2003-2004 - Cgglobal.com

Exports
Total exports during the current year were Rs. 286 crores (CIF, including deemed
exports of Rs. 101 crores) compared with Rs. 267 crores (including deemed exports of
Rs. 64 crores). Although physical exports declined during the current year, the surge
of domestic projects with export benefits resulted in a significant increase of 58 per
cent in deemed exports. This year was marked by the successful entry of the
Switchgear Group into the lucrative European market despite stiff International
competition. Other breakthrough entries for Switchgear were the Far East markets.
The Transformer Group continues to focus on its traditional markets and during the
year also successfully executed projects in additional countries within these markets.
The LT Motors Division achieved its highest ever annual exports sales of
approximately Rs. 16.47 crores through supplies to other motor manufacturers and
OEMs in South America, North America, Middle East and South East Asia. The
Unexecuted Order Book at the year end for physical exports was Rs. 180 crores, 13
per cent higher than Rs. 160 crores as at last year end, thus confirming the potential
for growth in physical exports for next year.
Joint Ventures
The brief particulars of the Company’s Joint Ventures as at 31st March, 2004, are
annexed as information to the Members.
Credit Rating
The improved operational and financial performance of the Company enabled it to
upgrade its credit rating from F1 to F1+, awarded by FITCH Ratings India, in respect
of its commercial paper/short term debt instruments programme, for a higher
quantum of Rs. 40 crores, as compared with Rs. 30 crores last year. This rating is the
highest credit rating that can be assigned to this category of instrument. In addition
to the above, FITCH also assigned an A+ (Ind) rating to the Company’s proposed long
term debt programme; this rating indicates adequate credit quality and timely
repayment capacity.
Treasury Management
The aggressive treasury management actions, initiated last year continued with
further intensity during the year, with the dual objectives of reducing borrowings and
also the average cost of borrowings. The above initiatives have resulted in reduction
of borrowings from Rs. 459 crores, to Rs. 334 crores, a net reduction of 27 per cent.
This has been a significant contributing factor in improving the Company’s debtequity
ratio from 1.6 last year to 1.0 this year. The interest and other financial costs
have also reduced considerably, from Rs. 64.43 crores last year to Rs. 38.48 crores
this year, a net reduction of 40 per cent. This has resulted in a favourable impact on
FITCH Ratings India
upgraded CG’s
credit rating from
F1 to F1+ for
short-term debt
instruments, the
highest credit
rating for this
category.
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