2007-2008 - Cgglobal.com

MANAGEMENT
DISCUSSION
& ANALYSIS
Seeking greater global opportunities,
growing its various businesses, increasing
capacities, improving operational
efficiencies and controlling input costs at
a time of high commodity prices — these
have been some of the focus areas for
Crompton Greaves during 2007-08
Overview
Over the last five years, Crompton Greaves
Ltd (‘Crompton Greaves’ or ‘the Company’)
has successfully executed several initiatives:
creating synergies, integration, growth and a
transformation from being a first-rate Indian
company to a world leader in its business lines.
Thus, despite operating in an increasingly
competitive global environment, the Company
has been consistently reaping benefits from
these efforts and achieving higher growth and
profitability.
As stated in last year’s Annual Report,
Crompton Greaves, through its 100%
subsidiary CG International BV (Netherlands),
had executed an agreement in May 2007 to
purchase the shares of Microsol Holdings
Limited (‘Microsol’) for an enterprise value of €
10.50 million. The purchase was completed on
28 May 2007. Thus, the consolidated financials
of Crompton Greaves reflect Microsol’s
performance from that date. Headquartered
in Ireland and with a substantial presence in
Europe, Microsol provides automated solutions
for medium and high voltage substations — for
new units as well as for retrofitting. Automated
solutions was one of the missing pieces in the
Crompton Greaves’ portfolio. With Microsol,
the Company can now become a full solutions
provider. Moreover, since Microsol’s solutions
are based on open architecture software,
these can be aligned to any product, including
those of competitors — thus making it an ideal
platform for retrofitting of substations.
To enhance its strengths even further, in
February 2008, the Company, through CG
International BV, acquired the balance 40%
voting share capital in PT Pauwels Trafo Asia,
Indonesia, for US$ 10.70 million. Therefore, with
effect from 13 February 2008, the Company,
through its subsidiaries now owns 100% of the
voting share capital of PT Pauwels Trafo Asia.
Seeking greater global opportunities,
growing its various businesses, increasing
capacities, improving operational efficiencies
and controlling input costs at a time of high
commodity prices — these have been some of
the focus areas for Crompton Greaves during
2007-08. The consolidated financial results on
the next page reflect the Company’s successes
in these endeavours.
Strategic Business Units
Crompton Greaves has three Strategic Business
Units (SBUs) : Power Systems, Industrial Systems
and Consumer Products. Chart A gives the
comparative shares of business of the three
SBUs on a consolidated global basis for 2007-08
compared with 2006-07.
8 ANNUAL REPORT 2007–2008 CROMPTON GREAVES LIMITED