Cummins India Ltd

TO THE MEMBERS,

The Board of Directors take pleasure in presenting the Sixty-Third Annual Report including inter-alia DirectorsRs. Report, its annexures and audited financial statements (including standalone & consolidated financial statements along with respective AuditorsRs. Report thereon) for the year ended March 31,2024. The consolidated performance of the Company and its subsidiaries has been referred to wherever required.

1. FINANCIAL RESULTS:

On Standalone basis:-

During the Financial Year 2023-24, revenue from operations was Rs. 8,958.60 Crores as compared to Rs. 7,744.43 Crores during the previous year (16% higher). Profit after tax increased to Rs. 1,660.62 Crores from Rs. 1,129.82 Crores recorded for the previous year (47% higher).

During the Financial Year 2023-24, revenue from operations was Rs. 9,000.20 Crores as compared to Rs. 7,772.09 Crores during the previous year (16% higher).

Profit after tax increased to Rs. 1,720.58 Crores from Rs. 1,228.15 Crores recorded for the previous year (40% higher).

* Includes Exceptional Items amounting to f (1.70) Crores (F.Y. 2022-23: f (14.30) Crores)

2. RESERVES:

The closing balance of reserves, including retained earnings, of the Company as at March 31,2024 was Rs. 6,107.65 Crores. During the Financial Year, no amount was proposed to be transferred to the Reserves.

3. BUSINESS UPDATE AND STATE OF COMPANYRs.S AFFAIRS:

The information on CompanyRs.s affairs and related aspects is provided under Management Discussion and Analysis Report, which has been prepared, inter-alia, in compliance with Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and forms part of the Annual Report.

4. DIVIDEND:

The Directors have recommended a final dividend of Rs. 20/- (i.e. 1000%) per equity share of Rs. 2/- each fully paid-up share in their meeting held on May 29, 2024, in addition to the interim dividend of Rs. 18/- (900%) per equity share of Rs. 2/- each fully paid-up share declared on February 07, 2024, aggregating to Rs. 38/- (i.e. 1900%) per equity share of Rs. 2/- each fully paid-up share for the year ended March 31,2024 (previous year Rs. 25 /- per equity share i.e. 1,250%). The final dividend is subject to approval of the Members at the ensuing Annual General Meeting and shall be subject to deduction of income tax at source as per applicable laws.

The final dividend recommended, and the interim dividend paid is in accordance with the principles and criteria as set out in the dividend distribution policy.

5. SHARE CAPITAL:

The paid-up share capital of the Company is Rs. 554,400,000/- divided into 277,200,000 equity shares of Rs. 2/- each as on March 31, 2024. Your Company has not come up with any issue (public, rights or preferential) during the year. There is no change in the share capital during Financial Year 2023-24.

6. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES:

Your Board is pleased to provide details of the following subsidiary, joint ventures and associates as on March 31,2024 : -

a) Cummins Sales & Service Private Limited (CSSPL):

CSSPL, a wholly owned subsidiary, of the Company focuses on sales of Cummins engines, parts, accessories and providing service support to engines and generators mainly in parts of Northern India close to the National Capital Region (NCR). CSSPL generated a revenue of Rs. 199.02 Crores from its operations for the year ended March 31,2024, as compared to Rs. 145.51 Crore during the previous year (37% higher).

b) Cummins Research and Technology India Private Limited (CRTIPL):

The Board of directors of CRTIPL at its meeting held on March 21, 2016, had decided to cease operations of CRTIPL. Accordingly, it ceased its operations from April 1, 2016. The Members of CRTIPL, in their extra-ordinary general meeting held on April 1,2022, passed a resolution to initiate voluntary winding-up of CRTIPL under the Companies Act, 2013 and Insolvency and Bankruptcy Code, 2016. The liquidator, appointed by the Members at the extra-ordinary general meeting, completed all the procedures pertaining to the voluntary winding-up, and submitted the dissolution application with the Mumbai Bench of The National Company Law Tribunal (Rs.NCLTRs.) on May 20, 2023. The final order of dissolution (voluntary liquidation) has been passed by NCLT on December 13, 2023 and accordingly, CRTIPL ceases to exist effective from that date.

c) Valvoline Cummins Private Limited (VCPL):

VCPL, a 50:50 joint venture between Valvoline International Inc., USA, one of the global leaders in lubricants and engine oils, and your Company, VCPL generated a revenue of Rs. 2,255.59 Crores from its operations for the year ended March 31,2024, as compared to Rs. 2,150.25 Crores during the previous year 5% higher).

d) Cummins Generator Technologies India Private Limited (CGTIPL):

Your Company owns 48.54% shareholding in the Associate Company namely CGTIPL which is in the business of design, manufacturing, marketing, sales and service of alternators and related spare parts. CGTIPL generated revenue of Rs. 1,805.38 Crores from its operations for the year ended March 31,2024, as compared to Rs. 1,803.26 Crores during the previous year (0.12% higher).

The Members of CGTIPL at their Extra-ordinary General Meeting held on March 17, 2022, approved a scheme of reduction of the issued, subscribed and paid-up share capital of the Company (the Rs.SchemeRs.) from Rs. 16,070,010/- consisting of 1,607,001 equity shares of Rs. 10/- each to Rs. 15,995,680/- consisting of 1,599,568 equity shares of Rs. 10/- each by paying off, cancelling and extinguishing, in aggregate, 7,433 equity shares of the Company (Rs.Capital ReductionRs.) as recommended by the Board of Directors in their meeting held on February 11, 2022. The Company has filed a petition with HonRs.ble National Company Law Tribunal, Mumbai Bench, (Rs.HonRs.ble NCLTRs.) seeking approval for the said Scheme of Capital Reduction on April 07, 2022. No effect of the scheme has been given in CGTIPL financial statements as at and for the year ended March 31,2024, pending approval from HonRs.ble NCLT.

As required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, consolidated financial statements of the Company, its subsidiary, joint venture and associate companies, prepared in accordance with the applicable Indian Accounting Standards (Ind AS) notified under the Companies (Indian Accounting Standards) Rules, 2015, as amended, form part of the Annual Report.

Further, a statement containing the salient features of the financial statement of subsidiary, associate company and joint venture in the prescribed Form AOC-1 is appended as Annexure Rs.1Rs. which forms part of this Report.

Pursuant to the provisions of Section 136 of the Companies Act, 2013, the financial statements of the Company, consolidated financial statements along with relevant documents and separate financial statements in respect of CSSPL, are available on the website of the Company on https://www.cummins.com/en/in/investors/india-financials.

The Company will make the said financial statements and related detailed information of CSSPL available upon request by any Member of the Company. These financial statements will also be kept open for inspection by any Member at the Registered Office of the Company and of CSSPL.

7. CHANGE IN THE NATURE OF THE BUSINESS:

During the year under review, there was no change in the nature of the business pursuant to inter-alia Section 134 of the Companies Act, 2013 and Companies (Accounts) Rules, 2014.

8. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

No loan or guarantee was given, or investment was made by your Company during the Financial Year 2023-24 pursuant to Section 186 of the Companies Act, 2013.

9. DEPOSITS:

Your Company has not accepted any Public Deposits under Chapter V of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014 during the Financial Year 2023-24.

10. FUND RAISING BY ISSUANCE OF DEBT SECURITIES, IF ANY

Pursuance to SEBI Circular No. SEBI/HO/DDHS/CIR/P/2018/144 dated November 26, 2018, read with SEBI Circular No. SEBI/HO/DDHS/DDHS-RACPOD1/P/CIR/2023/172 dated October 19, 2023, the Directors the Directors confirm that the Company is not defined as a "Large Corporate" as per the framework provided in the said Circular. Further, your Company has not raised any funds by issuance of debt securities.

11. PARTICULARSOFCONTRACTSORARRANGEMENTSWITH RELATED PARTIES:

During Financial Year 2023-24, no materially significant related party transactions were entered into by the Company, that may have potential conflict with the interests of Company at large.

Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 in the prescribed Form AOC-2 is appended as Annexure Rs.2Rs. which forms part of this Report.

The Policy on materiality of related party transactions as approved by the Board can be accessed on the CompanyRs.s website at the link: https://www.cummins.com/en/in/investors/india-corporate-governance.

As required under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, related party transactions have been disclosed under significant accounting policies and notes forming part of the Financial Statements in accordance with relevant accounting standards.

Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the resolution for seeking approval of the Members on material related party transactions is being placed at the ensuing Annual General Meeting scheduled on August 07, 2024.

12. CONSERVATION OF ENERGY:

During the Financial Year 2023-24 your Company has strived to imbibe energy conservation principles and initiatives across all its facilities.

Your Company generated a total of 65,02,276 KWH of electricity from onsite solar installations. Details of the same are mentioned below:

At CPG plant 121 kWP Solar power plant installed in Feb 2024. Per year 140400 kWh units will be generated by this solar plant.

Overall energy conservation from existing as well as new solar PV installations:

Apart from the solar energy projects, your company also undertook various other energy conservation initiatives. Details of the same are mentioned below:

Kothrud Engine Plant of the Company undertook initiatives such as replacement of non-energy efficient fans (460 Nos), installation of occupancy sensors for offices & washrooms (60 Nos), NK warehouse

and took focused efforts to arrest compressed air leakages (Leakage reduction from 976 to 664 cfm). The Plant also continued implementation of the existing initiatives such as installation of LED Lights, replacement of chillers, panel & office ACs, and implementation of other low cost no cost projects. All these initiatives resulted in savings of 4.62 lakh units of electricity.

At CPG Phaltan plant of the Company, 4 HVLS were installed which led to conservation of around 78,500 kWh units in replacement of AHU. Also, shop floor florescent lamp replaced with 120-watt LED lamps. Now CPG shop floor is with 100% LED lamps. Energy saving achieved 45,000 kwH units annually.

At High Horsepower plant of the Company at Phaltan Rebuild Centre, fluorescent tube lights were replaced with LED lights at paint booth area leading to energy saving of 1,742.4 kWh. Additionally, new room heater On Off operation on timer at HT room was installed that led to energy savings of 2,880 kWh.

At CompanyRs.s registered office, various initiatives were undertaken for replacement of fluorescent tube lights with LED lights leading to a total saving around 35,100 kWh. The site also installed sensor for ramp lights that led to energy saving around 480 kWh.

13. RESEARCH & DEVELOPMENT AND TECHNOLOGY ABSORPTION:

Your Company is committed to introducing new products and improving existing products to have better performance levels, lower life cycle costs, excellent safety, recyclability characteristics and meet stringent emission norms tailored for the specific needs of the Indian industry.

Your Company continues this endeavor by developing the next generation of systems in collaboration with the parent company - Cummins Inc., USA.

Improved technical productivity, through new methodologies and technologies, is being continuously pursued to reduce the costs associated with new product development and customer support. An example of this is the further enhanced use of analysis-led design through computer models that help minimize hardware testing and therefore accelerate product development cycle times with reduced product testing.

A. New Product Development: -

The following new Products were developed as part of the above initiatives during the year: -

1. Hotel load converter developed for Rail business to enter in Rail electrification space;

2. Entire range of CPCBIV+ products (engine & gensets) was certified and launched;

3. New product range for Exports (20-330 kVA) was launched;

4. Marine engine product families to support the increasing commercial Marine Business;

5. Further enhancements of non-diesel product development capability such as use of alternative fuels is being explored in India; and

6. Telematics and Analytics capabilities have been developed to improve uptime and fuel efficiency performance of our products.

Further, your Company continues to strengthen its channel presence through its Genset Original Equipment Manufacturers partners who have added 12 additional sales dealers across various geographies.

B. Benefits derived as a result of the above activities are: -

1. Enhanced product and service capabilities through use of electronic tools and simulation software to deliver improved engine performance;

2. Enhanced capability to tailor engine designs to improve value proposition for customers through delivering superior power output, fuel economy, transient response and reduced emissions;

3. Enhanced product and service capabilities through use of electronic tools and simulation software to control the engine performance and combustion process;

4. Enhanced capability to tailor engine designs to improve the value proposition for customers through delivering superior power output, fuel economy, transient response and reduced emissions;

5. Product and component availability to meet the new emission norms ahead of implementation;

6. Safer, recyclable, reliable, durable, and performance-efficient products and critical components;

7. Component indigenization capability was improved through enhanced test capability, rig test and flow bench development and availability; and

8. Significant enhancements in measurement capability were made to pursue business opportunities in non- diesel applications to serve both the rural and international communities.

C. Future plans include: -

1. Developing local Rs.fit-for-marketRs. solutions to meet export emission requirements.

2. Technological innovation to add value to products in the areas of alternate fuels, fuel cells, power electronics, hybrid engines and recycle / re-use;

3. Continued expansion of the product range to serve the needs of both local and global market;

4. Continued focus on indigenization and partnering with suppliers for waste elimination initiatives; and

5. Focused engine development for the Power Generation segment for the upcoming emissions norms.

D. Your Company continues to draw benefits from its parent company, Cummins Inc.Rs.s technology, advanced engineering, and research. With this support your Company is committed to develop advanced fuel-efficient and emission-compliant products that use a variety of energy sources and comply with future domestic emissions and carbon dioxide targets. These help to reduce greenhouse gas emissions and improve air quality, whilst also enabling the products to deliver superior performance, reliability, durability, and recyclability.

E. Expenditure on Research & Development (R&D):-

The total expenditure on R & D was as follows:-

14. FOREIGN EXCHANGE EARNINGS AND OUTGO:

Your Company continues to be Net Foreign Exchange Earner. During the year under review, your Company exported 5,851 engines and 5,862 generator sets. Foreign exchange earned in terms of actual inflows during the year 2023-24 and foreign exchange outgo in terms of actual outflows during the year 2023-24 were as follows:-

* Equivalent value of various currencies

15. MANAGEMENT DISCUSSION & ANALYSIS AND CORPORATE GOVERNANCE REPORT:

The Management Discussion and Analysis Report and the Corporate Governance Report which forms part of this Report are appended as Annexure Rs.3Rs. and Rs.4Rs. respectively.

The Company has obtained a Certificate from Practicing Company Secretary confirming compliance with conditions of the Code of Corporate Governance as stipulated in Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (including amendments thereof) and the same is appended as Annexure Rs.6Rs. which forms part of this Report.

The Company has received a Certificate from Practicing Company Secretary confirming that none of the Directors on the Board of the Company have been debarred or disqualified by MCA or SEBI or any such statutory authority from being appointed / continuing as Director and the same is appended as Annexure Rs.7Rs. which forms part of this Report.

16. ANNUAL RETURN:

As per the requirement under Section 92(3) of the Companies Act, 2013, the draft Annual Return for Financial Year 2023-24 is available on the website of the Company at the link: https://www.cummins.com/en/in/investors/india-annual-reports. The Annual General Meeting is proposed to be held on August 07, 2024. The Company shall upload a copy of Annual Return for Financial Year 2023-24 as soon it has filed the said Annual Return with Registrar of Companies.

17. RISK MANAGEMENT:

Business Risk Evaluation and Management is an ongoing process within the Organization. The Company has a robust Enterprise Risk Management Framework to identify, monitor and minimize risks. As a process, the risks associated with the business are identified and prioritized based on impact, probability of occurrence, organizationRs.s risk management capability and velocity of risk. Such risks are reviewed by the Senior Management, Risk Management Committee and the Board on a regular basis. We have a structured governance mechanism where risks identified under the ERM Framework are categorized based on level of oversight required. Subsequently, Risk Owners and appropriate review forums are identified for each of the risk and metrics are developed for monitoring and reviewing the risk mitigation efforts. The established comprehensive Risk Management Framework ensures that risk areas having a potential impact on CompanyRs.s continued existence as a going concern and to its development are identified and addressed on timely basis.

The Risk Management Committee of the Board of Directors of your Company assists the Board in (a) overseeing and approving the CompanyRs.s enterprise wide risk management framework including the risk management processes, systems and practices of the Company; (b) overseeing that all existing risks and new risks that the organization faces including cyber security risks have been identified and assessed, and (c) overseeing that adequate resources have been allocated to effectively manage those risks. Further details on Risk Management Committee are included in the Corporate Governance Report.

The details and process of Enterprise Risk Management implemented by the Company through Risk Management Policy, are included in the Management Discussion and Analysis, which forms part of Annual Report.

18. INTERNAL FINANCIAL CONTROL:

Your Company has established adequate internal financial controls for ensuring orderly and efficient conduct of its business, including adherence to CompanyRs.s policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and the timely preparation of reliable financial information.

Details of internal financial control and its adequacy are included in the Management Discussion and Analysis Report which is appended as Annexure Rs.3Rs. and forms part of Annual Report.

19. VIGIL MECHANISM/ WHISTLE BLOWER POLICY:

Your Company has a Rs.Vigil Mechanism PolicyRs. which inter-alia provides adequate safeguards against victimization of persons who may blow the whistle. Vigil Mechanism Policy may be accessed on the CompanyRs.s website at the link: https://www.cummins.com/en/in/investors/india-corporate-governance.

In addition, your Company has complied with provisions relating to constitution of an Internal Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and has a stable well governed ethics investigations process. Regular workshops and awareness programmes against sexual harassment are conducted across the organization. During the year under review, no complaint pertaining to sexual harassment of woman employee was reported to the Committee and consequently, no complaints remained unresolved as on March 31,2024.

Your CompanyRs.s leadership culture is to inspire and encourage all employees to reach their full potential. A great leadership culture begins with outstanding leaders who create an outstanding place to work, inspiring and encouraging all employees to achieve their full potential. Leaders connect people and their work to the vision, mission, values, brand promise and strategies of the company, motivating them and giving them a higher sense of purpose. Leaders also build trust in our teams and in our organizations and align on key goals and priorities. Leaders foster open communications and offer various opportunities to employees to express their feedback through several ways.

The Company is committed to the highest possible standards of openness, integrity and accountability in all its affairs and to providing a workplace conducive to open discussion of its business practices. Your Company has laid out infrastructures and policy through which the employees can voice their concerns about suspected unethical or improper practice, or violation of Cummins Code of Business Conduct or complaints regarding accounting, auditing, internal controls or disclosure practices of the Company. Protected disclosures can be made by a whistle blower through an email or dedicated telephone line or letter to the Managing Director of the Company or Letter to Head of Legal Department or Letter to the Chairman of Audit and Compliance Committee or via the Ethics helpline/ Webpage, details of which are available on website www.cumminsindia.com.

20. COMPLIANCE WITH THE CODE OF CONDUCT:

All Directors on the Board and Senior Management have affirmed compliance to the Code of Conduct and Cummins Code of Business Conduct respectively for the Financial Year 2023-24. A declaration signed by the Managing Director affirming compliance with the CompanyRs.s Code of Conduct by the Board of Directors and Senior Management for the Financial Year 2023-24 as required under Regulation 26(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is included in the Corporate Governance Report which is appended as Annexure Rs.4Rs. and forms part of this Report.

Pursuant to regulation 26(5) of the SEBI Listing Regulations, senior management has made periodical disclosures to the Board relating to all material financial and commercial transactions, where they had (or were deemed to have had) personal interest that might have been in potential conflict with the interest of the Company.

21. DIRECTORSRs. RESPONSIBILITY STATEMENT:

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, work performed by the internal, statutory, cost and secretarial auditors and/or external consultant(s) including audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by Management and the relevant Board Committees, including the Audit and Compliance Committee, the Board is of the opinion that the CompanyRs.s internal financial controls were adequate and effective during the Financial Year 2023-24.

Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

(i) in the preparation of the annual accounts for the year ended March 31, 2024, the applicable accounting standards have been followed and there was no material departure from the same;

(ii) they have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as on March 31,2024 and of the profit for the period April 01,2023 to March 31,2024;

(iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) they have prepared the annual accounts on a going concern basis;

(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively during the year; and

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

22. DIRECTORS:

a) Changes in the composition of the Board of Directors:

Appointments and Re-appointments

Ms. Lira Goswami (DIN: 00114636) was appointed by the Board as an Additional (Non-Executive and Independent) Director with effect from May 24, 2023 and was regularized as a Director (Non-

Executive and Independent) in 62^nd Annual General Meeting of the Company held on August 03, 2023, to hold office for period of five (5) consecutive years effective from May 24, 2023 to May 23, 2028, not liable to retire by rotation.

Ms. Jennifer Mary Bush (DIN: 09777114) Non-Executive Non-Independent Director of the Company was appointed as the Chairperson of the Board with effect from November 07, 2023.

Mr. Sekhar Natarajan (DIN: 01031445) was appointed by the Board as an Additional Director (NonExecutive Independent) with effect from May 29, 2024. On recommendation of the Nomination and Remuneration Committee, the Board of Directors have proposed appointment of Mr. Sekhar Natarajan as a Non-Executive and Independent Director, not liable to retire by rotation, for period of five (5) consecutive years effective from May 29, 2024 to May 28, 2029 to the Members of the Company in the upcoming Annual General Meeting. The resolution seeking MemberRs.s approval for his appointment including continuance of Mr. Natarajan beyond December 14, 2028 on account of his attaining the age of 75 years on that date forms part of the Notice.

Mr. Farokh Nariman Subedar (DIN: 00028428) was appointed by the Board as an Additional Director (Non-Executive Independent) with effect from May 29, 2024. On recommendation of the Nomination and Remuneration Committee, the Board of Directors have proposed appointment of Mr. Farokh Subedar as a Non-Executive and Independent Director, not liable to retire by rotation, for period of five (5) consecutive years effective from May 29, 2024 to May 28, 2029 to the Members of the Company in the upcoming Annual General Meeting. The resolution seeking MemberRs.s approval for his appointment forms part of the Notice.

In accordance with the Companies Act, 2013 and Articles of Association of the Company, Mr. Donald Jackson (DIN: 08261104), Director (Non-Executive and Non-Independent) of the Company, retires by rotation and being eligible, offer himself for re-appointment. The proposal seeking MemberRs.s approval for his re-appointment forms part of the Notice, which is also approved by the Board on the recommendation of the Nomination and Remuneration Committee.

As required under Regulation 36(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Secretarial Standard 2, particulars of Directors seeking appointment/ re-appointment at this Annual General Meeting are given in the Annexure to the Notice and the Board on the recommendation of Nomination and Remuenration Committee, recommends the respective resolutions further to the Members for approval.

Cessation

During the year, Mr. P.S. Dasgupta (DIN: 00012552) resigned as Director (Non-Executive and Independent) of the Company effective from close of business hours of May 24, 2023 on account of professional exigencies. Consequently, he also ceased to be a Chairman of Stakeholders Relationship Committee and Corporate Social Responsibility Committee & Member of Audit and Compliance Committee, Risk Management Committee and Nomination and Remuneration Committee with effect from close of business hours of May 24, 2023. He had confirmed vide his resignation letter that there were no other material reasons for his resignation.

Mr. Steven Chapman (DIN: 00496000) resigned as a Chairman, Non-Executive and Non-Independent Director of the Company effective from close of business hours of September 30, 2023, on account of pre-occupation and other personal reasons. Consequently, he also ceased to be a Member of Nomination and Remuneration Committee with effect from close of business hours of September 30, 2023. He had confirmed vide his resignation letter that there were no other material reasons for his resignation.

The Board places on record its appreciation for the outgoing DirectorsRs. invaluable contribution and guidance during their tenure.

Retirement

The Board at its meeting held on May 29, 2024 took note of Mr. Nasser MunjeeRs.s (DIN: 00010180) and Mr. Rajeev BakshiRs.s (DIN: 00044621) upcoming retirement as a Non-Executive Independent Director effective from July 31,2024, upon completion of their second term.

The Board placed on record the deepest appreciation and gratitude for the valuable contributions made by them during their tenure on the Board.

The details of Board composition, number of meetings held, details of directorships of Directors etc. are provided in the Corporate Governance Report which is appended as Annexure Rs.4Rs. and forms part of this Report.

b) Committees of the Board:

The Board of Directors have constituted following Committees in order to effectively cater its duties towards diversified role under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015:-

¦ Audit and Compliance Committee;

¦ Stakeholders Relationship Committee;

¦ Nomination and Remuneration Committee;

¦ Corporate Social Responsibility Committee; and

¦ Risk Management Committee

Details of the constitution, broad terms of references of each Committee and number of meetings attended by individual Director etc. are provided in the Corporate Governance Report which is appended as Annexure Rs.4Rs. and forms part of this Report.

c) Policy on DirectorRs.s Appointment and Remuneration:

The Policy of the Company on DirectorRs.s Appointment and Remuneration, including criteria for determining qualifications, positive attributes, independence of the Directors and other matters provided under Section 178 (3) of the Companies Act, 2013, adopted by the Board viz. Nomination and Remuneration Policy, is appended as Annexure Rs.8Rs. which forms part of this Report.

Details of the remuneration paid to the Board of Directors are provided in the Corporate Governance Report. It is affirmed that the remuneration paid to the Directors is as per the terms laid down in the Nomination and Remuneration Policy of the Company.

d) Board Performance Evaluation Mechanism:

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out the annual performance evaluation of its own performance and the Directors, Chairperson individually, as well as the evaluation of working of its Committees. Details of the evaluation mechanism is provided in the Corporate Governance Report which is appended as Annexure Rs.4Rs. and forms part of this Report.

e) Inter-se relationships between the Directors:

There are no relationships between the Directors inter-se.

f) Familiarization Programme for Independent Directors:

During the year, various documents, background notes etc. were shared with the Independent Directors to have a better insight into state of affairs of the Company.

The Chairman and/or the Managing Director also have periodic discussions with the newly appointed Directors to provide them, details of initiatives of the Company for better understanding of the Company, its business and the regulatory framework in which the Company operates and equip him/ her to effectively fulfil his/ her role and responsibilities as a Director of the Company.

The details of familiarization programmes imparted are available at: https://www.cummins.com/en/in/investors/india-corporate-governance.

g) Declarations from the Independent Directors:

Pursuant to the provisions of Section 149 of the Companies Act, 2013 read along with Rules framed thereunder and Regulation 16(1)(b) and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time, the Independent Directors have submitted inter-alia declarations that each of them meets the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Independent Directors have also confirmed compliance with the provisions of the rule 6 of Companies (Appointment and Qualifications of Directors) Rules, 2014, as amended, relating to inclusion of their name in the databank of Independent Directors.

Further, the Independent Directors have also confirmed that there has been no change in the circumstances affecting their status as Independent Directors of the Company. The said Certificates(s) were taken on record by Board after their requisite assessments.

The Board took on record the declaration and confirmation submitted by the Independent Directors regarding their meeting the prescribed criteria of independence, after undertaking due assessment of the veracity of the same as required under Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

23. NUMBER OF MEETINGS OF THE BOARD:

Five meetings of the Board of Directors were held during the year. The details of the meetings held and attendance there at are provided in the Corporate Governance Report which is appended as Annexure Rs.4Rs. and forms part of this Report. The maximum interval between any two meetings did not exceed 120 days, as prescribed by the Companies Act, 2013.

24. KEY MANAGERIAL PERSONNEL:

There were no changes in the Key Managerial Personnel(s) during the year.

25. PARTICULARS OF EMPLOYEES AND REMUENRATION:

The details in accordance with the provisions of Section 197(12) of the Companies Act, 2013, read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Amendment Rules, 2016, is appended as Annexure Rs.10Rs. which forms part of this Report.

Statement containing particulars of top 10 employees and particulars of employees as required under Section 197(12) of the Act read with Rule 5(2) and (3) of the Companies (Appointment and Remuneration

of Managerial Personnel) Rules, 2014 is a separate Annexure in terms of proviso to Section 136(1) of the Act, the Report and Accounts are being sent to the Members, excluding the aforesaid Annexure. The said Statement is also open for inspection. Any Member interested in obtaining a copy of the same may write to the Company Secretary at Cil.Investors@cummins.com. None of the employees listed in the said Annexure are related to any Director of the Company.

26. INDUSTRIAL RELATIONS:

Industrial Relations at all the plants of the Company continue to be cordial with minimal labour issues. Multiple initiatives have been rolled out for shop employees to ensure better management & governance, career growth to associates working on shop floor at Megasite. Our unionized plant, KEP concluded long term wage settlement with Union in December 2023, settlement inclusive of productivity increase, linkage to new performance categories along with wage rise was signed off and implemented amicably. This settlement will help us to reward better performance, help employees to grow in the organization. We have introduced a performance management system for our shop, office & technician employees with updated performance categories which shall help us to differentiate and recognize with employees contribution in business success. We are taking right steps to provide them access to technology with which employees can leverage our online systems for better learning and bringing effectiveness in their daily work. We have also introduced an internal job posting system for all new positions across organization which helps us to grow talent from non-exempt category. Our emphasis on "Right Environment" for all our employees is continued as earlier to ensure that all our employees feel comfortable and secure at their workplace. We ensured our employees are engaged through various sports activities and family functions such as cricket tournaments for all our employees/ Family Day celebration etc. Employee participation in various Corporate Responsibility projects has been commendable during the Financial Year. They joined hands with Company to drive some critical social impact projects.

27. AUDITORS:

STATUTORY AUDITORS:

At the 60^th Annual General Meeting held on August 12, 2021, M/s. Price Waterhouse & Co Chartered Accountants LLP, Chartered Accountants (Firm Registration No.: 304026E/E-300009) ("PWC"), was appointed as Statutory Auditor of the Company to hold office till the conclusion of 65^th Annual General Meeting.

Accordingly, PWC completed audit for Financial Year 2023-24 and issued AuditorRs.s Report. There are no qualifications, reservations, adverse remarks or disclaimers made by the auditors in the Audit Report for the Financial Year 2023-24.

In terms of the Section 139(1) of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, the appointment of Statutory Auditors does not require ratification by the Members in Annual General Meeting. Accordingly, the Board noted the continued appointment of PWC as the Statutory Auditors of the Company for the Financial Year 2024-25 in its meeting held on May 29, 2024. PWC have informed the Company that they are eligible to continue and their appointment is within the limits prescribed under Section 141 of the Companies Act, 2013.

SECRETARIAL AUDITORS:

M/s Pramod Shah & Associates, (FCS 334), was appointed to conduct the secretarial audit of the Company for the Financial Year 2023-24, as required under Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Secretarial Audit Report in Form MR-3 and Secretarial Audit Report pursuant to Regulation 24A of SEBI (Listing

Obligations and Disclosure Requirements) Regulations, 2015 for Financial Year 2023-24 is appended as Annexure Rs.5Rs. which forms part of this Report. Both the reports do not contain any qualification, reservation or adverse remark.

The Annual Secretarial Compliance Report has been submitted to the Stock Exchanges as required under Regulation 24A of SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.

Further, during the Financial Year 2023-24 and two previous financial years, no penalties, strictures were imposed on the Company by Stock Exchange(s) or SEBI or any statutory authority, on any matter related to capital markets.

The Board on the recommendation of the Audit and Compliance Committee has appointed M/s MMJB & Associates LLP, Practicing Company Secretaries, (LLPIN: AAR-9997) to conduct the secretarial audit of the Company for the Financial Year 2024-25 in its meeting held on May 29, 2024.

COST AUDITORS:

Pursuant to Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, as amended from time to time, the cost audit records maintained by the Company in respect of its manufacturing activity is required to be audited. The Directors, on the recommendation of the Audit and Compliance Committee, had appointed M/s. C S Adawadkar & Co., Cost Accountants (Firm Registration Number: 100401), to audit the cost accounts of the Company for the Financial Year 2023-24 at a remuneration of Rs. 950,000/- plus taxes as applicable and re-imbursement of out of pocket expenses. The remuneration was ratified by Members in the 62^nd Annual General Meeting held on August 3, 2023.

Pursuant to recommendation of the Audit and Compliance Committee, the Board in its meeting held on May 29, 2024 has appointed M/s C S Adawadkar & Co. (Firm Registration No.: 100401), to audit the cost accounts of the Company for the Financial Year 2024-25 at a remuneration of Rs. 950,000/- plus taxes as applicable and re-imbursement of out of pocket expenses. As required under the Companies Act, 2013, the Members ratification for the remuneration payable to M/s. C S Adawadkar & Co, Cost Auditors, is being sought at the ensuing Annual General Meeting.

M/s. C S Adawadkar & Co, Cost Auditors, under Section 139(1) of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, have furnished a certificate of their eligibility and consent for appointment.

28. CORPORATE SOCIAL RESPONSIBILITY POLICY AND ITS REPORT:

Your Company is an early adopter of the Corporate Social Responsibility (CSR) initiatives. Corporate Social Responsibility continues to be the core value of your Company embedded in the core value of caring, which focuses on Rs.serving and improving the communities in which we liveRs.. Your Company works with Rs.Cummins India FoundationRs. towards three broad focus areas viz. Higher Education, Energy and Environment and Equality of Opportunity. Additionally, Company also carries out other strategic initiatives.

Details about the CSR Policy and initiatives taken by the Company during the year are available on our website https://www.cummins.com/en/in/investors/india-corporate-governance. The Annual Report on our CSR Activities inter-alia including the amount spent, unspent together with reasons thereof is appended as Annexure Rs.11Rs. which forms part of this Report.

29. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT :

As stipulated under the Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with the SEBI Circular dated May 10, 2021, your Company has introduced the Business Responsibility and Sustainability Report (Rs.BRSRRs.) for Financial Year 2023-24, which provides enhanced disclosures on Environment, Social and Governance (ESG) practices and focused areas of the Company, is appended as Annexure Rs.12Rs. and forms a part of this Report.

In terms of SEBI Listing Regulations, the Company has obtained, BRSR Reasonable assurance on BRSR Core Indicators from Price Waterhouse & Co Chartered Accountants LLP on a standalone basis for the FY 2023-24.

30. SECRETARIAL STANDARDS:

The Company is in compliance with applicable Secretarial Standards issued by the Institute of Company Secretaries of India, specifically Secretarial Standards on Meetings of the Board of Directors (SS-1) and Secretarial Standards on General Meetings (SS-2).

31. DIVIDEND DISTRIBUTION POLICY:

The Board of Directors of the Company have formulated a Dividend Distribution Policy which is appended as Annexure Rs.9Rs. and forms part of this Report. The policy is also available on our website https://www.cummins.com/en/in/investors/india-corporate-governance.

32. INVESTOR EDUCATION AND PROTECTION FUND (IEPF):

Pursuant to Section 124 and Section 125 of Companies Act, 2013 and IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, during the year under review, the Company has transferred the following unclaimed and unpaid dividend and corresponding shares to IEPF, upon completion of period of seven years:

33. DETAILS OF INSOLVENCY AND BANKRUPTCY CODE:

During the year under review, your Company has neither made any application nor any application is pending under the Insolvency and Bankruptcy Code.

34. DETAILS REGARDING VALUATION REPORT:

During the year under review, your Company has not entered into any One-Time Settlement with BankRs.s or Financial Institutions and therefore, no details of valuation in this regard is available.

35. GENERAL:

Further, the Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions or applicability with respect to these items during the year under review:

a. Issue of equity shares with differential rights as to dividend, voting or otherwise;

b. Issue of shares (including sweat equity shares) by the Company to its employees;

c. The Managing Director of the Company did not receive any remuneration or commission from any of its subsidiaries. Further, the Company had not appointed any other Whole-time Director except the Managing Director;

d. No frauds were reported by Auditors under Section 143(12) of the Companies Act, 2013 and rules frame thereunder;

e. No equity shares were lying under unclaimed suspense account during the financial year 2023-24;

f. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and CompanyRs.s operations. However, MembersRs. attention is drawn to the Statement on Contingent Liabilities, commitments in the notes forming part of the Financial Statement;

g. No material changes and commitments occurred during April 01,2024 till the date of this Report which would affect the financial position of your Company; and

h. Details as prescribed under section 134 of the Companies Act, 2013 and Rules made thereunder, applicable to the Company, have been specifically given in this Report, wherever applicable.

ACKNOWLEDGEMENT:

The Directors would like to express their sincere appreciation for the assistance and co-operation received from the financial institutions, banks, government authorities, customers, vendors and members during the year under review. The Directors also wish to place on record their deep sense of appreciation for the committed services by the CompanyRs.s executives, staff and associates.