Shanthi Gears Ltd

AND

#MDStart#

MANAGEMENT DISCUSSION & ANALYSIS

Dear Shareholders,

The Board is pleased to present the 51^st Annual Report together with the audited financial statements for the year ended 31^st March, 2024.

1. Business Environment

According to IMF, global growth rate is at 3.2% in CY2023 and is projected to continue at the same rate in CY2024 and CY2025. The pace of expansion is low as compared to past owing to both near-term factors like high borrowing costs, withdrawal of fiscal support, longer-term effects from the COVID-19 pandemic and Russia's invasion of Ukraine, weak growth in productivity and increasing geoeconomic fragmentation.

The global economy has been surprisingly resilient, despite significant central bank interest rate hikes to restore price stability. Though sharp price increases remain an obstacle across the world, the IMF foresees global inflation tumbling from 6.8% in CY2023 to 5.9% in CY2024 and 4.5% in CY2025. Growth in Emerging and Developing Asia is expected to decline slightly from 5.6% in CY2023 to 5.2% in CY2024 and 4.9% in 2025. The IMF expects the Chinese economy to slow from 5.2% in CY2023 to 4.6% in CY2024 and 4.1% in CY2025.

On the Economy

Indian Economy: The Indian economy is set to achieve nearly 7% growth in the FY24-25. The positive outlook is attributed to the robust domestic demand that has propelled the country to a growth rate exceeding 7% over the past three years. The strength in domestic demand is driven by private consumption and investment, government reforms and initiatives implemented over the past decade. Investments in both physical and digital infrastructure, along with measures to boost manufacturing, have bolstered the supply side, providing a significant boost to economic activity in the country.

Increased Government investment activity has also resulted in the crowding-in of private investment. Capital Goods and Construction/Infrastructure Goods indices of the Index of Industrial Production (IIP) were 6.2% and 9.6% higher during FY24 compared to the previous year. Though imports of capital goods in FY24 were marginally lower than that in the previous year, their share in overall imports increased from 11.8% in FY23 to 12.4% in FY24, indicating a continued build-up of productive capacity in the economy.

Source:

• https://ddnews.gov.in/en/indian-economy-poised-for-7-growth-in-fiscal-year-2024-25-ministry-of-finance/

• https://dea.gov.in/sites/default/files/Monthly%20Economic%20Review%20-April%202024.pdf

According to the Ministry of Commerce and Industry, total goods imports by India in 2023-24 decreased by 5.66 percent to US$675.44 billion. Looking ahead, India is actively working on expanding its export portfolio.

Robust public investment driving growth: The Indian government's steadfast commitment to boosting infrastructure development and public investment has been a driving force behind the country's economic growth. Increased spending on infrastructure projects, such as roads, ports, and power generation, has not only created employment opportunities but has also facilitated the smooth flow of goods and services, thereby enhancing overall productivity and competitiveness.

Promising export sectors and job creation: While external demand for Indian merchandise exports is expected to remain subdued due to global economic uncertainties, sectors such as pharmaceuticals and chemicals are anticipated to witness strong export growth. These industries, which have emerged as key drivers of India's export basket, are poised to benefit from the country's cost-competitiveness and growing global demand for high-quality Indian products. Robust economic growth and higher labor force participation are also contributing to job creation and income generation, improving labor market indicators.

Balanced approach to fiscal prudence: The Indian government's commitment to fiscal prudence is acknowledged, as it seeks to gradually reduce the fiscal deficit while simultaneously increasing capital investment. This balanced approach aims to strike a balance between promoting economic growth and maintaining fiscal discipline, thereby ensuring long-term macroeconomic stability.

With its strong economic fundamenta ls, strategic focus on infrastructure development, resilient domestic demand, and promising export sectors, India is well-positioned to navigate global uncertainties and sustain its robust economic growth trajectory in 2024.

Sources:

• https://www.imf.org/en/Publications/WEO

• https://www.business-standard.com/economy/news/un-revises-india-s-2024-economic-growth-projection-upwards-to-nearly-7-124051700065_1.html

On the Industrial Gear Industry: The Industrial Gearbox market growth in India will be driven through, Technological Advancements, Growing Demand, Regulatory Support, Environmental Awareness and Cost reduction initiatives.

The Indian gear industry has experienced significant growth over the past decade, driven by various factors that have shaped the country's industrial landscape. The rapid industrialization, expansion of the automotive sector and increasing demand for high-precision gears have been key contributors to this growth.

The industrial machinery sector has witnessed steady growth, driven by increasing industrialization and the expansion of sectors such as construction, power generation and mining. These sectors rely heavily on gears for their machinery and equipment, further boosting the demand for gears in India.

India's favourable business environment, coupled with government initiatives to promote manufacturing and infrastructure development, has created a conducive ecosystem for the gear industry to flourish. The "Make in India" campaign, launched by the Indian government, has attracted both domestic and foreign investments in the manufacturing sector, including gear manufacturing.

Industry shift towards electric vehicles (EVs) has opened up avenues for gear manufacturers to produce specialized gears for EV transmissions and powertrains. With the government's push for electric mobility, this presents a significant growth opportunity for the industry.

The Indian gear industry has also embraced automation and digitization, incorporating CAD, CAM, and CNC technologies to industry 4.0 components such as AI, ML, AR, etc., into their manufacturing processes. This has enabled gear manufacturers to enhance precision, optimize productivity, and deliver high-quality products that meet global standards.

As, India continues to invest in infrastructure, upskill its workforce, and adopt advanced manufacturing technologies with a competitive cost advantage, India positions itself as a promising destination for gear manufacturing in the future.

On the Economy

On the Industrial Gear Industry

Global gear sector prospects: According to FMI, the industrial gearbox market is expected to grow its revenue share from US$ 30.08 billion in 2023 to US$ 47.16 billion by 2033. Throughout the forecast period, the market is anticipated to exhibit a constant CAGR of 4.6%.

Indian gear sector prospects: India is one of the largest markets for gears in Asia and has seen steady growth over the past few years. The growing demand for automotive, industrial, and agricultural applications is driving the market forward. In addition to this, government initiatives such as Make-in-India are also pushing up sales of locally manufactured gears.

Gears have wide application in manufacturing industries viz. Steel, Power, Cement, Mining, Oil & gas production plants, among others where they facilitate movement between various parts of machines/ equipment used on shop floors.

Government policies such as Make-in-India will further drive-up demand during making it another key driver behind industry expansion and give global recognition to the Indian economy.

Sector-wise prospects Railway

Indian Railways has announced the implementation of three major economic railway corridor programs aimed at enhancing logistics efficiency and reducing costs. These programs, identified under the PM Gati Shakti initiative, include energy, mineral, and cement corridors, port connectivity corridors, and high traffic density corridors. By decongesting high- traffic corridors, the operations of passenger trains are expected to improve, leading to increased safety and higher travel speeds for passengers.

The conversion of forty thousand normal rail bogies to Vande Bharat standards is set to enhance passenger safety, convenience, and comfort. The Indian government has announced an ambitious plan to manufacture 400 Vande Bharat trains by 2024-25. This is part of its larger goal of developing

Sources:

• IMARC -Indian Railway Budget

the country's railway infrastructure and boosting local manufacturing under the "Make in India" initiative.

Besides Vande Bharat Express, Indian Railways have plans for 1500 numbers of High-Power Passenger and Goods Locomotives as well as 500 numbers of Self Propelled Motor Coaches for Urban and Suburban transportation to meet increasing demands.

Extrusion

The global plastic extrusion machine market is projected to reach US$ 7113.2 million in 2023. Based on the report, sales of plastic extrusion machines are expected to have a CAGR of 4.70% and to reach an evaluation of US$ 10,754.4 million by 2032.

The demand for plastic extrusion machines is soaring, as there is a growing need for extruded plastic products from several end-use segments, such as packaging, consumer goods, construction and automotive. This primarily boosts the growth of the global plastic extrusion machine market.

The demand for the plastic extrusion machine market is said to be constantly high, as these machines assist in speeding up the workflow and volume, at the same time maintaining stability through manufactured products.

Manufacturers of plastic extrusion machines are progressively aiming towards manufacturing reliable and effective twin-screw plastic extrusion machines. This is anticipated to encourage the growth of the plastic extrusion machine market share during the forecast period. Faster production and increasing manufacturing rates through plastic extrusion are anticipated to support the global plastic extrusion machine market growth.

The global rubber extruder market size is expected to reach US$ 4,234 million by 2032. The rubber extruder market is growing rapidly. As per FMI analysts, the global rubber extruder market is estimated to be valued at US$ 2,527.7 million in 2023 and is projected to increase at a CAGR of 5.3% during the forecast period.

Over the forecast period, the rubber extruder market is expected to gain traction due to its significant drivers, such as the introduction of new and novel rubber products.

Several other factors are also expected to boost the demand for rubber extruders, such as the growing automotive manufacturing industry in emerging and developed regions and the growing consumer awareness about comfort is expected to gain traction in the overall industry of rubber extruders. Providing fuel-efficient and high-performance vehicles in the automotive industry is a key consumer demand that manufacturers are able to serve with innovative rubber products.

Cranes

The India's crane market size reached US$ 3.4 billion in 2023. Looking forward, IMARC Group expects the market to reach US$ 5.2 billion by 2032, exhibiting a growth rate (CAGR) of 4.6% during 2024-2032. The significant growth in the construction industry, rapid technological advancements, and extensive research and development (R&D) activities are some of the key factors driving the market.

Cranes are a type of construction machinery used for loading and unloading heavy materials, machines, and goods. They are manufactured using high- strength, low-alloy (HSLA) steels and elements, such as nickel, titanium, chromium, molybdenum, vanadium, and niobium. Mobile, fixed, marine, and port are some of the commonly available types of cranes. They are equipped with cables, pulleys, hoists and wire ropes and utilize electric motors & hydraulic systems to provide great lifting capabilities. Cranes are cost-effective and offer a faster setup that helps improve efficiency and increase safety and productivity. As a result, they find extensive applications across the mining, construction, excavation, oil and gas and marine industries.

Besides this, the implementation of various government initiatives on infrastructure development, which involves the construction of buildings, bridges, dams, pipelines, road networks, ports and railways, is propelling the market growth.

Material Handling

The global material handling equipment market size was valued at US$ 227.4 billion in 2023 and is expected to expand at a compound annual growth rate (CAGR) of 6% from 2024 to 2030.

Rapid industrialization and increased demand for automation in material handling equipment are expected to fuel market growth in this period.

The India's Automated Material Handling Market size is estimated at US$ 1.47 billion in 2024, and expected to reach US$ 2.66 billion by 2029, growing at a CAGR of 12.70% during the forecast period (2024-2029).

The ongoing modernization of industrial facilities and infrastructures to improve their production capacity is anticipated to drive the growth of the material handling equipment market.

Expansion plans by Steel Plants and Coal Mining will induce demand, for material handling conveyors.

Cement

India is the second-largest cement producer in the world and accounts for over 8% of the global installed capacity. Of the total capacity, 98% lies with the private sector and the rest with the public sector. The top 20 companies account for around 70% of the total cement production in India. As India has a high quantity and quality of limestone deposits throughout the country, the cement industry promises huge potential for growth.

India's cement demand will grow by 6%-8% over the next few years as per the credit and analytical report from Fitch a leading financial analyst in the Cement sector. India's steady GDP expansion of 7%-8% will define growth across various construction end-markets. We expect cement demand from infrastructure and affordable housing markets to increase by the high- single to low-double digits.

The Government of India is strongly focused on infrastructure development to boost economic growth and is aiming for 100 smart cities. The Government also intends to expand the capacity of railways and the facilities for handling and storage to ease the transportation of cement and reduce transportation costs. These measures would lead to increased construction activity, thereby boosting cement demand.

The future outlook of the cement sector looks on track. In the next 10 years, India could become the main exporter of clinker and grey cement to the

Middle East, Africa, and other developing nations of the world. Cement plants near the ports, for instance, the plants in Gujarat and Visakhapatnam, will have an added advantage for export and will logistically be well-armed to face stiff competition from cement plants in the interior of the country.

India's cement production capacity is expected to reach 550 MT by 2025. The cement demand in India is estimated to touch 419.92 MT by FY27 driven by the expanding demand of different sectors, i.e., housing, commercial construction, and industrial construction. The cement sector is expected to grow at a CAGR of 4.7% during 2024-32.

2. Company Performance

3. Review of Operations

In FY23-24, the Company reported improved performance. Revenue from Operations at ^536 crores, registering a growth of 20% growth over the previous year. This growth was owing to an increase in order inflow and deliveries.

Focus on Replacement segment in power transmission helped in sustaining the competitive advantage. The business continued to build relationships through high levels of customer engagement during the year.

Specific attention is given for development of alternate materials and processes to drive value addition and cost reduction. Capital investments were made wherever technological upgradation was required.

EBITDA increased to ^122.85 crores in FY24 from ^101.07 crores in FY23 - a growth of 22%. The Company registered a net profit of ^82.25 crores (an 23% increase).

From a liquidity standpoint, the Company generated a Free Cash Flow of ^43.14 crores during the financial year and registered 10% growth over the previous year.

The Company's Return on Capital Employed imporoved to 34% in FY24 from 32% in FY23.

The Company remains debt free and invests its surplus funds judiciously balancing safety and returns.

4. Dividend

The Board of Directors declared an Interim Dividend of ^3/- per share (@ 300%) on equity share of

the face value of ^1/- each for the financial year 2023-24, which was paid on 23^rd February, 2024 to all the eligible shareholders. A final dividend of ^2/- per share (@ 200%) has been proposed by the Board for the said financial year and together with the Interim Dividend of ^3/- per equity share, already declared and paid, in respect of the financial year 2023-24, ^5/- per share (@ 500%) will be considered as the total Dividend for the said financial year.

The dividend pay-out this year got exceeded w.r.t Company's policy on Dividend Distribution, to commemorate the company's performance. The Dividend Policy as approved by the Board is uploaded and is available on the following link on the Company's website, http://www.shanthigears.com/wp-content/ uploads/2021/04/SGL-Dividend-Distribution Policy.pdf.

Details thereof also form part of this Annual Report for the information of shareholders as Annexure-A.

5. Share Capital

The paid-up Equity Share Capital as on 31^st March, 2024 was ^7.67 crores.

6. Deposits

The Company has not accepted any fixed deposits under Chapter V of the Companies Act, 2013 and as such no amount of principal and interest was outstanding as on 31^st March, 2024.

7. Particulars of Loans and Guarantees

During the year under review, the Company has not given any loans or guarantees under the provisions of Section 186 of the Companies Act, 2013. As part of treasury management, the Company deploys short-term surplus in units of mutual funds, the details relating to which form part of the Notes to the financial statements provided in this Annual Report.

8. Directors

Mr. M A M Arunachalam, will retire by rotation at the ensuing Annual General Meeting under

Section 152 of the Companies Act, 2013 and being eligible, he offers himself for re-appointment.

Mr. J Balamurugan, completed his second term of office, as an independent director of the Company by this AGM. The Board placed on record its appreciation for the valuable services rendered by Mr. J Balamurugan, during his association as an independent director of the Company.

Mr. N Krishna Samaraj, Independent Director will hold office up to the date of the 51^st Annual General Meeting. Mr. N Krishnan Samaraj retires by this Annual General Meeting and not offering himself/seeking reappointment. The Board placed on record its appreciation for the valuable services rendered by Mr. N Krishnan Samaraj, during his association as an independent director of the Company.

Mr. A Venkataramani, has been appointed as an Additional Director in the capacity of a "Non-Executive & Independent Director" with effect from 09^th May, 2024, who meets the criteria for independence under Section 149(6) of the Act and the Rules made thereunder and Regulation 16(1)(b) of the LODR Regulations and in respect of whom the Company has received a notice in writing from a member under Section 160 of the Act, necessary resolution proposing his appointment as an Independent Director of the Company for a period of 5 (five) years till 08^th May, 2029 forms part of the notice of the Annual General Meeting and he shall not be liable to retire by rotation.

The Board takes pleasure in recommending the appointment of Mr. A Venkataramani as an Independent Director of the Company.

All the Independent Directors of the Company have furnished necessary declaration in terms of Section 149(6) of the Act affirming that they meet the criteria of independence as stipulated under the Act. In the opinion of the Board, all the Independent Directors fulfil the conditions specified in the Companies Act, 2013 and Rules made thereunder and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and are independent of the Management.

9. Key Managerial Personnel

Mr. M Karunakaran, CEO & Whole-time Director, Mr. Walter Vasanth P J, Company Secretary & Compliance Officer and Mr. Ranjan Kumar Pati, Chief Financial Officer are the Key Managerial Personnel (KMP) of the Company as per Section 203 of the Companies Act, 2013.

10. Internal Control System and their Adequacy

The Company has an Internal Control System, commensurating with its size, scale and complexity of its operations.

It has a sound system of internal controls in place to ensure the achievement of goals, evaluation of risks and reliable financial and operational reporting.

This efficient internal control procedure is driven by a robust system of checks and balances that ensures the safeguarding of assets, compliance with all regulatory norms and procedural & systemic improvements periodically.

The Company uses an ERP (Enterprise Resource Planning) package supported by in-built controls. This guarantees timely financial reporting. The audit system periodically reviews the control mechanism and legal, regulatory and environmental compliances.

The internal audit team also checks the effectiveness of internal controls and initiates necessary changes arising out of inadequacies, if any. All financial and audit controls are further reviewed by the Audit Committee of the Board of Directors.

11. Internal Financial Control Systems with reference to financial statements

The Company has a formal system of internal financial control to ensure the reliability of financial & operational information and regulatory & statutory compliances. The Company's

business processes are enabled by an Enterprisewide Resource Platform (ERP) for monitoring and reporting processes resulting financial discipline and accountability.

12. Enterprise Risk Analysis and Management

The Company's risk strategy is determined by its risk appetite defined by a series of risk criteria. The criteria are based on sectoral realities, customer circumstances, liquidity available and its earnings target within accepted volatility limits. These criteria provide a reference for our operating divisions.

The Company's risk management framework comprises a combination of centrally issued policies and divisionally-evolved procedures that are regularly reviewed for their alignment with sectoral dynamics and evolving trends.

The framework encompasses strategy and operations and seeks to proactively identify, address and mitigate existing and emerging risks with the goal of making the business model emerge stronger and business growth becomes sustainable.

The Company has constituted a Risk Management Committee aligned with the requirements of the Companies Act, 2013 and Listing Regulations. The details of the Committee and its terms of reference are set out in the Corporate Governance Report forming part of this Report.

The Company operates across various product platforms built over the years. Relative advantages and disadvantages of such product verticals are studied and advances are tracked. The Company seeks to address technology gaps through continuous benchmarking of existing manufacturing processes with developments in the industry and in this connection has made arrangements with technology consultants.

Sub-par utilization of capacities may lead to inadequate leverage benefits. The Company is ramping up its marketing efforts towards successful product establishment and market acceptance of its products, exploring development of alternate products and establishing a range of applications.

13. Corporate Governance

Your Company is committed to maintaining high standards of Corporate Governance. A report on Corporate Governance, along with a certificate from the Practicing Company Secretary on compliance with Corporate Governance norms forms part of this report as Annexure-H.

14. Corporate Social Responsibility (CSR)

As a corporate citizen, your Company is committed to the conduct of its business in a socially responsible manner. The Company contributed a portion of its profit to the promotion of worthy causes like education, healthcare, scientific research etc. As a part of the Corporate Social Responsibility program, the Company has undertaken projects in the areas of Education, Scientific Research, etc., List of CSR Activities, Composition of CSR Committee and CSR Policy is annexed herewith as Annexure-B.

15. Annual Return

The Annual return in Form MGT-7 is available on the Company's website at the following link: http://www.shanthigears.com/annual-return/

16. Directors Responsibility Statement

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

a) in the preparation of the annual accounts, applicable Accounting Standards have been followed and that there were no material departures therefrom;

b) they have, in the selection of the accounting policies, consulted the statutory auditors and have applied their recommendations consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2024 and of the profit of the Company for the year ended on that date;

c) they have taken proper and sufficient care for the maintenance of adequate accounting

records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

e) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively during the year ended 31^st March, 2024; and

f) proper system has been devised to ensure compliances with the provisions of all applicable laws and that such systems were adequate and operating effectively during the financial year ended 31^st March, 2024.

17. Policy on Appointment and Remuneration of Directors

Pursuant to Section 178 (3) of the Companies Act, 2013 the Nomination and Remuneration Committee of the Board of the Company has formulated the criteria for Board nominations as well as policy on remuneration for Directors and employees of the Company.

The Remuneration policy provides the framework for remunerating the members of the Board, Key Managerial Personnel and other employees of the Company. This policy is guided by the principles and objectives enumerated in Section 178 (4) of the Companies Act, 2013 and reflects the remuneration philosophy and principles of the Murugappa Group to ensure reasonableness and sufficiency of remuneration to attract, retain and motivate competent resources, a clear relationship of remuneration to performance and a balance between rewarding short and long-term performance of the Company. The policy lays down broad guidelines for payment of remuneration to Executive and Non-Executive Directors within the limits approved by the shareholders.

The Board Nomination criteria and the Remuneration policy are available on the website of the Company at http://www.shanthigears.com/ wp-content/uploads/2019/05/SGL-Remuneration- Policy-Mar-2019.pdf

18. Related Party Transactions

All related party transactions that were entered during the year under review were on an arm's length basis and were in ordinary course of business. There are no materially significant related party transactions during the year which may have a potential conflict with the interest of the Company at large. Necessary disclosures as required under Accounting Standard (Ind AS 24) have been made in the notes to the Financial Statements. The Policy on Related Party Transactions, as approved by the Board, is uploaded and is available on the Company's website http://www. shanthigears.com/wp-content/uploads/2022/09/ SGL-RPT-Policy 1-Apr-2022.pdf

None of the Directors had any pecuniary relationships or transactions vis-a-vis the Company.

All transactions with Related Parties under the Companies Act, 2013, entered during the financial year were in the ordinary course of business at arm's length and hence no particulars are required to be entered in the Form AOC-2. Further, all transactions entered into with Related Parties during the year even at arm's length basis in the ordinary course did not exceed the thresholds prescribed under the Companies (Meetings of Board and its Powers) Rules, 2014 or Listing Regulations or the Company's Policy in this regard and hence no disclosure was required to be made in Form AOC-2. Accordingly, there are no contracts or arrangements entered into with Related Parties during the year to be disclosed under Sections 188(1) and 134(3)(h) of the Companies Act, 2013 in Form AOC-2. The form is enclosed as Annexure-E.

19. Board Evaluation

The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

20. Vigil Mechanism/Whistle Blower Policy

The details of Vigil Mechanism/Whistle Blower policy are given in the Corporate Governance Report.

21. Business Responsibility & Sustainability Reporting

As required under the SEBI Listing Regulations which mandate the inclusion of a Business Responsibility & Sustainability Report as part of the Annual Report for the top 1000 listed entities based on market capitalisation, the Business Responsibility Report forms part of the Annual Report as Annexure G. The Business Responsibility Policy of the Company is displayed in the Company's website at the following link: http://www.shanthigears.com/wp-content/ uploads/2020/06/SGL-BRR-Policy-May-2020.pdf

22. Declarations/Affirmations

During the year under review:

• there were no material changes and commitments affecting the financial position of the Company, which have occurred between the end of the financial year of the Company to which the financial statements relate viz., 31^st March, 2024 and the date of this Report; &

• there were no significant material orders passed by the regulators or courts or tribunals impacting the Company's going concern status and its operations in future.

23. Human Resources

Intellectual capital has been the cornerstone of Shanthi Gear's sustenance over the years. The Company has a large pool of engineers. This critical competitive edge has enabled the Company to stand out from the clutter and develop niche solutions that address the ever-evolving requirements of the sectors it caters to.

The HR strategy and initiatives of your Company are designed to effectively partner the business in the achievement of its ambitious growth plans and to build a strong leadership pipeline for the present and several years into the future. Industrial Relations continued to be cordial.

Senior leaders have been investing a lot of time and efforts in identifying and developing succession pipeline for critical positions in the organization. The transition management programmes viz., FTF and LEAD have been very successful and as part of the programme, implementation of Individual Development Plans (IDPs) for talent pool identified through these programmes is being facilitated. The IDPs are being reviewed regularly and On-the-Job projects, job enlargement/job rotation, mentoring support to the Talents are being provided. Coaching & mentoring was done for select talent across the organization with an intent of developing future leaders. Internal employees have been given opportunities to take up higher roles and grow in the system under Grow from within Scheme.

The Company had 536 permanent employees on its rolls, as on 31^st March, 2024.

The disclosure with respect to remuneration as required under Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached and forms part of this Report as Annexure-C.

The information relating to employees and other particulars required under Section 197 of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 will be provided upon request. In terms of Section 136 of the Companies Act, 2013, the Report and Accounts are being sent to the Members excluding the information on employees, particulars of which are available for inspection by the Members at the Registered Office of the Company during business hours on all working days of the Company up to the date of the forthcoming Annual General Meeting. If any Member is interested in obtaining a copy thereof, such member may write to the Company Secretary in the said regard.

24. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo

Conservation of energy, technology absorption and foreign exchange earnings and outgo is annexed herewith as Annexure-D.

25. Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

The Company has in place a Prevention of Sexual Harassment policy (POSH) in line with the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Compliance Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (Permanent, contractual, temporary and trainees) are covered under this policy. The Company has not received any complaints about sexual harassment during the year 2023-24.

26. Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s R. Sridharan & Associates, Company Secretaries to undertake Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith and forms part of this Report as Annexure-F. Accordingly, no qualification or observation or other remarks have been made by the Secretarial Auditor in his Report.

27. Auditors

The Members have appointed of M/s MSKA & Associates, Chartered Accountants, (Firm Registration No 105047W) the Statutory Auditors of the Company for a period of 5 years from the conclusion of 50^th AGM (2023) till the conclusion of 55^th AGM (2028) subject to ratification of such appointment by members at every AGM. The requirement to place the matter relating to the appointment of auditors for ratification by Members at every AGM has been done away with

the Companies (Amendment) Act, 2017 with effect from 7^th May, 2018. Accordingly, no resolution is being proposed for ratification of the appointment of statutory auditors at the Fifty-first AGM.

Mr. B. Venkateswar was appointed as Cost Auditor for the audit of the Cost Accounting records of the Company for the year ended 31^st March, 2025. A resolution seeking Members' ratification of the Remuneration payable to the Cost Auditor is included in the AGM notice dated 09^th May, 2024. The Cost Audit report will be filed within the stipulated period.

28. Subsidiaries/Associates/Joint Ventures

The Company does not have any subsidiaries/ Associates/Joint Ventures.

29. Secretarial Standards

The Company has duly complied with the applicable Secretarial Standards as required by the Companies Act, 2013.

30. General

The Company has not issued equity shares with differential voting rights or sweat equity shares, there is no reportable event with respect to one

time settlement with any Bank or Financial Institution and no corporate insolvency resolution process was initiated under the Insolvency and Bankruptcy Code, 2016, eitherby or against the Company, before National Company Law Tribunal.

31. Change in Nature of Business

There has been no change in the nature of business during the financial year under review.

32. Other Confirmations

No application under the Insolvency and Bankruptcy Code, 2016 (IBC) was made on the Company during the year. Further, no proceeding under the IBC was initiated or is pending as at 31^st March, 2024. There was no instance of one time settlement with any Bank or Financial Institution.

33. Acknowledgement

The Directors thank all Customers, Vendors, Banks, State Governments and Investors for their continued support to your Company's performance and growth. The Directors also wish to place on record their appreciation of the contribution made by all the employees of the Company in delivering good performance during the year.

#MDEnd#