,43,261 54,579Less : Deferred Tax Liability 63,98,243 66,82,177

(62,54,982) (66,27,598)

10,55,01,086 10,60,80,591

Earnings per share — Basic and Diluted(Face value of Rs. 10 each) 1.69 2.14



The Schedules referred to above and the notes attached form an integral part of the accounts.

Mumbai, 23rd April, 2003 Mumbai, 23rd April, 2003


By the hand of



Directors

J. T. Wadhwani}

Global Reports LLC

I 116


Schedules to Profit and Loss Account31.03.2003 31.03.2002

SCHEDULE 1 Rs. Rs. Rs.

Other IncomeInterest (Gross)- From banks - Fixed Deposits 30,635 25,745

- Margin Money Deposits 13,716 16,202- From Others - Income Tax Refund 1,65,836 23,850

- Customers (For Earlier Years) 1,54,753 1,97,835- Inter Corporate Deposit 37,00,001 11,25,206- Others 17,927 5,843

(including tax deducted at source 40,82,868 13,94,681Rs. 7,45,285 : Previous year Rs. 1,91,965)Sundry Balances written back (net) 215 2,03,866Exchange Fluctuation (net) — 16,724Service Revenue 32,551 42,850Miscellaneous Income 47,003 24,004Custom Duty Refund 1,68,625 —

43,31,262 16,82,125

31.03.2003 31.03.2002SCHEDULE 2 Rs. Rs. Rs.

MaterialsOpening Stock

Raw Materials 52,97,687 49,24,156Purchases 4,03,33,748 3,87,33,463Closing Stock

Raw Materials (57,08,568) (52,97,687)

Raw Materials Consumed 3,99,22,867 3,83,59,932

(Increase) / Decrease in Stocks :Opening Stock

Work in Progress 55,65,613 64,53,301Finished Goods — —

55,65,613 64,53,301

Closing StockWork in Progress 27,22,485 55,65,613Finished Goods — —

27,22,485 55,65,613

28,43,128 8,87,688

4,27,65,995 3,92,47,620

31.03.2003 31.03.2002SCHEDULE 3 Rs. Rs.

Staff and WelfareSalaries,Wages and Bonus 81,36,923 79,94,009Provident Fund, Pension Scheme andEmployees State Insurance Contributions 7,51,158 7,63,019Contribution to Gratuity Scheme 1,73,893 1,76,743Contribution to Superannuation Scheme 1,69,009 2,15,455Workmen and Staff Welfare 2,99,231 3,79,526

95,30,214 95,28,752

Global Reports LLC

I 117


31.03.2003 31.03.2002SCHEDULE 4 Rs. Rs. Rs.

Manufacturing, Selling and Administration

Stores and Spare Parts consumed 13,02,902 21,79,615

Power and Fuel consumed 29,28,134 26,48,036

Repairs and Maintenance

Buildings 59,156 5,93,095

Plant and Machinery 1,74,275 2,02,448

Others 88,545 98,246

3,21,976 8,93,789

Freight and forwarding (net) 6,57,982 7,66,210

Advertising and Sales Promotion 3,58,321 1,32,075

Commission and incentive 28,15,654 27,99,409

Auditors’ Remuneration

(includes service tax, where applicable)

Statutory Audit Fees 1,05,000 1,05,000

Tax Audit Fees 31,500 31,500

Certification / other charges 893 840

Reimbursement of expenses 26,050 37,095

1,63,443 1,74,435

Rent 5,38,489 6,74,279

Rates and Taxes 2,57,755 2,91,538

Insurance 2,66,140 2,01,625

Travelling and Conveyance 10,85,742 16,21,184

Vehicle Expenses 4,38,093 5,50,497

Security Services 2,24,036 2,24,414

Communication expenses 8,24,428 10,48,270

Printing and Stationery 2,26,106 2,22,088

Legal and Professional fees 3,21,544 4,29,972

Directors sitting fees 60,000 45,000

Preliminary Expenses written off — 3,385

Loss on sale of fixed assets (net) 21,011 25,924

Exchange fluctuation (net) 16,417 —

Miscellaneous Expenses 16,16,212 20,22,516

1,44,44,385 1,69,54,261

Global Reports LLC

I 118


Schedules to Balance Sheet31.03.2003 31.03.2002

SCHEDULE 5 Rs. Rs.

Share Capital

Authorised40,00,000 Equity Shares (Previous Year 40,00,000 Equity shares) 4,00,00,000 4,00,00,000

of Rs.10/- each

Issued,Subscribed and Paid up

39,00,000 Equity Shares (Previous year 39,00,000 Equity shares) 3,90,00,000 3,90,00,000of Rs. 10/- each fully paid.

{Of the above 31,75,520 Equity shares(Previous year 31,75,520 Equity Shares) are held byCG Capital and Investments Limited, which is a 100%subsidiary of Crompton Greaves Limited}

3,90,00,000 3,90,00,000

SCHEDULE 6 At At01-04-2002 Additions Deductions 31-03-2003

Rs. Rs. Rs. Rs.

Reserves and Surplus

General Reserve 1,49,65,597 10,00,000 — 1,59,65,597

Doubtful Debts Reserve 23,00,000 27,25,000 — 50,25,000

Less : Provision for doubtful debts (22,51,652) (27,72,395) — (50,24,047)(Deducted from Sundry debtorsas per contra)

1,50,13,945 9,52,605 — 1,59,66,550

Balance in Profit and Loss Account 1,20,66,646 1,05,34,536

As at 31-03-2003 2,70,80,591 2,65,01,086

As at 31-03-2002 3,08,87,535 2,70,80,591

31.03.2003 31.03.2002SCHEDULE 7 Rs. Rs.

Secured Loans(refer Note 19 of Schedule 18)

From Banks

- Overdrafts — —

— —

31.03.2003 31.03.2002SCHEDULE 8 Rs. Rs.

Unsecured Loans

From Others

- Inter Corporate deposit from Crompton Greaves Limited 4,00,00,000 4,00,00,000

4,00,00,000 4,00,00,000

Global Reports LLC

I 119


SCHEDULE 9Fixed Assets

Gross Block Depreciation Net Block

Particulars At 1-4-2002 Additions Deductions At 31-3-2003 At 1-4-2002 for the year on deductions At 31-3-2003 At 31-3-2003 At 31-3-2002Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs. Rs.

Leasehold Land 14,17,455 - - 14,17,455 5,79,836 47,285 6,27,121 7,90,334 8,37,619Buildings 1,44,81,300 - - 1,44,81,300 29,85,761 4,83,675 34,69,436 1,10,11,864 1,14,95,539Plant and Machinery 3,51,33,275 9,93,645 23,855 3,61,03,065 1,34,49,156 26,71,602 9,936 1,61,10,822 1,99,92,243 2,16,84,119Furniture and Fixtures 22,56,697 1,34,929 46,886 23,44,740 10,50,065 2,07,909 28,795 12,29,179 11,15,561 12,06,632Vehicles 8,97,216 3,25,000 - 12,22,216 5,28,843 1,10,950 6,39,793 5,82,423 3,68,373

Sub-total (A) 5,41,85,943 14,53,574 70,741 5,55,68,776 1,85,93,661 35,21,421 38,731 2,20,76,351 3,34,92,425 3,55,92,282

Capital Work-in-ProgressPlant and Machinery 57,910 0 57,910 0 - - - - - 57,910Buildings 19,06,236 2,22,546 0 21,28,782 - - - - 21,28,782 19,06,236

Sub-total (B) 19,64,146 2,22,546 57,910 21,28,782 - - - - 21,28,782 19,64,146

Total (A+B) 5,61,50,089 16,76,120 1,28,651 5,76,97,558 1,85,93,661 35,21,421 38,731 2,20,76,351 3,56,21,207 3,75,56,428

As at 31- 03- 2002 5,21,89,415 72,61,837 33,01,163 5,61,50,089 1,53,12,182 33,24,539 43,060 1,85,93,661 3,75,56,428

Note : 1. Capital Work-in-Progress (Buildings) includes capital advances for building Rs. 14,54,950 (Previous year Rs. 14,54,950)

SCHEDULE 10 31.03.2003 31.03.2002Rs. Rs.

Inventories(At lower of cost or realisable value)Raw Materials(including in transit Rs. 5,32,961 : Previous year Rs. 1,66,725) 57,08,568 52,97,687Work-in-Progress 27,22,485 55,65,613Fuel 3,65,159 31,423Stores and consumables 1,05,553 1,19,250

89,01,765 1,10,13,973

SCHEDULE 11 31.03.2003 31.03.2002Rs Rs. Rs.

Sundry Debtors(Unsecured)Debts outstanding for a period exceeding six months

Considered Good 51,68,420 97,23,356Considered Doubtful 50,24,047 22,51,652

Less: Doubtful Debts Reserve per Contra 50,24,047 22,51,652

0 0Other DebtsConsidered Good 2,63,66,885 3,25,59,405

3,15,35,305 4,22,82,761

SCHEDULE 12 31.03.2003 31.03.2002Rs. Rs.

Cash and Bank BalancesCash on hand 30,568 6,130Bank balances with Scheduled Banks– On Current Accounts 70,57,235 3,38,463

(includes remittances in transit)– On Unclaimed Dividend Accounts 40,214 25,054– On Fixed Deposit Account 68,24,202 –

(includes Interest accrued thereon Rs. 24,202 :Previous year Rs. Nil)– On Margin Money Deposit Account 2,77,189 2,60,229

(includes Interest accrued thereon Rs. 10,836 : Previous year Rs. 10,229)– In Postal Savings Bank Account 13,726 13,426

(the above deposit has been pledged with sales tax authorities)(includes Interest accrued thereon Rs. 3,726 : Previous year Rs. 3,426)(Maximum amount outstanding at any time during the year Rs. 13,726 :Previous year Rs. 13,426)

1,42,43,134 6,43,302

Global Reports LLC

I 120


SCHEDULE 13 31.03.2003 31.03.2002Rs. Rs.

Loans and Advances(Unsecured, considered good)Advances recoverable in cash or in kind or for value to be received * 9,32,651 25,71,472(includes advances for other capital goods Rs. 7,500 :

Previous year Rs. 7,500)Intercorporate Deposit ** 4,02,12,877 4,02,12,877(includes Interest accrued thereon Rs. 2,12,877 :

Previous year Rs. 2,12,877)Advance Income Tax and Tax deducted at source 73,47,595 1,18,94,015

Balance in Excise Duty Current Account 1,63,265 87,247

4,86,56,388 5,47,65,611

* includes amount due from an officer of the Company Rs. 30,000 :Previous year Rs. 1,50,000.

* maximum amount outstanding during the year Rs. 1,50,000 :Previous year Rs. 1,75,000

** the aforesaid deposit has been placed as security with a body corporate

SCHEDULE 14 31.03.2003 31.03.2002Rs. Rs.

Current LiabilitiesSundry Creditors– Dues to small scale industrial undertakings 27,56,855 18,12,463

(includes interest payable thereon Rs. Nil : Previous year Rs. Nil)– Others 1,18,27,820 1,37,42,453

(includes advances received Rs. 13,33,506 :Previous year Rs. 13,33,506)

Unclaimed dividend 40,214 25,054

Interest accrued but not due on intercorporate deposit 1,63,628 1,64,870

1,47,88,517 1,57,44,840

SCHEDULE 15 31.03.2003 31.03.2002Rs. Rs.

Provisions

– For Taxation 77,25,984 1,16,50,000– For Leave Encashment 2,87,542 3,09,046– Proposed dividend 39,00,000 58,50,000– Tax on dividend 4,99,688 –

1,24,13,214 1,78,09,046

SCHEDULE 16 31.03.2003 31.03.2002Rs. Rs.

Deferred TaxDeferred tax assets and liabilities are attributable to the following items

Assets :– Expenses allowable for tax purposes when paid 36,873 47,957– Share issue expenses 3,232 6,622– Others 1,03,156 –

(A) 1,43,261 54,579

Liabilities :– Depreciation 63,98,243 66,28,344– Others – 53,833

(B) 63,98,243 66,82,177

(A - B) (62,54,982) (66,27,598)

Global Reports LLC

I 121


SCHEDUL1E 17


1. BASIS OF PRESENTATION

The accounts have been prepared using historical cost convention in accordance with Indian GenerallyAccepted Accounting Principles (GAAP) and on the basis of going concern principle with revenuesrecognised and expenses accounted on accrual basis, including for committed obligations and are incompliance with the Accounting Standards referred to in Section 211(3C) and other requirements of theCompanies Act, 1956. Insurance and other claims are accounted for as and when admitted by theappropriate authorities.Wherever changes in presentation are made, comparative figures of the previous year are regroupedaccordingly.

2. REVENUE RECOGNITIONa. Revenue from the sale of manufactured products is recognised upon passage of title to the customer

and generally coincides with the delivery and acceptance.

b. Service revenue is recognised as per the terms of contract.

c. Sales include Excise Duty recoverable from customers and are net of discounts.

3. FIXED ASSETSa. Fixed assets are capitalised at acquisition cost (net of duty credits availed, if any), including directly

attributable costs such as freight, insurance and specific installation charges for bringing the assets toworking condition for use.

b. Expenditure relating to existing fixed assets is added to the cost of the assets, where it increases theperformance / life of the asset as assessed earlier.

c. Fixed assets are eliminated from financial statements either on disposal or when retired from activeuse.

d. Preoperative expenses, including interest on specific loan for the project incurred till the project isready for commercial production is capitalised. Borrowing costs that are attributable to the acquisition,construction or production of qualifying assets are capitalised as part of the cost of such assets.

e. i) Machinery spares which are specific to particular items of fixed assets and whose use is irregularare capitalised.

ii) Machinery spares which are not specific to particular items of fixed assets are treated as inventoryand charged to Profit and Loss Account as and when issued for consumption in the ordinarycourse of operations.

4. DEPRECIATIONa. Depreciation is provided on the Straight line method at the rates and in the manner specified in

Schedule XIV of the Companies Act, 1956.b. Lump sum amounts paid for leasehold land are amortised and charged to depreciation over the initial

lease period.

5. INVENTORIES

Inventories are valued at the lower of cost or realisable value after providing for damages and obsolescence.

a. In case of raw materials, packing materials, fuel, stores and consumables, cost represents purchaseprice and other costs incurred for bringing the inventories to their present location and condition and isdetermined on first-in-first-out basis.

b. In case of work-in-progress, cost represents cost of raw materials, and the costs of conversion suchas direct labour, direct expenses and production overheads, which are based on normal level ofproduction.

c. In case of finished goods, cost represents cost of raw materials, and the costs of conversion such asdirect labour, direct expenses and production overheads, which are based on normal level of productionand excise duty paid / payable.

6. BORROWING COSTS

Borrowing costs that are attributable to the acquisition, construction or production of qualifying assets arecapitalised as part of the cost of such assets. A qualifying asset is an asset that necessarily takes asubstantial period of time to get ready for its intended use or sale.

All other borrowing costs are recognised as an expense in the period in which they are incurred.

Global Reports LLC

I 122


7. EXCISE DUTY

Excise Duty liability on manufactured goods lying in factory premises is accrued and accordingly includedin the valuation of finished goods.

8. FOREIGN CURRENCY TRANSACTIONS

a. Transactions in foreign currencies are recorded at the exchange rates prevailing on the transactiondates.

b. Current assets and current liabilities in foreign currencies remaining unsettled at the year end aretranslated at the year end exchange rates.

c. Exchange gains / losses on settlement / conversion are :

i. adjusted to the cost of fixed assets, where such gains / losses relate to liabilities in foreigncurrencies incurred for acquisition of fixed assets.

ii. recognised in the Profit and Loss account in other cases.

9. RESEARCH AND DEVELOPMENT

Research expenditure of revenue nature is charged to the Profit and Loss account under respectiveheads of accounts. Capital expenditure on research and development is shown as an addition to fixedassets under the respective asset categories.

10. RETIREMENT BENEFITS

a) Provident fund :

Provident fund contributions are accrued each year in terms of contracts with the employees.

b) Gratuity :

The employees of the Company are covered under the Employees Group Gratuity Scheme of LifeInsurance Corporation of India. The Company accounts for gratuity liability equivalent to the premiumamount payable to Life Insurance Corporation of India every year, which is based on an actuarialvaluation.

c) Leave encashment :

Leave encashment liability is determined and accrued on the basis of actuarial valuation / terms ofcontract and as per the Rules of the Company.

d) Superannuation scheme :

Contributions to Superannuation Scheme is made under the Group Superannuation Scheme ofLife Insurance Corporation of India.

11. DEFERRED REVENUE EXPENDITURE

Preliminary expenses are amortised over a period of ten years from the year of commencement ofcommercial production.

12. CONTINGENCIES AND EVENTS OCCURRING AFTER THE BALANCE SHEET DATE

Contingencies (gains and losses) arising out of contractual obligations, are accounted on the basis ofmutual acceptances.

Where material, events occurring after the date of the Balance Sheet are considered upto the date ofapproval of accounts by the Board of Directors.

13. TAXES ON INCOME

a) Tax on income for the current period is determined on the basis of the estimated taxable income andtax credits computed in accordance with the provisions of the Income Tax Act, 1961, and based onthe expected outcome of assessments / appeals.

b) Deferred tax is recognised on timing differences, between the accounting income and the estimatedtaxable income for the period and quantified using the tax rates and laws enacted or substantivelyenacted on the Balance Sheet date.

c) Deferred tax assets which arise mainly on account of unabsorbed business loss and unabsorbeddepreciation are recognised and carried forward only to the extent that management is virtuallycertain that sufficient future taxable income will be available against which such deferred tax assetscan be realised.

Global Reports LLC

I 123


SCHEDULE 18

NOTES ON ACCOUNTS

1. Contingent liability in respect of :

a. Counter guarantees given by the Company to their bankers on account of guarantees given by themto third parties Rs. 5,24,000 (Previous year Rs. 4,85,000).

b. Show cause notice issued by the Excise Authorities in respect of classification of final product, whichhas been disputed by the Company Rs. 5,82,928 (Previous year Rs. 1,55,388).

2. Estimated amount of contracts remaining to be executed on capital account and not provided for (net ofadvances) Rs. 3,81,550 (Previous year Rs. 3,76,550).

3. Interest includes Rs. Nil on fixed loans (Previous year Rs. Nil).

4. None of the borrowing costs incurred during the year are attributable to the acquisition of fixed assets.

5. During the year, the Company has not entered into any lease transactions.

6. Remuneration paid to Ex-Managing Director is as under :31.03.2003 31.03.2002

(Rs.) (Rs.)Salaries and allowances - 5,63,226Contribution to Provident Fund and other funds - * 4,63,609Other perquisites and benefits 60,000 5,91,311

60,000 16,18,146

* Includes Rs. 3,11,538 being gratuity paid by LIC.

7. In compliance with Accounting Standard 18 on “Related Party Disclosures” issued by “The Institute ofChartered Accountants of India”, following are the disclosures in respect of related party transactions forthe year ended 31st March, 2003.

1. Relationships:

(a) Holding Company, its : Crompton Greaves Limited, CG Capital andSubsidiaries Investment Limited and CTR Manufacturing Industries Limited

(b) Key Managerial Personnel : i) Mr. S. K. Arora – Chief Executive Officerii) Mr. R. K. Kanwal – Ex-Managing Director

2. The following transactions were carried out with related parties in the ordinary course of business.

31.03.2003 31.03.2002Sr. Transactions Holding Key Holding Key

No. Company, its Managerial Company, its ManageiralSubsidiaries Personnel Subsidiaries Personnel

(Rs.) (Rs.) (Rs.) (Rs.)

1. Sales and Service Revenue 68,06,619 0 77,02,539 02. Commission received 0 0 0 03. Interest Income 0 0 0 04. Dividend Received 0 0 0 05. Dividend paid 47,63,280 0 31,75,520 1,4026. Rent Income 0 0 0 07. Rent Expense 2,24,961 0 2,76,608 91,3338. Purchase – Fixed Asset 0 3,25,000 0 09. Interest Expense 36,00,000 0 10,94,794 0

10. Remuneration 0 7,49,000 0 17,46,99611. Inter corporate deposits taken 0 0 0 012. Inter corporate deposits given 0 0 0 013. Advances given 0 0 0 1,50,00014. Due to related parties (including

interest) as at year end 4,16,33,487 0 4,18,00,091 015. Due from related parties as at year end 45,92,523 30,000 53,07,919 1,50,000

Global Reports LLC

I 124


8. In compliance with Accounting Standard 20 on “Earnings per Share” issued by “The Institute of CharteredAccountants of India”, following are the disclosures in respect of the calculation of earnings per share forthe year ended 31st March, 2003.

Particulars 31- 03-2003 31- 03-2002

a. NumeratorProfit after tax and taxation adjustments of earlier years Rs. 65,92,578 Rs. 83,49,056

b. DenominatorWeighted average number of equity shares 39,00,000 39,00,000

c. Earnings per share (EPS)

EPS = Numerator

Rs. 1.69 Rs. 2.14 Denominator

9. In compliance with Accounting Standard 22 on “Accounting for Taxes on Income”, issued by “The Instituteof Chartered Accountants of India”, the Company has recognised deferred tax on timing differences, beingthe difference between taxable income and accounting income that originate in one period and are capableof reversal in one or more subsequent periods.

During the previous year, the Company has adjusted the deferred tax liability arising on account of timingdifferences as at 1st April, 2001 amounting to Rs. 63,06,000 in General Reserve.

10. The names of suppliers, being small scale industrial undertakings to whom the Company owes a sum thatis outstanding for more than 30 days as on 31st March, 2003 are as under:

a. Advance Polymers

b. Gujarat Polymers

c. Kasturi Graphics

d. Kamsons Chemicals Pvt Ltd.

e. KE-Technical Textiles Pvt Ltd.

f. Magnichem Industries

g. Shree Vinayak Organics (I) Pvt. Ltd.

h. Sneham International

i. Stay On Papers Pvt Ltd.

j. Wayon Fabrics Pvt. Ltd.

The information regarding small scale industrial undertakings has been determined to the extent suchparties have been identified on the basis of the information available with the Company. This has beenrelied upon by the auditors.

11.Value of Imports on (C.I.F. Basis)31.03.2003 31.03.2002

(Rs.) (Rs.)

Raw Materials and spares 77,91,998 87,72,101

12. Particulars of Sales, Opening Stock and Closing Stock of Speciality Adhesive Tapes and Labels.

31.03.2003 31.03.2002

Quantity in Value Quantity in Valuesq. metres (Rs.) sq. metres (Rs.)

*Sales 7,18,782 9,23,59,592 6,76,962 9,01,72,194

Closing stock — — — —

Opening stock — — — —

* Sales are inclusive of excise duty of Rs. 1,24,50,749 (Previous year Rs. 1,08,50,143) and are net ofdiscounts of Rs. 12,92,692 (Previous year Rs. 12,49,030).

Global Reports LLC

I 125


13. Details of Licensed Capacity, Installed Capacity and Actual production of Speciality AdhesiveTapes and Labels.

31.03.2003 31.03.2002

Quantity Quantityin sq. metres in sq. metres

* Licensed capacity 32,00,000 32,00,000

* Installed capacity 9,50,000 9,50,000

Production 7,18,782 6,76,962

* As certified by management, on which the auditors have placed reliance, being a technical matter.

14. Raw Materials consumed

31.03.2003 31.03.2002

Unit Quantity Rs. Quantity Rs.

Base materials Mtrs 4,43,446 1,75,66,062 3,62,652 1,43,77,148

Base materials Kgs 26,153 83,83,802 33,407 1,07,83,892

Chemicals Kgs 59,133 1,03,79,945 58,154 1,09,52,751

Solvents Ltrs 96,898 27,94,600 1,01,367 16,32,594

Others 7,98,458 6,13,547

3,99,22,867 3,83,59,932

15. Consumption of Raw Materials

31.03.2003 31.03.2002

% of total Rs. % of total Rs.consumption consumption

Raw materials

— Indigenous 73 2,89,51,049 72 2,74,94,635

— Imported 27 1,09,71,818 28 1,08,65,297

3,99,22,867 3,83,59,932

16. Expenditure in Foreign Currency (charged to accounts) :

31.03.2003 31.03.2002(Rs.) (Rs.)

Testing fees — 6,258

Others 9,832 9,450

Global Reports LLC

I 126


17. Earnings in Foreign Currency

31.03.2003 31.03.2002(Rs.) (Rs.)

Export of goods on FOB basis 13,274 30,018

18. Remittance in foreign currency on account of dividend :

Year No. of non No. of Amount of Year to whichending resident shares dividend dividend

shareholders held Rs. relates

31st March, 2003 1 400000 6,00,000 2001 – 2002

31st March, 2002 1 400000 4,00,000 2000 – 2001

19. Secured loans – securities are as under :

i) Cash credit facility from bank is secured by hypothecation of stocks and book debts and is furthersecured by mortgage by deposit of title deeds in respect of Company’s immovable properties, bothpresent and future consisting of land, factory building structures, erections, godowns and furniture andfixtures. Since at the year end, the Company did not avail any cash credit facility, the cash creditaccounts showed a debit balance, which are shown under “Bank balance with Scheduled banks – onCurrent account” under Schedule 12 of the Balance Sheet.

ii) The Company had been sanctioned a term loan of Rs. 150.00 lacs by Bank of Baroda, Panaji forwhich charges were created by hypothecation of movable machinery and extension of charge by wayof equitable mortgage on immovable property situated at Kundiam, Goa. The Company, however hasnot availed the loan facility until the year end.

20. Cost of materials consumed includes expenditure incurred on research and development Rs. 3,12,125(Previous year Rs. 1,05,342)

21. Figures for the previous year have been regrouped / reclassified wherever necessary to make themcomparable with those of the present year.

Global Reports LLC

I 127


22. Additional Information as required under Part IV of Schedule VI to the Companies Act, 1956.

Balance Sheet Abstract and Company’s General Business Profile

I. Registration Details :

Registration No. 24 – 00921

State Code 24

Balance Sheet Date 31st March, 2003

II. Capital Raised during the year : (Rs. in 000’)

Public Issue Nil

Rights Issue Nil

Bonus Issue Nil

Private Placement Nil

III. Position of Mobilisation and Deployment of Funds: (Rs. in 000’)

Total Liabilities 105501

Total Assets 105501

Sources of Funds :

Paid-up Capital 39000

Reserves and Surplus 26501

Secured Loans Nil

Unsecured Loans 40000

Application of Funds :

Net Fixed Assets 35621

Investments Nil

Net Current Assets 76135

Deferred tax asset (net) (6255)

Miscellaneous Expenditure Nil

Accumulated Losses Nil

IV. Performance of the Company : (Rs. in 000’)

Turnover (including other income) 84240

Total Expenditure 74199

Profit / (Loss) before tax 10041

Profit / (Loss) after tax 6593

Profit / (Loss) after tax and taxation adjustments of earlier years 6593

Earnings Per Share (Rs.) 1.69(Refer Note 8 of Schedule 18)

Dividend Rate (%) 10

Global Reports LLC

I 128


V. Generic Names of three Principal Products / Services of the Company (as per monetary terms)

Product Description Item Code No.(ITC Code)

Electric Insulation Tapes 8546.00

Self Adhesive Tapes and Labels 3919.00

Glass Cloth Tapes 7014.00



By the hand of




Directors

J. T. Wadhwani}

Global Reports LLC

I 129

ANNUAL REPORT 2002-2003CTR MANUFACTURING INDUSTRIES LIMITED

CTR Manufacturing Industries Limited

Board of DirectorsMr. B. R. Jaju - Chairman

Mr. A. P. Kumar - Managing Director

Mr. S. M. Trehan

Mr. W. Henriques

Company Secretary

Mr. K. S. Koparkar

Registered Office

Nagar Road, Pune 411 014

Auditors

Khimji Kunverji & Co.

A. A. Bhat & Co.

Bankers

Bank of Maharashtra

Canara Bank

129 COMP1 C:/SALES/Joe Rego/Crompton Sub /File CTR Manuf 2003.p65/RSM/29/5/sbs(29-5)/deepak/06-06/deepak/10-06/Sagam/12-6(108-110)

Global Reports LLC

I 130

CTR MANUFACTURING INDUSTRIES LIMITED ANNUAL REPORT 2002-2003


To,

The Members,

Your Directors present their Report together with the Audited Balance Sheet as at 31st March 2003and the Profit and Loss Account for the year ended on that date:

FINANCIAL RESULTS

31.3.2003 31.3.2002Rs. Rs.

(a) Gross Sales / Income 28,44,66,718 26,07,43,807

(b) Less: Excise Duty 3,98,41,492 3,39,89,657

24,46,25,226 22,67,54,150(c) Less : Operating Expenses 21,88,49,639 19,68,21,518

(d) Operating Profit 2,57,75,587 2,99,32,632

(e) Add: Dividend and Other Income 13,55,005 16,54,363

(f) Profit before Interest, Depreciation, Amortisation and Taxes 2,71,30,592 3,15,86,995

(g) Less : Interest 1,06,14,738 1,17,09,779

(h) Profit before Depreciation, Amortisation and Taxes 1,65,15,854 1,98,77,216

(i) Less : Depreciation 64,61,934 59,38,850

(j) Less : Miscellaneous Expenditure Amortised 22,68,000 69,70,835

(k) PROFIT BEFORE TAX 77,85,920 69,67,531

(l) Less : Provision For Current Year Tax 39,00,000 5,50,000

(m) Less : Provision For Deferred Tax 7,15,013 (8,21,654)

(n) PROFIT AFTER TAX 31,70,907 72,39,185

(o) Add:Prior Period Depreciation Written Back — 1,06,795

(p) Balance brought forward from previous year 1,34,73,144 61,27,164

(q) BALANCE CARRIED TO BALANCE SHEET 1,66,44,051 1,34,73,144

PRODUCTION, SALES AND TRADING RESULTS

During the year under review, gross sales increased by 9.10% from Rs.26.07 crores to Rs.28.45crores. Also due to cost cutting measures, profitability could be increased to Rs.77.86 lacs comparedto Rs. 69.68 lacs of the previous year.

OUTLOOK

It is envisaged that your Company will continue to register increased invoicing during the year onaccount of anticipated improved working of transformer manufacturers, who constitute the majorityof customers. However intensified competition is expected to squeeze profitability. The Fire Systemdivision as also the Intank Tapchanger division will register growth, having stabilized their activities.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EARNINGS AND OUTGO

As required by the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules,1988, the relevant data pertaining to Conservation of Energy, Technology Absorption and ForeignExchange Earnings and Outgo are given in the prescribed format as an Annexure to this Report.

DIRECTORS

Mr. B. M. Suri resigned from the Directorship of the Company with effect from 31st August, 2002.The Directors wish to place on record their appreciation of the valuable services rendered byMr. Suri during his tenure as Director.

Global Reports LLC

I 131


Mr. S. M. Trehan retires by rotation at the ensuing Annual General Meeting and being eligible,offers himself for re-appointment.

During the year under review, Mr. B. R. Jaju has been appointed as an Additional Director andholds office up to the conclusion of the ensuing Annual General Meeting. A proposal for hisappointment as Director is being submitted for Members’ approval.

PARTICULARS OF EMPLOYEES

The Company does not have any employee who was in receipt of remuneration aggregating to thesum prescribed under Section 217(2A) of the Companies Act, 1956 read with the Companies(Particulars of Employees) (Amendment) Rules, 2002.

INDUSTRIAL RELATIONS

Industrial and Employee relations continued to be normal during the year under review.

DIRECTORS’ RESPONSIBILITY STATEMENT

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

The Directors confirm that:

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

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

• sufficient care has been taken that adequate accounting records have been maintained forsafeguarding the assets of the Company, and for prevention and detection of fraud and otherirregularities;

• the Annual Accounts have been prepared on a ‘going concern basis’.

AUDITORS

The Company’s Auditors, Khimji Kunverji & Company and A. A. Bhat & Company hold office up tothe conclusion of the ensuing Annual General Meeting, and being eligible, are recommended forre-appointment on the terms to be finalised by the Board of Directors. They have furnished therequisite certificate to the effect that their re-appointment, if effected, would be in accordance withSection 224(1B) of the Companies Act, 1956.

LISTING AGREEMENT

The Company’s equity shares are listed on The Stock Exchange, Mumbai and the necessary listingfees have been paid up to date.


A. P. Kumar B. R. JajuMumbai, 21st April, 2003 Managing Director Chairman

Global Reports LLC

I 132


Annexure to Directors’ ReportUnder Section 217(1)(e) of the Companies Act, 1956A CONSERVATION OF ENERGY

a) Energy conservation measures : Installation of power factor improvementcapacitors, CF lamps and electronicballasts at Aurangabad factory.Installation of Metal Hallide Lighting at thePune factory.

b) Additional investments & proposals; : Installation of maximum demandif any, being implemented for reduction controllers planned at both factories.of consumption of energy

c) Impact of the measures at (a) and : Enhanced tariffs have generally offset(b) above for reduction of energy savings. Consequently very marginalconsumption and consequent impact on effect on the cost of production.the cost of production of goods

B TECHNOLOGY ABSORPTIONRESEARCH AND DEVELOPMENT ( R & D )1. Specific areas in which R & D is : Developed 52 KV off circuit flange

carried out by the Company mounted Tapchanger;Developed cylindrical Tie in resistor for InTank On Load Tapchanger;Developed 358 mm wide Radiator;Implemented Epoxy Flood Painting forRadiators.

2. Benefits derived as a result of the above R & D: Improvement in market share3. Future plan of action : Enhance product reliability4. Expenditure on R & D : 31st March, 2003

Rs. In Lacsi. Capital : NILii. Recurring : 6.81iii. Total : 6.81iv. Total R & D Expenditure as a : 0.24%

percentage of total turnoverTECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION1. Efforts, in brief, made towards technology

absorption, adaptation and innovation2. Benefits derived as a result of the above efforts3. a. Imported Technology Not Applicable

b. Year of Importc. Has technology been fully Absorbedd. If not fully absorbed, areas where this

has not taken place, reasonsthereof and future plan of action

C FOREIGN EXCHANGE EARNINGS AND OUTGO1. Activities relating to exports, initiatives : Export inquiries for the Company’s

taken to increase exports, development products are being pursued.of new export markets for products andservices and export plans

2. Total Foreign exchange earned and usedTotal foreign exchange earned : Rs. NILTotal foreign exchange used : Rs. 193.91 Lacs


A. P. Kumar B. R. JajuMumbai, 21st April, 2003 Managing Director Chairman

}

Global Reports LLC

I 133


Auditors’ Report

We have audited the attached Balance Sheet of CTR Manufacturing Industries Limited as at31st March 2003 and also the Profit & Loss Account for the year ended on that date annexedthereto. These financial statements are the responsibility of the Company’s management. Ourresponsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with auditing standards generally accepted in India. ThoseStandards require that we plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free of material misstatement. An audit includes examining, on a testbasis, evidence supporting the amounts and disclosures in the financial statements. An audit alsoincludes assessing the accounting principles used and significant estimates made by management,as well as evaluating the overall financial statement presentation. We believe that our audit providesa reasonable basis for our opinion.

As required by the Manufacturing and Other Companies (Auditor’s Report) Order, 1988 issued bythe Central Government of India in terms of sub-section (4A) of section 227 of the Companies Act,1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of thesaid Order.

Further to our comments in the annexure referred to above, we report that:

(i) We have obtained all the information and explanations, which to the best of our knowledge andbelief were necessary for the purposes of our audit;

(ii) In our opinion, proper books of account as required by law have been kept by the Company sofar as appears from our examination of those books;

(iii) The Balance Sheet and Profit and Loss Account dealt with by this report are in agreement withthe books of account;

(iv) In our opinion, the Balance Sheet and Profit and Loss Account dealt with by this report complywith the accounting standards referred to in sub-section (3C) of section 211 of the CompaniesAct, 1956;

(v) On the basis of confirmations received from the directors and taken on record by the board ofdirectors, none of the director is disqualified from being appointed as director as on the datescertified by the directors under section 274(1)(g) of the Companies Act, 1956.

(vi) In our opinion and to the best of our information and according to the explanations given to us,the said accounts read together with significant accounting policies and notes to accounts inschedule no. 18 and 19 respectively and those appearing elsewhere in the accounts, give theinformation required by the Companies Act, 1956, in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of affairs of the company as at 31st March,2003; and

(b) in the case of Profit and Loss Account, of the profit for the year ended on that date.

(c) in the case of Cash Flow Statement, of the cash flows for the year ended on that date.

Mumbai, 21st April, 2003 Pune, 21st April, 2003

For and on behalf of For and on behalf ofKHIMJI KUNVERJI & CO. A. A. BHAT & CO.Chartered Accountants Chartered Accountants

Shivji K. Vikamsey N. V. BadwePartner PartnerMembership No. : 2242 Membership No. : 101282

Global Reports LLC

I 134


Annexure to the Auditors’ Report

The annexure referred to in paragraph 3 of the auditors report to the members of CTR ManufacturingIndustries Limited for the year ended March 31, 2003. We report that:

1. The Company has maintained proper records showing full particulars including quantitativedetails and situation of fixed assets except tools, which are included in Plant and Equipment.The fixed assets were physically verified by the management at reasonable intervals. Thediscrepancies noticed on such physical verification were not material and the same have beenproperly dealt with in the books of account.

2. None of the Fixed Assets have been revalued during the year.

3. The stock of finished goods, stores, spare parts and raw materials of the company have beenphysically verified by the Management at reasonable intervals. Stocks in possession and custodyof third parties and stocks-in transit have been verified by the management with reference to theconfirmations or statements of account or correspondence with the third parties or subsequentreceipt of goods.

4. The procedure of physical verification of stocks followed by the management are reasonableand adequate in relation to the size of the company and the nature of its business.

5. The discrepancies noticed on physical verification of stocks as compared to book records werenot material and the same have been properly dealt with in the books of account.

6. On the basis of our examination of stocks records, the valuation of above mentioned stock is fairand proper in accordance with the normally accepted accounting principles and is on the samebasis as in the preceding year.

7. The rate of interest of unsecured loan taken from a company listed in the register maintainedunder section 301 of Companies Act, 1956 / companies under the same management asdefined under section 370 (1B) of the Companies Act, 1956 is prima facie not prejudicial to theinterest of the company. There are no other terms & conditions of the loans. The company hasnot taken any loans secured or unsecured, from other parties listed in the said register.

8. The company has not granted any loans, secured or unsecured, to companies, firms or otherparties listed in the registers maintained under section 301 of the Companies Act, 1956 /companies under the same management as defined under section 370 (1B) of the CompaniesAct, 1956.

9. In respect of Loans and Advances in the nature of loans given by the company, they haverepaid the principal amount where stipulated and have also been regular in the payment ofinterest, where applicable.

10. There are adequate internal control procedures commensurate with the size of the companyand the nature of its business for the purchase of stores, raw materials including components,plant and machinery, equipment and other assets and for the sale of goods.

11. As per the information & explanations given to us, the transactions of purchase of goods andmaterials & sale of goods, materials and services made in pursuance of contracts or arrangementsentered in the registers maintained under section 301 of the Companies Act, 1956 and aggregatingduring the year to Rs. 50,000 or more in respect of each party have been made at prices whichare reasonable having regard to prevailing market prices for such goods, materials and servicesor the prices at which transactions for similar goods, materials & services have been made withother parties.

12. As explained to us, the Company has a regular procedure for the determination of unserviceableor damaged stores, raw materials and finished goods. Adequate provisions have been made inthe books of accounts for the loss arising on the items so determined.

13. No deposits within the meaning of section 58A of the Companies Act, 1956 and the rules framedthereunder have been accepted by the company.

14. The company has maintained reasonable records for the sale and disposal of the realisablescrap. As explained to us, the company’s manufacturing activities do not give rise to any by-products.

Global Reports LLC

I 135


15. In our opinion, the company has an internal audit system, which is commensurate with its sizeand nature of its business.

16. According to the information and explanation given to us, the Central Government has notprescribed the maintenance of cost records under section 209(1)(d) of the Companies Act,1956, for any of the products of the company.

17. According to records of the Company, Provident Fund and The Employees State Insurancedues have been regularly deposited during the year with the appropriate authorities.

18. There were no undisputed amounts payable in respect of Income Tax, Wealth Tax, Sales Tax,Customs Duty and Excise Duty outstanding for a period of more than six months as at 31stMarch, 2003.

19. On the basis of our examination of books of accounts, vouchers produced to us for our verification,the explanation given and representation made to us on our enquiries, unqualified report ofinternal auditor and the check and control relating to authorizing the expenditure on the basis ofcontractual obligation to the employees/directors, accepted business practices having regard tothe company’s needs and exigencies, we have not come across any expenses charged to therevenue accounts which in our opinion and judgement and to the best of our knowledge andbelief, could be regarded as personal expenses.

20. The company is not a Sick Industrial Company within the meaning of clause (o) of sub-section(1) of section 3 of the Sick Industrial Companies (Special Provisions) Act, 1985.

21. In respect of the service activities of the Company, there is a reasonable system of recordingreceipts issues and consumption of materials and stores. Further, considering the nature andvolume of the service activity, the company does not deem it necessary to allocate the materialsconsumed to the relative jobs.

22. Considering the nature and volume of the service activity, the company does not deem itnecessary to allocate the man-hours utilised to the relative jobs.

23. In our opinion, there is a reasonable system of authorisation at proper levels, and an adequatesystem of internal control commensurate with the size of the company and the nature of itsbusiness, on issue of stores and allocation of stores and labour to jobs.

24. In respect of trading activities carried on by the company, there were no damaged goods duringthe year.


For and on behalf of For and on behalf ofKHIMJI KUNVERJI & CO. A. A. BHAT & CO.Chartered Accountants Chartered Accountants

Shivji K. Vikamsey N. V. BadwePartner PartnerMembership No. : 2242 Membership No. : 101282

Global Reports LLC

I 136


Schedule 2002-2003 2001-2002Rs. Rs.

INCOME

Sales 28,44,66,718 26,07,43,807

Less: Excise Duty 3,98,41,492 3,39,89,657

Net Sales 24,46,25,226 22,67,54,150Other 1 13,55,005 16,54,363

24,59,80,231 22,84,08,513

EXPENDITURE

Materials 2 13,62,06,001 11,97,99,664

Staff & Welfare 3 4,44,15,933 4,38,57,516

Manufacturing, Selling & Administration 4 4,04,95,705 4,01,35,173

Depreciation 5 64,61,934 59,38,850

Interest 6 1,06,14,738 1,17,09,779

23,81,94,311 22,14,40,982

Profit For The Year 77,85,920 69,67,531

Provision For Tax

Current Tax 39,00,000 5,50,000

Deferred Tax 7,15,013 (8,21,654)

Prior Period Depreciation Written Back (1,06,795)

Profit / (Loss) Brought Forward From Previous Year 1,34,73,144 61,27,164

1,66,44,051 1,34,73,144

Appropriation

Profit / (Loss) Carried Forward To Balance Sheet 1,66,44,051 1,34,73,144

Basic/Diluted Earnings Per Share 11.41 26.43(Refer Note no.26 of Schedule 19)



Profit & Loss Account for the year ended 31st March, 2003

Mumbai, 21st April, 2003 Pune, 21st April, 2003 Mumbai, 21st April, 2003

As per our report attached Mr. A. P. KumarManaging Director

For and on behalf of For and on behalf ofKhimji Kunverji & Co. A. A. Bhat & Co.Chartered Accountants Chartered Accountants Mr. B. R. Jaju

Chairman

Shivji K. Vikamsey N. V. Badwe Mr. K. S. KoparkarPartner Partner Company Secretary

Global Reports LLC

I 137




As per our report attached Mr. A. P. KumarManaging Director

For and on behalf of For and on behalf ofKhimji Kunverji & Co. A. A. Bhat & Co.Chartered Accountants Chartered Accountants Mr. B. R. Jaju

Chairman

Shivji K. Vikamsey N. V. Badwe Mr. K. S. KoparkarPartner Partner Company Secretary

Schedule 2002-2003 2001-2002Rs. Rs Rs.

SOURCES OF FUNDSShareholders Funds

Share Capital 7 2,78,13,875 2,78,13,875Reserve & Surplus 8 2,69,10,412 2,38,46,300

5,47,24,287 5,16,60,175Loan Funds

Secured Loans 9 3,15,48,929 4,81,13,038Unsecured Loans 10 5,00,64,365 4,95,45,361

8,16,13,294 9,76,58,399

13,63,37,581 14,93,18,574

APPLICATION OF FUNDSFixed Assets

Gross Block 14,52,21,530 13,97,30,493Less : Depreciation 7,89,21,833 7,24,45,766

Net Block 11 6,62,99,697 6,72,84,727Capital Work-in-progress 1,96,140 3,77,832

6,64,95,837 6,76,62,559Investments 12 21,160 21,160Current Assets, Loans & Advances

Inventories 13 3,58,66,549 4,23,99,617Sundry Debtors 14 6,45,50,809 8,00,07,030Cash & Bank Balances 15 57,94,174 28,38,739Loans & Advances 16 4,51,06,101 4,19,24,757

15,13,17,633 16,71,70,143Less : Current Liabilties & Provisions 17 7,07,36,644 7,77,57,893

Net Current Assets 8,05,80,989 8,94,12,250Deferred Tax Liabilities (Net) (1,51,11,370) (1,43,96,360)Miscelleneous Expenditure 43,50,965 66,18,965(To the extent not w/off)

13,63,37,581 14,93,18,574

Significant Accounting Policies 18Note on Accounts 19(The Schedules Referred to above and thenotes attached form an integral part of TheBalance Sheet)

Global Reports LLC

I 138


Schedules to Profit & Loss Account

2002-2003 2001-2002SCHEDULE 1 Rs. Rs.

Other Income (Net)

Sundry Interest(Income Tax Deducted at Source Rs. 5,81,793; Previous Year Rs.1,39,587) 1,68,615 43,929Dividend From Long Term Investments 2,000 1,800(TDS Rs. Nil)

Miscellaneous Income 11,83,813 16,08,634

Profit on sale of assets 577 —

13,55,005 16,54,363

2002-2003 2001-2002SCHEDULE 2 Rs. Rs.

Materials

Opening Stock

Raw Materials 2,91,30,027 3,03,74,656

Work-in-Process 97,67,280 97,89,801

Finished Goods 1,84,595 30,176

Traded Products 23,27,5921 31,44,930

4,14,09,494 4,33,39,563

Add : Purchases

Raw Material 12,85,77,543 11,35,18,910

Traded Goods 11,41,230 43,50,683

12,97,18,773 11,78,69,593

17,11,28,267 16,12,09,156

Less: Closing Stock

Raw Materials 2,23,90,394 2,91,30,027

Work-in-Process 1,11,28,441 97,67,280

Finished stock 2,59,022 1,84,595

Traded Goods 11,44,409 23,27,592

3,49,22,266 4,14,09,494

13,62,06,001 11,97,99,664

2002-2003 2001-2002SCHEDULE 3 Rs. Rs.

Payments and Provisions for employees

Salaries, Wages and Bonus 3,70,87,596 3,57,33,315

Gratuity & Superannuation 26,22,021 34,86,871

Provident Fund and Family Pension Contribution 22,84,245 22,34,631

Workmen and Staff Welfare 24,22,071 24,02,699

4,44,15,933 4,38,57,516

Global Reports LLC

I 139


2002-2003 2001-2002SCHEDULE 4 Rs. Rs.

Manufacturing Selling and Administration

Consumption of Stores and Spare Parts 29,61,064 32,83,555

Power and fuel 44,86,059 46,61,685

Repairs to :

Building 9,28,131 7,58,835

Plant and Machinery 6,11,033 5,74,185

Others 4,11,491 5,48,880

19,50,655 18,81,900

Packing and Forwarding 14,80,220 11,54,794

Advertising 1,12,903 87,969

Auditors’s Remuneration

Statutory Audit 86,000 86,000

Tax Audit 15,000 15,000

Other Services 30,000 21,000

Expenses Reimbursed 30,219 6,571

1,61,219 1,28,571

Rent 5,30,975 5,61,856

Rates and Taxes 1,48,784 98,664

Insurance 8,09,987 7,51,361

Bad Debts 24,86,142 20,64,437

Provision for Doubtful Debts 16,70,247 —

Vehicle Expenses 11,06,805 10,12,980

Travelling 36,88,136 32,26,068

Professional Charges 16,96,235 10,47,340

Miscellaneous Expenses 1,30,92,175 1,19,96,663

Royalty 18,46,100 11,47,199

Cash Discount — 59,296

Deferred Revenue Exp. W/Off 22,68,000 69,70,835

4,04,95,705 4,01,35,173

2002-2003 2001-2002SCHEDULE 5 Rs. Rs.

Depreciation

Depreciation on Fixed Assets 65,68,729 60,45,645

Less : Transferred from Revaluation Reserve 1,06,795 1,06,795

64,61,934 59,38,850

Global Reports LLC

I 140


2002-2003 2001-2002SCHEDULE 6 Rs. Rs.

Interest

Interest on Fixed Loans 12,60,641 47,31,834

Others 93,54,097 69,77,945

1,06,14,738 1,17,09,779

Schedules to Balance Sheet 2002-2003 2001-2002

SCHEDULE 7 Rs. Rs.

Share Capital Authorised

25,000 13.5 % Cumulative Redeemable 25,00,000 25,00,000Preference Share of Rs. 100 each.

3,75,000 Equity Share of Rs 100 each 3,75,00,000 3,75,00,000

4,00,00,000 4,00,00,000

Issued

2,78,280 Equity Share of Rs 100 each 2,78,28,000 2,78,28,000

2,78,28,000 27,28,28,000

Subscribed

2,77,970 Equity Share of Rs 100 each fully paid. 2,77,97,000 2,77,97,000

Add : Forfeited Shares (310 Equity Shares) 16,875 16,875

2,78,13,875 2,78,13,875

Of the above Equity Shares 2,28,098 Equity Shares are held byCG Capital and Investment Limited, a subsidiary ofCrompton Greaves Limited.

2002-2003 2001-2002SCHEDULE 8 Rs. Rs.

Reserves And Surplus

Revaluation Reserve

As per last Balance Sheet 47,45,740 48,52,535Less : Transferred to Profit & Loss Account 1,06,795 1,06,795

46,38,945 47,45,740Capital Redemption Reserve 20,76,500 20,76,500(As per last Balance Sheet)Government Subsidy 25,00,000 25,00,000(As per last Balance Sheet)

General Reserve 10,50,916 10,50,916(As per last Balance Sheet)

Profit & Loss A/C 1,66,44,051 2,86,91,158Add/(Less) : Deferred Tax Adjustment — (1,52,18,014)

1,66,44,051 1,34,73,144

2,69,10,412 2,38,46,300

Global Reports LLC

I 141


2002-2003 2001-2002SCHEDULE 9 Rs. Rs.

Secured Loans

Term Loans

Saraswat Co-operative Bank Limited — 33,000

Credit Lyonnais — 1,80,00,000

Interest Accrued on the above Term Loans — —

Other Loans

From Banks(Secured by hypothecation of inventories and bookdebts and second charge on fixed assets both movable andimmovable, created/to be credated)Cash Credit 3,14,82,966 3,00,80,038

Interest Accrued on the above Term Loans 65,963 —

3,15,48,929 4,81,13,038

2002-2003 2001-2002SCHEDULE 10 Rs. Rs.

Unsecured Loans

Interest Free Sales Tax Deferral Loan 2,00,64,365 1,95,45,361

Inter-Corporate deposit * 3,00,00,000 3,00,00,000

5,00,64,365 4,95,45,361

* Repayable within one year.

Global Reports LLC

I 142


SCHEDULE 11

Fixed Assets

Gross Block Depreciation Net Block (at Cost / Book Value)

Description At At At For the At At At1.4.02 Additions Deductions 31.3.03 1.4.02 Year Deductions 31.3.03 31.3.03 31.3.02

Rs Rs Rs Rs Rs Rs Rs Rs Rs. Rs.

Freehold Land 22,42,921 — — 22,42,921 — — — — 22,42,921 22,42,921

Leasehold Land 4,300 — — 4,300 1,314 45 — 1,359 2,941 2,986

Building 1,44,29,144 4,53,483 — 1,48,82,627 62,59,845 3,24,431 — 65,84,276 82,98,351 81,69,299

Office Equipment 92,47,673 15,18,318 91,795 1,06,74,196 54,85,148 10,68,340 85,158 64,68,330 42,05,866 37,62,525

Plant & Equipment 11,15,35,434 34,10,041 35,043 11,49,10,432 5,93,56,593 49,64,869 7,505 6,43,13,957 5,05,96,475 5,21,78,841

Vehicles 22,71,021 2,36,033 25,07,054 13,42,866 2,11,045 15,53,911 9,53,143 9,28,155

Total 13,97,30,493 56,17,875 1,26,838 14,52,21,530 7,24,45,766 65,68,730 92,663 7,89,21,833 6,62,99,697 6,72,84,727

Previous Year 13,87,98,643 9,92,850 61,000 13,97,30,493 6,64,55,884 60,45,645 55,763 7,24,45,766 6,72,84,727

NOTE: Cost of land and building includes Rs.20,96,911 and Rs.65,20,255 respectively added on account of revaluation of these assets on 31.12.1981 on the basisof valuation by external valuers and depreciation on the same is recouped from revaluation reserve.

2002-2003 2001-2002SCHEDULE 12 Rs. Rs.

Investments

LONG TERM INVESTMENTS

At Cost (Unquoted)

Government Securities

7 Years National Saving Certificate (Rs. 1000)Lodged as Security with Government Department) 1,150 1,150

Fully Paid-up Equity Shares

5 Equity Shares of the Aurangabad Central Co-op ConsumersSociety Ltd. of Rs. 10 each. 50 50

1000 Equity Shares of Saraswat Co-operative Bank Ltd. ofRs.10 each (in custody of Bank) 10,000 10,000

332 Equity Shares of the Bombay Mercantile Co-op. Bank Ltd ofRs.30 each 9,960 9,960

21,160 21,160

2002-2003 2001-2002SCHEDULE 13 Rs. Rs.

Inventories(As valued, verified and certified by the management)(At lower of cost or net realisable value)

Raw Material 2,23,90,394 2,91,30,027

Work-in-Progress 1,11,28,441 97,67,280

Finished Goods 2,59,022 1,84,595

Traded Products 11,44,409 23,27,592

Stores and Spares 9,44,283 9,90,123

3,58,66,549 4,23,99,617

Global Reports LLC

I 143


2002-2003 2001-2002SCHEDULE 14 Rs. Rs.

Sundry Debtors

Unsecured

Debts outstanding for a period exceeding six months :

Considered Goods 83,10,407 1,30,76,647

Considered Doubtful 10,59,615 —

Less: Provision for Doubtful debts 10,59,615 —

83,10,407 1,30,76,647Other Debts :

Considered Good 5,62,40,402 6,69,30,383

6,45,50,809 8,00,07,030

2002-2003 2001-2002SCHEDULE 15 Rs. Rs.

Cash And Bank Balances

Cash on hand 3,71,306 2,58,107

With Scheduled Bankson Current Account 54,22,868 25,80,632

57,94,174 28,38,739

2002-2003 2001-2002SCHEDULE 16 Rs. Rs.

Loans And Advances

Unsecured - Considered GoodAdvance recoverable in cash or kind or for value to be received 1,24,31,917 90,55,080

Inter Corporate Loan 3,00,00,000 3,00,00,000

Deposit with :

Government & Other 21,14,120 18,03,588

Central Excise & Customs 5,60,064 10,66,089

4,51,06,101 4,19,24,757

2002-2003 2001-2002SCHEDULE 17 Rs. Rs.

Liabilities

Creditors 4,27,55,135 4,92,26,413

Other Liabilities 2,76,45,614 2,32,08,926

Due to Holding Company Crompton Greaves Ltd. — 51,42,001

Interest accrued but not due on loans 1,55,342 —

Investor Education and Protection Fund shall be creditedby the following amounts namely:

(a) Unpaid Dividend 1,77,113 1,77,113

(b) Unpaid matured Debentures 2,700 2,700

(c) Interest accrued on (a) and (b) above 740 740

7,07,36,644 7,77,57,893

Global Reports LLC

I 144


SCHEDULE 18

SIGINIFICANT ACCOUNTING POLICIES

1. Basis of Presentation

The accounts have been prepared using historical cost convention except for revaluation of certain fixedassets and on the basis of a going concern, with revenues recognised and expenses accounted onaccrual. Insurance and other claims are accounted for as and when admitted by the appropriate authorities.

2. Fixed Assets

(a) Capitalised at acquisition cost adjusted by revaluation in case of certain Land and Building. Costinclude directly attributable cost such as freight, insurance and specific installation charges for bringingthe assets to its working condition for use.

(b) Expenditure relating to existing fixed assets is added to the cost of assets where it increases theperformance/life of the assets as assessed earlier.

(c) Fixed assets are eliminated from financial statement, on disposal.

(d) Preoperative expenses, including interest on specific loans for the projects incurred till the projects areready for commercial production, are capitalised.

(e) Internally manufactured/constructed fixed assets are capitalised at prime cost.

3. Investments

(a) Long Term Investments are carried at cost. However, permanent decline in value of investments isprovided for.

(b) Current Investments are carried at lower of cost or market value determined on individual investmentbasis.

4. Inventories

Inventories are Valued at the lower of Cost or estimated Net Realisable Value. Cost of inventories iscomputed on FIFO basis.

(a) In the case of raw material and stores & spares cost represents purchase price and other costsincurred for bringing inventories upto their present location and condition.

(b) In the case of work-in-progress and finished goods, cost represents cost of raw material and componentsplus the cost on conversion such as direct labour, direct expenses, sub-contract charges and productionoverheads which are specifically attributable to the units of production for bringing inventories to theirpresent location and condition.

5. Gratuity

Provision/Contribution to gratuity fund is made on the basis of actuarial valuation.

6. Reseach and Development

Expenditure on research and development are charged to profit and loss account in the year in whichthey are incurred except in case of development of new products undertaken where the same aredeferred & expensed out over a reasonable period for which the benefit is received /expected aftercommercial development of the products. Depreciation on assets used specifically for developmentpurposes is charged at the rates applicable to similar class of assets.

7. Foreign Currency Transaction

(a) Foreign currency transaction relating to purchase and sale of goods and services are recorded at theexchange rates prevailing at the time of transaction and adjusted to the rates prevailing at the time ofsettlement of the transaction during the accounting year.

(b) Currents assets and Current liabilities remaining unsettled at the close of the accounting period areconverted at the year end rates.

(c) In respect of fixed assets acquired out of foreign currency loans the corresponding loan liabilities arerestated at rate prevailing at the year end or at rates covered by forward contracts (where applicable)and resultant differences are adjusted to the cost of fixed assets.

Global Reports LLC

I 145


(d) In respect of foreign currency loan availed by the Company for working capital requirement thedifferent between the forward rate and the exchange rate on the date of the transaction is recognisedas income or expense over the life of the contract and recognised in the relevent Profit and LossAccount.

8. Deferred Revenue Expenditure

Amortised proportionately over a period of five / six years.

9. Depreciation

(a) Depreciation on fixed assets is provided on Straight Line Method at rates and in the manner specifiedin Schedule XIV to the Companies Act, 1956, read with the relevant circulars issued by the Departmentof Company Affairs.

(b) Leasehold land is amortized over the period of lease.

(c) In the case of revalued assets the difference between the depreciation based on revaluation and thedepreciation charged on historical cost is recouped out of revaluation reserves.

(d) Depreciation on assets whose costs undergo change due to increase / decrease in long term liabilityon account of exchange fluctuations is provided over the residual life of the assets.

(e) Depreciation on assets acquired/disposed off during the year is provided on prorata basis with referenceto the date of addition/disposal.

10. Government Subsidies

Capital subsidies not related to specific fixed assets are credited to reserve till the fulfillment of conditionsattached thereto, and are thereafter credited to General Reserves.

11. Contingencies and events Occurring after Balance Sheet

Accounting for contingencies (gains and losses) arising out of contractual obligations, are made only onthe basis of mutual acceptances.

Events occurring after the date of Balance Sheet are considered upto the date of adoption of the accountswhere material.

12. Taxation

(a) Provision for Income Tax is made on the basis of the estimated taxable income for the currentaccounting year in accordance with the Income Tax Act, 1961.

(b) The deferred tax for timing differences between the book and tax profits for the year is accounted forusing the tax rates and laws that have been enacted or substantively enacted as of the Balance Sheetdate.

(c) Deferred tax assets arising from timing differences are recognised to the extent there is reasonablecertainty that these would be realised in future.

SCHEDULE 1931-3-2003 31-3-2002

Rs. Rs.NOTES ON ACCOUNTS1. No Provision has been made for the following demands

including interest against which company has preferred appeals.a. Sales Tax — 8,04,336b. Excise Duty 34,17,943 34,33,899Maharashtra Sales Tax Tribunal has passed favourable orderand has issued directive to Assistant Commissioner(Assessment), Aurangabad to modify Assessment orderpassed for the year 1993-94 in line with his order. Thereforedemand of Rs. 281,483 will result in a refund, amount whereofcan not be quantified at present.

2. Estimated amount of Contracts remaining to be executedon Capital Account not provided for (Net of Advances) 2,26,123 10,900

Global Reports LLC

I 146


3. Contingent liabilities are in respect ofa. Bills Discounted 74,46,854 2,25,92,499b. Counter guarantees to bankers for gurantees given by them 37,95,145 39,02,589

4 Sales include excise duty charged to Customers and 3,98,41,492 3,39,89,657

is net of Brokerage and Commission 17,96,728 21,95,175

5 Purchase of material includes outside processing Charges 77,96,908 78,30,948

6 Creditors and other liabilities include advance from customers 4,11,209 17,00,253

7 Research & Development expenditure debited to other heads ofexpenditureMaterial Consumed 37,775 57,152Salaries and Wages 4,88,636 4,93,995Miscellaneous Expenses 1,24,700 40,796Depreciation 29,436 29,436

8 Miscellaneous income includes:Excess provision written back 97,763 1,19,770Sundry Credit Balances written back 4,07,013 5,40,489

9 a. Value of Import (on CIF basis)Raw Materials 2,79,99,637 1,80,04,004Spare parts and components 4,73,362 4,53,701Traded Goods 7,23,661 31,25,959

b. Expenditure in Foreign Currency1. Technical Assistance/Service Fee/Royalty - 7,45,5672. Travelling 1,88,576 -3. Others 5,519 -

c. Earnings in Foreign CurrencyExport of goods F.O.B. basis - 17,27,700

10 i) Based on the information/documents available withthe Company, Sundry Creditors includes amounts due tosmall scale industrial undertakings:

a. of which no amount was overdue on account ofprincipal and/or interest 1,42,93,475 45,53,706

b. of which the parties to whom the amount exceeding Rs. 1 lacs are outstanding for more than30 days are Accurate Forge Pvt Ltd, Ashoka Packing, Baroda Molds and Dies, Bhaldar Engineers,CIM Mfg Co., Controls and Systems, Dove Pneumatics, GearControl, Grand Polycot Co Pvt Ltd, Graphic Impressors,Gujarat Cork and Rubber PvtLtd, Gurukripa Engineering Works, Hiten Bushings, Jayashree Enterprises, Jewel MetalsPvt Ltd, K C Toolroom Pvt Ltd, Laxmi Industries, Manshu Comptel Pvt Ltd, Master MechEngineers, Nitin Associates, Omkar Industries, P & R Engineers, Peizotech Industries,Pioneer Coats, Poly Industries, Popular Electric Works, Pratik Corporation, Presscast,Pressgel Insulation Pvt Ltd, S M Enterprises, S V Engineers, Sahayog Founders andEngineers, Saras Enterprises, Shirke Electro Pvt Ltd, SNA Industries, Suraj EngineeringWorks, Tushar Metals Pvt Ltd, Uniglass Industries Pvt Ltd, Vaibhav Marbles andFabricators, Varsha Enterprises, Vijay Enterprises, Winstronix Cable Industries Pvt Ltd.

ii. Total outstanding dues of creditors other thansmall scale industrial undertakings 2,84,61,660 4,46,67,707

31-3-2003 31-3-2002Rs. Rs.

Global Reports LLC

I 147


11. Sales

31.03.2003 31.03.2002Unit Quantity Value Rs. Quantity Value Rs.

Radiators Sq.Mtr. 43,521 2,13,99,363 39,270 2,47,28,916Tapchangers Nrs. 711 12,98,59,275 551 10,47,92,500Plastic Film Capacitors * Nrs. 13,780,038 8,14,60,067 1,61,62,121 8,36,73,454Service Revenue & Others Rs. 16,23,168 10,99,810Railway Equipments Rs. 44,64,868 1,35,59,538Fire Systems Nrs. 68 4,28,13,990 41 2,64,66,722Traded Products :Electrical and Electronics Nrs. 79,670 18,66,749 2,92,135 61,78,832Hydraulics Nrs. 87 9,79,238 27 2,44,035

28,44,66,718 26,07,43,807

* Includes goods returned to Zonal Offices 1,28,765 numbers.

12. Raw Material Consumed:31.03.2003 31.03.2002

Unit Quantity Value Rs. Quantity Value Rs.CRCA Steel Tons 380.04 99,07,891 375.77 91,58,607Plastic Film Tons 16.00 1,67,70,561 14.00 1,51,69,824Others Rs. 10,86,38,724 9,04,35,108

13,53,17,176 11,47,63,539

13. Purchases:31.03.2003 31.03.2002

Unit Quantity Value Rs. Quantity Value Rs.Traded ProductsElectrical and Electronics Nrs 70,552 11,41,230 259,588 43,50,683

11,41,230 43,50,683

14. Consumption of Raw Material and Spare Parts and Percentage thereof:

31.03.2003 31.03.2002% Value Rs. % Value Rs.

Raw Materiala. Imported 15.97 2,16,09,668 17.72 2,03,39,422b. Indigenous 84.03 11,37,07,508 82.28 9,44,24,117

13,53,17,176 11,47,63,539

Spares Parts:a. Imported 18.34 5,42,938 19.85 6,51,719b. Indigenous 81.66 24,18,126 80.15 26,31,836

29,61,064 32,83,555

15. Opening and Closing Stock of Goods;

Unit Opening Stock Closing Stock

2002-2003 2001-2002 2002-2003 2001-2002Qty Rs. Qty Rs. Qty Rs. Qty Rs.

PlasticFilm Capacitors Nrs 34,885 1,34,595 5,059 30,176 77,560 2,59,022 34,885 1,84,595Traded products-Electrical andElectronics Nrs 62,758 13,17,931 95,305 19,09,589 53,640 8,58,937 62,758 13,17,931

Hydraulics Nrs 138 10,09,661 165 12,35,341 51 2,85,472 138 10,09,661

Global Reports LLC

I 148


16. Details of licensed capacity and actual production for each class of goods manufactured(Capacities are as certified by the management).

Products Unit Installed Capacity Actual Production

2002-2003 2001-2002 2002-2003 2001-2002

Radiators Sq.Mtrs. 1,32,000 1,32,000 43,521 39,270

Tapchangers: Nrs 800 550 711 551

Flange Mounted and In-tank

Plastic Film Capacitors * Nrs 5,00,00,000 5,00,00,000 1,36,93,948 1,61,91,947

Milling Cutters Nrs 31,500 31,500

Railway Maintenance Rs. 4,00,00,000 4,00,00,000 44,64,868 1,35,59,538

Equipment Fire Systems Nrs 90 90 68 41

Cylinder Liners Nrs 1,20,000 1,20,000 - -

Piston Pins Nrs 3,00,000 3,00,000 - -

* Includes Goods returned.

17 Staff and Welfare includes Remuneration to Managing Director :

2002-2003 2001-2002

Salary Rs. 6,60,000 6,60,000Contribution to PF,Gratuity & Other Funds Rs. 2,19,247 1,92,123Other Benefits Rs. 4,14,562 4,17,965

Total Rs. 12,93,809 12,70,088

18 Loans and Advances in Schedule 15 include Income Tax paid Rs. 61,54,348 (previous year Rs.39,96,407)and current liabilities and provision in Schedule 16, include provision for Income Tax Rs.71,29,046 (Previousyear Rs.32,29,046).

2002-2003 2001-2002

19. Amount of exchange difference (net) - debited to profit and loss account 4,68,176 4,771 - to be debited to profit and loss account of the subsequent

year in respect of forward contracts 3,33,160 -

20 Miscellaneous expenditure (to the extent no written off) consists deferred revenue expenditure for technicalknow-how.

21 The break-up of net deferred tax liability as on 31.3.2003 is as under:

Deferred tax Deferred taxasset liability

Timing difference on account of:

Depreciation - 1,54,06,075

Expenditure/Provision allowable 18,93,684 15,98,980

Total 18,93,684 1,70,05,055

Net Deferred tax liability 1,51,11,371

22 Sundry interest shown in other income is net of interest paid Rs.28,55,342 (P.Y. Rs.6,84,247)

23 Related Party

Disclosure in term of Accounting Standard 18 on ‘RELATED PARTY DISCLOSURE’ for the year

2002-2003 is as per ANNEXURE-1

24 Segmental ReportingDisclosure in term of Accounting Standard 17 on ‘SEGMENTAL REPORTING’ for the year2002-2003 is as per ANNEXURE-2

Global Reports LLC

I 149


25 Loans/advances and investments in its own shares.

Disclosure in term of Clause 32 of the Listing Agreement with The Stock Exchange, Mumbai relating toloans/advances and investments in its own shares by a Listed company is as per ANNEXURE-3

2002-2003 2001-200226 Net profit to calculate Basic/Diluted Earnings

per share 31,70,907 73,45,981Weighted average number of equity shares forBasic/Diluted Earnings per share 2,77,970 2,77,970

Nominal Value of shares 100 100

Earnings per share 11.41 26.43

27 The figures of previous year has been regrouped/rearranged where necessary to make them comparablewith those of the current year.

Global Reports LLC

I 150


28 Additional information as required under part IV of schedule VI to the Companies Act. 1956.

Balance Sheet Abstract and Company’s General Business Profile:

I. Registration DetailsRegistration No.: 13087State Code: 11Balance Sheet Date: 31st March 2003

II. Capital Raised during the YearPublic Issue: NilRights Issue: NilBonus Issue: NilPrivate Placement: Nil

III. Position of Mobilisation and Deployment of Funds Rs. in ThousandsTotal Liabilities: 1,36,338Total Assets: 1,36,338Sources

Paid up Capital: 27,814Reserves and Surplus: 26,910Secured Loans: 31,549Unsecured Loans: 50,064

Application of FundsNet Fixed Assets: 66,496Investments: 21Net Current Assets: 80,581Deferred Tax Liability (15,111)Miscellaneous Expenditure: 4,351Accumulated Losses: -

IV. Performance of the Company Rs. in ThousandsTurnover: 2,45,980Total Expenditure: 2,38,194Profit before extraordinary items and taxation: 7,786Profit/(Loss) before tax: 7,786Profit/(Loss) after tax: 3,171Prior period adjusted: -Earning per Share (Rs.): 11.41Dividend Rate 0

V. Generic Names of the Principal Products, Services of the Company;Product Description Item Code No.

(ITC Code)Plastic Film Capacitors: 85.32On Load Tapchanger for Transformers: 85.04Pressed Steel Radiator for Transformers: 85.04Fire Extinguishing Systems for Transformers: 85.04


For and on behalf of For and on behalf of

Khimji Kunverji & Co. A. A. Bhat & Co. A. P. KumarChartered Accountants Chartered Accountants Managing Director

B. R. JajuChairman

Shivji K. Vikamsey N. V. Badwe K. S. KoparkarPartner Partner Company Secretary

Global Reports LLC

I 151


ANNEXURE - 1

Disclosure in terms of Accounting Standard 18 on Related Party Disclosure for the year 2002-2003:

In view of Accounting Standard 18 “Related Party Disclosures” issued by the Institute of Chartered Accountantsof India and made mandatory in respect of accounting year commencing on or after 1st April 2002, thedisclosure of the related party transactions for the year ended 31st March 2003 are given below:

1. Relationships:

i) Holding Company:

a) Crompton Greaves Ltd holds 100% of the Equity Share Capital in CG Capital & Investments Ltd.

b) CG Capital & Investments Ltd. holds 82.06% of Equity Share Capital of CTR ManufacturingIndustries Limited.

ii) Fellow Subsidiary:

a) CG—PPI Adhesive Products Ltd.

iii) a) Key Management Personnel: Mr. A. P. Kumar, Managing Director.

b) Relatives of Managing Director, Mr. A. P. Kumar

a) Mrs. P. Kumar

b) Mr. Robin Kumar

c) Companies/Firms in which Managing Director, or his relatives are interested:

a) Greenoaks Poultry Farm

b) Arkayo Video Theaters P. Ltd.

c) Radix Transmission Ltd.

2. The following transactions were carried out with the related parties in the ordinary course of business:

(Rupees Thousands)

Sr. Transaction With Holding TotalNo. Company*

1 Sales 49,202 49,202

2 Purchases 215 215

3. Repayment of Advances 5,142 5,142

4 Intercorporate Deposit (ICD) at year end 30,000 30,000

5 Interest on ICD 2,855 2,855

6 Dues to related parties as at year end Nil Nil

7 Dues from related parties as at year end 16,479 16,479

8 Amount written off 36 36

9 Amount written back 13 13

*With Crompton Greaves Ltd.

3. Remuneration to Managing Director, Key Managerial Personnel is Rs. 12,93,809

Global Reports LLC

I 152


ANNEXURE-2 to Notes to Accounts for the Year ended March 31, 2003

SEGMENT DISCLOSURE (Rs. Thousands)

(I) Primary Segments-Business Fire Tap Electro- Others TotalSystem Changers nics

a Segment RevenueSales to External customer 43,377 1,31,065 83,956 26,388 2,84,785

Total Segment Revenue 43,377 1,31,065 83,956 26,388 2,84,785

b Segment Result (PBIT) 13,529 9,864 10,559 (8,522) 25,430Add: Unallocable Income 1,036Less: Unallocable Expenses 18,680Profit before Tax 7,786Provision for Current Tax 3,900Provision for Deferred Tax 715

Profit after Tax 3,171

c Carrying Amount of Segment Assets 21,674 48,246 80,723 38,860 1,89,503Unallocated Assets 17,571

Total Assets 2,07,074

d Carrying Amount of Segment Liabilities 5,967 30,892 29,926 21,262 88,047Unallocated Liabilities 64,303

Total Liabilities 1,52,350

e Cost incurred to acquire Fixed Assets 110 473 1,857 3,177 5,617

f Depreciation/Amortization 104 2,813 4,684 1,129 8,730

(II) Secondary Segment-GeographicalThe company’s operating facilites are located in india.Domestic Revenues 2,85,822

Export Revenue -

Total 2,85,822

ANNEXURE-3

DISCLOSURE OF LOANS / ADVANCES AND INVESTMENTS IN ITS OWN SHARES IN TERMS OF CLAUSE 32 OFLISTING AGREEMENT OF THE STOCK EXCHANGE, MUMBAI FOR THE YEAR 2002-2003

(Rs. Thousands)

With WithSr. Nature of Transaction Parent SubsidiaryNo. Company*

1 Loans and Advances in the nature of loans from parent 30,000 NIL

2 Loans and Advances in the nature of loans to parent NIL NIL

3 Loans and Advances in the nature of loans from associates NIL NIL

4 Loans and Advances in the nature of loans to associates NIL NIL

5 Loans and Advances in the nature of loans where there is no repaymentschedule or repayment beyond 7 years. NIL NIL

6 Loans and Advances in the nature of loans where there is no interest orinterest below Section 372A of Companies Act. NIL NIL

7 Loans and Advances in the nature of loans to firms/Companies in whichDirectors are interested. NIL NIL

* Crompton Greaves Limited

Global Reports LLC

I 153


CASH FLOW STATEMENT FOR THE YEAR ENDED 31ST MARCH 2003

Rupees in Thousands

2002-2003 2001-2002

(A) CASH FLOW FROM OPERATING ACTIVITIESNet profit before tax and extraordinary items 7,786 6,968

AdjustmentsDepreciation 6,462 5,939Investment Income (171) (2)(Profit)/Loss on sale of Fixed assets (1) —Interest 10,615 12,394Deferred Revenue Expenditure 2,268 6,971

19,173 25,302

Operating profit before working capital changes 26,959 32,270

(Increase)/decrease in trade and other receivables 14,150 (4,187)(Increase)/decrease in Inventories 6,533 2,131Increase/(decrease) in trade and other payables (11,013) (1,029)Direct Tax paid (1,875) (967)

7,795 (4,052)

Net cash from operating activities 34,754 28,218(B) CASH FLOW FROM INVESTING ACTIVITIES

Add : Inflows from investing activitiesSale of Fixed Assets (Net) 35 5Investment Income 171 2

Less : Outflows from investing activitiesPurchase of fixed assets 5,344 993

Net cash used in investing activities (5,139) (986)

(C) CASH FLOW FROM FINANCING ACTIVITIESAdd : Proceeds from Long Term BorrowingsInter Corporate Deposit — 30,000Unsecured Loans 519 62Proceeds from Cash Credit / Short Term Loan 4,947

519 35,009

Less : Outflows from financing activitiesRepayment of long term borrowings 18,033 18,000Intercorporate Deposit given — 30,000Redemption of Preference Shares — 398Outflow from dividend — 1,028Reduction in Cash Credit /Short Term Loan (1,469) —Interest Paid (10,615) 12,394

27,179 61,820

Net Cash Generated From Financing Activities (26,660) (26,811)Net Changes in Cash and Cash Equivalents (A+B+C) 2,955 421Cash and Cash Equivalent - Opening Balance 2,839 2,418

Cash and Cash Equivalent - Closing Balance 5,794 2,839

Note : Cash and Cash Equivalent represent :Note : Cash on Hand 371 258Note : Balance with banks in current account 5,423 2,581

Total 5,794 2,839

Mumbai, 21st April, 2003 For and on behalf of the Board

K. S. Koparkar A. P. Kumar B. R. JajuCompany Secretary Managing Director Chairman

Global Reports LLC

I 154


Auditors’ Certificate

We have verified the enclosed Cash Flow Statement of CTR Manufacturing Industries Limitedderived from the audited annual financial statements for the year ended 31st March 2003 and foundthe same in accordance there with and also with the relevant requirements of the listing agreementwith the Stock Exchange.


For Khimji Kunverji & Co. For A. A. Bhat & Co.Chartered Accountants Chartered Accountants

ShivjiK. Vikamsey N. V. BadwePartner Partner

Global Reports LLC


Consolidated

FinancialStatements

I 155

CROMPTON GREAVES LIMITED

Global Reports LLC


I 156

CONSOLIDATED FINANCIAL STATEMENTS

Auditors’ Report to the Shareholders of Crompton Greaves Limited

We have audited the attached Consolidated Balance Sheet of Crompton Greaves Limited, itsSubsidiaries and Associates as at 31st March, 2003, the Consolidated Profit & Loss Account for theyear then ended on that date annexed thereto and the consolidated Cash flow statement for theyear ended on that date. These Financial Statements are the responsibility of the Company’sManagement. Our responsibility is to express an opinion on these Financial Statements based onour audit.

We conducted our audit in accordance with generally accepted auditing standards in India. TheseStandards require that we plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are prepared, in all material respects, in accordance with an identifiedfinancial reporting framework and are free of material misstatements. An audit includes examining,on a test basis, evidence supporting the amounts and disclosures in the financial statements. Anaudit also includes assessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation. We believe that ouraudit provides a reasonable basis for our opinion.

We did not audit the financial statements of CTR Manufacturing Industries Limited, CG Capital &Investments Limited and CG Maersk Information Technologies Private Limited, whose financialstatements reflect total assets of Rs.67.66 crores as at 31st March, 2003 and total revenues ofRs.33.96 crores for the year then ended. These financial statements have been audited by otherauditors whose reports have been furnished to us, and our opinion, in so far as it relates to theamounts included in respect of the subsidiaries, is based solely on the report of the other auditors.

We report that the consolidated financial statements have been prepared by the Company inaccordance with the requirements of Accounting Standard (AS) 21 on “Consolidated FinancialStatements”, AS 23 on “Accounting for investments in Associates in consolidated financial statements”and AS 27 on “Financial reporting of interests in joint ventures” issued by The Institute of CharteredAccountants of India and on the basis of the separate audited financial statements of CromptonGreaves Limited, its Subsidiaries and Associates included in the consolidated financial statementsexcept for the accounts of CG Actaris Electricity Management Limited (formerly CG SchlumbergerElectricity Management Limited) since the accounts are in the process of being compiled andaudited for the year ending 31st March 2003.

(i) We further report that no provision has been made in the accounts in respect of(see Note No.2 of Schedule “B” )

Rs. Crores

(a) Income tax demands 1.98

(b) Excise demands(net after income tax) 8.85

(c) Sales tax demands(net after income tax) 1.83

(ii) Note No.12 of Schedule B regarding disclosure of transactions with related parties is givenbased on legal opinion on which we have placed reliance.

We report that, without considering items (ii) above, the effect of which could not be determined,had the observations made by us in item (i) above been considered, the Profit Before Tax for theyear would have been Rs. 24.84 crores (as against the reported profit before tax of Rs.37.50crores), debit balance in the Retained Earnings would have been Rs.6.74 crores (as against thereported figure of Rs.19.40 crores), the Current Liabilities & Provisions would have been Rs.593.16crores (as against the reported figure of Rs.580.50 crores).

Global Reports LLC


I 157

Subject to the foregoing and to the best of our information and explanation given to us, and onthe consideration of the separate audit reports on individual audited financial statements ofCrompton Greaves Limited, its subsidiaries and associates, we are of the opinion that:

(a) The Consolidated Balance Sheet gives a true and fair view of the consolidated state ofaffairs of Crompton Greaves Limited, its subsidiaries and associates as at 31st March 2003;and

(b) The Consolidated Profit & Loss Account gives a true and fair view of the consolidatedresults of operations of Crompton Greaves Limited, its subsidiaries and associates for theyear then ended.

(c) The Consolidated Cash flow statement gives a true and fair view of the cash flow ofCrompton Greaves Limited, its subsidiaries and associates for the year ended on that date.

Mumbai, 22nd May, 2003 SHARP & TANNANChartered Accountants


Membership No: 16368

Global Reports LLC


I 158

Mumbai, 22nd May, 2003 Mumbai, 22nd May, 2003As per our report attached.




Consolidated Profit & Loss Account for the year ended 31st March, 2003

Schedule As At As At31-3-2003 31-3-2002

Rs. Crores Rs. CroresINCOME

Gross Sales [Refer Note No.5] 1757.50 1631.23Less: Excise Duty 144.60 127.77

Net Sales 1612.90 1503.46Other Income 1 14.85 15.60

1627.75 1519.06

EXPENDITUREMaterials 2 1095.71 994.10Staff and Welfare 3 142.22 157.79Manufacturing, Selling and Administration 4 214.24 204.75Interest and Commitment Charges 65.13 75.67Depreciation 10 46.26 45.18Amortisation of Miscellaneous Expenditure 29.81 28.25

1593.37 1505.74

Profit Before Exceptional Items And Taxes 34.38 13.32Exceptional Items (Net) 3.12 -3.57

Profit Before Taxes 37.50 9.75

Provision for TaxationCurrent Tax -1.90 -0.93Deferred Tax -8.81 -2.45

Profit After Tax 26.79 6.37Taxation adjustment of Earlier Years 0.00 0.20Corporate Dividend Tax -0.05 0.00Transfer to Doubtful Debts Reserve -3.43 0.00

23.31 6.57Minority Interest -0.12 -0.28

Profit / (Loss) After Tax And Minority Interest 23.19 6.29Share of Profit / (Loss) of Associate Companies -3.79 2.32

Balance Carried To Balance Sheet 19.40 8.61

Earning Per Share (Basic and Diluted) 4.37 1.61

Significant Accounting Policies [A]

Notes On Accounts [B]

Global Reports LLC


I 159

Consolidated Balance Sheet As At 31st March, 2003

Schedule As At As At31-3-2003 31-3-2002

Rs. Crores Rs. Crores Rs. CroresSOURCES OF FUNDSShareholders’ Funds

Capital 5 52.37 52.37Reserves And Surplus 6 399.67 381.29

452.04 433.66Minority Interest 7 2.27 2.15Loan Funds

Secured Loans 8 318.72 467.11Unsecured Loans 9 142.01 109.66

460.73 576.77

915.04 1012.58

APPLICATION OF FUNDSFixed Assets 10

Gross Block 805.10 784.00Less : Depreciation 408.13 366.85

Net Block 396.97 417.15Capital Work-in-progress 7.17 9.06

404.14 426.21Goodwill On Consolidation 1.59 1.59Investments 11 60.95 90.86

Current Assets, Loans & AdvancesInventories 12 197.62 183.58Sundry Debtors 13 482.65 482.00Cash and Bank Balances 14 56.76 61.73Loans and Advances 15 142.71 150.61

879.74 877.92Less: Current Liabilities & Provisions

Liabilities 16 567.39 543.90Provisions 17 13.11 17.87

580.50 561.77

Net Current Assets 299.24 316.15Deferred Tax Asset 78.98 87.80Miscellaneous Expenditure(to the extent not written off or adjusted) 18 70.14 89.97

915.04 1012.58

Significant Accounting Policies [A]Notes on Accounts [B]

The Schedules referred to above and the Notes attached, (1 Crore = 10 Millions)form an integral part of the Balance Sheet.

Mumbai, 22nd May, 2003 Mumbai, 22nd May, 2003As per our report attached.




Global Reports LLC


I 160

SCHEDULE 2 As At As At31-3-2003 31-3-2002

Rs. Crores Rs. Crores Rs. CroresMaterialsOpening Stock

Raw material 49.93 49.24Work-In-Process



163.38 167.12Add: Purchases (Including Trading goods) 1106.83 1002.68Less : Scrap Sales 13.54 12.32

1093.29 990.36

1256.67 1157.48Less : Closing Stock

Raw materials 54.07 49.93Work-In-Process



160.96 163.38

1095.71 994.10

Schedules Forming Part of Consolidated Profit & Loss Account


Rs. Crores Rs. CroresOther IncomeIncome from Premises

(a)Lease Rent 1.63 1.34

(b) Income from Business Service Centres 6.51 4.98

(TDS deducted Rs. 0.18 crores;Previous year Rs. 0.19 crores)

8.14 6.32

Income from Investments 0.35 9.11Miscellaneous Income 6.36 0.17

14.85 15.60


Rs. Crores Rs. CroresStaff & WelfareSalaries, Wages and Bonus 112.16 116.30Provident Fund and Family Pension Scheme Contributions 8.19 8.85Superannuation Fund Contributions 2.00 1.86Gratuity (Including Contribution to Fund) 7.14 17.36Workmen & Staff Welfare 12.73 13.42

142.22 157.79

Global Reports LLC


I 161


Rs. Crores Rs. Crores Rs. CroresManufacturing, Selling and AdministrationStores and Spare Parts 13.06 11.58Power and Fuel 20.67 19.70Repairs :

Buildings 2.27 1.40Plant and Equipment 5.97 4.84Others 3.50 3.70

11.74 9.94Forwarding, Godown and Packing 50.59 50.29Advertising 7.38 3.28Auditors’ Remuneration

Statutory Audit Fees 0.30 0.26Tax Audit Fees 0.06 0.06Taxation 0.00 0.01Certification 0.03 0.07Other Services 0.08 0.00Expenses Reimbursed (including Service Tax) 0.11 0.11

0.58 0.51Rent 4.54 7.83Rates & Taxes 8.12 13.88Insurance 3.70 3.19Bad Debts 1.81 0.22Vehicle Expenses 1.50 1.46Travelling 15.32 13.77Professional Charges 7.86 4.64Technical Service Fees 1.82 3.32Exchange Premium / Difference 2.42 4.40Miscellaneous Expenses 63.09 56.71Directors’ Fees 0.04 0.03

214.24 204.75

Schedules Forming Part of Consolidated Balance SheetSCHEDULE 5 As At As At


CapitalAuthorised

6,00,00,000 Equity Shares of Rs.10 each 60.00 60.00

Issued and Subscribed5,23,75,116 Equity shares of Rs.10 each 52.37 52.37

Paid up5,23,66,656 Equity Shares of Rs.10 each 52.37 52.37

8,460 Forfeited Equity Shares of Rs.10 eachRs. 32175 partly paid 0.00 0.00

52.37 52.37

Of the above, following Equity Shares were allotted3,87,200 Pursuant to a contract without

payment being received in cash

1,62,00,000 As fully paid up Bonus Shares by capitalisation ofGeneral Reserve and Share Premium Account

14,76,566 As fully paid up pursuant to schemes of amalgamation

66,13,750 As underlying shares to an international offering ofGlobal Depository Receipts (GDRs) in US Dollars

Global Reports LLC


I 162


Rs. Crores Rs. CroresReserves & SurplusRevaluation Reserve 17.77 18.30Share Premium Account 379.82 379.82Government Subsidy 0.44 0.34Investment Allowance (Utilised) Reserve 0.79 1.02Debenture Redemption Reserve 5.00 5.00Doubtful Debts Reserve 0.04 0.04Capital Redemption Reserve 0.17 0.17Capital Reserve 0.34 0.34Retained Earnings / Deficit (-) b/f -24.34 -122.99Transfer from Investment Allowance (Utilised) Reserve 0.24 0.00Adjustment on account of Deferred Tax 0.00 90.64Profit after Tax and Minority Interest 19.40 8.61Retained Earnings / Deficit (-) c/f -4.70 -23.74

399.67 381.29


Rs. Crores Rs. CroresMinority InterestAs at 1.4.2002 2.15 2.37Adjustment on account of Deferred Tax 0.00 -0.39Share of Profit for the year 0.12 0.28Share of Revaluation Reserve Recoupment 0.00 0.00Dividends to Minority 0.00 -0.11

2.27 2.15


Rs. Crores Rs. CroresSecured LoansDebentures :(Privately placed with Financial Institutions)13.50% Secured Non-Convertible Debenturesof Rs.100 each

(a) 50,00,000 (VIII Series) redeemable in 18 equalquarterly instalments due from 15th June, 2000 16.67 27.78

(b) 50,00,000 (IX Series) redeemable in 3 equal semi-annualinstalments due from 1st September, 2002 16.67 50.00

Term Loans1. From Banks 98.73 92.602. From Financial Institutions 1.45 16.66

Cash Credit / Working Capital Demand LoansFrom Banks:-(a) Rupee Loans / Cash Credit 56.49 243.93(b) Foreign Currency Loans 128.71 36.14

318.72 467.11


Rs. Crores Rs. CroresUnsecured LoansFixed Deposits 72.53 36.42Commercial Papers 10.00 0.00Other Deposits:(a) Interest free Sales Tax Loans and Special

Incentive Loans from Central / State Governments 58.00 51.90(b) Arrears of Preferential Dividend 0.05 0.10(c) From Others 1.43 21.24

142.01 109.66

Global Reports LLC


I 163

SCHEDULE 10

Fixed Assets & Depreciation Rs. Crores

Description Gross Block Depreciation Net BlockAt Addi t ions Deduct ions At At O n For the At At At

1.4.2002 31.3.2003 1.4.2002 Deductions Year 31.3.2003 31.3.2003 31.3.2002

Land

Freehold 15.41 0.00 0.00 15.41 0.00 0.00 0.00 0.00 15.41 15.41Leasehold 14.90 0.00 0.00 14.90 2.20 0.00 0.17 2.37 12.53 12.70Buildings 197.49 4.08 1.31 200.26 38.11 0.35 5.04 42.80 157.46 159.39Plant & Equipment 454.80 17.31 2.08 470.04 251.35 1.72 34.30 283.93 186.11 203.44Furniture & Fixtures 92.24 3.46 1.62 94.08 68.40 1.25 6.06 73.21 20.87 23.84Vehicles 9.16 3.92 2.67 10.41 6.79 2.01 1.04 5.82 4.59 2.37

Sub Total 784.00 28.77 7.68 805.10 366.85 5.33 46.61 408.13 396.97 417.15

Capital Work inProgressBuildings 3.20 0.54 1.41 2.33 2.33 3.20Plant & Equipment 5.86 2.22 3.24 4.84 4.84 5.86

Sub Total 9.06 2.76 4.65 7.17 7.17 9.06

At 31.3.2003 793.06 31.53 12.33 812.27 366.85 5.33 46.61 408.13 404.14At 31.3.2002 788.02 72.91 67.87 793.06 326.40 5.12 45.57 366.85 426.21

As At As At31-3-2003 31-3-2002

Depreciation Rs. Crores Rs. Crores

Depreciation on Fixed Assets 46.61 45.57Less: Transferred from Revaluation Reserve 0.35 0.39

46.26 45.18


Rs. Crores Rs. CroresInvestmentsLong Term (At Cost)

Government and Trust Securities 2.38 2.31Fully paid Equity / Preference Shares and Debentures 26.19 51.79Associate Companies(Under Equity Method)Cost 22.07 22.07Share of Capital Reserves 0.47 0.47Share of Other ReservesOpening Balance as on 1-4-2002 13.63 12.35Share of Profits/(Loss) for the year -3.79 2.32Dividend Received 0.00 -0.45

Closing Balance as on 31.3.2003 9.84 14.22

32.38 36.76

60.95 90.86

Global Reports LLC


I 164


Rs. Crores Rs. Crores Rs. Crores Rs. Crores

Inventories :

(At lower of Cost or Net Realisable value)

Stores, Spare parts and Packing Materials 3.31 2.31

Raw Materials 54.07 49.93

Work-in-Process - Manufacturing 52.27 49.21


149.92 146.53

Work-in-Process - Contracts

At Cost 14.35 19.16

At Realisable Sales Value 109.71 43.54

Less : Progress Payments 76.36 25.65

33.35 17.89

47.70 37.05

197.62 183.58


Rs. Crores Rs. Crores Rs. CroresSundry DebtorsUnsecured

Debts outstanding for a period exceeding six months

Considered Good 130.93 123.13Considered Doubtful 24.57 21.19Less : Doubtful Debts Reserve per contra 24.57 21.19

0.00 0.00Other Debts


482.65 482.00


Rs. Crores Rs. CroresCash and Bank Balances

Cash on hand 0.25 0.19

Current Accounts with Banks 2.03 5.20

Remittances in transit 43.72 56.31

Term Deposits with Scheduled Banks 10.76 0.03

(including interest accrued thereon)56.76 61.73

Global Reports LLC


I 165


Rs. Crores Rs. Crores Rs. CroresCurrent Liabilities

Sundry Creditors :(a) Due to Small Scale Industrial

Undertaking(s) 90.37 84.47(b) Due to Others 429.60 426.12

519.97 510.59Other Liabilities :(a) Security Deposit 5.04 4.32(b) Unclaimed Dividend 0.16 0.16(c) Unclaimed Matured Fixed Deposit 1.22 0.00(d) Interest accrued but not due on loans 0.78 1.03(e) Others 40.22 27.80

47.42 33.31

567.39 543.90


Rs. Crores Rs. CroresProvisions

Gratuity 5.25 11.51Leave encashment on retirement 7.81 6.25Proposed Dividend 0.05 0.11

13.11 17.87


Rs. Crores Rs. CroresMiscellaneous Expenditure(To the extent not written off or adjusted)

Voluntary Retirement Scheme 59.48 79.02Testing fees 5.23 3.67Technical know-how 5.43 7.28

70.14 89.97

SCHEDULE 15As at As at


Loans & Advances(Unsecured, Considered Good, unless otherwise stated)

Advances recoverable in cash or in kindor for value to be received. 129.11 132.48Balances with excise, customs, etc. 6.58 6.06Inter-corporate deposits 7.02 12.07

142.71 150.61

Global Reports LLC


I 166

SCHEDULE [ A ]


1 BASIS OF PRESENTATION

(i) The Financial Statements of the subsidiaries used in the consolidation are drawn upto thesame reporting date as that of parent Company, i.e. year ended 31st March, 2003.

(ii) The accounts have been prepared using historical cost convention except for the revaluationof certain fixed assets and on the basis of a going concern, in accordance with Section211(3C) and other provisions of the Companies Act 1956, with revenue recognised andexpenses accounted on accrual, including for committed obligations. Insurance and otherclaims are accounted for as and when admitted by the appropriate authorities.

2 PRINCIPLES OF CONSOLIDATION

(i) The financial statements of the Parent Company and its Subsidiaries have been consolidatedon a line by line basis by adding together the book values of like items of assets, liabilities,incomes and expenses after eliminating intra-group balances, intra-group transactions andunrealised profits resulting therefrom.

(ii) The financial statements of the Parent Company and its Subsidiaries have been consolidatedusing uniform accounting policies for like transactions and other events in similarcircumstances.

(iii) The excess of cost to the Parent Company of its investment in each of the Subsidiary overits share of equity in the respective Subsidiary, on the acquisition date, is recognised in thefinancial statements as Goodwill on Consolidation and carried in the Balance Sheet as anasset. Negative Goodwill is recognised as Capital Reserve on Consolidation.

(iv) Investments in Associate Companies have been accounted under the Equity Method as perAccounting Standard 23 “Accounting for Investments in Associates in Consolidated FinancialStatements”, issued by the Council of the Institute of Chartered Accountants of India.

Under the Equity Method of Accounting the investment is initially recorded at cost, identifyingany goodwill/capital reserve arising at the time of acquisition. The carrying amount ofinvestment is adjusted thereafter for the post acquistion change in the investor’s share ofnet asset of the Investee. The consolidated statement of Profit & Loss reflects the investor’sshare of the results of operations of the Investee.

3 Company has disclosed only such Policies and Notes from the invididual financial statements,which fairly present the needed disclosures. Lack of homogeneity and other similar considerationsmade it desirable to exclude some of them, which in the opinion of the management, could bebetter viewed, when referred from the individual financial statements.

Global Reports LLC


I 167


NOTES ON ACCOUNTS

1 A In terms of AS 21 and AS 23 the consolidated financialstatements present the consolidated accounts ofCrompton Greaves Limited with its followingSubsidiaries and Associates.

Country of Proportion of Proportion ofIncorporation Ownership Ownership

Interest Interest% %

Subsidiaries

(a) CG Capital & Investments Limited India 100.00 100.00

(b) CG PPI Adhesive Products Limited India 81.42 81.42

(c) CTR Manufacturing Industries Limited India 82.06 82.06

Associates

(a) Brook Crompton Greaves Limited India 49.00 49.00

(b) CG Lucy Switchgears Limited India 50.00 50.00

(c) CG Maersk Information TechnologyPrivate Limited India 50.00 50.00

(d) CG Actaris Electricity Management Limited(Formerly CG Schlumberger India 49.00 49.00Electricity Management Limited)

(e) CG Smith Software Private Limited India 50.00 50.00

(f) Hitachi CG Motor EngineeringPrivate Limited India 49.00 49.00

(g) International Components India Limited India 50.00 50.00

B In case of CG Maersk Information Technology PrivateLimited financial statements drawn upto 31stDecember 2002 have been considered. There wereno material adjustments required for any significantevents or transactions between the associate and anyof the other group companies between the said dateand 31st March 2003.

C For the purpose of Consolidation in accordance withAS 23, Certain Associates which do not fulfill thecriterian specified in the said Accounting Standardhave been excluded. Investments in such associateshave been accounted for in accordance with AS 13.The list of Associates not included in the ConsolidatedFinancial Statements are as under.

(a) Karamchand Tapar (Africa) Limited, Mauritius

(b) Paxonet Communications Inc. USA

(c) Power Equipment Limited, Dubai

Global Reports LLC


I 168


NOTES ON ACCOUNTS

D For the purposes of disclosure pertaining to AS 27,all Joint Venture Companies have been consideredas Associates since these Joint Venture Companiesdo not fulfill the criterian specified in AS 27.

E Since the accounts of CG Actaris ElectricityManagement Ltd. are in the process of beingcompiled and audited, for the year ending 31stMarch, 2003, the same have not been consideredfor consolidation but accounted for in accordancewith AS-13.

2 No provision has been made for(a) Income Tax demands against which the Company

has preferred appeals. Similar matters involved inthe appeals have been decided in favour of thecompany in the past. 1.98 0.43

(b) Excise Duty demands which have been disputedby the Company (Net of Income Tax) 8.85 11.56

(c) Sales Tax demands which have been disputed bythe Company (Net of Income Tax) 1.83 1.86

3 Contingent Liability in respect of :

(a) Claims against the Company not acknowledgedas debts (Net of Income Tax) 0.65 1.12

(b) Show Cause Notice issued by the CustomsAuthorities for levy of penalty under Section 127 of theCustoms Act, which is in dispute and an appeal isfiled by the Company with Customs, Central Exciseand (Gold Control) Appeallate Tribunal (CEGAT),which is pending 0.00 0.05

(c) Bills Discounted 66.83 71.72

(d) Guarantees by the Compnay for obligations toother persons 19.71 28.34

(f) Income Tax Appeals / Reference Applications madeby the Income Tax Department against the orderspassed by the Appellate Authorities in favour of theCompany. 9.36 9.36

(g) Excise matters in dispute decided in favour of theCompany at Appellate Level for which the Departmentis in Appeal before CEGAT 6.28 4.58

4 Provision for Tax includes wealth tax provisions made underthe Wealth Tax Act, 1957. 0.25 0.25

5 Estimated amounts of contracts remaining to be executedon Capital Account and not provided for (Net of advances) 3.06 2.12

Global Reports LLC


I 169

6 Sales include

(a) Increase / Decrease (-) in Construction Work-in-Progress

(i) Closing Work-in-Progress 109.71 43.54

(ii) Less : Opening Work-in-Progress 43.54 164.07

66.17 -120.53

And are net of

(b) Brokerage and Commission 10.40 13.80

(c) Cash Discount 7.34 6.33

7 Interest and Commitment Charges include interest on(a) Fixed Loans 30.20 31.42(b) Debentures 8.17 11.38(c) Others 28.68 36.60

67.05 79.40(d) Less: Interest Income (Including tax diducted at

source. Rs.0.20 crores; previous year Rs.0.11 crores) 1.92 3.73

65.13 75.67

8 Advances recoverable in cash or in kind or for value to be received include :(a) Advance against allotment of shares 1.16 1.16(b) Rent Deposit with Directors 0.20 0.20(c) Due by an officer Rs. NIL (Previous Year Rs.7170) 0.00 0.00

(Maximum amount outstanding at any timeduring the year Rs.37170; previous year Rs.157170).

9 Arrears of preferential dividend of amalgamated companypayable in nine equal instalments in terms of BIFROrder and the Scheme of Amalgamation. 0.05 0.10

10 Exceptional items in the Profit & Loss Account pertain to :

(a) Advances written off, being overdue intercorporate depositsand interest due thereon from Bharat Starch Industries Ltd.(BSIL) in terms of consent to a scheme of arrangementfiled by BSIL with the Hon’ble High Court of Gujarat pursuantto which BSIL would cease to exist. 0.00 -17.27

(b) Advances written off, being overdue inter corporate depositsand interest due thereon from JCT Electronics Limited, interms of a scheme of arrangement filed by the company,duly approved by Hon’ble High Court of Punjab & Haryana. 0.00 -17.25

(c) Profit on sale of Land and Building situated at Worli, Mumbai 0.00 30.95

(d) Profit on sale of investments in CG Igarashi MotorsLtd. and CG Newage Electrical Ltd. and in lieu thereof 30.32 0.00

(e) Loss on sale of other investments -12.50 0.00

(f) Diminition in value of Advances -2.73 0.00

(g) Decline in value of certain Long Term Investments -11.97 0.00

3.12 -3.57


NOTES ON ACCOUNTS

Global Reports LLC


I 170


NOTES ON ACCOUNTS

11 (a) From the year 2001-2002; in order to comply with the requirementsof Section 211(3C) of the Companies Act, 1956; consequent toAccounting Standard 22 “Accounting for Taxes on Income”issued by the Institute of Chartered Accountants of India andmade mandatory in respect of accounting year commencing onor after 1st April, 2001, the Company has followed the deferredtax method of accounting. Accordingly the company has accountedfor deferred tax asset amounting to Rs.90.25 crores as at1st April, 2001. Deferred tax liability for the current yearamounting to Rs.8.81 crores (previous year Rs.2.45 crores)has been charged to Profit & Loss Account.

(b) Deferred Tax Asset & liability are attributable to the following items:

Deferred Tax Asset

Expenses allowable for tax purposes when paid / onpayment of TDS 4.37 1.19Unabsorbed carried forward tax losses / depreciation 130.70 166.57Others 4.21 2.96

139.28 170.72Deferred Tax LiabilityDifference between Tax and Book Written Down Value -58.74 -72.57Expenditure under Voluntary Retirement Scheme of earlier years -1.88 -8.93Others 0.32 -1.42

-60.30 -82.92

Net Deffered Tax Asset / (Liability) 78.98 87.80

12 (a) In respect of disclosure under “Accounting Standard 18” regardingreporting under related party transactions, the Company has obtainedlegal opinion for matters required to be disclosed under the saidStandard and accordingly information required under the Standard hasbeen given.

(b) Disclosures as required by Accounting Standard 18 “Related Party Disclosure”in respect of transactions for the year ended 31st March, 2003 are as under :

1 Relationships:(i) Associates :

(a) CG Actaris Electricity Management Limited(Formerly CG Schlumberger Electricity Management Limited)

(b) CG Igarashi Motors Limited (relationship ceased from 19.09.2002)(c) CG Newage Electrical Limited (relationship ceased from 05.07.2002)(d) Karamchand Thapar (Africa) Limited, Mauritius(e) Paxonet Communications Inc. USA(f) Power Equipment Limited, Dubai

(ii) Key Management PersonnelS.M. Trehan - Managing Director

(iii) Relatives of Managing Director(a) Mrs Mira Trehan(b) Mr Amitoj Trehan(c) Ms Ritambhara Trehan(d) Dr Om Prakash Trehan(e) Mrs Vimla Trehan(f) Mrs Navnidhi Nagrath(g) Mrs Madhur Chopra

Global Reports LLC


I 171


NOTES ON ACCOUNTS2 The following transactions were carried out with the

related parties in the ordinary course of business:

Sl. Transactions Associate AssociateNo. Companies Companies1 Sales and service revenue 9.77 7.78

2 Commission received 0.00 1.15

3 Interest income 0.00 0.00

4 Dividend received 0.00 3.99

5 Rent income 0.00 0.00

6 Purchases 0.05 2.87

7 Interest expense 0.00 1.20

8 Inter corporate deposits taken Balance as at the year end 0.00 9.35

9 Inter corporate deposits placed Balance as at the year end 0.00 0.00

10 Due to related parties as at year-end 0.00 12.19

11 Due from related parties as at year-end 0.00 0.40

3 Remuneration to Managing Directors, Key Managerial Personnel 0.68 0.39

13 In view of Accounting Standard 20 on “Earnings per Share” issued byThe Institute of Chartered Accountants of India and made mandatoryw.e.f. 1st April, 2001, the following are the disclosures in respect of thecalculation of earnings per share for the year ended 31st March, 2003.

Particulars(a) Numerator - Profit/(Loss) after tax, Minority Interest

and Share of Associate Companies Rs. 228918338 84068932(b) Denominator - Weighted average number of equity shares Nos. 52366656 52366656(c) Earnings per share (Basic & Diluted)

= Numerator / Denominator Rs. 4.37 1.61

14 In view of Accounting Standard 17 on “Segment Reporting”issued by The Institute of Chartered Accountants of Indiaand made mandatory w.e.f.1st April 2001, the disclosure inrespect of Segment information is as given below:

Global Reports LLC


I 172

A Business Segment 31.03.2002Rs. Crores

Power Consumer Industrial Digital Others Unallocable TotalSystems Products Systems Corporate

Assets (*)

Segment Revenue 617.69 500.24 345.25 168.05 0.00 1631.23Add : Inter-SegmentRevenue 0.22 1.40 13.51 1.05 -16.18 0.00

Total 617.91 501.64 358.76 169.10 -16.18 1631.23

Segment Result 55.23 42.95 19.88 8.99 1.57 128.62Less : Interest 75.67Less : Other UnallocableExpenditure Net ofUnallocable Income 43.20

Profit Before Tax 9.75

Capital EmployedSegment Assets 490.95 265.09 254.21 118.58 0.00 357.72 1486.55Segment Liabilities 217.85 131.54 95.01 68.15 0.00 49.22 561.77

Net Assets 273.10 133.55 159.20 50.43 0.00 308.50 924.78

Capital Expenditure -0.36 2.52 3.43 0.35 0.00 7.49 13.43Depreciation 14.90 9.17 13.56 1.25 0.00 6.30 45.18Non Cash Expenditure 5.53 11.91 8.79 1.33 0.00 0.69 28.25

(*) Unallocable Corporate Assets comprises Assets and Liabilities which cannot be allocated to the segments.Tax Credit Asset not considered in Capital Employed above

A Business Segment 31.03.2003Rs. Crores

Power Consumer Industrial Digital Others Unallocable TotalSystems Products Systems Corporate

Assets (*)

Segment Revenue 713.25 541.50 376.54 126.21 0.00 1757.50Add : Inter-SegmentRevenue 5.92 1.66 15.89 0.03 -23.50 0.00

Total 719.17 543.16 392.43 126.24 -23.50 1757.50

Segment Result 65.58 43.95 23.37 3.65 -1.16 0.00 135.39Less : Interest 65.13Less : Other UnallocableExpenditure Net ofUnallocable Income 32.76

Profit Before Tax 37.50

Capital EmployedSegment Assets 515.73 247.59 247.97 87.46 0.00 317.81 1416.56Segment Liabilities 236.25 128.01 113.76 50.63 0.00 51.85 580.50

Net Assets 279.48 119.58 134.21 36.83 0.00 265.96 836.06

Capital Expenditure 13.37 -0.13 7.12 0.66 0.00 3.55 24.57Depreciation 15.87 9.70 13.96 2.60 0.00 4.13 46.26Non Cash Expenditure 6.95 11.88 8.99 1.20 0.00 0.79 29.81

Global Reports LLC


I 173

B. Secondary Segment Reporting (Geographical Segments)

(a) The distribution of the company’s sales by geographicalmarket is as under:

Sales Revenue :

India 1550.51 1419.26

Outside India 206.99 211.97

Total 1757.50 1631.23

(b) The company’s tangible fixed assets are located entirely in India.

Segment Revenue and Results

The expenses which are not directly attributable to the businesssegment are shown as unallocable expenditure

Segment Assets and Liabilities

Segment assets include all operating assets used by the businesssegment and mainly consist of fixed assets, debtors and inventories.Segment liabilities primarily include creditors and other liabilities.Common Assets and Liabilities that cannot be allocated to any ofthe segments are shown as a part of unallocable assets / liabilities.

Primary Segment

In the opinion of the management, the business segments comprisethe following:

Power System : Transformer, Switchgear, Turnkey ProjectsConsumer Products: Fans, Luminaires, Light sources and PumpsIndustrial systems : Electric Motors and AlternatorsDigital : Networking and Telecommunication

15 Miscellaneous Income includes profit on sale of fixed assets Rs.3.19crores (previous year Rs.1.99 crores) and Loss on sale of investmentsRs.NIL (previous year Rs.4.25 crores)

16 During the year Crompton Greaves Limited divested its holdings of38% in CG Newage Electricals Limited and CG Capital has divested itsholding of 26.05% in CG Igarashi Motors Limited. Since 2002-03 is thetransitional year for inclusion of the results of associate companies inthe consolidated financial statements the results of the aforesaidcompanies have not been included because during the year theinvestments were held with a view to their subsequent disposal.

17 The Consolidated Cash Flow was not prepared for the year ending31st March 2002 being the first year of consolidation. Therefore thefigures for the previous year have not been given in the consolidatedcash flow for the year ending 31st March 2003.


NOTES ON ACCOUNTS

Global Reports LLC


I 174

18 In order to facilitate comparison, figures for the previous year havebeen amended to include the results of Associate Companies.

19 Figures pertaining to the Subsidiary Companies have been reclassifiedwherever necessary to bring them in line with the Parent Company’sfinancial statements.


As per our report attached.

SHARP & TANNANChartered AccountantsBy the hand of B.R. Jaju S.M. Trehan

Chief Financial Officer Managing Director

L. Vaidyanathan W. Henriques K.K. NohriaPartner Secretary Chairman

Global Reports LLC


I 175


31-3-2003Rs.’000

[A] CASH FLOWS FROM OPERATING ACTIVITIESNet profit before tax and exceptional items 343,870Depreciation 462,579Interest Net 651,283Investment income -3,465Miscellaneous Expenditure written off 46,063Exchange Premium 24,230Profit(-)/Loss(+) on sale of fixed assets -31,929Employee Voluntary Retirement Scheme 252,057

1,400,818

Operating profit before working capital changes 1,744,688

Adjustments for:Trade and other receivables 13,871Inventories -140,407Trade and other payables 171,680Leave encashment provision 15,621

60,765

Cash generated from (+)/Used in (-) operations 1,805,453

Direct taxes Paid (-) / Refund received (+) -19,501

Cash flow before exceptional items 1,785,952

Advance written off -27,300Employee Voluntary Retirement Scheme Incurred -56,606Miscellaneous Expenditure Incurred -43,271Minority Interest in share of profits -1,186Share of Profit / (Loss) of Associate Companies -43,817

-172,180

Cash generated from / (Used in) operations [A] 1,613,772

[B] CASH FLOW FROM INVESTING ACTIVITIESAdd: Inflows from investing activities

Sale of fixed assets 53,585Sale of investments (Gross) 532,327Government Subsidy Received 1,000Change in Minority Interest 1,167Change in Investment in Associate Companies 43,817Investment income 3,465

635,361Less : Outflows from investing activities

Purchase of fixed assets -268,708Purchase of investments -218,493

-487,201

Net cash used in investing activities [B] 148,160

Global Reports LLC


I 176

[C] CASH FLOW FROM FINANCING ACTIVITIESAdd: Inflows from financing activities

Secured loans 0Unsecured loans1 323,514

323,514Less: Outflows from financing activities

Secured Loans -535,215Unsecured Loans 0Interest paid (net) -651,283

-1,186,498

Net cash generated from financing activities [C] -862,984

NET CHANGES IN CASH AND CASH EQUIVALENT(A+B+C) 898,948

Cash and cash equivalents - Opening balance -2,183,374

Cash and cash equivalents - Closing balance -1,284,426

ANNEXURE

BREAK UP OF CASH AND CASH EQUIVALENTSCash and bank balances 567,575Bank overdraft -1,852,001

-1,284,426

NOTES:1 The cash flow statement has been prepared under the indirect method as set out in Accounting Standard

- 3 “Cash Flow Statements” issued by The Institute of Chartered Accountants of India except in case ofdividend, purchase and sale of investments which have been considered on the basis of actual movementsof cash and cash equivalents with corresponding adjustments in assets and liabilities.

2 Additions to fixed assets are stated inclusive of movements of capital work-in-progress between thebeginning and the end of the year and treated as part of investing activities.

3 Figures for the previous year have been re-grouped/re-classified wherever necessary.


B.R. Jaju W. Henriques S. M. Trehan K.K. NohriaChief Financial Officer Secretary Managing Director Chairman

AUDITORS’ CERTIFICATEWe have examined the attached cash flow statement of Crompton Greaves Limited for the year ended 31stMarch, 2003. The statement has been prepared by the Company in accordance with the requirements ofClause 32 of the Listing Agreement with the Stock Exchanges and is based on and in agreement with thecorresponding Profit and Loss Account and Balance Sheet of the Company covered by our report of 22ndMay, 2003 to the members of the Company.

Mumbai, 22nd May, 2003 SHARP & TANNANChartered Accountants


Membership No. 16368


31-3-2003Rs.’000

Global Reports LLC


I 177


Products and Services

Global Reports LLC


I 178

Industrial Systems

Motors

• AC Motors from 7 Watts to 10 Megawatts --All types including Flame Proof andIncreased Safety

• DC Motors• Alternators / AC Generators• Stampings & Laminations, Tools

Rail Transportation

• Traction Motors & Alternators• Traction Controls for Diesel Electric Multiple

Units• Power & Control Electronics for Locomotives• 25 kVA Inverters

Signalling Products• Signalling Relays• Point Machines• Universal Axle Counters

Consumer Products

Lighting

Lamps• Fluorescent Tube Lights, Compact

Fluorescent & T5 Lamps• Incandescent Lamps• Reflux Lamps, Reflux Systems• High Pressure Mercury/Sodium Vapour

Lamps• Metal Halide Lamps

Luminaires & Accessories• Mirror Optics• Streetlights, Floodlights• Domestic, Commercial• Industrial

Fans• Ceiling Fans in various models• Table, Pedestal and Wall Mounting Fans in

metal & plastic• Kitchen Fresh Air Fans• Cooler Kits• Industrial Fans: Exhaust Fan and Air

Circulator• Special Purpose Fans

PRODUCTS & SERVICES

Power Systems

Transformers• Power Transformers

• Industrial Transformers

• Amorphous Core Transformers

• Dry Type Transformers

• Freight Loco Transformers

• Furnace Transformers

• Rectifier Transformers

• Reactors

Switchgear• Instrument Transformers up to 400 kV

• Condenser Bushings

• Coupling/Grading Capacitors

• Bulk Oil, Vacuum and Gas Circuit

Breakers up to 400 kV

• On-load tap Changers

• Lightening Arresters

• Vacuum Interrupters

• MV & LT Vacuum Contactors

Capacitors• LT & HT Capacitors (MPP & APP)

• APFC Panels

• MFD Condensors

• Reactive Power Control Panels

(Wind Generation)

• Power Quality Solutions

Engineering Projects• Systems Engineering

• Projects on turnkey basis from concept to

commissioning: Power Generation,

Transmission & Distribution - 400 Volts

to 400 kV

• Industrial Electrification for Process Industries,

Power, Cement, Paper, Metallurgy, Steel

Petrochemicals, etc

• Control and Automation Projects for

Substations

• Railway Traction Substations

• Railway Overhead Electrification

Global Reports LLC


I 179

PRODUCTS & SERVICES

Pumps

• Centrifugal Monobloc Pumpsets• Self Priming Pumpsets - Monobloc &

Coupled• Submersible Pumpsets for 100, 150, 200 & 250

mm Borewell• Jet Centrifugal Pumpsets - Single or Multi

Stage• De-watering Pumpsets• Vertical In-line Pumpsets• Open well Submersible Pumpsets• Diesel Engines & Diesel Engine driven

Pumpsets• Compressor Borewell Pumpsets• Tank Compressor

International

• Exports of all Crompton Greavesmanufactured and factored products directlyand via global EPCs operating from India

Digital

Informatics

• Software Development and Networking• Value added Services and System

Integration• Consultancy Services

Telecommunications

• Public Switching Products- CDOT - Single Base Module (SBM) Rural

Automatic Exchanges- CDOT - MAX - L Exchanges up to 10,000

Lines- MAX - XL Exchanges up to 40,000 Lines

• Private Switching Products- Digital EPABX Systems - CORAL range

upto 6000 Ports (Tadiran Telecom, Israel)- Maintenance support for OKI EPABX

Systems

• Transmission Products- 2/8 Mbps OLTE and MUX Equipments- 2/34 Optimux Equipments- 2/140 Optimux Equipments- STM -1 & STM - 4 Equipments- CDOT: TDMA - PMP Digital Multi Access- Rural Radio (Digital MARR) Equipments

• Access Products- CorDECT Wireless Local Loop (WLL)

Equipments- High Bit rate Digital Subscriber Line

(HDSL) Equipments- Optical Modems

• Terminal Equipments- Electronic Push Button Telephones

Global Reports LLC


Establishments

I 180


Global Reports LLC


I 181

Registered Office

6th Floor, CG House, Dr. Annie Besant Road,Prabhadevi, Mumbai 400 025Tel. (022) 24237777 Fax (022) 24237788e-mail: [email protected]

Works

Power Systems• Kanjur, Bhandup, Mumbai 400 042

Tel.: (022) 25782451Fax: (022) 25783271, 25783216e-mail: [email protected]

• A3, MIDC Area, Ambad, Nashik 422 010Tel.: (0253) 2382271/75 Fax:(0253) 2381247e-mail: [email protected]

• D-2, MIDC, Waluj, Aurangabad 431 136Tel.: (0240) 2554662, 2554371/72Fax: (0240) 2554697e-mail: [email protected]

• T1+T2 MPAKVN Industrial AreaMalanpur (Dist. Bhind) M.P. 477 716Tel.: (07539) 283502-7 Fax: (07539) 283585e-mail: [email protected]

• Plot No. 29-32 New Industrial Area No. 1, AKVN,Mandideep 462 046 M.P.Tel.: (07480) 233306/40/48 Fax: (07480) 233149e-mail: [email protected]

Industrial Systems• Kanjur, Bhandup, Mumbai 400 042

Tel.: (022) 25782451Large & Traction Machines DivisionFax: (022) 25783845 e-mail: [email protected] DivisionFax: (022) 25787970 e-mail: vks@ cgl.co.in

• A/6-2, MIDC Industrial Area, Ahmednagar 414 111Tel.: (0241) 2777372 Fax: (0241) 2777508e-mail: [email protected]

• Plot No. 4, Gat No. 627/2Village Kuruli, Near Chakan, Pune Nashik Road,Pune 410 501Tel.: (02135) 254642 Fax: (02135) 254641e-mail: [email protected]

• D-5 Industrial Area MPAKVN,Mandideep 462 046 M.P.Tel.: (07480) 233116, 233118Fax: (07480) 503119e-mail: [email protected]

• 11B, Industrial Area 1,Pithampur 454 775, Dist. Dhar, M.P.Tel.: (07292) 253194, 253258, 253197Fax: (07292) 253211e-mail: [email protected]

• D-2-21, 22, 23 Tivim Industrial EstateKasarwada, Bardez, Goa 403 526Tel.: (0832) 2257639, 2257409 Fax: (0832) 2257207e-mail: [email protected]

• 196-198, Kundaim Industrial EstateKundaim, Ponda, Goa 403 115Tel.: (0832) 2395510 Fax: (0832) 2395377e-mail: [email protected]

Consumer Products• Luminaire Division,

2nd Floor, Central Building,Kanjur Marg (East), Mumbai 400 042Tel.: (022) 25782451 Fax: (022) 25787283 /25783027e-mail: [email protected]

• Baroda Lamp Works,Kural Village, Padra TalukaPadara - Jambusar Road,Dist Baroda 391 430, GujaratTel.: (02662) 242323/242278Fax: (02662) 242326e-mail: [email protected]

• A-28, MIDC, Ahmednagar 414 111Tel.: (0241) 2777152/155 Fax: (0241) 2777893e-mail: [email protected]

• 214-A Kundaim Industrial Estate,Kundaim, Goa 403 115Tel.: (0832) 2395206, 2395304Fax: (0832) 2395305e-mail: [email protected]

ESTABLISHMENTS

Global Reports LLC


I 182

• Plot No. 1 Goa IDC Industrial Estate, BethoraPonda, Goa 403 409Tel.: (0832) 2330005, 2330203, 2330235Fax: (0832) 2313155e-mail: [email protected]

Digital Group

• 10A, Jigani Industrial Area, Jigani, AnekalTaluk, Bangalore Rural, Bangalore 562 106Tel.: (080) 7825206/7 Fax: (080) 7825205

• 11-A, Industrial Area No.1, PithampurDist. Dhar M.P. 454 775Tel.: (07292) 253035, 253071Fax: (07292) 253213

International Division

• “Jagruti” 2nd Floor, Kanjurmarg (East)Mumbai 400 042Tel.: (022) 25782451-7, 25784211-19, 25796296Fax: (022) 25774066e-mail: [email protected]

Engineering Projects Division

• Bombay Mutual Building, 4th Floor, 232 NSCBose Road, Chennai 600 001Tel.: (044) 25341941Fax: (044) 25341048, 25342024e-mail: [email protected]

Regional Sales Offices

Northern Region

• Jaipur: Church Road, PO Box 173, Jaipur 302 001Tel.: (0141) 2376919, 2376307, 2365604Fax: (0141) 2365371e-mail: [email protected]

[email protected]

• Jalandhar: 416-417, 3rd Floor, Prestige Chamber,GT Road, Jalandhar 144001Tel.: (0181) 2459467, 2459478, 2223801, 5083744Fax: (0181) 2226342e-mail: [email protected]

• Lucknow: Saran Chambers II3rd Floor, 5 Park Road, Lucknow 226 001Tel.: (0522) 2239443, 2237007/8, 2237426Fax: (0522) 2237009e-mail: [email protected]

[email protected]

• New Delhi: Vandana Building, 11, Tolstoy MargNew Delhi 110 001Tel.: (011) 23354514/15, 23730445, 23352161/2Fax: (011) 23324360, 23352134e-mail: [email protected]

• New Delhi: Rail Transportation Systems Division,Vandana Building, 11, Tolstoy MargNew Delhi 110 001Tel.: (011) 23352147 Fax: (011) 23352134e-mail: [email protected]

• New Delhi: Rishyamook Building, Block B 2nd Floor85-A, Punchkuin Road, New Delhi 110 001Tel.: (011) 23348236/41, 23348425/26Fax: (011) 23744954

Eastern Region

• Kolkata: 50, Chowringhee Road, Kolkata 700 071Tel: (033) 22829681 - 85Fax: (033) 22829942, 22824818e-mail: [email protected]

• Kolkata: Digital - Eastern Region50, Chowringhee Road, Kolkata 700 071Tel: (033) 22829681 - 85, 22823208Fax: (033) 22827761e-mail: [email protected]

• Bhubaneswar: Janpath Tower, 3rd Floor,Ashok Nagar, Unit II, Bhubaneswar 751 009Tel.: (0674) 2533647, 2531128, 2531429Fax: (0674) 2533521e-mail: [email protected]

Western Region

• Ahmedabad: 909-916, Sakar II, Near EllisBridge, Ahmedabad 380 006

Tel.: (079) 6581729, 6582780, 6587328Fax: (079) 6586047e-mail: [email protected]

• Mumbai: Western Region,Kanjur Marg (E), Mumbai 400 042Tel.: (022) 25782451, 25791990Fax: (022) 25794882, 25795158e-mail: [email protected]

• Mumbai: Digital - Western Region,Kanjur Works, Kanjur Marg (E)Mumbai 400 042Tel.: (022) 25787733, 25787636, 25787161Fax: (022) 25784122

Global Reports LLC


I 183

• Indore: 103-B, Apollo Trade Centre,2B, Rajgarh Kothi, Mumbai Agra Road,Indore 452 001Tel.: (0731) 2498269, 2498271, 2498276Fax: (0731) 5067146e-mail: [email protected]

• Nagpur: (Satellite Office):3, West High Court Road,Lal Bahadur Shastri Chowk,Darampeth, Nagpur 440010Tel.: (0712) 2531271, 2560870-71Fax: (0712) 2537196e-mail: [email protected]

• Pune: Surya Bhavan, 5th Floor, FergussonCollege Road, Pune 411 005Tel.: (020) 25534675-77 Fax: (020) 25534684e-mail: [email protected]

Southern Region

• Bangalore: Lakshmi Mansion, Ground Floor,4/02, 22nd Cross, 8th Main, III Block, Jayanagar,Bangalore 560 011Tel.: (080) 6533926 to 3928/30, 6534170 & 73Fax: (080) 6534174e-mail: [email protected]

• Bangalore: Digital - Southern RegionLakshmi Mansion, Ground Floor,4/02, 22nd Cross, 8th Main, III Block, Jayanagar,Bangalore 560 011Tel.: (080) 6646961/81, 6340595Fax: (080) 6346130, 6647131

• Coimbatore (Satellite Office):No. 658-664, Rajalakshmi Plaza, 100ft. RoadGandipuram, Coimbatore 641 037Tel: (0422) 2526453 / 2521829, 2521830Fax: (0422) 2525334

• Cochin: Cherupushpam Building, 5th Floor,300-6, Shanmugam Road, Ernakulam,Cochin 682 031Tel.: (0484) 2370860 - 63, 2360240Fax: (0484) 2373738e-mail: [email protected]

• Chennai: ‘Crompton House’ 3, Dr. M G R Salai,(Kodambakkam High Road), Nungambakkam,Chennai 600 034Tel.: (044) 28257375 Fax: (044) 28231973/1974e-mail: [email protected]

• Madurai (Satellite Office):2,3, Mangayakarasi Women’s College Road,Paravi, Madurai 625402Tel.: (0452) 2667771Fax: (0452) 2667772

• Secunderabad: Minerva House, 4th Floor, 94,Sarojini Devi Road, Secunderabad 500 003Tel.: (040) 27847270, 27847090Fax: (040) 27842921e-mail: [email protected]

• Vijayawada (Satellite Office):G-3, Vijaya Apartments, MoghulrajpuramNear Madhu Kalyana MandapamVijayawada 520010Tel.: (0866) 2476783/3561 Fax: (0866) 2473561

Service Centres

Northern Region

• 6/12, Kirti Nagar Industrial Area,New Delhi 110 015Tel.: (011) 25173139, 25173149, 25916311Fax: (011) 25173148e-mail: [email protected]

• Church Road, PO Box 173, Jaipur 302 001Tel.: (0141) 2365604 Fax: (0141) 2365371e-mail: [email protected]

• Village Khajurla, Outside Jalandhar Octroi Post,Jalandhar - Phagwara Road, Jalandhar 144 001Tel.: (0181) 2261009, 2260387e-mail: [email protected]

• Plot No.1, Industrial Area, Phase-1Chandigarh 160 002Tel.: (0172) 657402e-mail: [email protected]

• D-8, Transport Nagar, Lucknow 226 012Tel.: (0522) 2433132, 2432345e-mail: [email protected] [email protected]

Eastern Region

• 21, RN Mukherjee Road, Kolkata 700 001Tel.: (033) 22489160, 22488911Fax: (033) 22489737e-mail: [email protected]

Global Reports LLC


I 184

• Janpath Tower (Basement), Ashok Nagar, Unit II,Bhubaneswar 751 009Tel.: (0674) 2531592 Fax: (0674) 2533521e-mail: [email protected]

• ‘Vishwasadan’, Opposite Narmada Apartment,Behind Jeevandeep Building, Exhibition Road,Patna 800 001Tel.: (0612) 2239405 Fax: (0612) 2229535e-mail: [email protected]

Western Region

• 909-916, Sakar II, Near Ellis Bridge Police StationAhmedabad 380006Tel.: (079) 6581729/2780/7328Fax: (079) 6586047e-mail: [email protected]

• Western Region, Kanjur Marg (E), Mumbai 400 042Tel.: (022) 25782451, 25791990Fax: (022) 25794882, 25795158e-mail: [email protected]

• 103-B, Apollo Trade Centre,2B, Rajgarh Kothi, Mumbai Agra Road,Indore 452 001Tel.: (0731) 2498269, 2498271, 2498276Fax: (0731) 5067146e-mail: [email protected]

• 3, West High Court Road,Lal Bahadur Shastri Chowk,Darampeth, Nagpur 440 010Tel.: (0712) 2531271, 2560870/71Fax: (0712) 2537196e-mail: [email protected]

• Surya Bhavan, 5th Floor,Fergusson College Road,Pune 411 005Tel.: (020) 5534675-77Fax: (020) 5534684e-mail: [email protected]

Southern Region

• ‘Crompton House’, 3A, Dr. MGR Salai(Kodambakkam High Road)Nungambakkam High Road,Chennai 600 034Tel.: (044) 28274610 Fax.: (044) 28258565e-mail: [email protected]

• No. 26, 2nd Main Road, Trustpuram,Chennai 600024Tel.: (044) 24724096

• 20, II Main Road, New Timber Yard Layout,Mysore Road, Bangalore 560 026Tel.: (080) 6755723/ 6755727 Fax: (080) 6755723e-mail: [email protected]

• No. 9C Jigani Industrial Area,Jigani Anekal Taluk,Bangalore 562 106Tel.: (080) 7825203, 7826057, 7826421Fax: (080) 7825205

• 1st Floor, 132, Industrial Area, Rasulpura,Secunderabad 500 003Tel.: (040) 27905938, 55269001e-mail: [email protected]

• 35/1872, South Janata Road, PalarivattomCochin 682 025Tel.: (0484) 2338102, 2338856e-mail: [email protected]

• Sree Rajalakshmi Plaza,658, Dr. Rajendra Prasad Road,(100 Feet Road), Gandhipuram,Coimbatore 641 037Tel.: (0422) 2521829/830Fax: (0422) 2525334e-mail: [email protected]

Global Reports LLC

Corporate - Morningstar

Documents

Transcript of Corporate - Morningstar