CG Power & Industrial Solutions Ltd

Your Directors are pleased to present their Eighty-Seventh Annual Report on the business and operations of your Company along with the audited financial statements, both standalone and consolidated, for the financial year ended 31 March, 2024.

Your Company's standalone turnover from operations was Rs. 7,610 crores during the year under review, compared to Rs. 6,580 crores in the previous year, representing a YoY growth of 16%, and the consolidated turnover was Rs. 8,046 crores compared to Rs. 6,973 crores in the previous year, representing a YoY growth of 15% over the previous year.

Your Company's financial performance for the year ended 31 March, 2024 as compared to the previous year is given in the Table below.

COMPANY FINANCIAL HIGHLIGHTS (in Rs. crores)

The Company recorded robust performance during the year under review resulting in growth in revenue and EBITDA.

A detailed review of the operations and financial performance of your Company and each of its business segments is contained in the ‘Management Discussion and Analysis' section of this Annual Report.

The Industrial Systems recorded revenue of Rs. 5,429 crores as compared to Rs. 4,934 crores during the year 2022-23, registering a growth of approx. 10% as compared to previous year. The operating profit before interest and tax of Industrial Systems stood at Rs. 790 crores as compared to Rs. 787 crores during the previous year, registering a growth of approx. 0.38%.

The Power Systems recorded revenue of Rs. 2,598 crores as compared to Rs. 2,023 crores during the year 2022-23, registering a growth of approx. 28% as compared to previous year. The operating profit before interest and tax of Power Systems stood at Rs. 416 crores as compared to Rs. 227 crores during the previous year, registering a growth of approx. 83%.

In order to meet the expected increase in demand for the products of the Company, the Board has approved the following expansion projects during the year:

A. Expansion of manufacturing capacity of Large Industrial Machines unit of the Company situated at Mandideep, Bhopal at an investment of Rs. 35 crores. The said expansion would increase the capacity of Large Industrial Machines ("LIM") upto 1,728 nos. per annum, from the existing capacity of 1,002 nos. per annum.

B. Expansion of manufacturing capacity of Instrument Transformers and Condenser Bushings, Medium Voltage Swithgears and

GIS unit of the Switchgear division of the Company situated at Nashik at an investment of Rs. 155 crores. The said expansion would increase the capacity of - Instrument Transformers and Condenser Bushings upto 2,494 nos. per annum, from the existing capacity of 384 nos. per annum, Medium Voltage Switchgears upto 5,000 nos. per annum, from the existing capacity of 1,800 nos. per annum and GIS unit upto 780 nos. per annum, from the existing capacity of 168 nos. per annum.

C. During FY 2022-23, the Board had approved the expansion of manufacturing capacity of Power Transformers and Distribution Transformers units of the Company situated at Malanpur and Bhopal at an investment of Rs. 126 crores. The said expansion was for increasing the capacity from 17,000 MVA to 25,000 MVA for Power Transformer and from 6,900 MVA to 9,900 MVA for Distribution Transformers.

Further to the above, approval has been provided during the year for an additional capacity expansion of Power Transformers (T3 unit) at an additional investment of Rs. 31 crores. The said expansion would increase the capacity for Power Transformer from 25,000 MVA to 35,000 MVA.

The Company with an intent to establish India's Semiconductor ecosystem had on 22 November, 2023 filed an application with the Ministry of Electronics and Information Technology (MeitY), Government of India seeking approval for setting up an Outsourced Assembly and Testing ("OSAT") facility and grant of subsidy under the Modi_ed Programme for Semiconductors and Display Fab Ecosystem Scheme of the Government of India.

The Company had on 8 February, 2024 entered into a Joint Venture Agreement and other related documents/ agreements with Renesas Electronics America Inc. and Stars Microelectronics (Thailand) Public Co. Ltd. for setting up the said OSAT facility in India, subject to necessary regulatory and statutory approvals.

The Company has received the approval of the Central Government for setting-up of OSAT facility by the Company and the JV partners at Sanand, Gujarat.

A Joint Venture Company has been formed under the name and style of "CG Semi Private Limited" on 8 March, 2024 for setting up the OSAT facility.

The Board of Directors of the Company, at its Meeting held on

19 October, 2022 had approved a Scheme of Arrangement ("Scheme") under Section 230 and other applicable provisions of the Companies Act, 2013 ("Act"). The Scheme inter-alia provides for capital reorganization of the Company, whereby it is proposed to transfer Rs. 400 crores from the General Reserves to the Retained Earnings of the Company with effect from the Appointed Date i.e. the effective date of the scheme mentioned in the Scheme. The Scheme is subject to receipt of regulatory approvals/ clearances from the Hon'ble National Company Law Tribunal, Mumbai Bench ("NCLT"), Securities and Exchange Board of India ("SEBI"), BSE Limited ("BSE") and National Stock Exchange of India Limited ("NSE") and such other approval/clearances, as may be applicable. BSE is appointed as the Designated Stock Exchange by the Company to obtain the No Objection Certificate ("NOC") from SEBI under Regulation 37 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. BSE has intimated the Company that it can re-submit the Scheme with revised rationale. The Company is evaluating the same.

As stated in the Annual Reports of the Company for previous years, due to financial stress and unviable operations, decisions were taken from time to time to prune / close down certain subsidiaries of the Company. In furtherance of the same, during the year under review, the following Step-down subsidiaries were divested: i. the liquidation process of CG Power Solutions UK Limited, United Kingdom was completed; ii. the winding up process of CG Middle East FZE, Dubai UAE was completed; and iii. the Hon'ble NCLT, Mumbai Bench had vide its order dated 10 November, 2023 declared CG Power Solutions Limited, India as "Dissolved".

On 14 July, 2023, QEI Buyer LLC, a Delaware Limited Liability Company based out of USA had acquired the entire assets of the business excluding Cash of QEI LLC, USA, the Company's Wholly Owned Step-down Foreign subsidiary. The aggregate consideration for the sale, conveyance, transfer, assignment and delivery of all of the Acquired Assets was USD 10.5 Million. The name of QEI LLC has changed to CG DE Sub, LLC w.e.f. 18 July, 2023.

During the year under review, the Company has received an improved Credit Rating of ‘IND AA+' from India Ratings & Research as against the earlier rating of ‘IND AA'.

Company has signed a Term Sheet with M/s. K Raheja Corp.

Group Company for the joint development of the Company's Property ‘CG House' situated at Dr. Annie Besant Road, Worli, Mumbai, built on leasehold land. The project is expected to be completed over 5 years from the date of execution of the Development Agreement, subject to the receipt of necessary approvals.

1. Mr. Vellayan Subbiah, Chairman

Mr. Vellayan Subbiah, Chairman has been awarded the ‘Ernst

& Young Entrepreneur of the Year Award 2023' (EOY) at the 25^th Anniversary of EY EOY India Awards.

EY Entrepreneur of the Year is the world's most prestigious business award for entrepreneurs. This esteemed award recognizes the entrepreneurial excellence of our Chairman, whose visionary leadership significantly contributed to the progress of our nation. The 25^th Anniversary of the Awards celebrated the theme of ‘Builders of a Better India.'

The nine-member independent jury recognized Mr. Vellayan Subbiah for his excellent leadership and bold strategies in transforming businesses and seizing new opportunities through acquisitions and diversification.

2. Mr. Natarajan Srinivasan, Managing Director

Mr. Natarajan Srinivasan, Managing Director has been honored with the ‘Transformational Leader Award - Midcap Category' for 2022-23 by the Asian Centre for Corporate Governance & Sustainability at the ‘10^th Asia Business Responsibility Summit & The Leadership, Corporate Governance, Sustainability & CSR Awards,' held in Mumbai on 27 February, 2024.

The shortlisting of the winners was based on independent research and thorough evaluation carried by the governing bodies - the Asia Centre for Corporate Governance & Sustainability, in collaboration with the Manendra & Young Knowledge Foundation, along with the panel of eminent jury members.

The objective of these awards is to raise the quality of Corporate Governance and to recognize Companies, Industry leaders, and Directors, who are doing exemplary work in improving Governance standards of their respective companies.

Pursuant to the completion of the family arrangement entered into amongst various members of the Murugappa family who are part of the promoters/members of the promoter group of the Company and on receipt of the request(s) from the Outgoing Promoters, the Board at their Meeting held on 23 January, 2024 had subject to approval of the Stock Exchanges, considered and approved the request of the following Outgoing Promoters for re-classification from the ‘Promoter and Promoter Group' category to ‘Public shareholder category, as per Regulation 31A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The shareholding of the Outgoing Promoters in the Company is as follows:

Subsequent thereto, the Company had on 21 February, 2024 made applications to the Stock Exchanges for their approval for the aforementioned re-classification. The applications are under process.

The Board of Directors at their Meeting held on 23 January, 2024, declared an interim dividend of Rs. 1.30 (Rupees One and Paise Thirty only) (65%) per equity share of face value Rs. 2/- (Rupees Two only) each. The interim dividend was paid to the shareholders on 21 February, 2024. The total outflow on account of said dividend was

Rs. 198.55 crores. Your Board does not recommend any further dividend for the financial year 2023-24.

The dividend declared is in accordance with the Dividend Distribution Policy of the Company. The Dividend Distribution Policy, in terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is available on the Company's website at - https://www.cgglobal.com/ admin/uploads_new/Dividend_Distribution_Policy.pdf

Your Directors do not propose to transfer any amount to the reserves.

Details of subsidiaries as on 31 March, 2024: There are 3 Indian and 16 foreign subsidiaries (including 2 subsidiaries in Belgium along with their subsidiaries declared as bankrupt; 3 subsidiaries under voluntary liquidation and 1 subsidiary declared insolvent). During the year under review, your Company has incorporated "CG Semi Private Limited" as a Subsidiary Company for carrying out the OSAT business. Apart from this, your Company has not incorporated or acquired any company.

The Corporate Insolvency Proceedings initiated under the Insolvency and Bankruptcy Code, 2016 during the financial year 2021-22, by the Company against its Wholly Owned Subsidiary - CG Power Solutions Limited ("CGPSOL"), was approved by the Hon'ble National Company Law Tribunal, Mumbai Bench vide its Order dated 10 November, 2023. Pursuant to the said Order, CGPSOL stands dissolved.

Pursuant to Section 136 of the Companies Act, 2013 ("the Act"), the audited financial statements, including the consolidated financial statements and related information of your Company and audited/ unaudited annual accounts of each of its subsidiaries are placed on the website of your Company.

Highlight of performance of subsidiaries of the Company is given below:

1. CG Adhesive Products Limited (formerly known as CG-PPI Adhesive Products Limited):

CG Adhesive Products Limited ("CGAPL") is the Company's subsidiary in Goa. Your Company holds 83.59% of CGAPL's equity share capital. CGAPL manufactures and deals in specialty adhesive tapes and labels.

During the year under review, CGAPL recorded revenue of

Rs. 30.27 crores (previous year: Rs. 23.60 crores) and registered profit before tax of Rs. 4.87 crores (previous year: Rs. 2.90 crores).

2. CG DE Sub, LLC (formerly known as "QEI, LLC"):

CG DE Sub, LLC ("CGDE") is the subsidiary of CG Power Americas, LLC, and a wholly owned step-down subsidiary of your Company in US, operating in multiple markets and business sectors within and relating to distribution control, load management control, supervisory control and data acquisition systems. Name of the subsidiary has been changed from QEI, LLC to CG DE Sub, LLC w.e.f. 18 July, 2023.

The Company, during the year has sold net assets in CGDE for a total consideration of USD 10.5 Mn as on 14 July, 2023 to QEI Buyer, LLC. Net gain (net of transactions costs and taxes) on sale of net assets is $ 7.90 Mn i.e. equivalent to Rs. 65.39 crores.

CGDE till the date of sale of net assets, had recorded revenue of $ 3.06 Mn i.e. equivalent to Rs. 25.35 crores. It registered profit before tax of $ 0.54 Mn i.e. equivalent to Rs. 4.50 crores. During previous year, CG DE Sub, LLC had recorded revenue of $ 11. 46 Mn i.e. equivalent to Rs. 94.23 crores and registered profit before tax of $ 1.41 Mn i.e. equivalent to Rs. 11.62 crores.

3. CG Drives & Automation Sweden AB:

CG Drives & Automation Sweden AB is a Subsidiary of CG

Industrial Holdings Sweden AB and a wholly owned step-down Subsidiary of your Company in Sweden. It is a technology partner for energy efficient products and solutions. It develops, manufactures and markets the equipment for control and protection of industrial processes.

During the year under review, CG Drives & Automation Sweden AB recorded revenue of SEK 334.17 Mn i.e. equivalent to

Rs. 265.33 crores (previous year: SEK 299.85 Mn i.e. equivalent to Rs. 236.57 crores) and registered profit before tax of SEK 36.31 Mn i.e. equivalent to Rs. 28.83 crores. (previous year: SEK 21.84 Mn i.e. equivalent to Rs. 17.23 crores).

4. CG Drives & Automation Germany GmbH:

CG Drives & Automation Germany GmbH is a Subsidiary of CG Drives & Automation Sweden AB, and a wholly owned step-down Subsidiary of your Company in Germany. It is into manufacture, sale, maintenance and repair of electronic devices and facilities in the area of drive technology.

During the year under review, CG Drives & Automation Germany GmbH recorded revenue of € 21.19 Mn i.e. equivalent to

Rs. 191.12 crores (previous year: € 22.24 Mn i.e. equivalent to

Rs. 196.20 crores). It registered profit before tax of € 0.60 Mn i.e. equivalent to Rs. 5.40 crores (previous year: € 1.52 Mn i.e. equivalent to Rs. 13.40 crores).

5. CG Drives & Automation Netherlands BV:

CG Drives & Automation Netherlands BV is a Subsidiary of CG Drives & Automation Sweden AB, Netherlands, and a wholly owned step-down Subsidiary of your Company in Netherlands. It is into development, production and marketing of inverter products including electrical motor drives, and trading of related products.

During the year under review, CG Drives & Automation Netherlands BV recorded revenue of € 9.94 Mn i.e. equivalent to Rs. 89.68 crores (previous year: € 8.09 Mn i.e. equivalent to

Rs. 71.32 crores) and registered profit before tax of € 0.55 Mn i.e. equivalent to Rs. 4.93 crores. (previous year: € 0.58 Mn i.e. equivalent to Rs. 5.14 crores).

Other than above, the remaining subsidiaries of the Company do not have any business operations. In terms of Section 129 of the Act, statement containing salient features of the financial statements of your Company's subsidiaries/ associates/ joint ventures companies in Form AOC-1 is given in the notes to the financial statements in this Annual Report.

Pursuant to Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI LODR"), a policy for determining material subsidiary of your Company as approved by the Board of Directors is available on the website under: https:// www.cgglobal.com/admin/uploads_new/Policy_determining_Mat_ Subsidiaries.pdf

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company's operations in future.

The investigations by Central Bureau of Investigation (CBI), Serious Fraud Investigation Office (SFIO) and Enforcement Directorate (ED) into the affairs of your Company and its subsidiaries pertaining to the past period and against the erstwhile promoters/directors of the Company relating to transactions that took place when the Company was under the control of the previous management / promoters, details of which have already been reported to the stock exchanges / in the previous Annual Reports of the Company, are in progress. Your Company is extending full co-operation to these agencies and information and documents as sought by them are being promptly provided by the Company.

STATUTORY AUDITORS

M/s. S R B C & CO LLP, Chartered Accountants (ICAI Firm Registration Number 324982E/ E300003) were re-appointed as Statutory Auditor of the Company at the 86^th Annual General Meeting ("AGM") held on

27 July, 2023, to hold office for a second term of five consecutive years from the conclusion of the 86^th AGM till the conclusion of the 91^st AGM to be held in the year 2028.

The Auditor's Report on the financial statements of the Company for the year ended 31 March, 2024, which forms part of the Annual Report of the Company, does not contain any qualification, reservation or adverse remark.

COST AUDITOR

As per the requirement of Section 148(1) of the Act read with rules made thereunder, your Company is required to maintain cost accounts and records. Accordingly, your Company has maintained cost accounts and records for financial year 2023-24 as applicable for its product range.

During the year under review, the Company filed the Cost Audit Report for the financial year 2022-23 with the Registrar of Companies, Mumbai, within the prescribed statutory timelines.

Upon recommendation of the Audit Committee, the Board has re-appointed M/s. R. Nanabhoy & Co., Cost Accountants (Firm Registration Number 000010) as Cost Auditor of your Company for financial year 2024-25 at a remuneration of Rs. 8,30,000/- (Rupees Eight Lakh Thirty Thousand only) per annum plus out-of-pocket expenses and taxes, as applicable. The Act mandates that the remuneration payable to the Cost Auditor is rati_ed by the shareholders. Accordingly, a Resolution seeking the Shareholders' rati_cation of the remuneration payable to the Cost Auditors for the financial year 2024-25 is included in the Notice convening the ensuing Annual General Meeting.

SECRETARIAL AUDITOR

Your Company had appointed M/s. Parikh & Associates, Practicing Company Secretaries, Mumbai (Firm Registration Number: P1988MH009800), to undertake the Secretarial Audit of the Company for financial year 2023-24.

Your Company has generally complied with the Secretarial Standards and the Secretarial Audit Report is annexed in Form MR-3 for financial year 2023-24 as Annexure 4 to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

The Company emphasizes the importance of robust internal control system which lays down the foundation of strong governance structure and promote a culture of integrity, transparency and accountability in the business. Given the nature of business and size of its operations, the Company has designed and instituted a strong internal control system that comprises well-defined organization structure, roles and responsibilities, documented policies and procedures to reduce business risks through a framework of process controls. A detailed note on Internal Financial Controls is included in the Management Discussion and Analysis section of this Annual Report.

BOARD OF DIRECTORS

Your Company's Board of Directors consists of eight Directors comprising (i) Three Non-Executive Non-Independent Directors which includes the Non-Executive Chairman of the Board, (ii) Four Non-Executive Independent Directors, and (iii) a Managing Director.

Mr. Vellayan Subbiah, Non-Executive Director, is the Chairman of your Board. Mr. P S Jayakumar, Ms. Sasikala Varadachari, Mr. Sriram Sivaram and Mrs. Vijayalakshmi R Iyer are Independent Directors in terms of Regulation 16 of the SEBI LODR and Section 149 of the Act. Mr. M A M Arunachalam and Mr. Kalyan Kumar Paul are Non-Executive Non-Independent Directors on your Board.

Mr. Natarajan Srinivasan is the Managing Director on your Board.

Your Board consists of professionals with diverse functional expertise, industry experience, educational qualifications and gender mix relevant to fulfilling your Company's objectives and strategic goals.

The Company has received a certificate from M/s. Parikh & Associates, Practicing Company Secretaries, confirming that none of the Directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as Directors of companies by the SEBI, Ministry of Corporate Affairs, or any such other statutory authority.

During the year under review, based on the recommendations of the Nomination and Remuneration Committee, your Board had re-appointed Mr. Natarajan Srinivasan as Managing Director of the Company for the period from 26 November, 2023 upto 30 April, 2025 and the said re-appointment was approved by the Members at the AGM held on 27 July, 2023.

In terms of the provisions of Section 152 of the Act and the Rules made thereunder and Article 114 of the Articles of Association of the Company, Mr. Vellayan Subbiah retires by rotation at the ensuing Annual General Meeting of the Company and is eligible for re-appointment.

As per Regulation 36 of the SEBI LODR and Secretarial Standard-2 on General Meetings issued by the Institute of Company Secretaries of India (SS-2), a brief profile and other relevant details regarding re-appointment of Mr. Vellayan Subbiah are contained in the Annexure accompanying the explanatory statement to the Notice of the ensuing Annual General Meeting.

Your Company has received declarations from all its Independent Directors confirming that they meet the criteria of independence as laid down under Section 149 of the Act and Regulation 16 of the SEBI LODR.

In the opinion of the Board, all the Independent Directors of your Company fulfill the conditions of independence as specified in the Act and SEBI LODR and are independent of the management and have the integrity, expertise and experience including the pro_ciency as required for effectively discharging their roles and responsibilities in directing and guiding the affairs of the Company.

During the financial year 2023-24, your Board of Directors met 5 times, in accordance with the provisions of the Act, SEBI LODR and other statutory provisions.

Details of Board Meetings held and the attendance of Directors are given in the Section titled "Report on Corporate Governance", which forms part of this Annual Report.

Your Board has established following committees in compliance with the requirements of the Act and SEBI LODR: (i) Audit Committee, (ii) Nomination and Remuneration Committee, (iii) Corporate Social Responsibility Committee, (iv) Risk Management Committee, and (v) Stakeholders' Relationship Committee.

Details of composition of the statutory committees, number of meetings held and attendance of Committee Members thereof during the financial year, are given in the Section titled "Report on Corporate Governance" forming part of this Annual Report.

All recommendations of the Audit Committee have been accepted by the Board.

Your Board has constituted a Finance Committee comprising of Mr. Vellayan Subbiah, Chairman of the Board and Mr. Natarajan Srinivasan, Managing Director, to inter-alia take decisions relating to borrowings, investments and lending from time to time within such limits / sub-limits as may be decided by the Board.

Pursuant to Section 203 of the Act, the Key Managerial Personnel of the Company as at the end of the financial year were:

Mr. Natarajan Srinivasan, Managing Director

Mr. Susheel Todi, Chief Financial Officer

Mr. Sanjay Kumar Chowdhary, Company Secretary (w.e.f. 9 May,

2023)

During the year under review, P Varadarajan resigned as the Company Secretary and Compliance Officer of the Company w.e.f. 8 May, 2023.

Your Company has formulated a Remuneration Policy governing the appointment and remuneration of Directors, KMP, Senior Management and other employees. The Remuneration Policy of the Company provides a performance driven and market-oriented framework to ensure that the Company attracts, retains and motivates high quality executives who can achieve the Company's goals, while aligning the interests of employees, shareholders and all stakeholders in accordance with the Murugappa Group's values and beliefs. The terms of reference of the Nomination and Remuneration Committee includes formulation of criteria for determining qualifications, positive attributes and independence of Directors.

The Company's Remuneration Policy is available on the website of the Company under: https://www.cgglobal.com/assets/pdf_files/CG_ Remuneration_Policy_21_22.pdf

Your Company has adopted a Board Diversity Policy to reap the benefits of a broader experience in decision making.

In line with the requirements of the Act and the SEBI LODR, an annual evaluation of performance of the Board, its Committees and individual Directors was carried out during the year under review. Pursuant to the provisions of Schedule IV of the Act and Regulation 25 of the SEBI LODR, the Independent Directors of your Company, at their Meeting held on 15 March, 2024, evaluated the performance of Non-Independent Directors, the Board as a whole, performance of the Chairman; and also assessed the quality, quantity and timeliness of flow of information between the Management and the Board.

Pursuant to Regulation 25 of the SEBI LODR, your Company familiarizes its Independent Directors with their roles, rights, responsibilities as well as the Company's business and operations. Moreover, Directors are regularly updated on the business strategies and performance, management structure and key initiatives of businesses at every Board Meeting. Details of the programme can be viewed under the following link available on the Company's website: https://www.cgglobal.com/ assets/pdf_files/Familiarisation_Programme_for_Independent_ Directors.pdf

All related party transactions that were entered into during the financial year under review were on arm's length basis and were in the ordinary course of business. Hence, disclosure of particulars of contracts/ arrangements entered into by your Company with related parties in Form AOC-2 is not applicable for the year under review. There were no materially significant related party transactions during the year which may have a potential conflict with the interest of the Company at large. The Audit Committee grants omnibus approval for transactions which are of repetitive nature with related parties.

Related party transactions entered during the year under review are disclosed in the notes to the Financial Statements. None of the Directors had any pecuniary relationship or transactions with the Company, except the payments made to them in the form of remuneration / sitting fee.

The Company's Related Party Transactions Policy is available on the website of the Company under: https://www.cgglobal.com/assets/ pdf_files/Related_Party_Transaction_Policy_1_Apr_2022.pdf

Pursuant to the provisions of Section 186 of the Act and Schedule V of the SEBI LODR, particulars of loans, guarantees given and investments made by your Company during financial year 2023-24 are given in the notes to the Financial Statements.

In accordance with Regulation 34(2)(f) of the Listing Regulations, the BRSR forms part of this Annual Report. The report describes initiatives undertaken by the Company from an environmental, social and governance perspective. Further, SEBI vide its Circular No. SEBI/ HO/CFD/CFD-SEC-2/P/CIR/2023/122 dated 12 July, 2023, updated the format of BRSR to incorporate BRSR core, a subset of BRSR, indicating specific Key Performance Indicators (KPIs) under nine ESG attributes, which are subject to mandatory reasonable assurance by an independent assurance provider. In accordance with this requirement, the Company has appointed CNK & Associates LLP, Chartered Accountants as the assurance provider.

Company's comprehensive Risk Management Framework involves a three-tiered approach, taking into account the Enterprise Risks, Process Risks and Compliance Risks.

Enterprise risk identification and mitigation initiatives are handled through an on-going process for each of the businesses, as well as for the Company as a whole. The coverage extends to all key business exposures. After getting a measure of each such enterprise risk, the mitigation actions are tracked.

The Risk Management Committee of the Board reviews the key risks associated with the businesses of your Company and their mitigation measures. A detailed note on ERM is given in the Management Discussion and Analysis, forming part of this Report.

The Company has during the year initiated the Business Continuity Plan/ Management and has framed the Business Continuity Management System Policy, Governance and Framework.

During the year under review, your Company's R&D activities continued to focus on development of indigenous and energy efficient products.

Developed 2 major new products for Railway application to support the Government of India initiative and thrust on developing Railway infrastructure. The products developed were as below:

? V connected - 132kV, 63MVA traction power transformer to support new catenary system of 2x25kV designed for high-speed trains and reduce transmission losses.

? Auto transformer of 55/2x27, 5kV, 16.5MVA capacity to feed double catenary system to support high speed infrastructure with reduced transmission losses.

The products were declared developed after successfully conducting short circuit testing at CPRI Bangalore and Bhopal.

Developed knowledge and knowhow to do extensive electromagnetic and electrostatic analysis of power transformer models for improving reliability and performance parameters.

Conducted short circuit test successfully on the highest capacity auto transformer rated 160MVA/220/132kV.

Successfully tested and supplied 500MVA/400/220kV auto transformers to various utilities with benchmark performance parameters including partial discharge.

Achieved benchmark noise level of <= 75dB in shunt reactors.

Developed 30MVA/132kV trackside transformers for Delhi and

Patna Metro rail systems.

Developed high creepage (31 mm/kV) designs of 245 kV and 420 kV EHV Current and Capacitor Voltage Transformers in Polymer and Porcelain Insulators for Indian utilities, aimed at compliance of new specification standardization drive at all utilities to address the failures of product due to significant increase of pollution in India.

Indigenously designed, developed and type tested 170kV

40kA Single phase/ Gang operated spring-spring Gas Circuit Breaker and 420kV 50kA spring-spring Gas Circuit Breaker with Composite Insulator for global market. These breakers also meet the stringent requirement of high dielectric performance and working in high seismic prone locations across globe and are equipped with SMART monitoring system to assess its condition online to take decision on maintenance/ repair over its life span.

Indigenously developed and successfully type tested Compact

66kV-145kV Gas Insulated Switchgear (GIS) with reduced footprint. Customer will get benefited by savings on Civil Construction Cost for Sub-Station. Additionally, it will support sustainability initiatives by Reduced Material Consumption, Reduced SF6 Gas Consumption and thus reduced Environmental Impact.

Additionally, to support sustainability initiatives, redesigned

245kV GIS Product by design optimization resulting into better access for serviceability at site for customer. Reduced Material Consumption, Reduced SF6 Gas Consumption and thus Reduced Environmental Impact.

During the year FY24, Vacuum Interrupter and Instrument

Transformer Division at Aurangabad continued to focus on development of Indian railway rolling stock product 25kV Primary Voltage Transformer, smart switching devices as per Industry 4.0 norms for Distribution Grid, 52kV, 4500Amp current bushing for solar power plant substation transformer and 145kV Power Voltage Transformer for auxiliary power supply of substation.

25kV Primary Voltage Transformer: Developed loco head

25kV Primary Voltage Transformer (PVT) for Indian Railways. Application of 25kV PVT is primarily for measurement of catenary voltage. The division successfully completed all type test as per CLW specifications in line with requirement given in IEC Standard 61869, CEN/TS 45545, EN 61373 and critical test i.e. Ferro resonance and test as per European Standard EN 50152-3-3.

Developed smart switching devices for distribution grid for voltage class up to 33kV. Auto-Reclosers and Sectionalisers. These new products comply with the Industry 4.0 norms of digital Integration and communication capabilities. These products enhance the reliability of electrical power in distribution grid. These devices are provided with electrical as well as mechanical interlocks to avoid foul operations.

High current condenser bushing: 52kV, 4500A for pulling substation power transformer: CG has successfully developed 52kV, 4500Amp oil impregnated paper insulation high current condenser bushing. This product is developed for renewable energy pulling substation power transformers. Successfully completed all type tests as per standard IEC 60137. CG is first Indian company to develop high current bushing for duct application in solar power generation.

145kV, 100kVA Power Voltage Transformer for auxiliary power supply in substation: Developed 145kV, 100kVA Power Voltage Transformer for auxiliary power supply to the substation and green field projects. CG is first Indian company to develop OIP (Oil Impregnated Paper) insulation 145kV, 100kVA Power Voltage Transformer. This type of transformer offers all the features of a potential transformer (which is generally used in substation for measurement and protection in substation) with the applications of a Small Power Transformer.

Designed, developed, and successfully type tested 12 kV, 40 kA,

3150 A VCB with extended electrical and mechanical endurance class E2, C2, M2 as per IEC 62271- 100 suitable for earthed and unearthed neutral system. This is specially developed for power plant and premium industrial market segment.

Designed, developed, and successfully type tested 33 KV, 31.5KA,

2500 A outdoor porcelain clad VCB with extended electrical and mechanical endurance class E2, C2, M2 suitable for earthed and unearthed neutral system. This is specially developed for sub transmission and distribution network to increase our product offering.

Designed, developed, and successfully type tested internal arc compliant 12 kV, 21kA 630 A RMU with IAC rating 21kA / 1sec AFLR. The Internal arc gases disposed to the trench to avoid any damage to the public and property adjacent to the panel thus increasing the public and user's safety.

Continued to prioritize the development of innovative and energy-efficient products, with a focus on indigenous solutions and achieved several milestones, including:

Development of new IE2+ and IE3 series from 160kW and above with improved efficiency, cost effectiveness and higher output to volume ratio.

Development of cost-effective fire fighting application motors from 160 Frame to 315 Frame in line with market demands.

Development of Neema premium multi-potential range motors for overseas customers.

Development of next gen DC motors from 315 frame and above range with better serviceability and better cooling.

Implementation of various latest design tools to analyse the parameters of designed products and achieve cost savings on raw materials.

Development of 250W BLDC Hub Motor for E-cycle.

Development of application specific motors for F&B, Agro, AHU,

Appliances and Poultry applications.

Introduction of H+ range of power stacks and 7^th generation of IGBTs offering better performance and more compact footprint.

Improvement of thermal performance of product and elevating the rated temperature to 45/50 deg C against existing 40 deg C making the product line more competitive.

Improvement in cost efficiency of 200kW drive by introduction of new 7^th generation IGBTs.

Range extension of general purpose drive from earlier 37kW to 55kW. This extension will be used to cater wider customer segment and will make our product offering more competitive.

Introduction of new range of active front end and low harmonic drives from 7.5kW to 45kW.

Development of new applications in solar drives enabling us to cater to rural markets for grid and PV power sharing, flour mills and compressors.

Developed insulation scheme for IIC 11kV for Ex ec and 6.6kV for

Ex eb Hazardous area classification.

Developed retrofitting solutions to customers from our LIM plant.

Expansion of our product range of 10/12 pole large motors in frames 630, 710, and 800 with a specific focus on water sector applications.

Implementation of various latest design simulation tools to analyse the parameters of designed products and achieved cost savings on raw materials.

Started developing special product development for Nuclear

Power Plant.

Virtual test benches have been implemented to test train control operations, doing away with the necessity for actual control panels and driver desk equipment during TCMS software testing.

Developed source code database software for storage and retrieval purposes and implemented a software version control system.

2.4 MW integration test setup was developed to verify the operation of MEMU's propulsion system equipment.

Designed a facility for testing the converter performance validation of 9000 HP Loco converters.

A driving test configuration with variable voltage and frequency was developed to validate the performance of the traction motor in both regeneration and motoring modes.

Developed DC Traction Motor for export markets.

Developed a fully suspension Traction Motor with High Speed for

Metro Applications.

Developed Traction Converter and Train Control and Management

Software (TCMS) for MEMU on Board.

Designed Gear Drive Assembly, Auxiliary Power Converter, and

Axle Hung Nose Suspension Traction Motor for MEMU on Board Applications.

Designed Coach Control and Monitoring Panels (End Wall

Panels), Driver Desk, and Rear Wall Control Panel for MEMU on Board.

Developed Bogie Frame and Traction Rod for 9000 HP Locomotive

Application; Highest Powered (1.2 MW) Traction Motor; and Traction Converter.

Designed a 9000 HP Bogie Traction Motor Fail-Safe Mechanism.

Amrit Bharat Express Composite Converter was designed & developed.

Hotel load converter for the Shatabdi and Rajdhani trains.

Details, as required under Section 134 of the Act read with the Companies (Accounts) Rules, 2014, are given in the prescribed format as Annexure 1 to this Report.

A detailed review of the Environment, Health and Safety (EHS) measures undertaken by your Company is given in the BRSR Report, which forms part of this Report.

A detailed review of the operations, performance and future outlook of your Company and its businesses is given in the section titled "Management Discussion and Analysis", which forms part of this Report.

A section on Corporate Governance standards followed by your Company, as stipulated under Schedule V of SEBI LODR, is enclosed separately.

A certificate from M/s. Parikh & Associates, Practicing Company Secretaries, regarding compliance with the conditions of Corporate Governance, as stipulated under SEBI LODR, is annexed to the Report on Corporate Governance.

In terms of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended ("CSR Rules"), your Company has during the year 2023-24 spent Rs. 900 lakhs being two percent of the average net profits of your Company during the three preceding financial years in accordance with the CSR Policy of the Company.

Annual Report on CSR initiatives as required under the CSR Rules is annexed as Annexure 2 and forms an integral part of this Report.

Details of the composition of the CSR Committee and CSR Policy of the Company are also provided in the said Annexure.

Your Company has appointed Datamatics Business Solutions Limited ("DBSL"), an entity which is registered with SEBI, as its Registrar and Share Transfer Agent. Contact details of DBSL are mentioned in the section titled "Report on Corporate Governance" of this Annual Report.

Disclosures pertaining to remuneration and other details as required under Section 197 of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are given in Annexure 3 to this Report. In accordance with the provisions of Section 197(12) of the Act, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the names and other particulars of the employees covered under the said rule shall be made available to any Member on a specific request made in this regard, by him or her in writing.

The Shareholders of the Company had, through Special Resolution passed by Postal Ballot on 23 September, 2021, approved the introduction and implementation of Employee Stock Option Plan 2021 ("ESOP 2021"/ "Scheme") and authorized the Board / Nomination and Remuneration Committee to issue to the eligible employees, such number of Options under the ESOP 2021, as would be exercisable into, not exceeding 2,70,00,000 (Two crores Seventy Lakhs) fully paid-up equity shares of Rs. 2/- each in the Company. ESOP 2021 is in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.

The Company has so far granted 43,43,590 Options to employees. 18,34,100 Options were granted in the year 2021-22, 4,53,140 Options were granted during the year 2022-23 and 20,56,350 Options were granted during the year 2023-24. Out of the total options granted till date, 5,49,580 options were cancelled during the year under review.

The disclosures required to be made under SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 are made available on the website of the Company under https://www.cgglobal. com/. The certificate under the said regulations shall be made available for inspection in accordance with statutory requirement.

Your Company has adopted a Prevention of Sexual Harassment Policy and has also constituted an Internal Complaint Committee in compliance with the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Internal Complaint Committee has been constituted region-wise, and is presided by a woman employee and is comprising of five to seven Company employees with an external member, to whom employees can address their complaints.

During the year under review, no incident of sexual harassment was reported.

Your Company has set up a vigil mechanism, viz. a Whistle Blower Policy, as per the provisions of Section 177 of the Act and Regulation 22 of the SEBI LODR to enable its stakeholders to report violations, genuine concerns, unethical behaviour and irregularities, if any, which could adversely affect the Company's operations. No person has been denied access to the Chairman of the Audit Committee of the Board.

Your Company has not accepted any deposits from public or its members under Chapter V of the Act and no deposits were outstanding as on 31 March, 2024.

During the year under review, your Company has allotted 2,01,780 equity shares of Rs. 2 each, under the ESOP Scheme 2021, to the option grantees who had exercised their options. The detailed are provided below:

As at 31 March, 2024, the share capital of the Company is as follows:

The authorized share capital of your Company is

Rs. 407,60,00,000/- (Rupees Four Hundred Seven Crores and Sixty Lakh) divided into 203,80,00,000 equity shares of

Rs. 2/-(Rupees two) each.

The subscribed and paid-up share capital of your Company stood at Rs. 305,46,66,428/-(Rupees Three Hundred Five Crores Forty Six Lakhs Sixty Six Thousand Four Hundred Twenty Eight only) consisting of 152,73,33,214 equity shares of Rs. 2/- (Rupees two) each.

Your Company's equity shares are listed and traded on BSE Limited and National Stock Exchange of India Limited.

Pursuant to Sub-Section 3(a) of Section 134 and Sub-Section (3) of Section 92 of the Act, a copy of the Annual Return of the Company as on 31 March, 2024 is placed on the website of the Company and the same is available on the following link: https://www.cgglobal.com/ financials#annualfireport

During the year under review, the Statutory Auditors of the Company had not reported any matter under Section 143(12) of the Act. Therefore, disclosure is not applicable in terms of Section 134(3)(ca) of the Act.

The Company has not issued any equity shares with differential rights as to dividend, voting or otherwise.

There are no applications or any proceedings pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) against the Company.

On 11 August, 2023, the Company and JC Flowers Asset Reconstruction Company Private Limited (‘JCF ARC') (Yes Bank's Assignee) had entered into a Settlement Agreement in respect of recovery case filed by Yes Bank Limited before Debt Recovery Tribunal, Delhi seeking a sum of Rs. 593.10 crores from defendants Nos. 1 to 6, the Company being defendant No. 3 and a criminal complaint filed before the Court of Metropolitan Magistrate at Patiala House, New Delhi for an amount of

Rs. 210 crores. Pursuant to the terms of the said Agreement, the Company has made a payment of Rs. 42 crores and JCF ARC has filed an application to unconditionally withdraw the said two cases initiated and pending against the Company, in order to fully discharge the Company from all the obligations whatsoever arising out of the said cases/ litigations. JCF ARC has already withdrawn the case against the Company filed before Debt Recovery Tribunal, Delhi on 14 September, 2023 and it has filed an application before Metropolitan Magistrate at Patiala House, New Delhi for withdrawal of criminal complaint, which is under process.

There were no material changes and commitments affecting the financial position of the Company, between the end of the financial year and the date of this Report.

The Board of Directors confirm that the Company has in place a framework of internal financial controls and compliance system, which is monitored and reviewed by the Audit Committee and the Board besides the statutory, internal and secretarial auditors. To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013:

a) the annual Financial Statements for the year ended 31 March, 2024 have been prepared in conformity with the applicable accounting standards along with proper explanation relating to material departures, if any; b) that such accounting policies as mentioned in the Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March, 2024 and of the profit of the Company for the year ended on that date;

c) that proper and sufficient care has been taken 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;

d) that the annual Financial Statements have been prepared on a going concern basis;

e) that proper internal financial controls to be followed by the Company have been laid down and that the financial controls are adequate and were operating effectively; 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.

The Board of Directors wishes to convey its gratitude and appreciation to all employees for their tremendous efforts as well as their exemplary dedication and contribution to the Company's performance. The Directors would also like to thank the Central and State Governments, Shareholders, State Bank of India, Ministry of Corporate Affairs, Customers, Suppliers, Dealers, Employees and Employee Unions and all other business associates for their continued support extended to your Company.