Craftsman Automation Ltd

To

The Members,

The Directors are pleased to present the Thirty eight (38^th) Annual Report of the Company together with the audited financial statements (consolidated and standalone) for the year ended 31^st March 2024.

In compliance with the applicable provisions of Companies Act, 2013, (including any statutory modification(s) or amendments thereof, for time being in force) ("Act") and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), this report covers the financial results and other developments during the financial year ended 31^st March, 2024, in respect of Craftsman Automation Limited.

1.1. The financial performance of the Company for the financial year ended 31^st March, 2024 is summarised below:

(C in Crores)

Standalone Financial Results:

During the Financial Year (FY) 2023-24, the Company has achieved operating income of C320779 Crores as compared to C2980.24 Crores in FY 2022-23. The profit before tax for FY 2023-24 stood at C265.50 Crores compared to C339.45 Crores achieved in FY 2022-23. The profit after tax stood at C19759 Crores for FY 2023-24 as compared to C23776 Crores for the previous year.

Consolidated Financial Results:

The Company's consolidated revenue for FY 2023-24 was C4451.73 Crores as compared to C3182.60 Crores for the previous year. During the year under review, the consolidated profit after tax stood at C33733 Crores as compared to C250.96 Crores for the previous year.

The Consolidated Financial Statement includes Audited Financial Statements of Craftsman Europe

B.V., Wholly Owned Subsidiary, DR Axion India Private Limited, Subsidiary (w.e.f 1^st February, 2023. Accordingly, 2 months Financial has been consolidated for FY 2022-23) and Carl Stahl Craftsman Enterprises Private Limited, Joint Venture.

2. DIVIDEND:

For the FY 2023-24, the Company has declared a Final Dividend of C11.25 on the equity shares of C5/- each with total outlay of C793 Lakhs.

The Board of Directors at their meeting held on 27^th April, 2024 has recommended payment of C11.25 (Eleven Rupees and Twenty Five Paisa) per equity share being 225% on the face value of C5 each as final dividend for the FY ended 31^st March, 2024. The payment of dividend is subject to approval of the shareholders at the 38^th Annual General Meeting ("AGM") of the Company. The dividend if approved by the members would involve a cash outflow of C 2377 Lakhs. The dividend pay-out is in accordance with the company's dividend distribution policy.

In view of the changes made under the Income Tax Act, 1961, by the Finance Act, 2020, dividend paid or distributed by the Company shall be taxable in the hands of the shareholders. Your Company shall, accordingly, make the payment of the dividend after deduction of tax at source at appropriate rates applicable to resident and non resident shareholders as the case may be.

Pursuant to provisions of Regulation 43A of the Listing Regulations as amended from time to time, the Company has formulated Dividend Distribution Policy. The policy is available on the Company's website at https://www.craftsmanautomation.com/ investors/wp-content/uploads/2022/08/14.CAL- Dividend-Distribution-Policy.pdf

3. TRANSFER OF UNCLAIMED DIVIDEND TO THE INVESTOR EDUCATION AND PROTECTION FUND (IEPF):

In accordance with the provisions of Sections 124 and 125 of the Act and Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), dividend of a Company which remain unpaid or unclaimed for a period of seven years from the date of transfer to the Unpaid Dividend Account shall be transferred by the Company to the Investor Education and Protection Fund ("IEPF").

In terms of the foregoing provisions of the Act, there is no dividend which remains outstanding or remain to

be paid and required to be transferred to the IEPF by the Company during the year ended 31^st March, 2024.

4. SHARE CAPITAL:

During the year under review, the Company has not altered/modified its authorised share capital and has not issued any shares including equity shares with differential rights as to dividend, voting or otherwise. The Company has not issued any sweat equity shares to its directors or employees and also has not made any buy back of shares during the year under review.

The Paid-up Share Capital of the Company as on 31^st March, 2024 is C10,56,41,555 divided into 2,11,28,311 Equity Shares of C5/- each fully paid up.

5. CHANGE IN REGISTERED OFFICE OF THE COMPANY

During the year, there were no change in the registered office of the Company.

6. RESERVES AND SURPLUS:

The Company has not transferred any amount to the Reserves for the FY ended 31^st March, 2024.

7. MANAGEMENT DISCUSSION & ANALYSIS REPORT:

Pursuant to Regulation 34(2)(e) of the Listing Regulations, Management Discussion and Analysis Report forms part of this report as Annexure - 1.

8. CORPORATE GOVERNANCE:

Pursuant to Regulation 34(3) of the Listing Regulations, a report on Corporate Governance along with a Certificate from the Company Secretary in Practice confirming the compliance of the provisions of Corporate Governance, forms an integral part of this Annual Report and are given in Annexure - 2 and Annexure - 3 respectively.

9. CORPORATE SOCIAL RESPONSIBILITY (CSR):

In accordance with the requirements of Section 135 of the Act, , and the Rules made there under, the Company has constituted a Corporate Social Responsibility (CSR) Committee and also formulated a Corporate Social Responsibility Policy (CSR Policy) which is available on the website of the Company at https://www.craftsmanautomation.com/investors/ wp-content/uploads/2022/08/1.-CAL-Policy-on- Corporate-Social-Responsibility-1.pdf.

An Annual Report on CSR activities of the Company during the FY 2023-24 as required to be given under

Section 135 of the Act read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 has been provided as an Annexure - 4 to this Report.

10. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the FY ended 31^st March, 2024 to which the Financial Statements relates and the date of signing of this report.

11. RISK MANAGEMENT POLICY:

Pursuant to Section 134(3)(n) of the Act and Regulation 17(9) of the Listing Regulations, the Company has formulated and adopted a Risk Management Policy. The Company has been consciously following a policy of risk mitigation by diversifying its products, services, markets and customers. The key risk of exposure to the cyclicality of automobile business is being mitigated by increasing the share of the Industrial & Engineering segment. Further, within the Industrial & Engineering segment, the risk of excessive reliance on contract manufacturing is being addressed by strengthening and growing the Company's own product portfolio and creating brand equity.

Following are the major risk concerns:

Competition:

Some of the Company's business segments operates in a competitive environment and some of the Company's customers pursue a policy of maintaining more than one source for a product/ service. The Company's senior management team closely monitors the market and devises the various strategies to stay ahead of the competition.

Economy:

The economy is still susceptible to the challenging global economic environment of increased trade tensions, protectionism and slow down. It is also constrained by fiscal profligacy and implementation delays, weak financial sector.

Automobile Industry:

The fortunes of the automobile industry are cyclical and the demand for vehicles are vulnerable to the interest rates and liquidity.

Risk Mitigation Measures:

As already mentioned the Company adopts the policy of risk diversification by broadening its products,

services, market and customer base. The Company over the years built a good design, engineering and product development team. This has enabled the Company to come out with new products and services and in the contract manufacturing space, the company is able to position itself as a one-stop solution provider to its customers. In addition, the Company has steadily invested over the years to build up world class manufacturing and testing facilities at Coimbatore and other plants. The state-of-the-art machines, continuous improvement in the production processes, constant upgradation of employee skill levels, backward integration to tool, die and fixture making and JIT deliveries have created a strong competitive advantage for the Company.

The Board has constituted Risk Management Committee under the Chairmanship of Mr. Srinivasan Ravi, which reviews the various risks faced by the Company and advises the Board on risk mitigation plans. Risk Management policy may be accessed on the Company's website at the link: https://www.craftsmanautomation.com/investors/ wp-content/uploads/2022/08/4.-CAL-Risk- Management-Policy.pdf

12. VIGIL MECHANISM / WHISTLE BLOWER POLICY FOR DIRECTORS AND EMPLOYEES:

The Company has formulated a comprehensive Whistle Blower Policy in line with the provisions of Section 177(9) and 177(10) of the Act and Regulation 22 of the Listing Regulations with a will to enable the stakeholders, including directors, individual employees to freely communicate their concerns about illegal or unethical practices and to report genuine concerns to the Audit Committee of the Company .

The mechanism provides adequate safeguards against victimization of directors or employees who avail of the mechanism. The Whistle Blower Policy has been placed in the website of the Company at https://www.craftsmanautomation.com/ investors/wp-content/uploads/2022/08/2.-CAL- WhistleBlowerPolicy.pdf

13. INFORMATION REQUIRED UNDER SEXUAL HARASSMENT OF WOMEN AT WORK PLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013:

The Company has in place a policy on prevention, prohibition and redressal of Sexual Harassment at workplace in line with the requirements of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Internal Committee has been setup to redress the complaints

received on the sexual harassment. All employees of the Company are covered under this policy.

The details of complaints received and disposed off during the FY 2023-24 is as follows:

14. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

During FY 2023-24, all contracts/ arrangements/ transactions entered into by the Company with related parties were in the ordinary course of business and on an arm's length basis. All the Related Party Transactions are placed before the Audit Committee for prior approval, as required under the Act and Listing regulations. A statement of all Related Party Transactions is placed before the Audit Committee for its review on a quarterly basis.

The Company has not entered into material contracts or arrangements or transactions with related parties in accordance with Section 188 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014. There were no materially significant Related Party Transactions made by the Company during the year that would have required shareholders' approval under the Listing Regulations.

Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Companies Act, 2013, in Form AOC-2 is not applicable. Members may refer to Note no. 3.5 to the Standalone Financial Statements which sets out related party disclosures pursuant to IND AS-24.

The Company has adopted policy on Related Party Transactions and can be accessed on the Company's website at https://www.craftsmanautomation.com/ investors/wp-content/uploads/2022/08/11 .-CAL- RPT-Policy.pdf.

15. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE ACT:

Pursuant to Section 186 of the Act, disclosure on particulars relating to loans, advances, guarantees and investments are provided as part of the

financial statements in notes to the Standalone Financial Statements.

16. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE FINANCIAL YEAR:

No application was made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the FY 2023-24.

17. DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF DURING THE FINANCIAL YEAR:

No onetime settlement was done with any Bank / Financial Institutions during the financial year under review.

18. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:

There were no significant / material orders passed by the regulators or courts or tribunals during the FY 2023-24, impacting the going concern status and Company's operations in future.

19. ANNUAL RETURN:

Pursuant to Section 92(3) and 134(3)(a) of the Act the Annual Return of the Company prepared in accordance with Section 92(1) of the Act read with Rule 11 of the Companies (Management and Administration) Rules, 2014 (as amended), is placed on the website of the Company and is accessible at the web-link https://www.craftsmanautomation.com/ investors/annual-reports/.

20. CREDIT RATING:

During the year under review, CRISIL Limited, a credit rating agency registered with the Securities and Exchange Board of India has upgraded the credit rating assigned to the long term loan facilities from A+/Positive to AA-/Stable and for the short term loan facilities from rating A1 to A1+ vide letter dated 20^th July, 2023.

21. DEPOSITS:

The Company has not accepted any deposits falling within the meaning of Section 73 or 74 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014 during the FY and as such, no amount on account of principal or interest on deposits from public was outstanding as on 31^st March, 2024.

22. AWARDS AND RECOGNITIONS:

The Company has always been singled out by its customers as a supplier partners known for its reliability and quality.

During the year, the Company has received the following awards:

1. Annual Supplier Conference - "Ability Going Extra Mile - 2023" from TATA Motors

2. Appreciation Award for the service towards construction of Aurolab Warehouse - 2023 from Aurolab Warehouse

3. Annual Commodity Award - Casting and Forging and Special Appreciation Award- Scorpio-N from Mahindra & Mahindra

CRAFTSMAN EUROPE B.V., THE NETHERLANDS

During the year under review, Craftsman Europe B.V., Wholly Owned Subsidiary has posted a turnover of C20.00 Crores (€ 22.27 Lakhs) as against C21.59 Crores (€ 25.70 Lakhs) in the previous year. The profit for the FY2023-24 amounted to C2.16 Crores as compared to C2.38 Crores for the previous year.

DR AXION INDIA PRIVATE LIMITED:

During the year under review, DR Axion India Private Limited, Subsidiary of Craftsman Automation Limited has posted a turnover of C1246.15 Crores as against C1084.09 Crores in the previous year. The profit for the FY2023-24 amounted to C136.89 Crores as compared to C58.36 Crores for the previous year. DR Axion India Private Limited was acquired w.e.f 1^st February, 2023. Accordingly, 2 months Financial has been consolidated for FY 2022-23.

CARL STAHL CRAFTSMAN ENTERPRISES PRIVATE LIMITED:

Carl Stahl Craftsman Enterprises Private Limited which is an associate Company in which your Company is holding 30% of equity shares notched a turnover of C76.72 Crores in FY 2023-24 as against the C48.97 Crores of FY 2022-23. The Profit for the year was C 2.82 Crores as against profit of C1.60 Crores in FY 2022-23.

Pursuant to Section 129(3) of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement

containing salient features of the financial statements of the Company's Subsidiaries and Associate Company in Form No. AOC-1 is attached to this report as Annexure - 5.

24. CHANGE IN NATURE OF BUSINESS:

During the year under review, there has been no change in the Company's nature of business.

25. DIRECTORS:

The Board of the Company is duly constituted. None of the directors of the Company is disqualified under the provisions of the Act or the Listing Regulations.

The Board at its meeting held on 6^th March, 2023 had appointed Mrs. Rajeswari Karthigeyan (DIN: 07148250) as an Additional Director in the category of Independent Director of the Company with effect from 6^th March, 2023 upon recommendation of the Nomination and Remuneration Committee. Further, the shareholders of the Company had approved the appointment of Mrs. Rajeswari Karthigeyan (DIN: 07148250) as an Independent Director w.e.f 6^th March, 2023 through Postal Ballot on 13^th April, 2023 with requisite majority.

The Shareholders of the Company had approved the reappointment of Mrs. Vijaya Sampath (DIN:00641110) as an Independent Director for the second term w.e.f 30^th April, 2023 and reappointment of Mr. Sundararaman Kalyanaraman (DIN:01252878) as an Independent Director for the second term w.e.f 24^th May, 2023 and also approved the continuation of Directorship of Mr. Sundararaman Kalyanaraman (DIN: 01252878) as an Independent Director from the day he attains the age of 75 years till the expiry of his second term through Postal Ballot on 13^th April, 2023 with requisite majority.

During the FY 2023-24, Mr. Chandrasekar Madhukar Bhide, ceased to be an Independent Director of the Company w.e.f 23^rd May, 2023 upon completion of his tenure.

In accordance with the provisions of the Act and Articles of Association of the Company, Mr. Srinivasan Ravi (DIN: 01257716), Chairman and Managing Director, retires by rotation and being eligible, offers himself for reappointment at the ensuing AGM. His appointment is placed for approval of the members and forms part of the notice of the 38^th AGM. The information about the Director seeking his reappointment as per Para 1.2.5 of Secretarial Standards on General Meetings and Regulation 36(3) of the Listing Regulations has been given in the notice convening the 38^th AGM.

26. KEY MANAGERIAL PERSONNEL:

Pursuant to Section 2(51) and 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following are the Key Managerial Personnel of the Company:

i. Mr. Srinivasan Ravi, Chairman and Managing Director;

ii. Mr. Ravi Gauthamram, Whole Time Director;

iii. Mr. C.B.Chandrasekar, Chief Financial Officer;

iv. Mr. Thiyagaraj Damodharaswamy, Chief Operating Officer - Automotive Powertrain;

v. Mr. Shainshad Aduvanni, Company Secretary.

The remuneration and other details of these Key Managerial Personnel for FY 2023-24 are provided in the Annual Return which is available on the website of the Company.

27. COMMITTEES:

As per the requirements of the Act and Listing Regulations, the following committees were constituted and the composition, meeting of committees held during the year are as follows.

i. Audit Committee:

The Composition of the Audit Committee:

1. Mr. Tamraparni Srinivasan Venkata Rajagopal, Independent Director (Chairman);

2. Mr. Sundararaman Kalyanaraman, Independent Director (Member);

3. Mrs. Vijaya Sampath, Independent Director (Member);

4. Mrs. Rajeswari karthigeyan, Independent Director (Member).

During the FY 2023-24, Mr. Chandrasekar Madhukar Bhide, ceased to be an Independent Director w.e.f 23^rd May, 2023 and the Chairman of the Audit Committee of the Company w.e.f 8^th May, 2023 upon completion of his tenure. Hence the Audit Committee was reconstituted as above w.e.f 8^th May, 2023.

During the FY 2023-24, the Audit Committee met four times on 8^th May, 2023, 24^th July, 2023, 30^th October, 2023 and 27^th January, 2024.

ii. Nomination and Remuneration Committee:

The Composition of the Nomination and Remuneration Committee:

1. Mrs. Vijaya Sampath, Independent Director (Chairperson);

2. Mr. Sundararaman Kalyanaraman, Independent Director (Member);

3. Mr. Tamraparni Srinivasan Venkata Rajagopal, Independent Director (Member).

During the FY 2023-24, Mr. Chandrasekar Madhukar Bhide, ceased to be an Independent Director w.e.f 23^rd May, 2023 and member of the Nomination and Remuneration Committee of the Company w.e.f 8^th May, 2023 upon completion of his tenure. Hence the Nomination and Remuneration Committee was reconstituted as above w.e.f 8^th May, 2023.

During the FY 2023-24, Nomination and Remuneration Committee met three times on 8^th May, 2023, 24^th July, 2023 and 27^th January, 2024.

iii. Stakeholders Relationship Committee:

The Composition of the Stakeholders Relationship Committee:

1. Mr. Sundararaman Kalyanaraman, Independent Director (Chairman);

2. Mr. Srinivasan Ravi, Chairman and Managing Director (Member);

3. Mrs. Rajeswari karthigeyan, Independent Director (Member).

During the FY 2023-24, Mr. Chandrasekar Madhukar Bhide, ceased to be an Independent Director w.e.f 23^rd May, 2023 and the Chairman of the Stakeholders Relationship Committee of the Company w.e.f 8^th May, 2023 upon completion of his tenure. Hence the Stakeholders Relationship Committee was reconstituted as above w.e.f 8^th May, 2023.

During the financial year 2023-24, Stakeholders Relationship Committee met once on 27^th January, 2024.

iv. CSR Committee:

The composition of CSR Committee:

1. Mr. Srinivasan Ravi, Chairman and Managing Director (Chairman);

2. Mr. Tamraparni Srinivasan Venkata Rajagopal, Independent Director (Member);

3. Mrs. Vijaya Sampath, Independent Director (Member).

During the FY 2023-24, the CSR Committee met two times on 8^th May, 2023 and 27^th January, 2024.

v. Risk Management Committee:

The composition of Risk Management Committee:

1. Mr. Srinivasan Ravi, Chairman and Managing Director (Chairman);

2. Mr. Ravi Gauthamram, Whole Time Director (Member);

3. Mr. Sundararaman Kalyanaraman,

Independent Director (Member);

2

4. Mr.C.B.Chandrasekar, Chief Financial Officer (Member);

During the FY 2023-24, the Risk Management Committee met two times on 25^th August, 2023 and 9^th February, 2024.

vi. Management Committee:

The Composition of the Management Committee:

1. Mr. Srinivasan Ravi, Chairman and Managing Director (Chairman);

2. Mr. Ravi Gauthamram, Whole Time Director (Member).

During the FY 2023-24, the Management Committee met once on 19^th May, 2023.

A. Internal Financial Controls and their Adequacy

In terms of Section 134(5)(e) of the Act, the term Internal Financial Control means the policies and procedures adopted by a Company for ensuring orderly and efficient conduct of its business, including adherence to Company's policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial information.

Internal Control Over Financial Reporting (ICFR) remains an important component to foster confidence in a company's financial reporting, and ultimately, streamlining the process to adopt best practices. Your Company through Internal Audit Program is regularly conducting test of effectiveness of various controls. The ineffective and unsatisfactory controls are reviewed and remedial actions are taken immediately. The internal audit plan is also aligned to the business objectives of the Company which is reviewed and approved by the Audit Committee. Further, the Audit Committee monitors the adequacy and effectiveness of your Company's internal control framework.

Adequate internal financial controls are in place which ensures the reliability of financial and operational information. The regulatory and statutory compliances are also ensured. The Oracle enterprise wide resource platform deployed in the Company enables the business processes and also ensures financial discipline and fosters accountability.

A. Statutory Auditors

The Shareholders at their meeting held on 20^th May, 2020 had appointed Sharp & Tannan, Chartered Accountants, A-Wing, 602, Anna Salai, Chennai - 600 006 (Firm Registration No:003792S), as the Statutory Auditors of the Company for a period of 5 years from the conclusion of the 34^th AGM (2020) till the conclusion of 39^th AGM (2025).

B. Statutory Audit Report

There are no qualifications, reservations or adverse remarks made by Sharp & Tannan, Statutory Auditors in their report for the FY ended 31^st March, 2024.

C. Internal Auditor

MC Ranganathan & Co., Chartered Accountants, Chennai, who are the Internal Auditors have carried out internal audit for the FY 2023-24. Their reports were reviewed by the Audit Committee.

D. Cost Auditor

During the FY 2023-24, the Company is required to maintain cost records under Companies (Cost Records and Audit) Rules, 2014. Accordingly, cost records have been maintained by the Company, which are being audited by S.Mahadevan & Co, Cost Accountants, Coimbatore (Registration No. 000007).

In accordance with Section 148 of the Act, the Board of Directors of the Company, on recommendation of the Audit Committee, has reappointed S.Mahadevan & Co, Cost Accountants, Coimbatore, (Registration No. 000007) as the Cost Auditors to conduct the Audit of the Cost Accounting Records maintained by the Company for the FY 2024-25. S.Mahadevan & Co have confirmed that their appointment is within the limits of Section 141 (3)(g) of the Act and have also certified that they are free from any disqualifications specified under Section 141(3) read with Section 148(5) of the Act.

As per the provisions of the Act, a resolution seeking members' ratification for the remuneration payable to S. Mahadevan & Co, Cost Auditors for the year 2024-25 is included at item no.4 of the Notice convening the 38^th AGM.

E. Secretarial Auditor and Secretarial Audit:

Pursuant to the Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed KSR & Co Company Secretaries LLP Coimbatore as the Secretarial Auditors of the Company to undertake the Secretarial Audit of the Company for the FY 2023-24.

The Secretarial Audit Report in form MR-3 forms part of the Directors' Report as Annexure - 6.1. The report does not contain any qualification, reservation, adverse remark or disclaimer.

The Secretarial Audit Report of DR Axion India Private Limited, Subsidiary in form MR-3 is attached to this report as Annexure - 6.2. The Secretarial Audit Report of DR Axion India Private Limited does not contain any qualification, reservation, adverse remark or disclaimer.

F. Annual Secretarial Compliance Report

The Company has undertaken an audit for the FY ended 31^st March, 2024 for all applicable compliances as per the Regulation 24A of the Listing Regulations and Circulars/Guidelines issued thereunder. The Annual Secretarial Compliance Report to be issued by KSR & Co Company Secretaries LLP will be submitted to the Stock Exchanges as per the Listing regulations.

G. Reporting of Frauds by Auditors:

During the year under review, the Statutory Auditors, Internal Auditors, Cost Auditors and Secretarial Auditors have not reported any instance of fraud committed in the Company by its Officers or Employees to the Audit Committee under Section 143(12) of the Act and the rules made thereunder.

30. MEETINGS OF THE BOARD AND COMMITTEES:

During the FY 2023-24, the Board of Directors met five (5) times and the details of the meetings of the Board and its Committees are given in the Corporate Governance Report (Annexure - 2). The gap intervening between two meetings was within the time prescribed under the Act and Listing Regulations.

Details of attendance of meetings of the Board, its Committees and the Annual General Meeting/ Postal Ballot are included in the Report on Corporate Governance, which forms part of this Annual Report.

31. MEETING OF INDEPENDENT DIRECTORS:

In terms of requirements under Schedule IV of the Act and Regulation 25 (3) of Listing Regulations, a separate meeting of the Independent Directors was held on 29^th October, 2023 and 25^th March, 2024.

The Independent Directors at the meeting, inter alia, reviewed the following: -

• Performance of Non-Independent Directors and Board as a whole.

• Performance of the Chairman of the Company, taking into account the views of Executive Directors and Non-Executive Directors.

• Assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

32. DECLARATION BY INDEPENDENT DIRECTORS:

The Company has received declarations from each Independent Director of the Company under Section 149(7) of the Act and Regulation 25(8) of the Listing Regulations confirming compliance with the criteria of independence as stipulated under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations and there has been no change in the circumstances which may affect their status as Independent Directors during the FY 2023-24.

All Independent Directors of the Company have affirmed compliance with the Schedule IV of the Act and Company's Code of Conduct for Directors and Employees for the FY 2023-24.

All the Independent Directors of the Company have registered themselves with the Indian Institute of Corporate Affairs ('IICA') towards the inclusion of their names in the data bank and they meet the requirements of proficiency self-assessment test.

33. NON-EXECUTIVE DIRECTORS' COMPENSATION AND DISCLOSURES:

None of the Independent / Non- Executive Directors have any pecuniary relationship or transactions with the Company which in the judgement of the Board may affect the independence of the Directors.

34. FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS:

The Company has adopted a familiarisation programme for Independent Directors with an objective of making the Independent Directors of the Company accustomed with the business and operations of the Company through various structured orientation programme. The familiarization programme also intends to update the Directors on a regular basis on any significant changes therein so as to be in a position to take well informed and timely decision.

The details of the familiarization programme undertaken have been uploaded on the Company's website and the same is accessible at the web-link https://www.craftsmanautomation.com/investors/ wp-content/uploads/2024/04/Details-of-Familiarisation- Programme_2023-24.pdf

35. PERFORMANCE EVALUATION OF BOARD AND ITS COMMITTEES:

Pursuant to the provisions of the Act and Listing Regulations and as per Guidance Note on Board Evaluation issued by SEBI on 5^th January, 2017 the Board has carried out annual performance evaluation of its own performance, the Directors individually as well as evaluation of the working of its Committees at its meeting held on 27^th January, 2024.

The Nomination and Remuneration Committee has defined the evaluation criteria for the performance evaluation of individual Directors, the Board and its Committees. The performance of the Board, its committees and individual Directors was evaluated by the Board after seeking inputs from all the respective Committee members and Directors.

36. DIRECTORS' APPOINTMENT AND REMUNERATION POLICY:

The Company has on the recommendation of the Nomination & Remuneration Committee framed and adopted a Nomination and Remuneration Policy in terms of the Section 178 of the Act with effect from 02^nd July, 2018. The policy, inter alia lays down the principles relating to appointment, cessation, remuneration and evaluation of directors, Key Managerial Personnel and Senior Management Personnel of the Company.

The Nomination & Remuneration Policy of the Company is available on the website of the Company at web-link https://www.craftsmanautomation.com/investors/ wp-content/uploads/2022/08/3.-CAL-Nomination- Remuneration-and-Board-Evaluation-Policy.pdf.

37. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:

The details as required under Section 197(12) of the Act and Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure - 7 of this Report.

In terms of provisions of Section 197(12) of the Companies Act, 2013 and Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing names of the employees drawing remuneration and other particulars, as prescribed in the said Rules forms part of this report. However, in terms of first proviso to Section 136(1) of the Act, the Annual Report, excluding the aforesaid information, is being sent to the members of the Company. The said information is available for inspection at the Registered Office of the Company during working hours and any member who is interested in obtaining these particulars may write to the Company Secretary of the Company.

During the year, the Company had no employee who was employed throughout the FY or part thereof and was in receipt of remuneration, which in the aggregate, or as the case may be, at a rate which, in the aggregate, is in excess of that drawn by the Managing Director or Whole-Time Director or Manager and holds by himself or along with his spouse and dependent children, not less than 2% of the equity shares of the Company.

38. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT:

Pursuant to Regulation 34(2)(f) of the Listing Regulations, the initiatives taken by the Company from an environmental, social and governance perspective for the FY 2023-24 has been given in the Business Responsibility and Sustainability Report (BRSR) as per the format specified by SEBI Circular no. SEBI/HO/CFD/CFD-SEC-2/P/CIR/2023/122 dated 12^th July, 2023 which forms part of this report as Annexure - 8. The Company's ESG profile can be accessed through https://www.craftsmanautomation. com/esg-profile.html .

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

The information pertaining to details of conservation of energy, technology absorption, foreign exchange earnings and outgo as required under Section 134(3)

(m) of the Act read with Rule 8 of the Companies Accounts Rules, 2014 are as follows:

conservation of energy

a. Old Compressor motors were replaced with New High Efficient Motors in Screw Compressor.

b. The Company is replacing low Efficient Screw Air Compressor with new High Capacity and Efficient Air Compressors, which results in energy saving and reducing no of compressors.

c. The Existing LED lamps with High Coverage and High Efficient LED lamps has be replaced, due to which number of Fittings are reduced.

d. 3 different capacity STP converted into one single capacity STP

e. 90% of stabilizers were removed from the system by installing standby capacity UPS system.

f. Screw Compressors were shifted to new high ventilated rooms as a result, Efficiency has improved.

g. The Company is under process of using LNG instead of LPG for Melting Furnaces and PNG DG sets instead of Diesel Generator Set

alternate source of energy

a. The Company is planning to purchase more volume of power from Third Party Wind and solar Energy.

b. In Company's unit 3 plant located at Arasur, the Company has converted the incoming Government EB Power from 33KV HT Supply to 110Kv EHT Supply for uninterrupted quality power due to which the direct and indirect energy savings are more.

c. The Company has installed Solar Roof top plant

III. Capital investment on energy conservation equipment's

a. Solar Roof Top Plant

b. HT to EHT Conversion Power Project

c. PNG Generator sets (Piped Natural Gas)

B. Technology Absorption:

The Company has effectively integrated and absorbed general technology in the area of UPS Cooling System, Generator by ordering PNG Generator sets instead of Diesel Generator sets and power consumption from 800Kw Roof Top Solar Power Plant.

The expenditure incurred on Research and Development.

The Company has not incurred any expenditure on Research and Development.

C. Foreign Exchange earnings and Outgo:

Details of earnings accrued and expenditure incurred in foreign currency are as given below.

Foreign Exchange Earnings --- C205.54 Crores Foreign Exchange Outgo --- C365.42 Crores

40. DIRECTORS' RESPONSIBILITY STATEMENT:

The Directors' Responsibility Statement referred to in Section 134 (3) (c) of the Act shall state that:

a. in the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b. the directors had 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 at the end of the FY and profit of the Company for that period;

c. the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. the directors had prepared the annual accounts on a going concern basis;

e. the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

41. SECRETARIAL STANDARDS:

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

42. PROHIBITION OF INSIDER TRADING:

In terms of the provisions of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, as amended (PIT Regulations), the Company has adopted the revised "Code of Conduct to Regulate, Monitor and Report Trading by Insiders" ("the Code"). The Code is applicable to all Directors, Designated persons and connected Persons and their immediate relatives, who have access to unpublished price sensitive information relating to the Company.

The Company has also formulated a 'Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information (UPSI)' in compliance with the PIT Regulations.

The aforesaid Codes are posted on the Company's

website and can be accessed by using web link at

https://www.craftsmanautomation.com/investors/

wp-content/uploads/2022/08/6.-CAL-Code-of-

Conduct-under-SEBI-PITpdf

and

https://www.craftsmanautomation.com/investors/

wp-content/uploads/2022/08/7-CAL-Code-of-Fair-

Disclosure-of-UPSI.pdf

43. STATEMENT REGARDING OPINION OF THE BOARD WITH REGARD TO INTEGRITY, EXPERTISE AND EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTORS APPOINTED DURING THE YEAR:

In the opinion of Board of Directors of the Company, Independent Directors on the Board of Company hold highest standards of integrity and are highly qualified, recognized and respected individuals in their respective fields. It's an optimum mix of expertise (including financial expertise), leadership and professionalism.

44. CEO/CFO CERTIFICATION

As required under Regulation 17(8) of the Listing Regulations, the Managing Director and CFO of the

Company have certified the accuracy of the Financial Statements and adequacy of Internal Control Systems for financial reporting for the year ended 31^st March, 2024. The certificate is given in Annexure - 9.

45. DECLARATION REGARDING COMPLIANCE BY BOARD MEMBERS AND SENIOR MANAGEMENT PERSONNEL WITH THE COMPANY'S CODE OF CONDUCT:

The Code of Conduct of the Company aims at ensuring consistent standards of conduct and ethical business practices across the Company. This Code is available on the website of the Company at weblink https://www.craftsmanautomation.com/ investors/wp-content/uploads/2022/08/10.-CAL- Code-of-Conduct-for-Directors-and-SM.pdf. Pursuant to the Listing Regulations, a confirmation from the Managing Director regarding compliance with the Code by all the Directors and senior management of the Company is given in Annexure - 10.

46. CAUTIONARY STATEMENT:

The Annual Report including those which relate to the Directors' Report, Management Discussion and Analysis Report may contain certain statements on the Company's intent expectations or forecasts that appear to be forward-looking within the meaning of applicable securities laws and regulations while actual outcomes may differ materially from what is expressed herein. The Company bears no obligations to update any such forward looking statement. Some of the factors that could affect the Company's performance could be the demand and supply for Company's product and services, changes in Government regulations, tax laws, forex volatility etc.

47. ACKNOWLEDGEMENTS:

The Directors take this opportunity to thank the shareholders, bankers and the financial institutions for their cooperation and support to the operations and look forward for their continued support in future. The Directors also thank all the customers, vendor partners, and other business associates for their continued support during the year. The Directors place on record their appreciation for the hard work put in by all employees of the Company.

For and on behalf of the Board of Directors