Endurance Tech. Director Discussions


Dear Shareholders,

Your Directors present herewith the Twenty Fourth Annual Report on the business and operations of the Company together with financial statements for the financial year ended 31st March, 2023.

SUMMARISED STATEMENT OF PROFIT AND LOSS:

Rs in million

Particulars

Standalone

Consolidated

Financial Year 2022-23 Financial Year 2021-22 Financial Year 2022-23 Financial Year 2021-22

Revenue from operations

67,675.07 56,970.87 88,040.46 75,491.40

Other income

282.00 243.94 454.27 410.38

Total income

67,957.07 57,214.81 88,494.73 75,901.78

Raw Material Cost

45,326.04 37,583.26 53,295.23 44,201.44

Employee Benefit expenses

3,241.77 2,903.13 7,636.05 6,943.58

Finance cost

42.70 18.20 205.77 63.54

Depreciation

2,407.08 2,037.38 4,215.80 3,817.26

Other expenses

11,314.92 9,197.90 16,746.52 14,700.00

Total expenditure

62,332.51 51,739.87 82,099.37 69,725.82

Profit before exceptional items and tax

5,624.56 5,474.94 6,395.36 6,175.96

Exceptional Items

102.85 314.50 102.85 314.50

Profit before tax

5,521.71 5,160.44 6,292.51 5,861.46

Net Tax expense

1,432.54 1,343.01 1,496.76 1,254.37

Net profit for the year

4,089.17 3,817.43 4,795.75 4,607.09

DIVIDEND:

The Board of Directors, at its meeting held on 17th May, 2023, has recommended dividend of Rs 7 per equity share of Rs 10 each (@ 70%) (previous year Rs 6.25 per equity share), for the financial year 2022-23, for consideration of the Members at the ensuing Twenty Fourth Annual General Meeting ("AGM").

The dividend, if approved by the Members, will result in an outgo of Rs 984.64 million.

The dividend pay-out is in accordance with the Companys Dividend Distribution Policy.

Dividend Distribution Policy

This policy has been framed and adopted in terms of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"). The policy, inter alia, lays down various parameters relating to declaration / recommendation of dividend. There has been no change to the policy during the financial year 2022-23.

The policy is placed on the Companys website https: / / www.e nd urancegro up.com/wp-content/ uploads/2022/1 1 /Dividend-Distribution-Policy.pdf

Transfer to reserves

The Company has not transferred any amount of profits to reserves.

INDUSTRY OVERVIEW AND COMPANYS PERFORMANCE:

The performance of the auto industry reflected a positive sentiment. During the financial year ended 31st March, 2023, the auto industry recorded a growth of 1 1.8% as compared to the previous financial year. The sales of two wheelers also witnessed an increase by 8.3% and three wheeler sales increased by 12.2%. Despite inflation trending higher through the year and disruption in supply chain due to volatile geo-political situation, a combination of improved chip supply, higher incomes and pent-up demand resulted in increased sales of automobiles.

During the year under review, the Company posted a total income of Rs 67,957.07 million on a standalone basis as against Rs 57,214.81 million in the previous year. The total income on a consolidated basis was Rs 88,494.73 million compared to Rs 75,901.78 million in the previous year. The Companys total income on standalone and consolidated basis grew by 1 8.8% and 1 6.6%, respectively. In the financial year 2022-23, 77% of Companys consolidated total income, including other income came from Indian operations and the balance 23% came from the overseas operations.

The Companys profit after tax grew by 7.1 % in the financial year 2022-23 at Rs 4,089.17 million as against Rs 3,817.43 million in the previous year, on standalone basis; while consolidated profit after tax grew by 4.09% at Rs 4,795.75 million as against Rs 4,607.09 million in the previous year.

Acquisition of Maxwell Energy Systems Private Limited

The Company acquired 51% share capital of Maxwell Energy Systems Private Limited ("Maxwell") on 1st July, 2022, through a combination of primary issuance and secondary purchase, comprising 69,873 shares of face value of Rs 1 each. The acquisition was for a total investment of Rs 1,350 million and was effective 1st July, 2022, pursuant to which Maxwell became a subsidiary of the Company.

Maxwell was a wholly owned subsidiary of a US based company, ION Energy Inc. ("ION"). Maxwell is in the business of embedded electronics particularly in Battery Management Systems ("BMS") for vehicles including electric vehicles ("EV"). Maxwell also designs and develops BMS for stationary batteries / energy storage solutions. Maxwells BMS leverages on proprietary algorithms to improve battery life and performance.

The acquisition will facilitate the groups foray into an EV-centric product line as an early participant to offer BMS to auto OEMs. It is expected that, as a preferred tier-1 auto component supplier, the Company will effectively leverage its business relationships to further grow the acquired business with its OEM customers.

CONSOLIDATED FINANCIAL STATEMENTS:

As per Regulation 33 of the Listing Regulations and Section 129 of the Companies Act, 2013 ("Act") read with the rules issued thereunder, consolidated financial statements of the Company for the financial year 2022-23 have been prepared in compliance with applicable accounting standards. The audited financial statements of the Company and its subsidiaries (including step-down subsidiaries) have been approved by the board of directors of respective entities.

During the year under review, the Board of Directors reviewed the affairs of the subsidiary companies in accordance with Section 129(3) of the Act. Consolidated financial statements together with the statutory auditors report thereon form part of this Annual Report.

SUBSIDIARIES:

The Company has eleven operating subsidiaries as on 31st March, 2023 and as on the date of this Report, as tabulated below. Details of the subsidiary companies and their performance are detailed in the Management Discussion and Analysis Report, forming part of this Annual Report.

Sr. no.

Name of subsidiary

Brief particulars

1. Endurance Overseas S.r.L, Italy (EOSrl), Direct Subsidiary A special purpose vehicle (SPV) in Italy for making strategic overseas investments and it is a direct subsidiary of the Company.
2. Endurance SpA, Italy Step-down subsidiary Engaged in the activity of carrying out high pressure aluminium die casting and machining operations from its plants in Lombardore and Chivasso, Italy.
3. Endurance Engineering S.r.L, Italy Step-down subsidiary Engaged in the production of plastic components for automotive applications from its plant in Grugliasco, Italy.
4. Endurance Castings SpA, Italy Step-down subsidiary Primarily engaged in manufacturing of high pressure die casting and machining components having a plant in Bione, Italy.
5. Endurance Adler SpA, Italy Step-down subsidiary The company is having a plant in Rovereto, Italy and manufactures clutches and braking systems.
6. Veicoli S.r.l, Italy Step-down subsidiary The company offers a software platform to companies that operate fleets of commercial and passenger. It operates from Turin, Italy.
7. Frenotecnica Sri, Italy Step-down subsidiary The company is located in Rovereto, (Trento), Italy. It is engaged in the business of designing and manufacturing of friction materials and components for braking systems for two-wheeler vehicles. The primary business activity comprises sale of brake pads under its registered trademark "Brenta" for aftermarket and replacement business.
8. New Fren Sri, Italy Step-down subsidiary The company is located in Cirie, Turin, Italy. It manufactures brake discs, centrifugal clutches, pads and brake shoes for two-wheeler vehicles through aftermarket channels and replacement business.
9. GDS Sari, Hammas Sousse, Tunisia

Step-down subsidiary

The company is a subsidiary of New Fren Sri with its manufacturing facility in Hammas Sousse, Tunisia. It supports its parent entity in the same line of business activities.
10. Endurance GmbH, Germany Direct Subsidiary The company is primarily engaged in the manufacturing of high pressure die casting and machining components with plants in Massenbachhausen, Germany.
11 Maxwell Energy Systems Private Limited, India, Direct Subsidiary The Company is located in Mumbai, Maharashtra, India and it is into the business of advanced embedded electronics for BMS for EVs.

Further, as on 31st March, 2023 and as on the date of this report, the Company has one associate company, TP Green Nature Limited ("TP Green"). During the year under review, the Company has invested Rs 65.85 million in TP Green and holds 6,584,488 equity shares of Rs 10 each being 26% of its paid-up equity share capital. TP Green is an associate company of the Company, in terms of Section 2(6) of the Act. However, the Company does not exercise any significant influence in the management of its business affairs nor has any rights / obligations, except as its shareholder. Therefore, financial statements of TP Green are not required to be considered for consolidation in terms of Section 129 of the Act.

TP Green is a special purpose vehicle incorporated by TATA Power Renewable Energy Limited and is engaged in the business of solar power generation with a capacity of 12.5 MW. This investment enables the Company to qualify itself as a captive consumer as per the captive mechanism rules under the Electricity Act for procuring solar energy from TP Green for its certain manufacturing plants located in Chakan and Waluj, Maharashtra.

There has been no material change in the nature of business of the subsidiaries. During the year under review:

1. EOSrl acquired 100% equity stake in Frenotecnica Sri, Italy ("Frenotecnica") for an aggregate value of Rs 5,289,900, which includes acquisition cost of € 29,900. The effective date of acquisition was 10th June, 2022.

Frenotecnica, based in Rovereto (Trento), Italy, is engaged in the business of designing and manufacturing of friction materials and components for braking systems for application in two-wheelers.

2. The Company acquired 51% share capital of Maxwell Energy Systems Private Limited ("Maxwell") on 1st July, 2022, through a combination of primary issuance and secondary purchase, comprising 69,873 shares of face value of Re. 1 each. The acquisition was for a total investment of Rs 1,350 million and was effective 1st July, 2022.

Maxwell is in the business of advanced embedded electronics, particularly in BMS for automobiles (including EVs), energy storage systems and battery packs.

3. EOSrl acquired 100% equity stake in New Fren Sri, Italy ("New Fren") for a total investment of € 1,1 65,394 which includes consideration of € 1,150,000 and acquisition cost of € 15,394. The effective date of acquisition was 16th November, 2022.

New Fren is engaged in the business of designing, manufacturing and sale of brake discs, centrifugal clutches, pads and brakes shoes for two-wheeler vehicles.

New Fren has a subsidiary namely, GDS Sari ("GDS"), situated at Hammas Sousse, Tunisia, wherein it held 99% shareholding.

4. During the period under review, EOSrl acquired residual 1% stake in GDS for an aggregate value of € 2,600, equivalent to 8,580 Tunisian dinar. The effective date of acquisition was 9th March, 2022.

In terms of Section 129(3) of the Act, a statement in Form AOC-1, containing salient features of the financial statements of the Companys subsidiaries, forms part of the Annual Report. A copy of the audited financial statements of each of the subsidiary companies and English translation thereof will be available for inspection by any shareholder of the Company at its registered office during business hours. These financial statements are also placed on the Companys website at https://www. endurancegroup.com/investor-relation/ annual-reports-of-subsidiaries.

SHARE CAPITAL:

The paid-up equity share capital as on 31st March, 2023, was Rs 1,406,628,480. There was no public issue, rights issue, bonus issue or preferential issue, during the financial year under review. The Company has not issued shares with differential voting rights, sweat equity shares, neither has it granted any employee stock options nor issued any convertible securities.

DIRECTORS:

The composition of the Board of the Company, as on the date of this Report is as follows:

Sr. No.

Name of Director

Position

1. Mr. Soumendra Basu (DIN 01125409) Chairman

(Non-executive, Independent)

2. Mr. Anurang Jain (DIN 00291662) Managing Director (Executive)
3. Mr. Roberto Testore (DIN 01935704) Independent Director (Non-executive)
4. Mr. Ramesh Gehaney Director and Chief Operating (DIN 02697676) Officer (Executive)
5. Mr. Satra jit Ray (DIN 00191467) Director and Group Chief Financial Officer (Executive)
6. Ms. Anjali Seth (DIN 05234352) Independent Director (Non-executive)
7. Mr. Massimo Venuti (DIN 06889772) Director

(Non-executive)

8. Mrs. Varsha Jain (DIN 08947297) Director and Head - CSR and Facility Management (Executive)
9. Mr. Indrajit Banerjee (DIN 01365405) Independent Director (Non-executive)
10. Mr. Anant Talaulicar (DIN 00031051) Independent Director (Non-executive)

Retirement of directors by rotation

In terms of Section 152(6) of the Act, Mr. Massimo Venuti, who retires by rotation at the ensuing AGM and being eligible, has offered himself for re-appointment. Information as required under Regulation 36(3) of the Listing Regulations is provided in the Notice convening the AGM.

KEY MANAGERIAL PERSONNEL:

The following officials are Key Managerial Personnel of the Company in terms of the provisions of Sections 2(51) and 203 of the Act:

i. Mr. Anurang Jain, Managing Director;

ii. Mr. Ramesh Gehaney, Director and Chief Operating Officer (Whole Time Director);

iii. Mr. Satrajit Ray, Director and Group Chief Financial Officer (Chief Financial Officer);

iv. Mrs. Varsha Jain, Director and Head - CSR and Facility Management (Whole Time Director); and

v. Mr. Sunil Lalai, Company Secretary and Executive Vice President - Legal (Company Secretary).

There has been no change in the Key Managerial Personnel during the year under review.

Board of Directors and its Committees

During the financial year under review, the Board met five times. A detailed update on the Board, its composition and attendance of the Directors at each meeting is provided in the Corporate Governance report.

The Board has constituted six Committees, namely, Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Stakeholders Relationship Committee, Risk Management Committee and Finance Committee (a non-statutory committee). All recommendations made during the year by the Committees including the Audit Committee were accepted by the Board.

A detailed charter including terms of reference of various Board constituted committees, number of committee meetings held during the financial year 2022-23 and attendance of members at each meeting, also forms part of the Corporate Governance report.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 134(3)(c) of the Act, the Directors, based on the representation received from the management, confirm that:

i. in the preparation of the annual accounts for the year ended 31st March, 2023, the applicable accounting standards have been followed and there are no material departures;

ii. the directors have 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 financial year and of the profit of the Company for that period;

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

iv. the directors have prepared the annual accounts on a going concern basis;

v. the directors have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and are operating effectively; and

vi. the directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and are operating effectively.

DECLARATION BY INDEPENDENT DIRECTORS:

In terms of Section 149(7) of the Act and Regulation 16(1) (b) of the Listing Regulations, the Independent Directors of the Company have submitted their declarations confirming compliance with the criteria of independence as stipulated thereunder.

All Independent Directors of the Company have affirmed compliance with the Companys Code of Conduct for Directors and Senior Management Personnel for the financial year 2022-23.

The Board took on record declaration and confirmation submitted by the Independent Directors regarding their fulfilment of the prescribed criteria of independence, after assessing veracity of the same as required under Regulation 25 of the Listing Regulations.

In terms of the amended Rules, an independent director is required to apply online to the Indian Institute of Corporate Affairs ("MCA") for inclusion of his / her name in the data bank for such period till he / she continues to hold office of an independent director in any company.

In terms of Section 150 of the Act read with Rule 6 of the Rules, Independent Directors of the Company have confirmed that they have registered themselves with the databank maintained by IICA. Independent Directors are also required to undertake online proficiency self-assessment test conducted by the IICA within a period of 2 (two) years from the date of inclusion of their names in the data bank, unless they meet the criteria specified for exemption. All Independent Directors of the Company are exempt from the requirement to undertake online proficiency self-assessment test.

Opinion of the Board with regard to integrity, expertise and experience (including proficiency) of the Independent Directors:

The Board is of the opinion that the Independent Directors of the Company are professionally qualified and well experienced in their respective domains and meet the criteria regarding integrity, expertise, experience and proficiency. Their qualification and vast experience in varied fields helps in strengthening the Companys systems and processes to align the same with good industry practices and institutionalising tenets of corporate governance.

DIRECTORS REMUNERATION POLICY AND CRITERIA FOR MATTERS UNDER SECTION 178 OF THE ACT:

In terms of Section 178 of the Act, the Nomination and Remuneration Policy covers Directors, Key Managerial Personnel and Senior Management Personnel of the Company. The policy, inter alia, lays down the principles relating to appointment, cessation, remuneration and evaluation of Directors, Key Managerial Personnel and Senior Management Personnel of the Company.

Details of the Companys policy on directors appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters as stipulated under sub-section (3) of Section 178 of the Act, forms part of the Corporate Governance report.

The policy was last revised by the Board at its meeting held on 18th April, 2023 and pursuant to the Listing Regulations is also placed on the Companys website at https://www. end urancegroup.com/wp-con tent/ uploads/2022/1 1 /nomination-and-remuneration-Policy- approved-by-the-Board-on-1 8-04-2023 .pdf.

PERFORMANCE EVALUATION:

In compliance with the provisions of Section 178 of the Act, the Nomination and Remuneration Policy ("NR Policy") of the Company, inter alia, specifies that the Board will conduct annual evaluation of its own performance, its Committees and the directors individually. Performance evaluation of Directors shall be done by the entire Board (excluding the Director being evaluated). The Nomination and Remuneration Committee is responsible for implementation of the methodology followed by the Company in this regard. The NR Policy of the Company is placed on the Companys website at https://www.endurancegroup.com/wp-content/ uploads/2022/1 1 /nomination-and-remuneration-Policy- approved-by-the-Board-on-1 8-04-2023.pdf.

Performance of the Board is evaluated based on inputs from all the directors on a structured questionnaire covering various aspects such as criteria of board composition and structure, effectiveness of board processes, information and functioning, orientation towards corporate governance and its contribution in effective management of the Company. Assessment and observations on the performance of Board are discussed and key action areas for the Board, Committees and Directors are noted for implementation.

Information and other details on annual performance assessment are given in the Corporate Governance report.

SECRETARIAL STANDARDS:

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

INFORMATION ON BOARD MEETING PROCEDURE AND ATTENDANCE DURING THE FINANCIAL YEAR 2022-23:

Board meetings of the Company are conducted as per the provisions of the Act, the Listing Regulations and applicable Secretarial Standards. In the last meeting of each calendar year, the Board decides the schedule of meetings to be held in the succeeding year.

Based on the dates of meetings decided by the Board, adequate notice is given to all directors and Committee members; an agenda with detailed notes thereon is sent at least seven days before the respective meeting. If any board meeting is to be held at a shorter notice, permission of at least one independent director is ensured. The notes to agenda contain relevant information and supporting documents along with recommendation from the management, for meaningful deliberation and / or decision on the agenda items.

A gist of Board and Committee meetings held during the year along with attendance record of each Director forms part of the Corporate Governance report.

AUDIT COMMITTEE:

Audit Committee of the Company is constituted in terms of Section 177 of the Act and Regulation 18 of the Listing Regulations.

As on 31st March, 2023, the Committee comprised the following directors as its members:

i. Mr. Indrajit Banerjee, Chairman;

ii. Mr. Soumendra Basu; and

iii. Ms. Anjali Seth.

All of the Committee members are non-executive independent directors and are financially literate as required under Regulation 18(1) (c) of the Listing Regulations.

The Committee invites the Managing Director, the Director and Group Chief Financial Officer, the Director and Chief Operating Officer, to attend meetings of the Committee. The Statutory Auditors and the Chief Internal Auditor are also invited for specific agenda matters.

Mr. Sunil Lalai, Company Secretary and Executive Vice President - Legal acts as Secretary to the Committee.

There was no change in the composition of the Committee during the year under review.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE:

The Corporate Social Responsibility ("CSR") Committee is constituted in compliance with Section 135 of the Act.

As on 31st March, 2023, the CSR Committee comprised the following directors as its members:

i. Mr. Anurang Jain, Chairman;

ii. Mr. Soumendra Basu;

iii. Mr. Ramesh Gehaney; and

iv. Mrs. Varsha Jain.

There was no change in the composition of the Committee during the year under review.

RISK MANAGEMENT COMMITTEE:

The Risk Management Committee ("RMC") is constituted in compliance with Regulation 21 of the Listing Regulations.

As on 31st March, 2023, the RMC comprised the following directors as its members:

i. Mr. Anurang Jain, Chairman;

ii. Mr. Indrajit Banerjee;

iii. Mr. Ramesh Gehaney; and

iv. Mr. Satrajit Ray.

The Risk Management Policy of the Company is reviewed annually and it was last revised in August, 2022. The updated policy is placed on the Companys website https://www.endurancegroup.com/wp-content/ uploads/2022/1 1 /Risk-Management-Policy.pdf.

The policy lays down a framework for risk management and mitigation process commensurate with the scale and nature of the Companys business. The policy also identifies the risk categories in line with the Companys growth strategy, continually changing business environment and legislative requirements. As per the terms of reference of RMC, it is entrusted with the responsibility to periodically review the risk management framework.

The risk management framework defines thresholds against each of the identified risk events and mitigation measures to be adopted. The framework is reviewed periodically by the respective functions, for necessary updates. The senior management team reviews the critical risk events and implements action plans to avoid recurrence of such events. A risk report is submitted bi-annually for review by the RMC and the same is also placed before the Board for advice on matters of significance.

There was no change in the composition of the Committee during the year under review.

CREDIT RATING:

During the year under review, CRISIL Ratings Limited (a subsidiary of CRISIL Limited), a credit rating agency registered with the SEBI, has reaffirmed the long-term rating for bank credit facilities and the short-term rating for bank credit facilities / Commercial Papers as CRISIL AA+/Stable and CRISIL A1+, respectively. ICRA Limited, a credit rating agency registered with SEBI had reaffirmed the ICRA AA+ (Stable) rating for long term borrowing and ICRA A1+ rating for short term borrowing.

INTERNAL FINANCIAL CONTROLS:

In terms of Section 1 34(5)(e) of the Act, the term Internal Financial Control means the policies and procedures adopted by a company for ensuring orderly and efficient conduct of its business, including adherence to its policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records, and timely preparation of reliable financial information.

The Company has adequate Internal Financial Control systems in the form of policies and procedures. It follows a structured mechanism of function-specific reviews and risk reporting by senior management of the Company and critical matters are brought to the attention of the Audit Committee and the Board. Further, internal Standard Operating Procedures (SOPs) and Schedule of Authority (SOA) are well defined and documented to provide clear guidance to ensure that all financial transactions are authorised, recorded and reported correctly.

In order to record day-to-day financial transactions and ensure accuracy in reporting thereof, the Company uses an established Enterprise Resource Planning (ERP) system, which is equipped with maker and checker mechanism and has an audit trail of all transactions. Adequate controls and checks are built in the ERP system to integrate the underlying books of account and prevent any kind of control failure. Mapping of policies and procedures including SOPs and SOA is done through ERP and audit of these processes forms part of the work scope of both internal and statutory auditors of the Company.

The Company has an in-house Internal Audit (IA) team lead by a Chief Internal Auditor. The Chief Internal Auditor, who functionally reports to the Audit Committee and administratively reports to the Managing Director is responsible for leading the IA department. The scope of work, accountability, responsibility, reporting and authority of the IA department is defined in the Internal Audit Charter, which is reviewed by the Audit Committee, annually.

The IA team draws up an internal audit plan before the start of a financial year, which is approved by the Audit Committee and progress thereof is reviewed by the Committee at its quarterly meetings. In order to ensure objectivity and independence of the audit mechanism, internal audit activities for certain plants are outsourced. The IA team conducts audits of plants and corporate functions, specifically emphasising on systems, processes, procedures, guidelines and controls as also statutory compliances, adherence to policies / SOPs, and internal guidelines issued by the management. Implementation of the audit recommendations are monitored by the IA team.

Report on audit findings and corrective measures taken by the respective process owners, is reviewed periodically by the senior management team of the Company comprising the Managing Director, the Director and Group Chief Financial Officer, and the Director and Chief Operating Officer. Significant observations and status of implementation of recommendations of the IA team are presented to the Audit Committee. The Committee reviews the report and advises on improving the systems and processes, where necessary.

The Companys internal control mechanism is commensurate with the scale of its operations thereby ensuring compliance with the Act and the Listing Regulations.

CORPORATE GOVERNANCE:

In compliance with Regulation 34 of the Listing Regulations, a separate report on Corporate Governance along with a certificate from the statutory auditors towards compliance with the provisions of Corporate Governance, forms an integral part of this Annual Report.

The Managing Director and the Director and Group Chief Financial Officer have certified to the Board with regard to financial statements and other matters as required under Regulation 17(8) read with Schedule II to the Listing Regulations.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT:

In terms of Regulation 34(2) of the Listing Regulations, a Business Responsibility and Sustainability Report for the financial year 2022-23 forms part of this Annual Report.

CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING AND FAIR DISCLOSURE OF UNPUBLISHED PRICE SENSITIVE INFORMATION:

The Company has adopted a Code of Conduct for Prevention of Insider Trading ("PIT Code") in terms of the SEBI (Prohibition of Insider Trading) Regulations, 2015, ("PIT Regulations"). Further, the Company has also adopted a Code of Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information ("UPSI Code").

The PIT Code and the UPSI Code are drawn up on the principle that the Companys directors and employees owe a fiduciary duty, inter alia, to the shareholders of the Company to place the interest of shareholders above their own and conduct their personal securities transactions in a manner that does not give rise to any conflict of interest.

The PIT Code lays down guidelines for designated persons on the procedures to be followed and disclosures to be made while dealing in securities of the Company and also stipulates the consequences of non-compliances or leak of confidential price sensitive information.

The UPSI Code documents the manner of disseminating Unpublished Price Sensitive Information ("UPSI") for making it accessible to the public on non-discriminatory basis. The UPSI Code was last reviewed and revised by the Board of Directors at its meeting held on 8th February, 2023.

Any information is determined to be UPSI, based on the principles enumerated in the Companys Policy on Determination of Materiality of Event / Information.

In addition to the above, the Company also maintains a Structured Digital Database in terms of Regulation 3(5) of the PIT Regulations containing the nature of UPSI and the names of persons sharing the information, names of persons with whom information is shared along with the Permanent Account Number or any other identifier authorised by law.

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

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 1 34(3) (m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, is attached as Annexure I.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:

In terms of Section 135 of the Act read with Schedule VII to the Act and Companys Corporate Social Responsibility ("CSR") Policy, the Company undertakes CSR projects under the aegis of Sevak Trust, with whom it has been associated for more than a decade. The CSR projects and programmes recommended by the CSR Committee and approved by the Board are aimed towards enhancing employability by imparting skill-building vocational training to unemployed youth and undertaking developmental activities in villages to improve living standards and welfare through education, promoting health and hygiene, water conservation and

agriculture oriented initiatives, providing community facilities, etc. As part of its CSR initiatives, the Company has also undertaking the responsibility of upgrading the Sevak Trust Balwadi. The land parcel admeasuring 6,000 sq. mtr. was purchased in June 2022 at Waluj, Aurangabad and construction of new school premises has been initiated in the financial year under review. The upgraded Balwadi will be equipped with latest infrastructure and learning tools for primary education.

Salient features of the CSR Policy, are available on the Companys website at https://www.endurancegroup. com/wp-content/uploads/2022/1 1 /Corporate-Social- Responsibility-Policy, pdf. The Annual Report on CSR activities is attached as Annexure II to this Report.

In terms of Section 1 35 of the Act read with Rule 4(5) of the Companies (Corporate Social Responsibility Policy) Rules, 2015, the Director and Group Chief Financial Officer of the Company has provided requisite certificate that the funds disbursed by the Company to Sevak Trust during the financial year 2022-23 have been utilised for the respective purposes and in the manner as approved by the Board.

Expenditure towards CSR activities

As per the requirements under the Act, the Company earmarked an amount of Rs 1 10.26 million for the financial year 2022-23, calculated based on the average net profit before tax of the immediate preceding three financial years. The Board of Directors approved the following projects / programmes to be undertaken as CSR activities during the financial year 2022-23, and all of these activities were as per Schedule VII to the Act and the CSR Policy of the Company:

1. Village Development Project;

2. Setting up and running of Vocational Training Centre; and

3. Purchase of land parcel for construction of new building of Sevak Trust Balwadi and recurring expenses for running the school on existing premises taken on rent.

The total amount spent by the Company, during the financial year 2022-23 towards approved CSR projects and programmes was Rs 112.67 million, which included administrative overheads, as against the budget of Rs 110 million towards CSR expenses.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS:

During the year under review, no instances of fraud have been reported under Section 143(12) of the Act.

AUDITORS:

Statutory Auditors

Based on the recommendation of the Board, the Members of the Company at their Twenty Third AGM held on 24th August, 2022, approved appointment of M/s. S R B C & CO. LLP (ICAI Registration No. 324982E/E300003) ("SRBC") as Statutory Auditors of the Company for a second term of five consecutive years. This appointment was from the conclusion of the Twenty Third AGM held in the year 2022 till the conclusion of the Twenty Eighth AGM to be held in the year 2027, covering financial years from 2022-23 to 2026-27.

The Statutory Auditors of the Company have issued an unmodified opinion on the financial statements, both standalone and consolidated, for the financial year ended 31st March, 2023. The Auditors Reports for the financial year ended 31st March, 2023 on the financial statements of the Company forms part of this Annual Report.

Cost Auditor

As per the provisions of Section 148 of the Act and Rule 3 of the Companies (Cost Records and Audit) Rules, 2014, the Company is required to maintain cost records with respect to the manufacturing activities, viz. manufacturing of engine components, manufacturing of dies and moulds, and generation of electricity through windmills, and get the same audited.

Based on the recommendation of the Audit Committee, the Board has appointed Mr. Jayant B. Galande, Cost Accountant (Membership No. M-5255) as Cost Auditor of the Company for the financial year 2023-24. The remuneration proposed is Rs 450,000 and is subject to ratification by the shareholders at the ensuing AGM. The said remuneration is excluding applicable taxes and out-of-pocket expenses, if any, payable at actuals.

Secretarial Auditor

In terms of the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed Mr. Sachin Bhagwat (Membership No. A10189, CP No. 6029) Practicing Company Secretary, to conduct an audit of the secretarial records for the financial year 2022-23.

The Secretarial Audit report for the financial year 2022-23 is set out as Annexure III to this Report. The said report does not contain any qualification, reservation or adverse remark.

DISCLOSURES:

Policies of the Company

The Listing Regulations mandate formulation of certain policies for listed companies. Accordingly, the Board of

Directors has, from time to time, framed and approved policies as required under the Listing Regulations as well as under the Act.

Certain key policies that have been framed by the Company include:

Sr.no.

Name of Policy

1. Nomination and Remuneration Policy
2. Corporate Social Responsibility Policy
3. Dividend Distribution Policy
4. Vigil Mechanism-cum-Whistle Blower Policy
5. Risk Management Policy
6. Code of Conduct for Prevention of Insider Trading
7. Code of Conduct for Directors and Senior Management Personnel
8. Code of Practices and Procedures for Fair disclosure of Unpublished Price Sensitive Information
9. Policy for determination of Materiality of Subsidiaries
10. Policy for Determination of Materiality of and Dealing with Related Party Transactions
11. Policy for Determination of Materiality of Events / Information
12. Policy for Preservation of Documents
13. Archival Policy for disclosures to Stock Exchanges

The above-mentioned policies are available on the Companys website at the link www.endurancegroup.com/ investor-relations.

These policies are periodically reviewed by the Committees responsible therefor and changes, if any, are recommended to the Board for approval. Changes to the policies also factor amendments in statutes or governing regulations. During the period from 1st April, 2022, till the date of this Report, the following policies were revised:

Sr.

No.

Name of Policy

Revised effective

i. Policy for Determination of Materiality of Event / Information 29th April, 2022
2. Archival Policy for disclosures to Stock Exchanges
3. Nomination and Remuneration Policy ("NR Policy") 1 9th May, 2022 and later on 1 8th April, 2023
4. Risk Management Policy 10th August, 2022
5. Corporate Social Responsibility Policy ("CSR Policy") 7th November, 2022
6. Fraud Prevention and Detection Policy
7. Code of Conduct for Directors and Senior Management Personnel 8th February, 2023
8. Code of Practices and Procedures for Fair disclosure of Unpublished Price Sensitive Information

The Board of Directors, at its meeting held on 7th November, 2022 has approved the revised CSR Policy of the Company to align it with "National Guidelines on Responsible Business Conduct" ("NGRBC") issued by the Ministry of Corporate Affairs and based on the recommendation made by the Corporate Social Responsibility ("CSR") Committee at its meeting held on 7th November, 2022. Kindly refer Annexure II for salient features of the CSR Policy enumerated in the Annual Report on Corporate Social Responsibility activities.

Further, based on the recommendation of Nomination and Remuneration Committee, the NR Policy was revised by the Board, at its meeting held on 18th April, 2023. Certain sections of the NR Policy were redrafted to align with the practice being followed by the Company for appointment of directors and review of their remuneration.

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:

Disclosure of remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are annexed herewith as Annexure IV.

A statement containing particulars of employees as required under Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided as a separate annexure forming part of this Report. In terms of Section 136 of the Act, the Annual Report and financial statements are being sent to the shareholders excluding the aforesaid annexure. The said annexure is available for inspection at the registered office of the Company during business hours and will be made available to any shareholder on request.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The Company has not advanced any loans or given guarantees covered under the provisions of Section 1 86 of the Act. Particulars of investments form part of the notes to financial statements. Kindly refer notes nos. 4, 4A and 4B of the standalone financial statements for the details of investments made by the Company as on 31st March, 2023.

FIXED DEPOSITS:

During the year under review, the Company has not accepted any deposits from the public.

VIGIL MECHANISM-CUM-WHISTLE BLOWER POLICY:

In terms of the provisions of Section 177(9) of the Act, read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, the Company has established a vigil mechanism, which forms part of the Vigil Mechanism-Cum- Whistle Blower Policy in terms of Regulation 22 of the Listing Regulations for directors and employees. The objective of this policy is to provide a reporting mechanism for any person who observes any unethical behaviour, actual or suspected fraud, or violation of the Companys Code of Conduct for Directors and Senior Management Personnel and the Endurance Code of Conduct for all employees ("Codes of Conduct"). Such person can report the same to the Ombudsman appointed under the policy. The said policy also encompasses reporting of instances of leak of Unpublished Price Sensitive Information ("UPSI").

Protected disclosures can be made by a whistle blower to a dedicated e-mail ID and or postal address of Ombudsman, appointed under the policy. The policy has been hosted on the Companys website at https://www.endurancegroup.com/ wp-content/uploads/2022/1 1 /Whistle-Blower-policv.pdf.

An Ombudsman has been appointed in terms of the provisions of the Act to independently investigate protected disclosures communicated under the policy and matters of violation to the Codes of Conduct.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY BETWEEN 31st MARCH, 2023 AND DATE OF BOARDS REPORT:

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

RELATED PARTY TRANSACTIONS:

As per the Listing Regulations, all Related Party Transactions ("RPT") and any modifications thereto are placed before the Audit Committee for approval. Further, the Audit Committee accords specific / omnibus approval for RPTs, which are in ordinary course of business and satisfy the principles / conditions of being at arms length basis. The Audit Committee reviews, on a quarterly basis, the details of the RPTs entered pursuant to the aforementioned omnibus approval.

Particulars of RPTs entered during the year 2022-23

During the financial year, the Company did not enter into any contract / arrangement / transaction with related parties, which could be considered material for which shareholders approval, is required in accordance with Section 188 of the Act and the Policy on Determining Materiality of and Dealing with Related Party Transaction ("RPT Policy").

Accordingly, there is no information to be disclosed in Form AOC-2, while the particulars of all RPTs in terms of Indian Accounting Standard (Ind AS) - 24 are forming part of the financial statements.

The RPT Policy of the Company, as approved by the Board, can be accessed on the Companys website at https://www.e ndurancegroup.com/wp-con tent/ uploads/2022/1 1 /Policy-for-Determination-of-Materiality-of- and-Dealing-with-Related-Party-Transactions.pdf.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS:

There were no significant material orders passed by Regulators / Courts which would impact the going concern status of the Company and its future operations.

ANNUAL RETURN:

In terms of Section 92(3) read with Section 1 34(3)(a) of the Act, the annual return of the Company for the financial year ended 31st March, 2023 shall be available on the Companys website: https://www.endurancegroup.com/ investor-relation/annual-return/.

DISCLOSURE UNDERTHE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has adopted a "Policy on Safety & Security and Prevention of Sexual Harassment of Women Employees" ("POSH Policy") in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The POSH Policy aims to provide a safe, friendly, positive and productive working environment and promote an atmosphere in which employees can realise their maximum potential. The policy applies to all permanent and temporary employees and also to workforce engaged by the Company through contractors.

The Company observes zero tolerance towards any kind of violation of the aforementioned POSH Policy. As per POSH Policy, the Company has constituted Internal Committees ("1C") for all its locations. Such committees are chaired by a female employee and other senior management officials of the Company are its members along with an external member who has experience in dealing with cases relating to sexual harassment. The 1C is responsible for redressal of complaints related to sexual harassment and follows the guidelines provided in the POSH Policy.

During the year under review, three complaints were received by the 1C under the POSH Policy. Out of three complaints, one has been satisfactorily resolved, and inquiry and investigation of the other two complaints has been completed and 1C is in the process of concluding the same.

INDUSTRIAL RELATIONS:

During the year under review, the industrial relations remained cordial.

As on the date of this Report, the Company has twelve agreements entered into with labour unions for the Companys plants located at Waluj (Aurangabad, Maharashtra), Chakan (Dist. Pune, Maharashtra) and Pantnagar (Uttarakhand), out of which eight agreements were due for renewal during the period under review and were accordingly executed.

INVESTOR EDUCATION AND PROTECTION FUND:

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

In terms of the foregoing provisions of the Act, no dividend amount or shares were required to be transferred to the IEPF by the Company during the year ended 3 1st March, 2023.

The Company has uploaded details of unpaid and unclaimed dividend amounts lying with the Company as on 15th December, 2022, on the Companys website https://www.end urancegroup.com/investor-relation/ unclaimed-unpaid-dividends.

The following table provides dates on which unclaimed dividend would become due to be transferred to the IEPF:

Financial

Year

Date of declaration of dividend/ interim dividend

Amount of unpaid dividend as on 31st March, 2023 (in Rs)

Due date for transfer to IEPF

2016-17 28*July, 2017 47,632.50 31st August, 2024
2017-18 6th September, 201 8 41,592.00 1 1th October, 2025
2018-19 8th August, 2019 45,325.50 1 2th September, 2026
2019-20 3rd March, 2020 122,100.00 7th April, 2027
2020-21 25*1 August, 2021 45,145.00 24th September, 2028
2022-23 24*1 August, 2022 53,236.00 23rd September, 2029

ACKNOWLEDGMENTS:

Your Directors take this opportunity to express their sincere appreciation for the commitment, hard work and support of all its employees and workmen during the year.

The Directors also express their gratitude to the shareholders, workmen unions, customers, vendors, dealers, bankers, government authorities of India and other countries where the Company operates and all other business associates for their continued support extended to the Company and for reposing their confidence in the management. The management looks forward to their continued support in future.

For and on behalf of the Board
Soumendra Basu
Chairman

Date: 17th May, 2023

DIN 01125409