crompton greaves ltd Directors report

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

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

BUSINESS SEGMENTS:

a) Industrial Systems:

The Industrial Systems recorded revenue of 4,934 Crore as compared to 3,953 Crore during the year 2021-22, registering a growth of 25% as compared to previous year. The operating profit before interest and tax of Industrial Systems stood at 787 Crore as compared to 482 Crore during the previous year, registering a growth of 63%.

b) Power Systems:

The Power Systems recorded revenue of 2,023 Crore as compared to 1,516 Crore during the year 2021-22, registering a growth of 33% as compared to previous year. The operating profit before interest and tax of Power Systems stood at 225 Crore as compared to 138 Crore during the previous year, registering a growth of 63%.

EXPANSION:

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

A. Expansion of manufacturing capacity of Motors at the Companys plant at Ahmednagar and Goa at an investment of 230 Crore. The said expansion would increase the manufacturing capacity of Low Tension Motors ("LT Motors") upto 19.92 lakhs nos. per annum, from the existing capacity of 9.93 lakhs nos. per annum.

B. Expansion of manufacturing capacity of Power Transformers and Distribution Transformers units of the Company at its plants at Malanpur and Bhopal at an investment of 126 Crore. The said expansion would increase the capacity from 17,000 MVA to 25,000 MVA for Power Transformer and from 6,900 MVA to 9,900 MVA for Distribution Transformers.

SCHEME OF ARRANGEMENT:

Redemption of Non-convertible Debentures

The Company had on 5 December 2022 redeemed its 20,000 Unlisted, Unsecured, Unrated, Redeemable, Non-Convertible Debentures of face value 1,00,000/- each aggregating to 200 Crore, which were issued on 4 December 2020 pursuant to the terms and conditions of the Master Implementation cum Compromise Settlement Agreement and

Debenture Trust Deed dated 20 November 2020. The said debentures were redeemed by the Company by exercising the right of early redemption on completion of two years from the date of allotment.

Divestment

As stated in the Annual Reports of the Company for previous years, due to financial stress and unviable operations, decisions were taken from time to time to prune / close down certain subsidiaries of the Company. In furtherance of the same, during the year under review, the liquidation process of the Companys Step-Down Subsidiary - CG Power & Industrial Solutions Middle East FZCO, Dubai UAE was completed.

General

Company has settled all the guarantee obligations to its lenders (Standard Chartered Bank, Barclays Bank and Exim Bank) towards loans availed by the erstwhile Subsidiaries in Belgium.

Company has received approval of BMC for renewal of the lease of land where the CG House is located.

DIVIDEND

The Board of Directors at their Meeting held on 2 March 2023, declared an interim dividend of 1.50 (Rupees One and Paise Fifty only) (75%) per equity share of 2/- (Rupees Two only) each. The interim dividend was paid to the shareholders on 29 March 2023. The total outflow on account of said dividend was 229.07 Crore. Your Board does not recommend any further dividend for the financial year 2022-23.

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

TRANSFER TO RESERVES

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

SUBSIDIARIES

Details of subsidiaries as on 31 March 2023 : There are 3 Indian and 18 foreign subsidiaries (including 2

subsidiaries in Belgium along with their subsidiaries declared as bankrupt; 5 subsidiaries under voluntary liquidation and 1 subsidiary declared insolvent). During the year under review, your Company has not incorporated or acquired any company.

The Corporate Insolvency Proceedings initiated under the Insolvency and Bankruptcy Code, 2016 during the financial year 2021-22, by the Company against its Wholly Owned Subsidiary - CG Power Solutions Limited, is pending before the Honble National Company Law Tribunal, Mumbai Bench.

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

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

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

During the year under review, CGAPL recorded revenue of 23.60 Crore (previous year: 23.24 Crore) and registered profit before tax of 2.90 Crore (previous year: 3.78 Crore).

2. QEI, LLC:

QEI, LLC is the subsidiary of CG Power Americas, LLC, and a wholly owned step-down subsidiary of your Company in US, operating in multiple markets and business sectors within and relating to distribution control, load management control, supervisory control and data acquisition systems.

During the year under review, QEI, LLC recorded revenue of $ 11.46 Mn i.e. equivalent to 94.23 Crore (previous year: $10.33 Mn i.e. equivalent to 77.87 Crore). It registered profit before tax of $ 1.41 Mn i.e. equivalent to 11.62 Crore (previous year: $ 3.18 Mn i.e. equivalent to 23.96 Crore).

3. CG Drives & Automation Sweden AB:

CG Drives & Automation Sweden AB is a subsidiary of CG Industrial Holdings Sweden AB and a wholly owned step-down subsidiary

of your Company in Sweden. It is a technology partner for energy efficient products and solutions. It develops, manufactures and markets the equipment for control and protection of industrial processes.

During the year under review, CG Drives & Automation Sweden AB recorded revenue of SEK 299.85 Mn i.e. equivalent to 236.57 Crore (previous year: SEK 258.69 Mn i.e. equivalent to 208.19 Crore) and registered profit before tax of SEK 21.84 Mn i.e. equivalent to 17.23 Crore (previous year: SEK 7.11 Mn i.e. equivalent to 5.72 Crore).

4. CG Drives & Automation Germany GmbH:

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

5. CG Drives & Automation Netherlands BV:

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

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

MATERIAL ORDERS OF REGULATORS / COURTS / TRIBUNALS

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

UPDATE ON INVESTIGATIONS INITIATED IN THE PREVIOUS YEARS

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

AUDITORS AND AUDIT REPORTS STATUTORY AUDITORS

M/s. S R B C & CO LLP, Chartered Accountants (ICAI Firm Registration Number 324982E/E300003) were appointed as Statutory Auditor of the Company at the 81st Annual General Meeting ("AGM") held on 28 September 2018 to hold office from the conclusion of the said meeting till the conclusion of the 86th AGM. Accordingly, the term of office of M/s. S R B C & CO LLP, as Statutory Auditors of the Company will conclude at the close of the forthcoming AGM of the Company.

The Board of Directors of the Company, based on the recommendation of the Audit Committee, at its Meeting held on 8 May 2023, has proposed to the shareholders of the Company for their approval at the ensuing AGM, the re-appointment of M/s. S R B C & CO LLP, Chartered Accountants (ICAI Firm Registration Number 324982E/E300003) as the Statutory Auditor of the Company to hold office for a second term of five consecutive years from

the conclusion of the 86th AGM till the conclusion of the 91st AGM to be held in the year 2028. The Notice convening the 86th AGM to be held on 27 July 2023 sets out the details in this regard.

M/s. S R B C & CO LLP have confirmed that they satisfy the independence criteria required under the Act.

The Auditors Report on the financial statements of the Company for the year ended 31 March 2023, which forms part of the Annual Report of the Company, does not contain any qualification, reservation or adverse remark.

COST AUDITOR

As per the requirement of Section 148(1) of the Act read with rules made thereunder, your Company is required to maintain cost accounts and records. Accordingly, your Company has maintained cost accounts and records for financial year 2022-23 as applicable for its product range.

During the year under review, the Company filed the Cost Audit Report for the financial year 2021-22 with the Registrar of Companies, Mumbai, within the prescribed statutory timelines.

Upon recommendation of the Audit Committee, the Board has re-appointed M/s. R. Nanabhoy & Co., Cost Accountants as Cost Auditor of your Company for financial year 2023-24 at a remuneration of 8,30,000/- (Rupees Eight Lakh Thirty Thousand only) per annum plus out-of-pocket expenses and taxes, as applicable. The Act mandates that the remuneration payable to the Cost Auditor is ratified by the shareholders. Accordingly, a Resolution seeking the Shareholders ratification of the remuneration payable to the Cost Auditors for the financial year 2023-24 is included in the Notice convening the ensuing Annual General Meeting.

SECRETARIAL AUDITOR

Your Company had appointed M/s. Parikh & Associates, Practicing Company Secretaries, Mumbai (Firm Registration Number: P1988MH009800), to undertake the Secretarial Audit of the Company for financial year 2022-23.

Your Company has generally complied with the Secretarial Standards and the Secretarial Audit Report is annexed in Form MR-3 for financial year 2022-23 as Annexure 4 to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

INTERNAL FINANCIAL CONTROLS

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

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

BOARD OF DIRECTORS

Composition

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

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

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

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

Appointment/ Retirement of Directors during the year

During the year under review, based on the recommendations of the Nomination and Remuneration Committee, your Board had appointed Mrs. Vijayalakshmi R Iyer as an Additional Director in the capacity of Non-Executive Independent Director of the Company with effect from 24 September 2022. Her appointment was approved by the Members through Postal Ballot on 14 December 2022.

Mr. Shailendra Roy completed his tenure as an Independent Director of the Company and ceased to be a director on 18 September 2022. The Board places on record its appreciation of the contribution made by Mr. Shailendra Roy during his tenure as an Independent Director of the Company.

Mr. Natarajan Srinivasan was re-appointed as Managing Director for a further period of one year from 26 November 2022 to 25 November 2023 and the said re-appointment was approved by the Members through Postal Ballot on 14 December 2022.

The Board has recommended to the shareholders the re-appointment of Mr. Natarajan Srinivasan as Managing Director of the Company with effect from 26 November 2023 upto 30 April 2025 (both days inclusive) The Notice calling the 86th AGM contains details in this regard.

Retirement by rotation

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

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

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

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

The Company has received a certificate from M/s. Parikh & Associates, Practicing Company Secretaries, confirming that none of the Directors on the Board of the Company have been debarred or disqualified from being appointed or continuing

as Directors of companies by the SEBI, Ministry of Corporate Affairs, or any such other statutory authority.

BOARD MEETINGS

During the financial year 2022-23, your Board of Directors met 5 times, in accordance with the provisions of the Act, SEBI LODR and other statutory provisions.

COMMITTEES OF THE BOARD

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

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

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

KEY MANAGERIAL PERSONNEL ("KMP")

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

• Mr. Natarajan Srinivasan, Managing Director

• Mr. Susheel Todi, Chief Financial Officer

• Mr. P Varadarajan, Company Secretary

REMUNERATION POLICY AND CRITERIA FOR DETERMINING THE ATTRIBUTES, QUALIFICATION, INDEPENDENCE AND APPOINTMENT OF DIRECTORS

Your Company has formulated a Remuneration Policy governing the appointment and remuneration

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

The Companys Remuneration Policy is available on the website of the Company under: https://www. cgglobal.com/assets/pdf ffles/CG Remuneration Policy 21 22.pdf

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

PERFORMANCE EVALUATION OF THE BOARD OF DIRECTORS

In line with the requirements of the Act and the SEBI LODR, an annual evaluation of performance of the Board, its Committees and individual Directors was carried out during the year under review. Pursuant to the provisions of Schedule IV of the Act and Regulation 25 of the SEBI LODR, the Independent Directors of your Company, at their Meeting held on 1 March 2023, evaluated the performance of Non-Independent Directors, the Board as a whole, performance of the Chairman; and also assessed the quality, quantity and timeliness of flow of information between the Management and the Board.

FAMILIARISATION PROGRAMME FOR INDEPENDENT DIRECTORS

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

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year under review were on arms length basis and were in the ordinary

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

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

The Companys Related Party Transactions Policy is made available on the website of the Company under: https://www.cgglobal.com/assets/pdf files/ Related Party Transaction Policy 1 Apr 2022.pdf

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Pursuant to the provisions of Section 186 of the Act and Schedule V of the SEBI LODR, particulars of loans, guarantees given and investments made by your Company during financial year 2022-23 are given in the notes to the Financial Statements.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

ENTERPRISE RISK MANAGEMENT ("ERM") FRAMEWORK

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

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

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

RESEARCH AND DEVELOPMENT ("R&D")

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

Power Systems

• To support the Government of India (GOI) initiative towards building and reinforcing Railway Infrastructure in the country, Company developed two new products 21.6/30.24 MVA, 220/27 kV Trackside Transformer and 1288 kVA MEMU Loco Transformer for Indian Railways.

• Developed Inverter duty transformer for Solar application 12.5 MVA 33/0.630*4 kV with 5 winding and successfully conducted Short Circuit Test.

• Developing design optimization and compact EHV Instrument Transformer for Indian utilities, aimed at compliance of stringent Seismic stability specification of 800kV and 420kV EHV bushing to restrict imports and offer indigenous solution to customers.

• In-house development of Silicon Moulded Arrestor for critical short circuit duty cycle, electrostatics and mechanical requirements by offering technologically advanced, light weight and easy to handle solution.

• Product upgradation in EHV Switchgear by design upgradation and optimization.

b) 245kV, 50kV Gas Circuit Breaker for higher altitude application.

c) 145kV, 2000A Horizontal Double Break banging type Disconnector.

• Indigenously developed and successfully conducted type testing of 66kV-145kV GIS Surge Arrestor (three phase) and 245kV GIS Surge Arrestor (single phase). This will help customers to reduce their dependence on imports, reduction in delivery time, and savings on Forex.

• Re-layout of 245kV Hybrid GIS by Design optimization resulting into reduction in space occupied and reduced site Installation time, for customer.

Industrial Systems Motors

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

• Development of new VFDs with a rating of 75kW and 90kW, which are designed to operate at higher ambient temperatures and offer the option of flange mounting, thus optimizing cabinet design.

• Creation of a new range of power stacks for domestic and overseas customers, offering improved efficiency and reliability.

• Introduction of a new Wi-Fi connectivity solution that enables users to control and monitor the performance of their AC drives

using a smartphone application and wireless connection. The solution also provides easy commissioning, faster support, and status reporting.

• Development of a 250W hub motor controller for e-bikes with features such as pedal assist and speed accelerators for effortless riding.

• Successful certification of the super-premium Non safe area (FLP IIA, IIB, IIC) AC motor IE4 range from ATEX, PESO, BIS for frames 80 to 160, which will help to reduce energy consumption and carbon footprint.

• Launch of the new SM series alternators for 160 and 180 frames in line with market demands.

• Extension of the 450 frame Alternator range up to 2500 KVA, catering to a wider range of customer needs.

• Development of EV traction and auxiliary motors, with higher power, meeting superior performance and IP 67 enclosure standards.

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

• Release of the DC motor 450 and 500 frame, mill-duty motor to the market.

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

• Provision of retrofitting solutions to customers from our LIM plant.

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

• Provision of application-driven solutions to the agriculture sector, such as chaff cutters, areca nut, pulverizers, threshers, etc., through our FHP plant.

Railways

• Indigenously designed and developed 246 kW, 4 Pole, 3 Phase AC Asynchronous, Axle hung, nose suspended Traction Motor suitable

• Designed, developed and type tested Composite Converter, which is an integrated product of 6000 HP Traction Converter and 2X500 kVA Hotel Load Converter for Indian Railways complying to IEC 61287, IEC 61373, and IEC 60571. This will replace one diesel generator car, which in turn reduces carbon emission.

• Indigenously designed and developed

• Indigenously designed and developed 110V DC, 0.44KW DC series motor with ingress protection IP-67 and AC immunization 400V. This motor is used in drives of the point mechanism through friction clutch, reduction gears and throw bar when electric power is supplied.

• Indigenously designed and developed external clamp lock assembly for 60kg Thick Web Switch (TWS) Canted rail and this external locking mechanism is used in Dedicated

Freight Corridor Corporation (DFCC) and METRO Rails switching turnout with 220mm throw point machine application.

CONSERVATION OF ENERGY,

TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

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

ENVIRONMENT, HEALTH AND SAFETY ("EHS")

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

MANAGEMENT DISCUSSION AND ANALYSIS

CORPORATE GOVERNANCE

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

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

CORPORATE SOCIAL RESPONSIBILITY

("CSR")

In terms of Section 135 of the Companies Act, 2013 read with CSR Rules, your Company has during the year 2022-23 spent 69 lakhs being the two percent of the average net profits of your Company during the three preceding financial years in accordance with the CSR Policy of the Company.

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

REGISTRAR AND SHARE TRANSFER AGENT

PARTICULARS OF EMPLOYEES

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

EMPLOYEE STOCK OPTION PLAN 2021

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

The Company has granted 22,87,240 Options to employees upto 31 March 2023. 18,34,100 options were granted in the year 2021-22 and 4,53,140 Options were granted during the year 2022-23.

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

COMPLAINTS RELATING TO SEXUAL HARASSMENT

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

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

VIGIL MECHANISM

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

The Ombudsperson appointed by your Board deals with the complaints received by or against employees, customers and vendors of the Company and supervises the investigation, ensures appropriate action and submits a report to the Chairman of the Audit Committee on a quarterly basis.

PUBLIC DEPOSITS

Your Company has not accepted any deposits from public or its members under Chapter V of the Act and no deposits were outstanding as on 31 March 2023.

SHARE CAPITAL

During the year under review, your Company has allotted 8,52,88,405 equity shares of 2 each, fully paid up, as detailed below:

b) 54,760 shares under ESOP Scheme 2021 - 19,760 equity shares were allotted on 22 December 2022 and 35,000 equity shares were allotted on 9 March 2023 to the option grantees who had exercised their options.

As at 31 March 2023, the share capital of the Company is as follows:

• The authorized share capital of your Company is 407,60,00,000/- (Rupees Four Hundred Seven Crore and Sixty Lakh) divided into 203,80,00,000 equity shares of 2/- (Rupees two) each.

• The subscribed and paid-up share capital of your Company stood at 305,42,62,868/- (Rupees Three Hundred Five Crore Forty Two Lakhs Sixty Two Thousand Eight Hundred Sixty Eight only) consisting of 152,71,31,434 equity shares of 2/- (Rupees two) each.

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

ANNUAL RETURN

Pursuant to Sub-Section 3(a) of Section 134 and Sub-Section (3) of Section 92 of the Act, a copy of the Annual Return of the Company as on 31 March 2023 is placed on the website of the Company and the same is available on the following link: https://www.cgglobal.com/financials#annual report

REPORTING OF FRAUDS BY AUDITORS

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

OTHER DISCLOSURES / REPORTING

a) Issue of equity shares with differential rights

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

b) Insolvency and Bankruptcy Code ("IBC")

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

c) Onetime settlement with any bank or financial Institution

During the year under review, the Company has not entered into one-time settlement with any banks or financial institutions.

d) Material changes and commitments affecting the financial position of your company

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

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

a) the annual Financial Statements for the year ended 31 March 2023 have been prepared

in conformity with the applicable accounting standards along with proper explanation relating to material departures, if any;

b) that such accounting policies as mentioned in the Notes to the Financial Statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March 2023 and of the profit of the Company for the year ended on that date;

c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

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

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

ACKNOWLEDGEMENTS

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

On behalf of the Board of Directors

Vellayan Subbiah

Chairman (DIN: 01138759)

Mumbai, 8 May 2023