Linde India Ltd

The Directors have pleasure in submitting their Report together with the Audited Financial Statements of your Company for the financial year ended 31 March 2024.

The Company's standalone financial performance for the financial year ended 31 March 2024 is summarized below:

#Pertains to dividend for the financial year comprising of fifteen months period ended 31 March 2023 @ 120% including special dividend (Previous year @ 135% including special dividend for the financial year ended 31 December 2021 comprising of twelve months) on 85,284,223 equity shares of Rs.10 each.

Your Company clocked total revenues from operations of Rs.27,687 million during the financial year ended 31 March 2024 as compared to Rs. 31,355 million during the 15 months period ended 31 March 2023.

When compared with similar 12 months period ended 31 March 2023, the current year's revenue reflects a decent growth of 6.4% over previous year base of Rs.26,013 million. Gases Division recorded a remarkable double-digit growth of 10.2% year-on-year, growing from Rs.18,157 million to Rs. 20,006 million and the Project Engineering Division recorded a revenue of Rs. 7,681 million, marginally down by 2.2% year-on-year.

The growth in Gases revenue was driven by high gas & liquid demand across all key sectors, strong pricing discipline and surge in helium demand. Gases consumption in steel sector continued to be on the higher side in line with sectoral growth. Our Project Engineering business continued to ride the cyclic momentum with healthy order book position, growth capex projects pipeline and remained resilient to win projects across diverse industries and sectors.

During the year under review, your Company achieved earnings before interest, taxation, depreciation and amortisation (EBITDA) of Rs. 7,793 million as compared to Rs. 8,736 million in the previous financial year comprising of 15 months period from 1 January 2022 to 31 March 2023.

Again, on comparison with 12 months period ended 31 March 2023, the EBITDA grew by Rs. 515 million, representing a growth of 7.1% year-on-year. This increase in operating profit was due to strong growth in merchant volume mainly liquid oxygen and liquid argon and strong pricing across all products. The Onsite segment faced incremental demand from steel customers and Packaged Gases business successfully served high demand of industrial products, helium, special gas at impressive pricing. Healthcare segment also indicated increased demand in Liquid Medical Oxygen from both private and Govt. hospitals across the country. The Company's cross functional culture of cost productivity and consistent operational efficiencies continue to support the profitability growth.

The total depreciation for the year ended 31 March 2024 stood at Rs. 2,009 million, which was marginally lower in comparison to Rs. 2,529 million during the 15 months period ended 31 March 2023 and Rs. 2,071 million for similar 12 months period ended 31 March 2023, as major projects are still under construction and old assets are getting amortized over time.

Profit before tax (PBT) on 12 months comparable period shows an incremental profit of Rs. 555 million, representing a handsome growth of 10.8% year-on-year, translating from quality sales and cost productivity.

The total tax expenses for financial year ended 31 March 2024 stood at Rs. 1,448 million as against Rs. 786 million during the 15 months period ended 31 March 2023. The Company had elected to exercise the lower tax rate of 22% (effective rate of 25.168%) permitted under the new tax rate regime under Section 115BAA of the Income Tax Act, 1961 from the Tax year beginning 1 April 2022 which resulted in lower tax expense and re-measurement of deferred tax liabilities in financial year ended March 2023.

Profit after tax (PAT) for the year stood at Rs. 4,263 million as against Rs. 5,358 million for the 15 months period ended 31 March 2023 and Rs. 4,719 million for similar 12 months period ended 31 March 2023. The lower PAT was mainly on account of the tax reversal recorded in the previous period.

Your Board has recommended a dividend of 120% (Rs. 12/- per equity share) which comprises of a normal dividend of 40% (Rs. 4/- per equity share) and a special dividend of 80% (Rs. 8/- per equity share) on 85,284,223 equity shares of Rs.10 /- each in the Company for the financial year ended 31 March 2024, as against a dividend of 120% (Rs. 12/- per equity share) for the 15 months period ended 31 March 2023, which comprised of a normal dividend of 45% (Rs. 4.50/- per equity share) and a special dividend of 75% (Rs. 7.50/- per equity share).

The Board's recommendation for dividend has been made after considering the sustainability of the operating performance and cash flow position of the Company and is in line with its Dividend Distribution Policy. The dividend is subject to the approval of the Members at the ensuing 88^th Annual General Meeting scheduled to be held on Monday, 12 August 2024 and will be paid to the Members whose names appear in the Register of Members on the date of the Book Closure fixed for this purpose. This dividend will result in cash outgo of Rs. 1,023.41 million equivalent to that of the 15 months period ended 31 March 2023. The dividends paid or distributed by the Company shall be taxable in the hands of the Members. Your Company shall accordingly, make the payment of dividend after deduction of tax at source as per the provisions of the Income Tax Act, 1961.

The Board has not recommended any transfer to general reserves from the profits during the year under review.

The Dividend Distribution Policy is annexed to this report and is also available on the Company's website at https:// www.linde-gas.in/en/images/Dividend%20Distribution%20 Policy_%28FINAL%29%20LIL_tcm526-660614.pdf [Annexure 1]

Although the Company does not have any subsidiary, as per the requirement of Section 129(3) of the Companies Act, 2013 and the applicable Indian Accounting Standard 110 issued by the Institute of Chartered Accountants of India, your Company has prepared consolidated financial statements for the financial year ended 31 March 2024 together with its joint venture company, Linde South Asia Services Private Ltd. (earlier known as LSAS Services Private Ltd.). The said consolidated financial statements of the Company form part of the Annual Report. The Company is not required to consolidate the financials of Bellary Oxygen Company Private Limited, another joint venture company as the equity method of accounting is not applicable since it is classified as "investments held for sale." The Company also has three Associates as on 31 March 2024, viz. Avaada MHYavat Pvt Ltd., FPEL Surya Pvt Ltd. and Zenataris Renewable Energy Pvt Ltd. The financials of the said Associates have not been consolidated with the financials of the Company for the reasons more specifically explained in Note 1 of the Notes to the consolidated Financial Statements forming part of this Annual Report. However, since the Company does not have a subsidiary, the compliance under Section 136 of the Companies Act, 2013 about separate financial statements do not apply to it.

As on 31 March 2024, the Company had two joint ventures and three associates, whose details are provided below:

Bellary Oxygen Company Private Ltd. is a joint venture of the Company in the gases business with Inox Air Products Private Ltd. as the other JV partner and both JV partners own 50% of the issued and paid-up share capital of the joint venture company. The said joint venture company operated an 855 tpd Air Separation Unit at Bellary, Karnataka for supply of gases under a long-term gas supply agreement to JSW Steel Ltd.'s works at Bellary. As mentioned in the earlier Annual Reports of the previous years in the update on Belloxy Divestment Business, upon the expiry of the gas supply contract with JSW Steel Ltd. on 14 November 2021, Bellary Oxygen Company Private Ltd. signed and executed the Asset Sale Agreement with JSW Steel Ltd. Your Company has subsequently filed the closure report with the CCI and it is proposed to liquidate the joint venture company.

Linde South Asia Services Private Ltd. is a joint venture company between Linde India Ltd. and Praxair India Private Ltd., with both the JV partners owning 50% each of its total issued and paid-up equity share capital. Linde South Asia Services Private Ltd has an Operation and Management Services Agreement with both the JV partners, under which, the joint venture company renders O&M Services to both Linde India Ltd. and Praxair India Private Ltd., which consists of carrying out all support services relating to functions such as Procurement, SHEQ, Human Resources, Finance, IT, Legal, Administration, Business Development, Onsite account management, Sales & Marketing, Product Management, etc. on an arms' length basis.

Pursuant to Section 129(3) of the Companies Act, 2013, a statement containing salient features of the financial statements of the joint venture companies in the prescribed Form AOC-1 is annexed to this report. [Annexure 2]

Avaada MHYavat Private Ltd. (formerly known as Avaada HNSirsa Private Ltd) is engaged in the business of establishing, commissioning, setting up, operating and generation of electricity through renewable energy sources such as wind, solar, bio-mass, hydro, geothermal, co-generation and/or any other means in India or elsewhere, including transmission, distribution, supply and sale of such power either directly or through transmission lines and facilities of Central/ State Governments or Private Companies or Electricity Boards to industries and to Central/ State Government and other consumers of electricity including captive consumption. Your Company has invested a sum of Rs. 113.75 million towards subscription of 11,375,000 equity shares of Avaada MHYavat Private Ltd. representing 26% of the total paid-up capital of the said Associate during the 15 months period ended 31 March 2023. These investments were made with an objective to purchase renewable power under captive mechanism, resulting in a lower tariff and consequent cost savings.

FPEL Surya Private Ltd. is engaged in the business of establishing, commissioning, setting operation and generation of electricity through renewable energy source such as wind, solar, and/or any other means in India or elsewhere, including transmission, distribution, supply and sale of such power either directly or through transmission lines and facilities of Central/State Governments or Private Companies or Electricity Board to industries and to Central/State Government and other consumers of electricity including captive consumption. Your Company has invested a sum of Rs. 76.95 million towards subscription of 1,539,000 equity shares of FPEL Surya Private Ltd. representing 26% of the total paid-up capital of the said Associate during the 15 months period ended 31 March 2023. These investments were also made with an objective to purchase renewable power under captive mechanism, resulting in a lower tariff and consequent cost savings.

Zenataris Renewable Energy Private Ltd is engaged in the business of establishing, commissioning, operation and generation of electricity through renewable energy source such as wind, solar and/or any other means in India or elsewhere, including transmission, distribution, supply and sale of such power either directly or through transmission lines and facilities of Central/State Governments or Private Companies or Electricity Board to industries and to Central/State Government and other consumers of electricity including captive consumption. During the year under review, your Company has invested a sum of Rs. 410.90 million towards subscription of 7,196,147 equity shares of Zenataris Renewable Energy Private Ltd. representing 23.96% of the total paid-up capital of the said Associate. These investments were also made with an objective to purchase renewable power under captive mechanism, resulting in a lower tariff and consequent cost savings.

Pursuant to Section 129(3) of the Companies Act 2013, a statement containing salient features of the financial statements of the associate companies in the prescribed Form AOC-1 is annexed to this report. [Annexure 2]

Your Company's business has two broad segments, viz. Gases & Related Products and Project Engineering in line with the operating model of the Linde plc Group. The details about these business segments together with the industry developments are given below:

The gases business is capital intensive by nature as it requires large investments in setting up of air separation units as well as new packaged gases sites. The supply chain in the gases business also requires significant investments in the form of distribution assets and storage networks to service bulk volumes as well as in the form of cylinders to service relatively smaller volumes in packaged gases business. Our major users comprise of steel, chemicals and refinery sectors and a large number of merchant liquid customers primarily in metal, glass, automobile, petrochemicals and pharmaceutical sectors, besides customers for medical gases. New applications continue to provide growth opportunities. This growth also gets supported by the outsourcing of gases requirement under a ‘Build Own Operate' (BOO) type of supply scheme opportunities.

The Gases & Related Products segment comprises of pipeline gas supplies (Onsite) to large industrial customers, mainly the primary steel, glass and chemical industries, supply of liquefied gases through Cryogenic tankers (Bulk) to cater to mid-size demands across a wide range of industrial sectors and compressed gas supply in cylinders (Packaged Gas) for meeting smaller demand for gases mainly across fabrication, manufacturing and construction industry. The primary production of gases (oxygen, nitrogen and argon) is mostly achieved through cryogenic distillation of air in Air Separation Units (ASU). Oxygen, Nitrogen and Argon can also be produced in the gaseous state and supplied through pipeline to the Onsite customers or produced in liquid form and stored in insulated cryogenic tanks for supply to Bulk customers or further processed in the Packaged Gas plants to bottle compressed gas in cylinders. The strategy of the bulk and packaged gas business continues to focus on building density and sustaining market leadership through application led gas sales and enhanced service levels. The Healthcare business, an important part of the Gases business, provides high quality gases for pharmaceutical use such as medical oxygen, synthetic air and nitrous oxide in addition to providing state of the art medical gas distribution systems to major hospitals.

India's growth rate was the second highest among G20 countries and almost twice the average of emerging market economies. At 7.2%, India's economy grew at one of the fastest rates among the majors in FY 2022–23. From December 2022 to October 2023, the Indian rupee maintained a remarkably stable position in the foreign exchange market, resulting in enhancement of investor's confidence and thus, attracted foreign investments. Index of Industrial Production (IIP) growth rates during the period April-October 2023 in FY 2023-24 over the corresponding period last year was 6.9%; Mining, Manufacturing and Electricity recorded robust growth. Micron Technologies announced a US$2.75 billion chip packaging plant in Gujarat, becoming the first overseas company to commence construction under Indian Semiconductor Mission (ISM). The Indian Space Research Organisation (ISRO) created history with the successful soft landing of its Chandrayaan-3 mission on the lunar south pole. India became the 4^th nation to achieve a soft landing and became the first to reach unexplored south pole. The G-20 Summit, 2023 was hosted by India, with the theme- One Earth, One Family, One Future with the focus on green development, inclusive growth, digital economy, public infrastructure and reforms for women empowerment for socioeconomic progress. Chipmaker AMD unveiled a 500,000-square-foot campus in Bengaluru, focused on the design and development of semiconductor technology, including 3D stacking, artificial intelligence (AI), machine learning (ML) and more. As on November 2023, Government of India has approved 50 Solar Parks with an aggregate capacity of 10,401 MW, out of which 284 MW has already been commissioned. About 741 MW capacity has been installed under the grid connected rooftop solar programme till November 2023.

As if the moon was not enough, India aimed for the stars in 2023 with the launch of a spacecraft designed to study the solar atmosphere. Not only is science advancing rapidly in India, but so are other fields. India's GDP is anticipated to exceed US$5 trillion, according to International Monetary Fund (IMF) predictions. By 2027, India's economy will have surpassed both Japan's and Germany's to become the third largest in the world.

With increased participation in the capital market, India is now harnessing digital capital to fund physical infrastructure even as foreign capital inflows remain volatile.

According to the World Bank's latest India Development Update (IDU), despite significant global challenges, India was one of the fastest-growing major economies in FY 2022-23 at 7.2%. Strong domestic demand, significant investments in public infrastructure and a growing financial sector served as the foundation for this resiliency.

What made the highlights was that the Gross Domestic Product (GDP) grew at a higher-than-expected 7.6% in the July to September 2023 quarter, as per initial estimates from the National Statistical Office. In 2023, the inflation rate was the highest in July at 7.44%, the second-highest inflation rate since November 2021. The rupee depreciated approximately 0.29% from 82.7 on 1 January 2023 to around 83.01 on 15 December 2023.

According to figures from the Periodic Labour Force Survey, urban unemployment has come down from 7.2% in September 2022 to 6.6% in September 2023. The worker population ratio, percentage of employed persons in the population, in urban areas increased from 44.5% in September 2022 to 46% in September 2023.

According to IMF reports, the Indian rupee-dollar rate experienced minimal fluctuations from December 2022 to October 2023. The rupee's movement was restrained as a result of the RBI's unwavering support, which included dollar sales and proactive reserve replenishment.

The rupee depreciated approximately 0.29% from around 82.7% on 1 January 2023 to around 83.01 on 15 December 2023.

Steel sector: With the industry accounting for about 2% of the nation's GDP, India ranks as the world's second-largest producer of steel (with an output of 125.32 MT of crude steel and finished steel production of 121.29 MT in FY 2023). The growth in the Indian steel sector has been driven by the domestic availability of raw materials such as iron ore and cost-effective labour. According to the data released by the Department for Promotion of Industry and Internal Trade (DPIIT), between April 2000-September 2023, Indian metallurgical industries attracted FDI inflows of US$ 17.40 billion. In March 2023, 57 Memorandum of Understandings (MoUs) were signed for generating an investment of about 295 billion in the steel sector by FY 2028.

Automotive sector: The Indian automobile industry has historically been a good indicator of how well the economy is doing, as the automobile sector plays a key role in both macroeconomic expansion and technological advancement. The two-wheelers segment dominates the market in terms of volume, owing to a growing middle class and a huge percentage of India's population being young. Moreover, the growing interest of companies in exploring the rural markets further aided the growth of the sector. The rising logistics and passenger transportation industries are driving up demand for commercial vehicles.

India is the world's largest manufacturer of two-wheelers, with over 21 million produced annually. In terms of heavy vehicles, India is the world largest manufacturer of tractors, the world's third largest heavy truck manufacturer and fourth largest car manufacturer. Automobile Sector resulted in 5.35% of the total FDI inflow as per the December 2023 DPIIT Report. The automobile component industry turnover stood at Rs. 5,600 billion (US$ 69.7 billion) between 2022-23 and the industry had revenue growth of 32.8% as compared to 2021-22.

In Union Budget 2023-24 presented on 1 February 2023, adequate funds have been allocated for scrapping of old vehicles of Central and State Govt. Replacing old polluting vehicles is indicated as an important part of greener economy.

The Ministry of Heavy Industries has announced the extension of the tenure of the Production Linked Incentive (PLI) Scheme for Automobile and Auto Components by one year with partial amendments. Under the amended scheme, the incentive will be applicable for a total of five consecutive financial years, starting from the financial year 2023-24. The scheme has been successful in attracting proposed investment of Rs 676.90 billion against the target estimate of investment of Rs 425 billion over a period of five years.

Owing to the low penetration of passenger vehicles in the market, there is expected to be further growth in this segment boosting robust sales growth of Argon.

Electronics Sector: Electronic exports have become the 6^th largest export commodity group as of March 2023. With rising per capita disposable income and private consumption, India has emerged as one of the largest markets for electronic products in the world. The electronics sector of India contributes around 3.4% of the country's Gross Domestic Product (GDP). India's electronics manufacturing services industry is growing, driven by higher share of outsourcing in India by Original Equipment Manufacturers (OEMs), developing component ecosystem and government incentives.

India's domestic production increased at a CAGR of 13% from $49 billion in FY 2017 to $101 billon in FY 2023. The exports of electronic goods increased by 50.52% in FY 2023 to reach US$ 23.57 billion as compared to US$ 15.66 billion in FY 2022. Import substitution of 60% has been achieved in the Telecom sector and India has become almost self–reliant in Antennae, Gigabit Passive Optical Network (GPON) & Customer Premises Equipment (CPE).

Production-Linked Incentive Scheme (PLI) for large-scale electronics manufacturing (including mobiles) has seen investments worth Rs. 68.87 billion (US$ 833 million) (till June 2023), already surpassing the target for FY 2024 which was Rs. 54.88 billion (US$ 664.4 million). India and Japan on 20 July 2023, signed an agreement for semiconductor design, manufacturing, equipment research and talent development and to bring resilience to the semiconductor supply chain.

Healthcare & Pharma Sector: As per the ICRA reports, private hospitals are projected to add 30,000 beds over next 5 years.

India's fast-growing middle class is spending more on healthcare. With increasing disposable incomes and higher penetration of insurance technology platforms and private players, private healthcare has become more accessible. Covid has also changed consumer attitudes towards healthcare spending. Government health expenditures have also risen significantly from ~29% in 2014-15 to ~39% in 2021-22. This is expected to increase further.

Onsite: The Company continued to optimize plant operations with a view to improve specific power in various plants on an ongoing basis. Multiple productivity initiatives like cooler replacement, passing valve issue rectification, loss reduction, reduction in unit power, etc. were taken up at various sites to reduce energy consumption and to improve profitability. The Company has started sourcing of renewable energy through long term contract and is also exploring opportunity for open access from captive farms – both solar and wind (Hybrid open access at Taloja, Rourkela and Tata KPO). The Company has also signed long term agreement for renewable energy sourcing at its ASU sites situated at Dahej, Ludhiana and Selaqui. The Company had also during the year installed Rooftop Solar PV at its various sites across country viz. Pune, Dabaspet, Kolkata HO, Uluberia, PMW II, Taloja ASU & PGP.

On comparison with 12 months period ended 31 March 2023, Merchant Bulk Business witnessed an 8% increase in revenues against FY 2023. Similarly, at 1713 tpd, liquid loading for FY 2024 was higher than FY 2023. In line with the robust growth demonstrated by Gujarat in semiconductors, chemicals and manufacturing sectors, the Company has commissioned its 2^nd merchant ASU plant at Dahej with an additional incremental capacity of 250 tpd. Your Company continues to consolidate and expand its footprint in the glass/frit and chemical industry in the state of Gujarat. Rapid expansion and growth in steel sector in the Eastern Region of the country is creating huge opportunities for growth as well. The Company is working out expansive and innovative operating models to cater to this requirement from ASUs located in other regions. Improvement in automobile and metal fabrication segments as well as the increasing demand in the specialty steel segment have led to stress on Argon volumes across the country. Constrained availability of Argon is being compensated by improved pricing in the market. The Company continued its growth and dominance in the public Healthcare segments in the states of Uttar Pradesh, Chhattisgarh and Bihar. The Company continues to differentiate in the markets, through customized Application PSOs in the Glass/frit, Beverage, Metals (Copper, Aluminium) and tyre curing sectors. Chemicals/Specialty Chemicals are aiding higher Nitrogen volumes and a spike in demand from Steel and refinery segment has led to increased sale of Oxygen and Nitrogen.

Merchant packaged business – Industrial Products, Healthcare & Special Products and Chemicals: Your Company has been at the forefront of providing uninterrupted medical oxygen supply to hospitals across the country. The Company has taken significant steps to ensure that hospitals have access to the purest medical oxygen supplies as per Indian Pharmacopoeia specifications. On comparison with 12 months period ended 31 March 2023, healthcare business revenue was 8% higher than FY 2023 on account of return to normalcy. To achieve this, the company has installed and enhanced multiple Liquid Medical Oxygen installations and has 22 healthcare PSA installations across the country. These installations enhance oxygen availability and ensure hospitals have a reliable and consistent supply.

The advancement of healthcare facilities in tier II and tier III cities is of utmost importance to ensure the health and well-being of citizens. These cities are often home to a large population, but they often lack adequate healthcare facilities. One of the primary reasons for advancing healthcare facilities in tier II and tier III cities is to improve healthcare access and equity. These cities often face challenges in providing quality healthcare services due to limited resources and infrastructure. By investing in PSA installations in these cities your Company ensures equitable access to healthcare.

In addition to medical oxygen supply, your Company has also been focused on innovations in addressing the needs of healthcare professionals. The Company has actively promoted the use of ENTONOX?, a patented mixture of Nitrous Oxide and Oxygen, as an analgesic and anxiolytic agent. This innovation has expanded the use of ENTONOX? beyond pain management during childbirth and now extends to colonoscopy procedures. Recognizing the importance of innovation in the healthcare industry, the Company has also introduced NOxBOXi?, NO therapy system. NOxBOXi? is used for organ transplant and treatment of respiratory distress in newborns.

Some of the key initiatives taken by the Company during the year in the Healthcare segment are as under:

1. Extension of medical gas pipeline system: The Company expanded its presence in the field of medical gas pipeline systems. This expansion has helped the Company cater to a wider range of hospitals and healthcare facilities.

2. Expansion of geographic footprint for LIV cylinder facility: The Company extended the availability of its LIV cylinder facility to a wider geographic area. This expansion enables the Company to cater to more hospitals and patients, ensuring the availability of oxygen even in remote areas.

3. Expansion of customer reach: Your Company actively participated in various healthcare symposiums and exhibitions and safety meetings, expanding its customer reach and creating opportunities for collaboration and partnerships. Through these initiatives, the Company has been able to connect with healthcare professionals, forge new relationships and enhance its visibility in the market.

In conclusion, your Company's commitment to uninterrupted medical oxygen supply, coupled with its focus on innovation and customer proximity, has made it a leader in the healthcare business. The Company's efforts to install and enhance medical oxygen installations, promote the use of ENTONOX? and introduce new products, such as NOxBOXi?, have contributed to its continued success and growth in the market.

Industrial Products reported an increase of 17% on account of increased industrial activity for production backlog clearance and inorganic growth effect as compared to that of 12 months period ended 31 March 2023. Additional focus on Minibulk installations with a focus on high margin products has been continued to ensure sustained customer relationships.

On comparison with 12 months period ended 31 March 2023, the Special Gas business reported an annual growth of 31% against FY 2023. The said growth was also aided by a constrained Helium supply situation. Despite the sustained Russia-Ukraine conflict and the Red Sea crisis leading to higher supply chain costs, there was limited impact in product supply to customers and incremental costs were recovered. The Company has sustained its focus on the ophthalmic mixes segment as well as the Solar segment.

At the core of our endeavours lies a fundamental belief: every interaction with our customers is not just an opportunity but a privilege – a chance to make a meaningful impact. We embrace the ethos that exceptional customer experiences transcend more than transactions; they are the bedrock of lasting relationships, advocacy and sustainable growth.

As an ISO 10002:2018 & 10004:2018 certified organization, we raise our benchmark on improving ourselves with Industry's best practices to evaluate ourselves through global metrices like Net Promoter Score (NPS), Customer Effort Score (CES) and Customer Satisfaction Index (CSI).

During the survey conducted in the FY 2023-24, we have seen some encouraging scores. We scored 43 in Net Promoter Score, where an increase of 18% in Healthcare is recorded, cementing the trust we have built in India's Healthcare sector. We are consistently growing by 2% in our Customer Effort Score, with score of 4.2 as compared to last year's 4.1. Our overall Customer Satisfaction Index of 4.2, with an increase in almost all business segments.

Operations and Distribution form the two essential functions of Linde – if Operations works like the heart, the Distribution function constitutes the bloodline for Linde - taking care of large volume delivery of our products for our bulk business as well as relatively smaller volumes in the form of cylinders for the packaged gases business.

Over the last few years, the Deliver function has been investing in technology to enhance and transform key aspects of its operations – planning, driver training and communication, centralized control and monitoring, transportation and planning and maintenance. The collective result of these digital initiatives is generating greater yield in efficiency, productivity and above all safety.

The Company has continued to prioritize initiatives to overcome and mitigate the safety risks involved in the distribution of products. As reported in the previous year's report, while the Company has upgraded the Transport Operation Center (TOC) for more focused monitoring, it has also implemented several new digital solutions to train the Distribution crew. A virtual-reality- based methodology, which provides an immersive experience and engagement for the drivers to learn about their day-to-day critical processes, has been used to train more than 500 drivers. In addition, a video-based digital learning program has been deployed to provide more relatable and visual means for the drivers to understand the nuances of the processes and policies. The Company continues to engage the simulator-based training mechanisms from its Jamshedpur facility, training 400+ drivers during the year under review. These new-tech-based trainings are in addition to the regular mentoring and monitoring done by the Driver coaches (deployed against every set of 50 drivers) on safe behavior and best practices of driving and ‘fit for duty' tests to check agility and fitness of the drivers before starting a trip. The Company has also extended the use of technology to stay connected with the drivers round the clock. Today, the entire Deliver function including 1200+ drivers are connected through a mobile app, which not only provides critical information and guidance to the community but helps them track their performance. Additionally, a 24X7 helpline has been set up to address problems faced by the drivers, to assure that the Company is listening to their problems and trying to offer support as and when needed.

The Company continues its on-route vigilance through the Mobile Digital Video Recorder and the five sets of cameras covering the entire periphery of our vehicles and one set of Fatigue & Distraction AI enabled camera to ensure that any fatigue and distraction event(s) of drivers are identified and immediate actions are triggered to prevent the vehicle from any untoward incident. The drivers are also assisted through real-time, digital announcement to identify possible road risks. Recently, a machine-learning based solution has been implemented to bring in further efficiency and transparency in the distance measurement system.

With these innovative and digital solutions, the Company has improved its delivery efficiency, i.e., we travel almost 1.7 million km per month on an average with splendid performance in improving tonnes per trip by 5% year-on-year whereas overall delivered tonnes improved by 7%. To improve the cost efficiency, the Company continued to maintain the efficiency in managing the return and loss quantity to 1% average and improved the capacity utilization of the tanker by 3%.

The Company's overall Safety performance has improved since previous years and were successful to avoid any ‘InControl' incidents during the year ended 31 March 2024.

The Project Engineering Division (PED) of Linde India Limited is a powerhouse of innovation, specializing in the design, engineering, supply, installation, testing and commissioning of Air Separation Plants (ASUs) and related projects on a turnkey basis. We are a one-stop solution provider, guiding our clients from the initial conceptualization phase to the seamless operation of their facilities.

PED's expertise extends to the manufacturing of essential equipment, backed by our U-stamp certified facility in Kolkata. This state-of-the-art facility produces a wide range of proprietary equipment, including distillation columns for air separation plants, cryogenic liquid storage tanks, ambient and steam bath vaporizers, process vessels, small-sized cold boxes, containerized micro plants for filling cylinders, submerged combustion vaporizer and liquefiers for both internal use and sale to third-party customers. This comprehensive in-house manufacturing capability ensures quality, efficiency and timely delivery, enhancing our competitive edge.

Since 2020, PED has proudly maintained IMS certification, a testament to our commitment to quality management, environmental responsibility and occupational health and safety standards. This commitment permeates every aspect of our operations, ensuring our projects meet the highest international standards.

Our journey in FY 2023-24 has been marked by significant milestones, reflecting our unwavering dedication to delivering value. To meet the increasing demand for cryogenic vessels, PED inaugurated a new, larger workshop in Jamshedpur in March 2024. This expansion underscores our strategic vision and commitment to scaling our production capacity.

In the fiscal year, our order intake, comprising both third-party and internal projects, stood at Rs. 1,778 million. Notable achievements include the supply of a 149 TPD ASU for Kirloskar Ferro Industries Limited, an instrument and plant air system for Talcher Fertilizers, a VPSA for Amara Raja, a client of Praxair India Private Ltd., cold box supervision for Bhushan Power and Steel Limited, and Molecular Sieve supply for Nilachal Ispat Nigam Ltd. (NINL).

This robust third-party order book is complemented by a significant portfolio of in-house project orders totaling to Rs. 6,916 million. These projects include a Nitrous oxide plant at Telangana, a Nitrogen plant at IOCL Panipat, a 1000 TPD ASU for RSP and a Nitrogen plant for EMMVEE Solar.

FY 2023 witnessed several successful commissioning milestones, showcasing PED's expertise and dedication. We successfully delivered 6 ASUs: two chains of 1000 TPD each at NMDC, 250 TPD units one each at Patancheru, Dahej and Sricity and a 2063 TPD unit at Bellary and re-commissioning of a 418 TPD unit at Tata Steel NINL. Additionally, we commissioned 4 Nitrogen plants one each at Tangguh, Indonesia for CSTS, Mundra for Adani Solar, Dumad for IOCL and Vizag for HPCL, along with a VPSA for Sesa Goa.

Driven by a robust pipeline for both onsite and in-house ASU projects in FY 2023-24, PED's total order book stands at Rs. 20,003.90 million as of 31 March 2024. This signifies a strong foundation for continued growth and reinforces PED's position as a leading provider of air separation and cryogenic solutions.

As we look towards the future, PED remains committed to innovation, expansion and delivering exceptional value to our clients. Our dedication to continuous improvement, technological advancements and customer satisfaction will continue to drive our success in the years to come.

The Indian economy is expected to growth at a CAGR of 6.7%. At this rate, by 2031, the economy will have crossed the US$ 5 trillion mark and will be getting closer to the US$7 trillion mark to become the 3^rd largest economy in the world. The subsequent increase in per capita income is expected to improve domestic consumption rates due to increasing disposable incomes on the back of dropping inflation rates. Monetary policy easing in the US and European region will lead to further FDI, finding it's way to emerging markets in South Asia, where India is quite well-positioned. Improved balance sheets of banks have increased the flexibility of India Rs to pursue opportunities for expansion. Capacity utilization of existing investments is expected to improve considering the increased revenue growth of India Inc., projected at 9-10%. Long term commodity prices are expected to remain flat, signalling cooling inflation rates and reducing risks of raw material shocks.

With increasing competitiveness, manufacturing demand is expected to pick up pace. A favorable policy push, improving foreign and private investments, opportunities from global supply-chain diversification due to conflict are all expected to act in India's favour. Infrastructure capex is gaining momentum and the industrial sector is expected to follow suit in terms of improved capacity utilization and addition. Over the next four years, capex is expected to grow 9-11% annually for both infrastructure and industry.

India's steel demand to touch 190 MT-mark by 2030; production to reach 210 MT at 7% CAGR. Key initiatives like smart cities, freight corridors, high-speed rail, etc. indicate a strong demand for steel. The industry is also seeing a greater focus on decarbonization where your Company is well-positioned. Indian Automobile industry is capable of achieving ~US$1 trillion by 2035. Two-wheeler sales is expected to witness 9% to 11% growth between 2023 – 28 owing to rising income levels and need for personal mobility. PV segment volumes are expected to record a growth of about 18-20% in FY 2024. Government announcement of Rs 5 billion e-mobility scheme to promote two and three wheeler EVs will help global car companies expedite investment decisions. Globally, the demand for electric vehicles, electronics and semiconductors is expected to increase substantially. India is expected to stand out as the favoured destination for new investments among other Asian economies due to it's increasing domestic demand, favourable government policies and to de-risk the supply chain away from the fragile geopolitical scenario of the East. With an expected investment of Rs 5000-7000 billion in capex, it is estimated that roughly 20% of the overall industrial investment will happen in these sectors which will augur well for the medium to long term.

Indian pharmaceutical products market is projected to achieve a value of approximately US$130 billion by the end of 2030, as per the Economic Survey. An investment of Rs. 60 billion has been approved by Centre under PLI scheme for pharma and medical devices sectors. As per budget, total outlay for the development of the pharma industry for FY 2025 has been pegged at Rs. 13 billion.

Capital allocation for renewable energy has increased from US$ 41.73 billion to US$ 57.6 billion in the current fiscal. The continued focus on the renewable energy as well as favourable policies is also expected to give a fillip to the Solar industry creating additional capacities to meet the Net Zero targets set out.

GDP growth and supply chain management can get hit due to the fragile geopolitical situation in various parts of the world. Sectors like heavy engineering with exposure to exports could face headwinds due to the recessionary environment prevailing in the United States (US) and European Union (EU). A stagnant Chinese economy, looming overcapacity and strained trade relations with the US and EU could push imports to India hurting local manufacturing. Slowing Electronics segment in ASEAN (Semiconductor, Optic fiber, etc). could impact Helium and rare gases sales in India. Escalation in West Asia conflict could impact supply chain for imported products (helium and imported special products). Fluctuations in oil supply and the increase in the global shipping costs could stoke inflationary fears.

India is currently feeling the El Ni?o effect, with extreme weather events like the delayed onset of winters and high variation in average rainfall in some regions. The knock-on impact on agriculture, can lead to increased food inflation. This will also hurt rural consumption especially industries like steel, cement, automobiles, etc. where we are present. Efforts to rein in food inflation through export bans could also shed an unfavorable light on India having restrictive policies. There has been high reliance on the Steel sector. BOO model is gaining lesser favour with some customers preferring plant ownership. Multiple competitors including overseas players in the small Onsite & sale of equipment space putting pressure on margins. Alongside the increase in the captive and merchant ASU capacity expansion, there is also parallel increase in competition with entry of new players into merchant market including non-gas players. Loading of the additional competition capacity created is leading to predatory pricing putting pressure on the margins.

Your Company's business faces various risks - strategic as well as operational in both its segments viz. Gases and Project Engineering, which arise from both internal and external sources. As explained in the report on Corporate Governance, the Company has an adequate risk management system, which takes care of identification, assessment and review of risks. Your Company has been holding risk workshops periodically to refresh its risks in line with the dynamic and ever- changing business environment and the last refresher risk workshop was conducted on 20 July 2023, which was attended by the senior management team with a view to refresh the various risks facing the business of the Company. The risks being addressed by the Company during the year under review included risk relating to the organisation structure, financial risk, risk of cyber-attacks on the Company's plants and business systems, competition risk, procurement risk, customer behavioural risk, risk related to climate change, macroeconomic risk, ESG risk, risk of regulatory changes, etc.

Your Board of Directors provides an oversight of the risk management process in the Company and reviews the progress of the action plans for the identified key risks with a distinct focus on top 5 key risks on a quarterly basis. Mr Amit Dhanuka, Company Secretary of the Company is the Chief Risk Officer of the Company.

The Company has a Risk Policy with a view to provide a more structured framework for proactive management of all risks related to the business of the Company and to make it more certain that the growth and earnings targets as well as strategic objectives are met.

As on 31 March 2024, your Company had ‘zero' outstanding borrowing.

There were no material changes and commitments affecting the financial position of the Company, which occurred between the end of the period to which these financial statements relate and the date of this report.

As your Company has ‘zero' borrowings from the Banks, the last available rating of your Company's total bank facilities - both fund-based and non-fund based by CRISIL was withdrawn with effect from 1 August 2021.

As on 31 March 2024, your Company did not have any long-term borrowing. As a result of the same, your Company does not meet the criteria specified by SEBI for large corporates for fund raising through debt securities.

During the year under review, the Company has not accepted any deposits from public under Chapter V of the Companies Act, 2013.

There have been no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and Company's operations. However, the Company was in receipt of an Interim Ex-Parte Order bearing reference no. WTM/ AB/30299/2024-25 dated 29 April 2024 passed by the Securities and Exchange Board of India (SEBI) under Sections 11(1), 11(4) and 11B of the Securities and Exchange Board of India Act, 1992, in relation to an ongoing investigation carried out by SEBI. The Company had on 13 May 2024 filed an appeal before the Securities Appellate Tribunal (SAT) against the SEBI's aforesaid Order, which was heard by the Hon'ble Bench on 16 May 2024 and 17 May 2024, respectively. SAT has vide its Order dated 22 May 2024 allowed the appeal filed by the Company and has set aside the SEBI's Interim Ex-Parte Order bearing reference no. WTM/AB/30299/2024-25 dated 29 April 2024.

During the year under review, neither any application nor any proceeding has been initiated against the Company under the Insolvency and Bankruptcy Code, 2016.

The particulars of loans, guarantees given and investments made during the year under review under Section 186 of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are annexed to this Report. [Annexure 3]

Please refer Note no. 47 of the Standalone Financial Statements for the details on Key Financial Ratios.

During the year under review, your Company had transferred the 61^st unpaid/unclaimed dividend amount of Rs.0.36 million pertaining to the financial year ended 31 December 2015 to the Investor Education and Protection Fund in compliance with the provisions of Sections 124 and 125 of the Companies Act, 2013. In compliance with these provisions read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, your Company also transferred 16,757 equity shares held by 144 shareholders to the Demat Account of the IEPF Authority on 25 July 2023 and 26 July 2023, in respect of which dividend had remained unpaid/unclaimed for a consecutive period of 7 years. More information in this regard is provided in the Corporate Governance Report.

At Linde, our aim truly is to avoid causing any harm to people or the environment and as such Safety remains one of our topmost priority. Compliance with SHEQ rules, standards and procedures are pre-requisite for all employees & contractors. Management is committed to ensure that all personnel are trained and made competent before undertaking any safety critical activity for the Company.

Global Safety Commitment Day 2023 was celebrated at all Linde operating units & project sites in the month of September 2023 with the theme of ‘Focus on Safety – You make it Happen'. The objective is to spend time with our colleagues & reiterate, that our goal continues to be ZERO Today – zero incidents, zero injuries. The way we reach our goal is by creating and maintaining a workplace where safety is our prime focus. This can happen only when all employees join hands together.

SHEQ Standards are continuously reviewed over the past few years and in 2023, many new standards on safe work practices were launched and implemented. The standards did help to overall improve the process and make them safer.

To strengthen the SHEQ performance a comprehensive SHEQ Annual Operating Plan (AOP) was introduced, covering the area of improvements in Process safety, Distribution safety, Operational safety, Behavioral & Personnel safety, Quality & Environmental safety. These helped in prioritizing our efforts.

Along with various Management control actions, focus was given on training of plant personnel through various campaigns such as "Slips Trips & Fall", Hazardous Atmosphere, Working at Height, Hand protection at Project Sites, etc. An extensive training on Behavioral Safety was given to Distribution & Plant personnel. A Health Safety Environment Leadership program was also organized for 2^nd in Line Managers from multiple departments.

At Linde, we have never stopped embracing technological advancement. After upgrading our fleet with modern tracking system, driver assist equipment, now the driver training is enhanced through simulators installed at 2-3 central locations. Virtual Reality equipment are also introduced for drivers to give on the job training of non-driving activity such as filling/decantation, loading & unloading, safety precautions before starting of loading/ unloading, etc.

All the safety initiatives have given results with substantial decrease in Commercial Vehicle Incidents, whereas the Lost Work Day cases & the Total Recordable cases show a flat curve.

The Safety journey at Linde continues & safety remains as a Top Priority item in the list.

The year under review has been one with a remarkable growth and achievements for our organization.

Despite the challenges posed by an ever-evolving market landscape, we have continued to innovate expand and strengthen our position as an industry leader. Our commitment to excellence customer satisfaction and sustainable practices has driven us to new heights and we are excited to share the milestones we have reached, the progress we have made and the strategic initiatives we are implementing to ensure future success.

On the Diversity and Inclusion front, we concluded our first Women Leadership Programme, IGNITE. A batch of 26 women participated in a virtual learning session for a period of four months which covered topics like Breaking Barriers, Success Mindset, Practicing Emotional Intelligence, Influencing Skills, Executive Presence & Networking, Leadership Essentials, Collaboration and Business Acumen.

Additionally, we also arranged for Leadership Cafes where they met 3 Leaders from Linde's APAC region to get inspired and learn about their success story.

Harmonious and productive work culture was maintained on Employee Relations front during the period under reference. The sustained record of having Zero manhour loss due to labour issues was duly maintained.

Amongst activities of significance was Signing-off of Long-Term Settlement between the Company's management and the Union Representatives for the unionized workers of West Bengal. The tripartite settlement has been executed for a period of 3 and half years and includes mutually agreed points aimed at productive growth.

In addition, engagement activities for blue collar employees including celebration of major festivals like Vishwakarma puja, picnics and get togethers were organized which helped maintaining stronger employee bond.

The Company had harmonious employee relations across all its plants and offices in India. As on 31 March 2024, the total manpower strength was 269.

The Company remains committed to provide and promote a safe, healthy and congenial atmosphere irrespective of gender, caste, creed or social class of the employees. The Company's Policy on Prevention of ‘Sexual Harassment' is in line with the provisions of The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder. Internal Complaints Committee (ICC) has been set up to redress complaints, if any, received regarding sexual harassment. All employees whether permanent, contractual, temporary, etc. have been covered under this Policy. The Policy is gender neutral. During the year under review, one complaint alleging sexual harassment was received by the Company, which was investigated and redressed by the Internal Complaints Committee. The complaint was closed after initiating applicable consequence management action. As a preventive measure and to create awareness in this area, the Company has been conducting refresher programs for all permanent and contractual employees.

The disclosures pertaining to ratio of remuneration of each Director to the median remuneration of all the employees of the Company, percentage increase in remuneration of each Director and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, are annexed to this Report. [Annexure 4]

In terms of the provisions of Section 197(12) of the Companies Act, 2013 read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, a statement containing the names and other prescribed particulars of top 10 employees in terms of remuneration drawn and that of every employee, who if employed throughout the year ended 31 March 2024 was in receipt of remuneration aggregating to not less than Rs. 10.20 million; and if employed for part of the said period, was in receipt of remuneration not less than Rs.0.85 million per month forms part of this Report. However, having regard to the provisions to the proviso of Section 136(1) of the Companies Act, 2013, the Annual Report is being sent to all the Members of the Company excluding this information. The aforesaid statement is available for inspection by Members at the Registered Office of the Company during business hours on working days up to the date of the ensuing Annual General Meeting. Any Member interested in obtaining a copy of the said information may write to the Company Secretary at the Registered Office of the Company and the same will be furnished on request and the said information is also available on the website of the Company. None of the employees is covered under Rule 5(3)(viii) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended.

As a member of The Linde plc Group, your Company has been a socially responsible corporate and our core values define the way we operate and create value within the larger society. Linde's core principles and values form the basis of its CSR policy. Your Company is therefore, committed to behave responsibly towards people, society and the environment for inclusive growth of the society where we operate to conserve natural resources and to develop sustainable products. In line with its CSR Policy, Linde India's CSR commitment centres around four thematic areas - Education, Health, Environment and Livelihood (Skill Development) and other areas including Disaster Management as specified in Schedule VII to the Companies Act, 2013.

Some of the CSR projects/initiatives taken up/sustained during the year under review included expenditure for education programs for underprivileged children in Kolkata and Odisha, providing education and other support for blind children in Rourkela. Further, as a part of its endeavour to support disaster relief, the Company made a contribution to the Himachal Pradesh Government for providing emergency assistance for granting relief to the individuals and families affected by natural calamities. Other initiatives included projects across plant and office locations proposed and executed by the employees of the Company aimed at community building/ development. The Company also had two ongoing projects, one of them being Defensive driver training in collaboration with Institute for Road Traffic Education for drivers of heavy vehicles at several locations including Delhi NCR, Uttar Pradesh, Rajasthan, West Bengal, Odisha, Maharashtra and Jharkhand for making the highways safer and two-wheeler training workshops for delivery agents, and first-time drivers and university students. It also included a project on building infrastructure in Gujarat by Scaling Zero Fatality Corridors called the "Zero-Fatality Corridor" (ZFC) model, a solution which identifies high-fatality stretches of roads and implements distilled solutions. Another ongoing project of the Company comprised of training and awareness programs through Centre for Catalyzing Change to promote the cause of natural childbirth and reduce the rate of C-Section deliveries in Odisha. The Company has also been involved in conducting paramedical training for the female students in Dehradun and Hyderabad, providing medical treatment to the underprivileged children with congenital heart defects in the state of Tamil Nadu. The Company's CSR initiatives towards environment included projects relating to ecosystem conservation (water & soil conservation, planting trees, etc.) and waste management in the states of Jharkhand, West Bengal and Uttarakhand.

Your Company encourages volunteering of services by its employees into its CSR initiatives, which are measured as employee days spent on CSR projects.

The total spend on CSR during the year under review amounted to Rs. 80.20 million on various CSR projects/activities as mentioned above, which was duly approved by the CSR Committee and Board of Directors of the Company. The details required to be disclosed relating to the CSR projects/activities for the year ended 31 March 2024 are covered in the Annual Report on CSR activities, which is annexed to this Report. [Annexure 5]

The Linde plc Group has published a detailed Sustainable Development Report 2022, which is prepared in accordance with GRI standards. Linde Plc Group's mission of "making our world more productive" reflects its strong belief that Linde is a part of the solution to the climate change challenges faced by the world. As a member of the Linde plc Group, your Company has adopted the various policies of its parent, that relate to the 9 principles laid down by the Securities and Exchange Board of India for Business

Responsibility and Sustainability Reporting (BRSR) by the top 1000 listed entities in India based on market capitalisation. As stipulated in Regulation 34(2) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has included a BRSR as an integral part of the Annual Report for the year ended 31 March 2024 briefly describing initiatives taken by it from an environment, social and governance perspective during the year under review. The BRSR provides an avenue for disclosing an overview of the Company's material ESG risks and opportunities, goals and targets related to sustainability and performance against them. SEBI vide its Circular No. SEBI/HO/CFD/CFD-SEC-2/P/CIR/2023/122 dated 12 July 2023 had updated BRSR format and had also introduced BRSR Core, which is a sub-set of the BRSR, consisting of a set of Key Performance Indicators (KPIs) /metrics under 9 ESG attributes. In the said circular, SEBI mandated the top 150 listed entities by market capitalization to undertake reasonable assurance of the BRSR Core and include the same in the Annual Report to be prepared for the Financial Year 2023-24. Your Company was amongst the top 150 listed entities by market capitalization as on 31 March 2023 and the said BRSR Core was applicable on the Company for the Financial Year 2023-24. The Company has obtained a reasonable assurance on the BRSR Core from Futurestation Advisors LLP and the same forms part of this Annual Report.

As a member of the Linde plc Group, your Company attaches great importance to sound responsible management and good corporate governance. Linde plc follows highest standards in corporate governance and has policies and international best practices to build a strong governance architecture. Your Company remains committed to business integrity, high ethical standards and professionalism in all its activities same as ever. As an essential part of this commitment, the Board of Directors of your Company supports high standards in corporate governance.

It is the endeavour of the Company to ensure that their actions are always based on principles of responsible corporate management. In the Linde plc Group, corporate governance is seen as an ongoing process. Your Company closely follows the developments in the governance norms and has taken lead in ensuring compliance with the same. A separate report on Corporate Governance along with the certificate of the Secretarial Auditor, M/s. P Sarawagi & Associates, Company Secretaries, confirming compliance of the conditions of corporate governance, as stipulated under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 forms an integral part of this Annual Report.

A calendar of Board and Committee meetings is agreed and circulated in advance to the Directors. The Board met four times during the year under review, details where of are given in the Corporate Governance Report, which forms part of this Report.

The Nomination and Remuneration Committee of the Company identifies and ascertains the integrity, qualification, expertise, positive attributes and experience of persons for appointment as Directors and thereafter recommends the candidature for election as a Director on the Board of the Company. The Committee follows defined criteria in the process of obtaining optimal Board diversity which, inter-alia, includes optimum combination of executive and non-executive directors, appointment based on specific needs and business of the Company, qualification, knowledge, experience and skill of the proposed appointee, etc. The Policy on appointment and removal of Directors, Board Diversity Criterion and Remuneration to Directors/Key Managerial Personnel/Senior Management forms part of the Nomination and Remuneration Policy of the Company, which is available on the Company's website at https://www.linde-gas.in/en/images/Nomination%20and%20Remuneration%20 Policy_tcm526-657189.pdf.

In terms of Regulation 25(7) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company is required to conduct the Familiarisation Programme for Independent Directors (IDs) to familiarise them about their roles, rights, responsibilities in your Company, nature of the industry in which your Company operates, business model of your Company, etc., through various initiatives. The details of training and familiarization programmes for Directors have been provided under the Corporate Governance Report. Apart from the initial familiarisation program as above, presentations are made to the Board Members at almost all board meetings to enable them to familiarise and update themselves with the changes in the applicable legal framework, competition, industry specific developments, etc. The details of the familarisation programs held during and up to the year ended 31 March 2024 are available on the Company's website at https://www.linde-gas.in/en/images/ Linde_Familirisation%20Programme_2023-24_tcm526-682969.pdf

During the year under review, pursuant to provisions of Section 134, Section 149 read with Code of Independent Directors (Schedule IV) and Section 178 of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Nomination and Remuneration Committee of the Board reviewed the process and criteria used in the previous year for evaluating the performance of the Board, its Committees, Chairman of the Board and the individual Directors. Like the previous years, an online platform was provided to the Directors for participating in the performance evaluation process, which contained a structured questionnaire for seeking feedback from the directors on certain pre-defined attributes applicable to them, including some specific ones for the Independent Directors. More details about the performance evaluation process followed by the Board are provided in the Corporate Governance Report.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The declarations received from the Independent Directors are aligned to the amendment made in the Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

On an annual basis, the Company obtains from each Director, details of their Board and Committee positions he/she occupies in other Companies and changes, if any regarding their Directorships. The Company has obtained a certificate dated 28 May 2024 from M/s. P Sarawagi & Associates, 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 Securities and Exchange Board of India or Ministry of Corporate Affairs or any such authority and the same forms part of this Annual Report.

Your Company continues to have adequate system of internal control commensurate with the size and the nature of its business, which ensures that transactions are recorded, authorised and reported correctly apart from safeguarding its assets against loss from wastage, unauthorised use and removal.

The internal control system is supplemented by documented policies, guidelines and procedures. The Company's Internal Audit department continuously monitors the effectiveness of the internal controls with a view to provide to the Audit Committee and the Board of Directors, an independent, objective and reasonable assurance of the adequacy of the organization's internal controls and risk management procedures. The Internal Audit function submits detailed reports periodically to the management and the Audit Committee. The Audit Committee reviews these reports with the executive management with a view to provide oversight of the internal control systems.

Your Board has in compliance with the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, approved several policies on important matters such as related party transactions, risk management, nomination and remuneration of directors and senior managers, whistle blower mechanism, CSR, insider trading, practices and procedures for fair disclosure of unpublished price sensitive information, materiality of events/ information, preservation of documents, etc., which provide robust guidance to the management in dealing with such matters to support internal control. The Company reviews its policies, guidelines and procedures as a matter of internal control on an on-going basis in view of the ever-changing business environment.

Additionally, M/s Suresh Surana & Associates LLP, Chartered Accountants, engaged by the Company reviews the framework of its existing internal financial controls across the Company and testing of the operating effectiveness of various internal controls in the organisation. M/s Suresh Surana & Associates LLP, Chartered Accountants has submitted a report to the Audit Committee on their findings based on the testing of the key controls for the year ended 31 March 2024. The Statutory Auditors of the Company have also independently reviewed internal financial controls over financial reporting. Both M/s Suresh Surana & Associates LLP, Chartered Accountants as well as the Statutory Auditors have confirmed that these controls were operating effectively as at 31 March 2024. As stated in the Responsibility Statement, your Directors have confirmed that based on the reviews performed by the internal auditors, statutory auditors, cost auditors, secretarial auditors and the reviews undertaken by the management and the Audit Committee, the Board is of the opinion that the Company's internal financial controls have been adequate and effective during the year ended 31 March 2024.

There has been no change in the Board of Directors of your Company since the last Annual General Meeting held on 17 August 2023.

Mr Michael James Devine (DIN: 10042702), who was earlier appointed as an Additional Director by the Board with effect from 15 February 2023 was appointed as a Non-Executive Director by the Members of the Company through Postal Ballot on 25 April 2023.

Mr Michael James Devine, a Non- Executive Director and Chairman of the Board retires by rotation at the ensuring Annual General Meeting pursuant to the provisions of Section 152 of the Companies Act, 2013 and Article 104 of the Articles of Association of the Company and being eligible, offers himself for re-appointment. Necessary resolution for approval of re-appointment of Mr Michael James Devine, as a Director of the Company is included in the Notice of the ensuing Annual General Meeting. The Board recommends the aforesaid resolution for your approval.

Pursuant to Section 203 of the Companies Act, 2013, the present Key Managerial Personnel of the Company are Mr Abhijit Banerjee, Managing Director, Mr Neeraj Kumar Jumrani, Chief Financial Officer and Mr Amit Dhanuka, Company Secretary. During the year under review, there has been no changes in the Key Managerial Personnel of the Company.

Based on the framework of internal financial controls and compliance systems established and maintained by the Company, audit and reviews performed by the internal auditors, statutory auditors, cost auditors, secretarial auditors and the reviews undertaken by the management and the Audit Committee, the Board is of the opinion that the Company's internal financial controls have been adequate and effective during the year ended 31 March 2024.

As required by Sections 134(3)(c) and 134(5) of the Companies Act, 2013, the Directors to the best of their knowledge and belief state and confirm:

a. that in preparation of the annual financial statements for the year ended 31 March 2024, applicable accounting standards have been followed along with proper explanations relating to material departures, if any;

b. that they 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 aforesaid financial year and of the profit of the Company for that period;

c. that they had 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;

d. that the aforesaid annual financial statements have been prepared on a going concern basis;

e. that 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; and

f. that they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

There have been no instances of fraud reported by the Statutory Auditors under Section 143(12) of the Companies Act, 2013 and the Rules framed thereunder.

The Company has proper systems in place to ensure compliance with the provisions of the applicable standards issued by The Institute of Company Secretaries of India and such systems are adequate and operating effectively.

All related party transactions entered during the year under review were in ordinary course of business and on arm's length basis and the same have been disclosed under Note 44 of the Notes to the Standalone Financial Statements. No material related party transactions, that is, transactions exceeding 10% of the annual consolidated turnover as per the last audited financial statements were entered during the year under review by the Company. 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.

Details of conservation of energy, technology absorption and foreign exchange earnings and outgo in accordance with Section 134(3)(m) read with Companies (Accounts) Rules, 2014 are annexed to this Report. [Annexure 6]

A copy of Annual Return of the Company for the 15 months period ended 31 March 2023 in Form MGT-7 has been placed on the website of the Company at https://www.linde-gas.in/en/ images/LIL_Form_MGT_7_FY%202022-23.pdf_tcm526-681365. pdf. The Annual Return of the Company for the year ended 31 March 2024 would be updated on the Company's website within the due timelines.

Amid the global gloom and doom among major economies, India is expected to clock the fastest growth at 6.8% as per an IMF report and a further 6.5% in FY 2026. Key drivers will primarily be coming from government investments and the services sector, as private consumption and exports will perform unevenly. Inflation is also expected to be range-bound within RBI's target range. Any extreme weather events or escalation in the ongoing war escalating into a regional conflict in the Middle East leading to increased oil prices will upset RBI calculations. A stable government at the Centre is expected to lead to policy continuity in multiple areas including the manufacturing push and ease of doing business reforms. This should further spur the growth momentum amid improving FDI and also draw global supply chains in the near term.

Improving metal fabrication, Specialty Steel and automobile segments is leading to a tightness in the Argon supply demand scenario which has a positive impact on prices. Private capital expenditures are also expected to increase on the back of improving balance sheets of the Corporates as well as reduced Non-performing Assets (NPAs) of banks.

The Indian economy has begun to prosper from greater formalization, increased financial inclusion and economic opportunities brought forth by economic reforms based on digital technology.

With the tag of being the ‘most populous' country of the world, home to 1.4 billion people amid declining birth rates, India's working age group (15-64 years) is set to expand to 100 million over the next decade accounting for about 22.5% of the incremental global workforce. Artificial Intelligence (AI) will create cost-cutting opportunities and augment human capabilities.

Your Company is prioritizing digitialisation in line with global trends. Key focus areas are:

Expansion, Topline & Receivables

Cost-effectiveness & Digitally-enabled Logistics

Asset efficiencies & Reliability

Business Excellence & Enhanced Customer Experience

Over the next five years, there should be greater growth prospects for the Indian economy. An enhanced medium-term outlook is made possible by structural advancements in the financial system, the rate of ongoing reforms, and policies that encourage the growth of the private sector. Greater potential lies in technological developments and other structural changes like the growing de-risking of global supply chains and the green transition. Given it's strained trade relations with the US, policy uncertainty and strained geopolitical situation, manufacturers are re-focussed on adopting a ‘China+1' strategy. The large domestic market of India and faster growth prospects among other peers, will be a big draw for manufacturers looking for stability and growth.

M/s Price Waterhouse & Co. Chartered Accountants LLP (Firm Registration No. 304026E/E-300009) was appointed as the Statutory Auditors of the Company at its 86^th Annual General Meeting to hold office from the conclusion of the said meeting and until the conclusion of the 91^st Annual General Meeting to be held in the year 2027.

The Statutory Auditors have issued a modified opinion on the Financial Statements of the Company for the financial year ended 31 March 2024 and the said Auditors' Report(s) for the financial year ended 31 March 2024 forms part of this Annual Report.

Auditors' Observation: We draw attention to Note 50 to the the standalone financial statements, which explains the management's assessment of related party transactions with reference to the Securities and Exchange Board of India ("SEBI") (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended ("SEBI LODR"). Management has applied the materiality threshold of 10% or more of the annual consolidated turnover of the Company to the value of each contract with a related party consisting of individual or multiple transactions and not by aggregating the value of all contracts with each related party to evaluate whether it has breached the materiality threshold and therefore would require shareholders' approval as per SEBI LODR. SEBI, in its Interim Ex Parte Order ("Interim Order"), issued subsequent to the year end, on April 29, 2024, has stated that the Company is continuing to execute related party transactions which, prima facie, appear to be material, without obtaining shareholders' approval and has stated that materiality threshold has to be applied on an aggregate basis considering all transactions during the financial year with a related party. Pursuant to the appeal filed by the Company, the Securities Appellate Tribunal, in its Order dated May 22, 2024 ("SAT Order"), has set aside the Interim Order, allowing the Company to file its reply within a week from the date of inspection of documents, and also noted that SEBI will pass its Orders within 30 days of the conclusion of the hearing. Accordingly, the probable penal consequences and related implications on the standalone financial statements after completion of the above SEBI proceedings are presently not determinable.

Management Response: In terms of Regulation 2(zc) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (which defines the term "related party transactions") read with Regulation 23 thereof, the materiality threshold of 10% or more of the annual consolidated turnover of the Company should be applied to the value of each contract with a related party consisting of individual or multiple transactions and not by aggregating the value of all contracts with each related party. The Company has also sought and received legal opinions from eminent legal experts, which give the same interpretation. Accordingly, the Company is in compliance with all requirements under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 in respect of all related party transactions entered into by it. While SEBI is still investigating the matter, the Company is confident that the Company's legal position in this matter will be upheld.

The Board of Directors of the Company had appointed M/s. P Sarawagi & Associates, a firm of Company Secretaries pursuant to the provisions of Section 204 of the Companies Act,

2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 for undertaking the secretarial audit of the Company for the year ended 31 March 2024. In terms of the provisions of Section 204(1) of the Companies Act, 2013, a Secretarial Audit Report dated 28 May 2024 in Form MR-3 given by the Secretarial Auditor is annexed with this Report.[Annexure 7] The Report confirms that the Company had complied with the statutory provisions listed under Form MR-3 and the Company also has proper board processes and compliance mechanism. The Secretarial Auditors' Report has the following observations:

Auditors' Observation: During the year under review, the Company has generally complied with the applicable provisions of the acts, rules, regulations, standards, etc. However, based on the legal opinions obtained and relied upon by the Company, it has continued to reckon materiality threshold of 10% of the annual consolidated turnover of the Company to the aggregate value of all transactions in a contract, with a related party during the review period and not by aggregating value of all contracts with that related party. Accordingly, the Management of the Company is of the view that no related party transaction entered into by the Company, during the year under review, exceeded the materiality threshold of 10% of the annual consolidated turnover of the Company and therefore approval of the shareholders is not required. But the Securities and Exchange Board of India ("SEBI"), in its Interim Ex-Parte Order dated 29 April 2024, has, inter-alia, stated that the Company is continuing to execute related party transactions which, prima facie, appear to be material, without obtaining the shareholders' approval, as the materiality threshold has to be applied on an aggregate basis considering all transactions during a financial year with a related party. Pursuant to an Appeal filed by the Company, the Securities Appellate Tribunal, in its Order dated 22 May 2024, has set aside the Interim Order, inter-alia, allowing the Company to file its reply within a week from the date of inspection of documents and also noted that the SEBI will pass its Orders within 30 days of the conclusion of the hearing.

Management Response: In terms of Regulation 2(zc) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (which defines the term "related party transactions") read with Regulation 23 thereof, the materiality threshold of 10% or more of the annual consolidated turnover of the Company should be applied to the value of each contract with a related party consisting of individual or multiple transactions and not by aggregating the value of all contracts with each related party. The Company has also sought and received legal opinions from eminent legal experts, which give the same interpretation. Accordingly, the Company is in compliance with all requirements under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 in respect of all related party transactions entered into by it. While SEBI is still investigating the matter, the Company is confident that the Company's legal position in this matter will be upheld.

In terms of Section 148 of the Companies Act, 2013, the Company is required to have the audit of the cost accounting records conducted by a Cost Accountant. M/s Mani & Co., a firm of Cost Accountants conducted this audit for the 15 months period ended 31 March 2023 and submitted their report to the Central Government in Form CRA 4 on 6 September 2023.

The Board of Directors of the Company had on the recommendation of the Audit Committee appointed M/s. Mani & Co., Cost Accountants having registration no. 000004 as the Cost Auditor for the year ended 31 March 2025 to conduct cost audit under the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time. In accordance with the provisions of Section 148(3) of the Companies Act, 2013 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors as recommended by the Audit Committee and approved by the Board has to be ratified by the Members of the Company and appropriate resolution in this regard also forms part of the Notice convening the ensuing Annual General Meeting.

Your Directors wish to place on record their gratitude to the bankers, customers, dealers, suppliers and all other business associates and the shareholders of the Company for their continued support during the year under review. Your Directors, also place on record their appreciation of the contribution made by the employees of the Company at all levels and thank them for their dedication and commitment.

Your Directors also acknowledge the valuable support and cooperation received from the various Government departments and agencies in these challenging times and look forward to their continued support in the future. The Board of Directors also takes this opportunity to thank The Linde plc Group for their strategic inputs, guidance and support in various operational and functional areas. This has helped the Company to attain higher standards in every sphere of performance.

Certain statements in this report relating to Company's objectives, projections, outlook, expectations, estimates, etc. may be forward looking statements within the meaning of applicable laws and regulations. Although the Company believes that the expectations reflected in such forward looking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Accordingly, actual results or performance could differ materially from such expectations, projections, etc. whether express or implied as a result of among other factors, changes in economic conditions affecting demand and supply, success of business and operating initiatives and restructuring objectives, change in regulatory environment, other government actions including taxation, natural phenomena such as floods and earthquakes, customer strategies, etc. over which the Company does not have any direct control.