Ingersoll-Rand (India) Ltd

#MDStart#

MANAGEMENT DISCUSSION AND ANALYSIS

To

THE MEMBERS,

INGERSOLL - RAND (INDIA) LIMITED

Your Directors are pleased to submit the 102nd Annual Report along with the Audited Balance Sheet and Statement of Profit and Loss for the year ended March 31,2024, that is, the year under review.

1. FINANCIAL SUMMARY OF THE COMPANY

(Rupees in Lakhs)

2. MANAGEMENT DISCUSSION AND ANALYSIS

I. Overview of Ingersoll Rand in India

Ingersoll Rand is a leading manufacturer of Compressors and provider of services, enabling customers to create and execute strategies for their industrial transformation.

We are guided by our value system which motivates our attitudes and actions.

For over 100 years we have been waking up every day to help make life better. We are driven by an entrepreneurial spirit and an ownership mindset, inspiring us to care deeply about our neighbors and shared planet. We have a bias for action, take accountability and quickly bounce back from setbacks.

Ingersoll Rand had adopted "Ingersoll Rand Execution Excellence" (IRX) to fuel our performance and power our purpose of making life better for our employees, our customers, our shareholders and our planet.

Our strategic objective is to build a sustainable organization that remains relevant to the agenda of our customers, while creating growth opportunities for our employees, generating profitable growth for our investors and contributing to the communities that we operate in. There are numerous risks and challenges affecting our business. These are discussed in the Annual Report.

II. Industry Structure and Development:

Global Economic Scenario: Amidst the complex geopolitical landscape and the lingering effects of the COVID-19 pandemic, the global manufacturing sector crisis has emerged as a critical challenge, exacerbated by supply chain disruptions and soaring inflation rates. The ongoing Russia- Ukraine conflict has undoubtedly played a role in amplifying these issues. Geopolitical tensions have led to uncertainty, affecting the manufacturing output, supply chain and driving up costs, thereby triggering a domino effect on the global economy. As countries grapple with the consequences of this crisis, they have been forced to reassess their policies and prioritize more sustainable and resilient alternatives. In response, governments worldwide have taken proactive measures to mitigate the impacts of the crisis and build a more secure future.

Global Air Compressors market size was valued at USD 17,424.85 million in 2023 and is expected to expand at a compounded annual growth rate of 5.3% during the year, reaching USD 23,755.35 million by 2031. (source Fortune Business Insights)

India Economic Scenario: Indian economy has undergone many structural reforms that have strengthened its macroeconomic fundamentals. These reforms have led to India emerging as the fastest-growing economy among G20 economies and is expected to be one of the top three economic powers in the world within the next 5 years, backed by its robust democracy and strong partnerships.

The latest round of FICCI's Business Confidence Survey reported improved optimism among members of India Inc. The Overall Business Confidence Index surged to 70.9 in the year 2023-24, marking a substantial improvement from the 66.9 recorded in the previous year.

The government's economic policy focus was to restore India's growth potential by getting the financial sector back on track, facilitating economic activity by easing conditions for business and massively augmenting physical and digital infrastructure to enhance India's connectivity and, thus, the competitiveness of its manufacturing sector. With this vision to guide its policies, the government has undertaken diverse economic reforms to prepare the economy to grow at its potential by creating a business-friendly environment, improvising ease of living, and strengthening the governance systems and processes.

The government took targeted measures under the 'Make in India' initiative to bolster domestic manufacturing and promote self-reliance across various industries. Manufacturing is emerging as an integral pillar in the country's economic growth with the performance of key sectors like automotive, engineering, chemicals, pharmaceuticals and consumer durables showing increasing trend.

In the Interim Budget for 2024, Finance Minister Mrs. Nirmala Sitharaman presented key announcements for diverse industries, emphasizing growth and development. Highlights include continued expansion of airports and tourism projects, comprehensive support for dairy farmers, strategies for self-sufficiency in oilseeds and a new scheme for deep-tech technology in the defence sector.

India's Industrial Production touched 5.8% during financial year 2023-24 against 5.2 % in the preceding financial year. The manufacturing sector's growth accelerated to 5.2 % in March 2024 compared to 1.5 % a year ago, according to a statement by the Ministry of Statistics & Programme Implementation.

The Government has been promoting the manufacturing sector coupled with the inflow of FDI in India. The Government of India launched the "Make in India" initiative, which focuses on making India a manufacturing hub. This initiative aims to encourage foreign investors to invest in the manufacturing sector in the country through FDI.

As per the FDI factsheet released by the Department of Promotion of Industry and Internal Trade (DPIIT) India has registered a record total FDI of USD 33 billion in FY 2023-24. The rising number of manufacturing facility in the country would propel the demand for compressors in the coming years.

The Indian Compressor Market generated INR 15,530 lakh revenue in calendar year 2023 and it is projected to witness a compound annual growth rate of 6.6% during years 2024-2030, to reach INR 24,323 lakh by end of calendar year 2030. The growing automotive sector in India is expected to drive the demand for compressors. Additionally, the manufacturing sector in India is growing rapidly and is expected to reach INR 83,50,970 lakh by 2025 subject to the constant support from Government of India.

Despite the prevailing uncertainties in the global economy, India has shown remarkable resilience, emerging as the world's fifth-largest economy, surpassing the $4.12 trillion mark in 2024. India is projected to achieve robust growth rates at 6.6% to 7.0% in the coming years and outpacing developed nations like the US, EU and Japan. The Reserve Bank of India's prudent approach, with a modest increase in interest rates and a strong focus on domestic indicators, supports a GDP growth forecast of 7.6% to 8.0% for the fiscal year 2024-25. The Indian banking sector's solid fundamentals further contribute to sustaining economic growth.

Your Company's products are primarily sold to industries in the automotive, metals, pharmaceutical and textile sectors and these sectors have registered strong growth in the previous quarter.

III. Segment-wise operational performance: Air Solutions is the only segment in your Company's operations. The gross revenue of Air Solutions business for the year under review was Rs. 121,369 lakhs as against Rs. 115,079 lakhs in the previous financial year, a growth of over 5.47%. Your Company continues to focus on local innovation and creating markets "In India; For India; By India".

The profit before tax is Rs. 29,804 lakhs in the year under review as against Rs. 24,630 lakhs in the previous financial year, a significant jump of 21.00%.

IV. Outlook: Global growth is projected at 3.1% in calendar year 2024 and 3.2% in calendar year 2025 on account of greater than expected resilience in the United States and several large emerging market and developing economies.

India's GDP forecast is expected to be in the range of 6.8% to 7.0% in financial year 2024-25. The Asian Development Bank (ADB) has projected a moderate economic growth rate for India due to various factors such as a global slowdown, tight monetary conditions and elevated oil prices. According to the latest ADB outlook, India's economic growth rate is expected to reach 6.4% in FY 2023-24 from 6.8% in FY 2022-23, while the growth forecast for the current year has been revised downwards to 6.4% from 7.2% earlier projected. However, India's economic growth rate is still stronger than many peer economies and reflects robust domestic consumption and less dependence on global demand.

V. Risk and Concerns: The primary operating risks which could impact the Company relates to slow-down in the automotive, metals, pharmaceutical and textile sectors, exposure to seasonality for some of its businesses, competition from Indian and global players, volatile exchange rates, interest rate fluctuation, credit risks, import dependence, procurement concentration risks, volatile commodity prices risks, changes in tax and other legislations as well as risks arising out of higher input costs. The Company constantly monitors the challenges from amongst the eco-system comprising competition, industry, product life cycle, raw materials cost and takes steps to maintain and enhance existing competence. The primary threat over and above competitors created by COVID 19 was the demand supply gap, inflationary pressure and supply chain disruption which seems to be easing off though geopolitical volatile conditions still pose a threat. Availability of spurious parts and components at cheap prices continue to disrupt the fair competition. We see an increase in activity of using imports of substandard complete packages which is an added threat. Fluctuating foreign currency rates will have impact on imports.

VI. Opportunities and Threats: A confluence of factors on the global and local fronts, such as geo-political equations between countries, the usage of tariff and non-tariff barriers to address trade imbalances, volatility in crude oil and commodity prices, could impact business continuity and consumer confidence. The Company will continue to closely monitor the macro and micro level trends in the global and Indian economy and will take necessary steps to address these challenges.

VII. Discussion on financial performance with respect to operational performance: Analyzing Operational and Financial Performance is essentially about converting management data that the business teams has collected into useful information. The same is then used to make management decisions to aid future actions. It is important to regularly review the combined technical and operational/financial performance.

The basic process for analyzing operational and financial performance is more standardized than the process for analyzing technical performance and involves some standardized aspects. It comprises an analysis of financial data resulting from implementation of Operational Plan. Analysis of operational and financial performance is a continuous process, and it is important to find ways to fit this analysis into the overall organizational plan. The board is well aware and has a clear idea about where budget variances are arising from time to time. The board takes corrective steps which may be tactical or strategic ones to match the outcome of the operational performance with the financial performance.

The technical and project managers are well informed about the financial impact of their performance. This helps them to operate efficiently and effectively and to understand the impact of their performance on the financial results of the organization as a whole.

VIII. Material developments in Human Resources / Industrial Relations front, including number of people employed: Your Company is committed to hire, develop and retain the best talents in the industry. Ingersoll Rand has well defined talent deployment processes that help to attract and identify the top talents in the market.

Your Company has derived a competitive Career - Growth opportunity for developing the talent. Well-designed training and development programs, self - learning Linked - in tools, highly engaged Mentorship Programs, managers commitment towards the self-development goals set by the employees. The Company strives to provide fair treatment at workplace, a transparent and equitable compensation system, flexible work timings and an environment that ensures health and well-being for all our employees, partners & communities.

Your Company has Diversity, Inclusion and Equity Chapters with participation from employees across the country. This DE&I chapter is committed towards a transformed workplace, focusing on creating a more inclusive work environment, a balanced diverse ratio and equitable policies, systems and processes. Your Company has seen noticeable increase in the deployment of diverse talents.

Your Company constantly endeavours to adopt the best policies to keep its employees motivated, engaged and aligned to the core values of the Company. Your Company undertakes various employee engagement initiatives, fosters a culture of continuous learning and development to create future leaders. Your Company measures its employee engagement index through annual pulse survey with a commitment from the managers on the detailed action on the outcome of the Survey.

As on March 31, 2024, the company had 539 permanent employees on its rolls.

Ix. Safety, Health and Environment: Your Company, believes all injuries and work related diseases are preventable and takes all proactive steps to achieve the goal of "no work-related injuries" and safe operations. Your Company has established a high level of safety, standards and procedures to ensure safe working conditions for employees/contractors and visitors are trained to follow safe operating behaviors at workplace. With a belief that human behaviors can be changed, behaviors based safety program has been implemented in the Company. The employees are encouraged to follow best safety practices during personal activities at home and roads. The management is committed and responsible in complying with all safety norms and takes adequate precautionary measures to prevent workplace related incidents.

Your Company is committed for lead sustainably and continues to analyze management of hazardous and nonhazardous wastes and working with a long-term goal of zero waste to landfill. Your Company is committed to reduce 60% greenhouse gas (GHG) emission by 2030. As part of this goal, several energy conservations projects and energy management practices are implemented at plant. The products developed and launched have higher energy and water efficiency and uses materials with low environmental impact compared to previous generation products.

X. Technology Innovation: Your Company has continued to invest in technology innovation to sustain its leadership position and be the pioneer of best-in-class solutions for its customers. This year, your Company has added new products and upgraded existing range to the wide gamut of products and through new models for small to medium- scale industries. In rotary screw compressor segment we introduced 90-160 kW and 200-355kW while addressing specific OEM segments in 15-22kW and 30-37kW. We also had inbuilt VFD introduced in frames from 30-75kW. Water injected screw technology was also introduced. Plant Air Centrifugal saw the NX8000 & TA1500 while we expanded the frame sizes of HOC to compliment the compressor frames. Your Company is also realigning its strategy by introducing products to cater all segments of market.

XI. Disclosure as per Paragraph B (1) (i) and (j) under Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations")*.

The increase in return on investment in fixed deposits is due to increase in average value of fixed deposits held during the year as compared to previous year.

*Disclosure has been given only for such ratios listed in the said SEBI Listing Regulations, which has a difference of equal to or more than 25% as on March 31, 2024 in comparison to the previous financial year ended on March 31, 2023.

3. DIVIDEND

On November 8, 2023, the Board of Directors of your Company has declared an interim dividend at the rate of Rs. 50/- per equity share, resulting in cash outflow of Rs. 15,784 lakhs, paid out of retained earnings. The Board at its meeting held on May 28, 2024 has recommended a final divided of Rs. 20/- per equity share for the financial year ended on March 31,2024, which if approved by the members would result in cash outflow of Rs. 6,313.60 lakhs.

As per Regulation 43A of the SEBI Listing Regulations, the salient features of dividend distribution policy of the Company has been disclosed in the Corporate Governance Report and the dividend distribution policy is available on the website of the Company at https://www.irco.com/en-in/invest

4. TRANSFER TO RESERVES

Pursuant to the provisions of the Companies Act, 2013 (the "Act"), your Directors do not propose to transfer any amount to the General Reserves. The entire profit after tax for the year under review will be held in Retained Earnings.

5. THE STATE OF COMPANY'S AFFAIRS

Your Company's products are primarily sold to industries in the automotive, metals, pharmaceutical and textile sectors and these sectors have registered strong performance in the previous financial year.

For the year ending March 31,2024, your Company has recorded revenues of Rs.1,21,369 lakhs from operations which is 5.47 % higher compared to that of the previous financial year. Our profits after tax for the year ending March 31, 2024 stood at Rs.22,239 lakhs which is higher by 21.76% compared to profit after tax of the previous financial year.

Our principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from our operations. We continue to be debt-free and maintain adequate cash to meet not only the capex requirements for the new factory under construction but also our developmental and operational requirements.

Barring unforseen circumtances, your Company is expected to maintain its strong performance in year 2024-25.

6. LISTING OF EQUITY SHARES

The equity shares of the Company are listed on BSE Limited and National Stock Exchange of India Limited, both of which are premier stock exchanges having nationwide trading terminal. The securities of the Company were not suspended from trading during the reporting period.

7. INVESTMENT IN NEW MANUFACTURING PLANT

Your Board had on December 22, 2022 approved setting up a new manufacturing plant with an investment of about Rs. 170 crores to increase the manufacturing and output of the existing products and also to manufacture new products. Pursuant to the same, your Company has taken possession of land at Sanand - II Industrial Estate on 99 years lease from Gujarat Industrial Development Corporation (GIDC).

The new plant construction activities has commenced by obtaining necessary approvals including for the Site Master Plan and Consent to Establish (CTE) issued by Gujarat Pollution Control Board. Construction activities are focused on key components such as the Pre-Engineered Building, Admin Building and Utility Block, together with the development of a new Hydrogen Lab for research & development. All safety measures are in place and a strong emphasis is being placed on safety during course of construction. The construction is expected to be completed in the first quarter of calendar year 2025 and the new plant is expected to be operational by end of March 2025. The new plant upon becoming fully operational will manufacture new range of air compressors, air treatment devices, hydrogen compressors etc. to cater to the requirement of domestic market as well as exports.

8. MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments which has occurred, affecting the financial position of the Company between the end of the financial year of the Company i.e., March 31,2024 and the date of signing this report.

There has been no change in the nature of business of the Company.

9. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS IMPACTING THE GOING CONCERN STATUS

There are no significant and material order(s) passed by any of the Regulators or Courts or Tribunals, which could affect the going concern status of the Company and its future operations.

During the reporting financial year, no application was made or any proceedings are pending against the Company under the Insolvency and Bankruptcy Code, 2016.

10. DETAILS IN RESPECT OF Adequacy OF INTERNAL FINANCIAL CONTROLS wITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has established an internal control system commensurate with the size, scale, and complexity of its operations. To enhance the standards of controls and governance, the Company has adopted various measures to ensure that robust internal financial controls, put in place concerning operations, financial reporting and compliance, exist and are operating effectively.

Significant features of the Company's internal control system are:

• A well-established, independent, Internal Audit team operates in line with best-in-class governance practices. It reviews and reports to the Audit Committee regarding compliance with internal controls, the efficiency and effectiveness of operations as well as key process risks.

• The Audit Committee periodically reviews internal audit plans, significant audit findings and adequacy of internal controls.

• Systematic self-certification of adherence to key internal controls, as part of control self-assurance by process owners, monitors, and reviewers.

• Adherence with a comprehensive information security policy and continuous upgrades of the Company's IT systems for strengthening automated controls.

• Appropriate segregation of duties and usage of technology for continuous controls monitoring and enhanced controls assurance.

The financial statements of the Company have been prepared in accordance with Indian Accounting Standards (Ind AS) as per the Companies (Indian Accounting Standards) Rules, 2015 as amended from time to time notified under Section 133 of the Companies Act, 2013, (the 'Act') and other relevant provisions of the Act.

During the year under review, the internal controls were tested and found effective, as a part of the Management's control testing initiative. Accordingly, the Board, with the concurrence of the Audit Committee and the Auditors believe that the Company's Internal Financial Controls were adequate and operating effectively throughout the financial year ended March 31,2024.

11. DETAILS OF JOINT VENTURES, SUBSIDIARIES AND ASSOCIATES

Ingersoll-Rand Industrial U.S Inc. is the holding Company and Ingersoll-Rand Inc. is the ultimate holding company of your Company. Your Company does not have any associate, subsidiary or joint venture either in India or anywhere else in the world. Hence, the disclosure under Rule 8 of the Companies (Accounts) Rules, 2014 is not provided.

12. DEPOSITS

During the year under review, your Company has not accepted any deposits from the public within the meaning of Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014. There are no amounts outstanding on account of principal or interest on public deposits as on March 31,2024. Hence, no further disclosure in this regard is required to be made.

13. AUDIT

A. STATUTORY AUDIT:

M/s. Deloitte Haskins & Sells, Chartered Accountants (Firm Registration No. 008072S) were appointed as the Statutory Auditors of the Company to carry out Limited Review of the Unaudited Financial Results, Audit of the Financial Statements and Annual Financial Results of the Company and Tax Audit under the Income Tax Act, 1961 for a term of 5 years at the 100th Annual General Meeting to hold office till the conclusion of 105th Annual General Meeting of the Company to be held in year 2027.

The Audit Report issued by M/s. Deloitte Haskins & Sells, Chartered Accountants on the financial statements of the Company for the year ended March 31, 2024 is part of the Annual Report. The Audit Report does not contain any qualification, reservation, adverse remark or disclaimer on the said financial statements. Further, during the financial year 2023-24, the Statutory Auditors have not reported any instances of fraud to the Audit Committee or Board as per Section 143 (12) of the Act.

B. INTERNAL AUDIT

The Company has an in-house dedicated team for internal audit which conducts regular internal audit and provides their report to Audit Committee on quarterly basis.

C. COST AUDIT:

The Company has maintained adequate records and books of accounts pursuant to the Companies (Cost Records and Audit) Rules, 2014, as amended, prescribed under Section 148 of the Act. The Board of Directors have appointed M/s. Ashish Bhavsar & Associates, Cost Accountants, (ICMA Firm Registration No. 000387) as Cost Auditors for conducting the audit of the cost records maintained by the Company for the year ending March 31, 2025. The Cost Auditor has confirmed that they are not disqualified pursuant to the provisions of Section 141 of the Act read with Section 139 and 148 of the Act. M/s. Ashish Bhavsar & Associates, being eligible, have provided their consent to act as the Cost Auditors of the Company for the financial year 2024-25. The requisite resolution seeking approval for remuneration proposed to be paid to the Cost Auditors, as approved by the Board of Directors has been set out in the Notice of the 102nd Annual General Meeting of your Company.

The Company will file the cost audit report for the Financial Year ended March 31, 2024, with the Central Government before the due date.

D. SECRETARIAL AUDIT:

The Board of Directors of the Company have appointed Mr. Natesh K, Practicing Company Secretary (Certificate of Practice No. 7277), as the Secretarial Auditor to conduct an audit of the secretarial records for the financial year 2024-25. The Company has received consent from Mr. Natesh K for conducting audit of the secretarial records for the financial year ending March 31,2025.

Pursuant to Regulation 40(9) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (SEBI Listing Regulations) necessary certificates have been issued for the year ended March 31, 2024 by M/s. Parikh & Associates, Company Secretaries certifying due compliance of the share transfer formalities by the Company/its RTA.

The Secretarial Audit Report for the financial year ended March 31, 2024 pursuant to section 204(1) of the Act and Rule 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is set out in Annexure - D to this report. The Secretarial Audit Report does not contain any qualification, reservation, adverse remark or disclaimer.

The Secretarial Compliance Report for the financial year ended March 31, 2024, in relation to compliance of all applicable SEBI Regulations/circulars/ guidelines issued thereunder, pursuant to requirement of Regulation 24A(2) of SEBI Listing Regulations, is set out in Annexure- D1 to this report.

14. SECRETARIAL STANDARDS

The Directors have devised proper systems to ensure compliance with the provisions Secretarial Standards issued by the Institute of Company Secretaries of India on Meetings of the Board of Directors and General Meetings.

15. SHARE CAPITAL

The Company has only one class of share viz. equity share with a face value of Rs.10 each. During the year under review, there is no change in the issued and subscribed capital of your Company. The outstanding capital as on March 31, 2024 is Rs. 3,156.80 lakhs comprising 31,568,000 equity shares of Rs.10/- each. Share capital audit as per the directives of the Securities and Exchange Board of India to reconcile the total admitted capital with National Securities Depository Ltd. (NSDL) and Central Depository Services (India) Ltd. (CDSL) and the total issued and listed capital is being conducted on a quarterly basis by M/s. Parikh & Associates, Company Secretaries. The audit confirms that the total issued/ paid-up capital is in agreement with the aggregate of the total number of shares in physical form and the total number of shares in dematerialized form (held with NSDL and CDSL). The Audit Reports are placed on the table of the Board Meeting every quarter and duly forwarded to the stock exchanges where the equity shares of your Company are listed.

During the financial year under review, the Company has not carried out any subdivision, alteration, split of equity shares or reduction of capital. The Company has also neither issued any bonus shares nor bought back its shares during the financial year.

16. ANNUAL RETURN

The Annual Return of the Company as required under Section 92(3) read with Section 134(3)(a) of the Act is available on the website of the Company and can be accessed on the Company's website https://www.irco.com/ en-in/invest

17. BOARD MEETINGS

A minimum of four Board Meetings are held each year to review the quarterly financial results and operating performance of the Company. Apart from this, additional Board Meetings are also convened, when required, to address specific needs of the Company.

The agenda and notes to agenda backed by relevent supporting papers are circulated to all the Directors well in advance, usually a week before the meeting to ensure adequate information is provided to enable the Directors to prepare and take informed decisions at the meeting. All relevant information as mentioned in Part A of Schedule II of the SEBI Listing Regulations were tabled before the Board at all the meetings.

The details of the meetings of the Board of Directors of the Company convened and attended by the Directors during the financial year 2023-24 are given in the Corporate Governance Report, which forms part of this Annual Report. The maximum interval between any two consecutive Board meetings did not exceed 120 days, as prescribed in the Act.

18. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo required to be disclosed as per the provisions of Section 134(3) (m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014 is set out in Annexure - A forming part of this report.

19. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Your Company is committed to contributing time and extends financial support to the communities and beneficiaries in and around its areas of operation. This year too, your Company has continued its CSR initiatives to focus on providing education & skill development, healthcare, conservation of environment and community development. These activities are in accordance with Schedule VII of the Act. The Board of Directors and CSR Committee review and monitor from time to time all the CSR activities being undertaken by the Company. The CSR policy of your Company is the available on the website of the Company at https://www.irco.com/en-in/invest

During the financial year 2023-24, your Company incurred CSR Expenditure of Rs. 340.01 lakhs and the details of the same is set out in Annexure - B forming part of this report.

During the financial year ended March 31,2024, four meetings of the CSR Committee of the Board were held on May 25, 2023, August 10, 2023, November 8, 2023 and February 13, 2024. The details of the Members who attended the meetings during the year are given in CSR Report, which forms part of this Annual Report.

20. INDEPENDENT DIRECTORS

The Board has an optimum combination of Independent and Non-Independent Directors. As per the requirements of the SEBI Listing Regulations, half of the Board's strength comprise of Independent Directors. As on March 31, 2024, Mr. Sekhar Natarajan, Ms. Jayantika Dave and Ms. Vijaya Sampath are independent directors of the Company.

New independent directors as and when inducted into the Board are familiarized with the operations and functioning of the Company and their roles and responsibilities.

The Independent Directors have submitted a declaration of independence, as required pursuant to Section 149(7) and Regulation 25 of SEBI Listing Regulations stating that they meet the criteria of independence as provided in Section 149(6) and Regulation 16 of the SEBI Listing Regulations. As per the declarations, they have complied with the Code of Conduct laid down under the Schedule IV of the Act and have also registered themselves with Independent Director's database maintained by the Indian Institute of Corporate Affairs

All the directors have confirmed that they are not debarred from holding the office of director by virtue of any SEBI order or any other such authority. In the opinion of the Board, the independent directors have high level of integrity and experience and are proficient in their respective fields of expertise and are contributing to the overall performance of the Company.

The Company has over the years been fortunate to have eminent persons from diverse fields to serve as Directors on its Board. Pursuant to the SEBI Listing Regulations, the Nomination & Remuneration Committee of the Board has ensured diversity of the Board in terms of experience, knowledge, perspective, background, gender, age and culture.

21. AUDIT COMMITTEE

The Company has constituted an Audit Committee in accordance with the provisions of Section 177 of the Act and Regulation 18 of SEBI Listing Regulations. The matters relating to the composition, meetings, and functions of the Audit Committee are included in the Corporate Governance Report, forming part of this report. The Board has accepted the Audit Committee's recommendations during the year wherever required and hence no disclosure is required under Section 177(8) of the Act with respect to rejection of any recommendations of Audit Committee by Board.

22. DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. DIRECTORS:

Mr. Naveen Samant, Non-Executive and Non-Independent Director and Mr. Inder Arora, Executive and NonIndependent Director, have resigned from the Board effective August 16, 2023 and November 8, 2023 respectively. The Board places on record its appreciation for their contribution since their appointment.

In accordance with the applicable provisions of the Companies Act, 2013 read with terms of the Articles of Association of the Company and on the recommendation of the Nomination and Remuneration Committee, the Board at its meeting held on November 8, 2023, considered and approved the following appointments, subject to the approval of the shareholders:

• Appointment of Mr. Sunil Khanduja (DIN 10041581) as an additional director (Executive & Non-Independent category), effective November 8, 2023 for a period of 5 consecutive years subject to retirement by rotation.

• Appointment of Mr. Rajesh Ganjoo (DIN 10373687) as an additional director (Executive & Non-Independent category), effective November 8, 2023 for a period of 5 consecutive years subject to retirement by rotation.

As stipulated under Regulation 17 (1C) of SEBI Listing Regulations, the appointment of Director is required to be approved by the shareholders at the next general meeting or within a period of three months from the date of appointment, whichever is earlier. Accordingly, the Company has obtained the approval of Members by way of Ordinary Resolution through e-voting/postal ballot for the said appointments on January 21,2024.

Mr. P. R. Shubhakar, Executive Director, Chief Financial Officer and Company Secretary retires by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment. The Board recommends the appointment of Mr. P R Shubhakar as Director (Executive and Non-Independent category) of the Company.

B. KEY MANAGERIAL PERSONNEL:

• The Board of Directors at their meeting held on November 8, 2023 on the recommendation of the Nomination and Remuneration Committee has appointed Mr. Sunil Khanduja as Director - Operations and Mr. Rajesh Ganjoo as Executive Director, both for a period of 5 years with effect from November 8, 2023 up to November 7, 2028.

The Company has obtained the approval of Members by way of Ordinary Resolution through e-voting/postal ballot for both the above appointments on January 21,2024.

• Mr. Inder Arora has resigned from the services of the Company and ceased to be Executive Director effective from November 8, 2023.

Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company as on March 31,2024 are

23. PARTICULARS OF EMPLOYEES

The statement of Disclosure of Remuneration as required to be disclosed under Section 197 of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 ("Rules"), is appended as Annexure - C to the Report. The information as per Rule 5(2) of the Rules, forms part of this Report. However, as per first proviso to Section 136(1) of the Act and second proviso of Rule 5(2) of the Rules, this Report and Financial Statements are being sent to the Members of the Company excluding the statement of particulars of employees under Rule 5(2) of the Rules. Any Member interested in obtaining a copy of the said statement may write to the Company Secretary at the Registered Office of the Company. None of the employees listed in the said Annexure is related to any Director of the Company.

24. DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES

Your Company has been conducting and will continue to conduct its business with the highest standards of ethics, integrity and transparency across its operations and in compliance with the applicable laws and regulations. In pursuit of a strong commitment to governance and compliance, vigil mechanism as envisaged in the Act, the Rules prescribed thereunder and the SEBI Listing Regulations, has been implemented by your Company through its Whistle Blower Policy encompassing various elements and components in an integrated manner.

The Code of Conduct of your Company, which is applicable to all employees, serves as a guide for daily business interactions, reflecting your Company's standard for appropriate behavior and living corporate values. An Ethics Committee has been constituted to administer this Policy.

The suppliers and vendors of the Company are also required to adhere to Code of Conduct as it is a prerequisite for conducting business with your Company.

The Company has a Whistle Blower Policy in place, which is the mechanism for directors and employees of the Company to report concerns about unethical behavior, actual or suspected fraud or violation of the Company's code of conduct, violations of legal or regulatory requirements, incorrect or misrepresentation in any financial statements and reports etc. This policy covers reporting of any violation, wrongdoing or non-compliance, including without limitation, those relating to the Code of Conduct, policies and standard procedures of the Company, and any incident involving leak or suspected leak of unpublished price sensitive information (UPSI) or unethical use of UPSI in accordance with or under the SEBI (Prohibition of Insider Trading) Regulations, 2015. The policy provides for adequate safeguards against victimization of those who choose to report concerns by availing the mechanism and also provides for direct access to the Chairman of Audit Committee in exceptional cases. The Audit Committee of the Company oversees the implementation of the Whistle Blower Policy.

Detailed update on the functioning of the Whistle-Blower Policy and compliance with the Code of Conduct has also been provided in the Corporate Governance Report, forming part of this report.

The Whistle Blower Policy can be accessed on the website of the Company at https://www.irco.com/en-in/invest

25. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION

The Company has in place a Nomination and Remuneration Committee in accordance with the requirements of the

Act read with the rules made thereunder and Regulation 19 of the SEBI Listing Regulations. Your Board has adopted a Remuneration Policy for identification, selection and appointment of Directors, Key Managerial Personnel (KMPs) and Senior Management Personnel (SMPs) of your Company. The Policy provides criteria for fixing remuneration of the Directors, KMPs, SMPs as well as other employees of the Company.

The Board, on the recommendations of the Nomination and Remuneration Committee, appoints Director(s) (Executive and Non-Executive) of the Company based on his/her eligibility, experience and qualifications and such appointment is approved by the Members of the Company at General Meetings or by way of e-Voting/postal ballot. Generally, the Executive Directors and Independent Directors are appointed for a period of five years. The Directors, KMPs and SMPs shall retire as per the applicable provisions of the Act and the policy of the Company. While determining remuneration of the Directors, KMPs, SMPs and other employees, the Nomination and Remuneration Committee ensures that the level and composition of remuneration are reasonable and sufficient to attract, retain and motivate them and such remuneration comprises a balance between fixed and variable pay reflecting performance objectives appropriate to the working of the Company and its goals. Annual increments are also approved by the Nomination and Remuneration Committee. Remuneration to Directors is paid within the limits as prescribed under the Act and the limits as approved by the Members of the Company, from time to time. The remuneration policy of the Company is available on its website at https://www.irco.com/en-in/invest

26. ANNUAL EVALUATION BY THE BOARD OF ITS OWN PERFORMANCE AND THAT OF ITS COMMITTEES AND INDIVIDUAL DIRECTORS

Pursuant to the provisions of the Act, SEBI Listing Regulations and the Remuneration Policy of the Company, your Company has in place a Board Evaluation process for the Board of Directors as a whole, Board Committees and also for the Directors (Executive and Non-Executive) individually by seeking responses/inputs from all the Directors to an assessment questionnaire. A structured questionnaire has been prepared after taking into consideration inputs received from the directors, covering various aspects of the Board's functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations, independence, governance, ethics and values, adherence to corporate governance norms, interpersonal relationships, attendance and contributions to the meetings etc.

A separate exercise was carried out to evaluate the performance of individual directors including the Chairperson of the Board, who were evaluated on parameters such as participation and contribution by a director, commitment, including guidance provided to the senior management outside of Board/committee meetings, effective deployment of knowledge and expertise, effective management of relationship with various stakeholders, independence of behaviour and judgment etc. The performance evaluation of the Independent Directors as well as of the Chairperson was carried out by the entire Board. The evaluation process has been explained in the corporate governance report. The Board reviewed the evaluation results as collated by the Nomination and Remuneration Committee. Further, in a separate meeting of independent directors, performance of non-independent directors and the Board as a whole was evaluated as stipulated under the SEBI Listing Regulations. The Chairperson, based on the evaluation done by the Directors, informed that the performance of Directors are satisfactory and they are recommended for continuation as Directors of the Company.

27. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

During the year under review, your Company has not given any loans or provided any guarantees or made any investments within the meaning of Section 186 of the Act . The Company has not borrowed any loan from banks/ financial institutions. Consequently, there are no instances to report the difference between amount of the valuation done at the time of one time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof. Hence, no further disclosure are required to be made under this section.

28. CONTRACTS OR ARRANGEMENTS wITH RELATED PARTIES

All contracts/arrangements/transactions entered into by the Company during the year under review with Related Parties were in ordinary course of business and on arm's length basis in accordance with the provisions of the Act.

Your Company has formulated a policy on Related Party Transactions which has been uploaded on website of the Company at https://www.irco.com/en-in/invest

All transactions with related parties during the year which are in accordance with the Policy on Related Party Transactions, were reviewed and approved by the Independent Directors who are members of the Audit Committee in accordance with the SEBI Listing Regulations . Prior omnibus approval of the Independent Directors who are members of the Audit Committee is obtained on a yearly basis for the transactions which are of a foreseen and repetitive nature. A statement giving details of all Related Party Transactions is placed before the Audit Committee for their review on a quarterly basis.

There are no materially significant related party transactions entered into by the Company with its promoters, directors, key managerial personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

The details of the related party transactions as per Indian Accounting Standards (IND AS) - 24 are set out in Note No. 35 to the Financial Statements of the Company. The Company in terms of Regulation 23 of the SEBI Listing Regulations, submits disclosures of all related party transactions to the stock exchanges, within time stipulated and in the format stipulated under the said SEBI Listing Regulations.

Particulars of contracts or arrangements with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are provided in Annexure - E in Form AOC-2 and forms part of this report.

29. CORPORATE GOVERNANCE

Your Company has been consistent in complying with the corporate governance guidelines and best practices to boost long-term shareholder value and to uphold minority rights. The Company considers it an inherent responsibility to disclose in a timely and accurate manner all information regarding its operations and performance, as well as regarding leadership and governance within the Company.

Pursuant to Regulation 34 read with Schedule V of SEBI Listing Regulations, a separate report on Corporate Governance along with the compliance certificate from Mr. Natesh K, Company Secretary in practice confirming compliance with the requirements of Corporate Governance is set out in Annexure - F forming part of this report.

30. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

The Business Responsibility and Sustainability Report as stipulated under Regulation 34(2)(f) of SEBI Listing Regulations read with National Guidelines on Responsible Business Conduct (NGRBC) guidelines, issued by Ministry of Corporate Affairs is set out in Annexure G forming part of this report.

31. RISK MANAGEMENT POLICY

Pursuant to the requirement of Regulation 21 of the SEBI Listing Regulations, the Company has constituted a Risk Management Committee (RMC), consisting of Board members and senior executives of the Company. The policy includes the identification therein of elements of risk, which in the opinion of the Board may threaten the existence of the Company. The Audit Committee has additional oversight in the area of financial risks and controls. The Company has in place a Risk Management framework to identify, evaluate and mitigate business risks and challenges.

All properties and insurable interests of the Company have been fully insured.

32. DIRECTORS AND OFFICERS INSURANCE (D&O)

As per the requirements of Regulation 25(10) of the SEBI Listing Regulations, the Company has obtained Directors and Officers (D&O) Insurance for all its Directors and members of the Senior Management.

33. PREVENTION OF SEXUAL HARASSMENT POLICY

Your Company believes in providing every employee an opportunity to work in an environment which is free from any kind of behavior or conduct which could be considered as sexual harassment. Your Company is committed to treating every employee with dignity and respect. Your Company has zero tolerance towards sexual harassment at the workplace and has adopted a policy on prevention of sexual harassment policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder. All employees (permanent, contractual, temporary, trainees), consultants, trainees, volunteers, third parties and/or visitors at all business units or functions of the Company are covered by the said policy. An Internal Compliance Committee (ICC) has been set up to redress complaints received regarding sexual harassment.

The Company periodically conducts training sessions and workshops for employees across the organization to build awareness about the Policy and the provisions of Prevention of Sexual Harassment Act. The Company had mandated all employees to undergo online training on Prevention of Sexual Harassment (POSH) and has also conducted workshops during the year. The Company has filed Annual Return pursuant to the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 with the appropriate authority.

The following is a summary of sexual harassment complaints received and disposed off during the year:

34. DIRECTORS' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations provided to them, your

Directors, pursuant to Section 134 (3) (c) of the Act, state:

(a) that in the preparation of the annual accounts, the applicable accounting standards have been followed and no material departures have been made from the same;

(b) that appropriate accounting policies have been selected and applied consistently and have made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31,2024 and of the profit and loss of the Company for the year ended on March 31,2024;

(c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(d) that the annual accounts have been prepared on a going concern basis;

(e) that proper internal financial controls were followed by the Company and that such internal financial controls are adequate and were operating effectively; and

(f) that proper systems have been devised to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

35. ACKNOWLEDGEMENTS

Your Directors place on record their gratitude and appreciation to all employees of the Company for their whole-hearted efforts as well as their hard work, dedication and collective contribution to the Company's performance during the year. The Directors would also like to thank the shareholders, customers, dealers, suppliers, bankers and all other business associates for their continued support to the Company and for the faith reposed in the management.