Elgi Equipments Ltd Directors Report

Dear Shareholders,

Your Directors hereby present the sixty fourth Annual Report of Elgi Equipments Limited ("Elgi/the Company") along with the audited financial statements for the financial year ended March 31, 2024.

Financial Results

The highlights of the standalone performance of your Company during the fiscal are given hereunder:

(Rs in millions)

Particulars	2023 - 24	2022 - 23
Profit before depreciation, exceptional items & tax	4,638.95	3,923.37
Less: Depreciation and amortisation expenses	359.38	383.60
Less: Exceptional items	-	-
Profit Before Tax	4,279.57	3,539.77
Less: Income tax expense	1,057.60	814.99
Net Profit	3,221.97	2,724.78
Add: Opening balance in retained earnings	10,305.70	7,956.07
Less: Dividend paid during the year	632.37	364.45
- Transfer to general reserve	-	-
Add: Remeasurement of post-employment benefit obligation, net of tax	4.20	(11.79)
Transfer to retained earnings of gain from exercise of Treasury shares	12.92	-
- Income tax on gain from exercise of treasury shares	(0.95)	-
Transfer to retained earnings on Exercise of shares under ESOP scheme	8.21	1.09
Closing balance in P&L account	12,919.68	10,305.70

Review of Business Operations

The Company realised an operating revenue of 18,433.75 Million as against 17,566.35 Million in 2022-23.

The details of division wise performance and other operational details are discussed at length in the Management Discussion and Analysis section. There was no change in the nature of business of the Company during the financial year ended March 31, 2024.

Share Capital

During the year under review, there were no changes in the issued and paid-up share capital of the Company. The issued and paid-up share capital of the Company consist of 31,69,09,016 equity shares of face value of 1/- each amounting to 31,69,09,016/- as on the date of the report.

Transfer to reserves

The Company has not transferred any amount to the General Reserve during the year under review. However, an amount of 2,613.98 million of the current profits has been carried forward under the head retained earnings.

Dividend

Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), the Dividend Distribution Policy of the Company is hosted in the Company?s website https://www.elgi.com/in/policies/ dividend-policy.pdf. For the financial year 2023-24, in line with the Dividend Distribution Policy, the Board of Directors at their meeting held on May 27, 2024, has recommended a dividend of 2/- per share (200%) on the paid-up share capital of 31,69,09,016 equity shares.

Subject to the approval of shareholders, an amount of 633.82 million will be paid as dividend after deducting applicable taxes (Previous Year 633.82 million).

Transfer of Unclaimed Dividend/Shares to Investor Education and Protection Fund

In terms of Sections 124 and 125 of the Companies Act, 2013, ("Act") unclaimed or unpaid dividend relating to the financial year 2016-17 is due for remittance to the Investor Education and Protection Fund ("IEPF") established by the Central Government.

Further, pursuant to Section 124(6) of the Act, read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, 38,140 equity shares of 1/- each on which dividend had remained unclaimed for a period of 7 years have been transferred to the credit of demat account identified by the IEPF Authority during the year under review.

Annual Return

The Annual Return of the Company for the financial year 2023-24 as required under Section 92(3) of the Act is available on the website of the Company and can be accessed on the Company?s website at the link https://www.elgi.com/in/financials/.

Board Meetings held during the year

During the year, five meetings of the Board of Directors were held. The details of the meetings are furnished in the Corporate Governance Report which is attached to this Report.

Committees

As on March 31, 2024, the Company has Audit Committee, Nomination and Remuneration Committee, Compensation Committee, Stakeholders Relationship Committee, Risk Management Committee and Corporate Social Responsibility Committee. Detailed note on the composition of the Board and its Committees are provided in the Corporate Governance Report attached to this Report.

Statement on compliance with Secretarial Standards

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards and such systems are adequate and operating effectively.

Directors Responsibility Statement

Pursuant to the requirement under Section 134(3)(c) of the Act, with respect to Directors? Responsibility Statement, it is hereby confirmed that:

a. In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures from those standards;

b. 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;

c. The Directors have taken proper and sufficient care for 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. The Directors have prepared the annual accounts on a going concern basis;

e. The Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f. The Directors had devised proper systems to ensure compliance with the provisions of all the applicable laws and such systems were adequate and operating effectively.

Details in respect of frauds reported by Auditors under Section 143(12) of the Act, other than those which are reportable to the Central Government

There were no instances of frauds identified or reported by the Statutory Auditors during the course of their audit pursuant to Section 143(12) of the Act.

Declaration of Independent Directors

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under the Act and SEBI Listing Regulations. Regulations and that their name is included in the data bank as per Rule 6(3) of the Companies (Appointment and Qualification of Directors) Rules, 2014 (as amended).

Remuneration policy of the Company

The Board has based on the recommendation of the Nomination and Remuneration Committee, framed a policy for fixing and revising remuneration of Directors, Key Managerial Personnel, Senior Management Personnel and other employees of the Company. The

Remuneration policy is annexed herewith as Annexure A to this report. The Remuneration policy of the Company can be accessed on the Company?s website at the link https://www.elgi.com/in/policies/remn-policy.pdf.

Comments on Auditors Report

With respect to the remarks made by the Statutory Auditors, M/s. Price Waterhouse Chartered Accountants LLP, your directors wish to state as follows:

Remarks by Statutory Auditor	Response from the Management
Based on our examination, which included test checks, the Company has used two accounting software for maintaining its books of account which has feature of recording audit trail (edit log) facility and except that the audit trail feature for payroll software did not operate throughout the year; and for other accounting software, the feature of recording audit trail (edit log) facility was enabled from November 06, 2023;	Consequent to proviso Rule 3(1) of the Companies (Accounts) Rules, 2014, for the financial year commencing on or after the 1st day of April 2023, the Company is required to ensure that the accounting software and payroll software have a feature of recording audit trail of each and every transaction, creating an edit log of each change made in the books of account along with the date when such changes were made and also ensure that the audit trail cannot be disabled.
During the course of performing our procedures, except for the aforesaid instances, where the question of our commenting on whether the audit trail has been tampered with does not arise, we did not notice any instances of the audit trail feature being tampered. (refer note below to the standalone financial statements)	The Company had undertaken steps to ensure compliance with the above requirement from the beginning of the year and also considered the evolving guidance in this connection.
	1. In payroll software, audit trail for changes by end user is completely enabled from February 2024. However, due to limitation in the software, the audit log does not capture some specific changes and pre-modified values. From April 2024, the company has transitioned the payroll and employee records to a different software. The company is in the process of obtaining necessary information to ensure compliance.
	2. In respect of the accounting software, the feature of recording audit trail (edit log) facility was enabled from November 06, 2023 meeting all the statutory requirements.

With respect to the remarks made by the Secretarial Auditors, M/s. MDS & Associates LLP, your directors wish to state as follows:

Remarks by Secretarial Auditor	Response from the Management
The National Stock Exchange of India and BSE Limited have issued an Advisory Letter to the Company under Regulation 30 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 for partial disclosure of the information in the matter pertaining to the acquisition of stake in First Energy TN1 Private Limited.	The advisory letter was issued pursuant to the Company?s disclosure on Intimation of acquisition of shares of First Energy TN1 Private Limited. The matter pertained to reporting of the change in Company?s shareholding in First Energy Private Limited ("FEPL") and time of completion of acquisition that was reported to the Stock Exchanges. The Company clarified that the change in % was on account of change in Mega Watt of power purchased from FEPL and delay in dematerialization of shares by FEPL.
Remarks by Secretarial Auditor	Response from the Management
	The Board of Directors in its meeting held on August 11, 2023, took note of the advisory letter issued by NSE and the Company filed its response as noted by the Board to the stock exchanges.
	The Management has taken efforts to ensure continuous disclosure to stock exchanges.
The Company has reported certain events, which are covered under Regulation 30 read with Schedule III and Regulation 39(3) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, to the stock exchanges beyond the prescribed time specified thereunder.	With reference to the observations made by the Secretarial Auditors, we wish to state that the delay in filing/intimating to Stock Exchange under Regulation 30 and Regulation 39(3) has been caused inadvertently. The Management has taken efforts to ensure that returns/intimation to Stock Exchange are done in time and will also do so going forward.

Particulars of Loans, Guarantees or Investments made under Section 186 of the Act

Details of loans given, investments made, guarantees given and securities provided pursuant to the provisions of Section 186 of the Act have been given in the notes to the Financial Statements.

Particulars of contracts or arrangements with Related Parties

All transactions entered into with related parties as defined under the Act and Regulation 23 of the SEBI Listing Regulations during the financial year 2023-24 were in the ordinary course of business and on an arm?s length pricing basis.

The particulars of contract or arrangement entered into with related parties referred to in Section 188(1) of the Act which are material in nature are disclosed in the prescribed Form AOC-2 and annexed herewith as Annexure B to this report.

The Audit Committee and the Board of Directors have approved the Related Party Transactions Policy and the same has been hosted on the Company?s website at https://www.elgi.com/in/policies/rpt-policy.pdf.

The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and related parties.

Material Changes and commitments affecting the financial position of the Company

There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year as on March 31, 2024, and the date of this report.

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

The information on foreign exchange earnings and outgo, technology absorption, conservation of energy stipulated under Section 134(3)(m) of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed herewith as Annexure C.

Risk Management

Pursuant to the requirement of Regulation 21 of the SEBI Listing Regulations, the Company has constituted a Risk Management Committee ("RMC"), consisting of Board members and senior executive of the Company. The Company has in place a Risk Management framework to identify, evaluate business risks and challenges across the Company both at corporate level as also separately for each subsidiary.

The top 10 risks for the Company have been mapped by the operating management (with additional support of external guidance) after extensive deliberations on the nature of the risk being a gross or a net risk and thereafter in a prioritized manner presented to the Board for their inputs on risk mitigation/management efforts. Based on this framework, a Risk Management policy has been adopted.

The RMC engages in the Risk Management process and has set out a review process so as to report to the Board the progress on the initiatives for the major risks of each of the businesses that the Company is into. The RMC reviews the top 10 risks. The results of the mitigation measures implemented by the Company are given below:

S.No. Risk Category	Risk Summary	Risk Response/Mitigation actions/Position
1 Compliance Risks	The Companys business is subject to legal and regulatory requirements globally; non- compliance could result in severe consequences	The Company had implemented a professional software.
		Proof of compliance is collected or reported by the compliance owners every quarter end. The status is reported to the Audit Committee and Board during their quarterly meetings.
		The process of revisiting the checklist for existing entities in rotation is being continued. Further, whenever there is a new entity created in a new geography, we engage a law firm to get the compliance list created within the first year of incorporation. As part of the above process, we have revisited the checklist for ELGi USA with the help of a USA based law firm. Consequently, new set of compliances have been added.
2 Human Resource Risks	Recruiting and retaining strong talent is key to achieving the Companys aspirations; any gaps in these efforts could impact the achievement of revenue and profitability targets.	The talent acquisition process is getting further strengthened. We now use outcome-based Job Description for all key roles. The new competency behaviour model is used in key hiring. We have involved global leadership in the new leadership hiring process.
		On the other hand, the Company is also investing well in the Talent development model. The project titled "Integration of Talent" was kick started in early September 2021 with the intention to align, design and implement Integrated Talent Management Strategy. The objective being "grow talent pool for global success". After completion of the first phase of the project consisting of rolling out and training of Behavioural Competency model, the second phase involving assessment against the Individual development plan, career dialogue with the identified successor and key talent are progressing well as per the project plan
		The Company had moved to a decentralized compensation decision mechanism (instead of HR managing this centrally) which has seen well received by the businesses and employees... This is also an important enabler to the talent management program, as the Companys managers become more aware and start investing in their human resources at a strategic level.
3 Economic & Market Risks	Our global operations are subject to economic and market risks in the geographies we operate in.	The Companys strategic investment in creating and growing global market presence is continuing to help the company deliver top line growth and improved profitability during and after the Covid period. The Company was able to leverage and cross deploy resources to manage shifting demands.
		The risk mitigation efforts, supported through serving broad range of industry segments, with wide range of products is serving the Company well.
4 Growth Risks	Acquisitions, joint ventures, and investments could be unsuccessful or consume management time and resources, which could adversely affect our operating results	The Company has not made any acquisitions in recent years. The company has recognised the key success factors learning from earlier acquisitions and post-acquisition Integration is given adequate weightage and priority
5 Strategic Risks	Business continuity could be severely affected due to natural disasters or unexpected events like COVID 19 pandemic	The companys Insurance policies and coverages are commensurate with business requirements These policies are periodically reviewed to strengthen the scope as required.
		Given our expanding global presence and the changing risk landscape, the Company has engaged a leading Insurance solution provider to assess the current global Insurance coverage & present their recommendations for a robust risk mitigation.
		The Company has a disaster management plan in place and continues to refine it regularly to meet the changing requirements.
6 Supply Chain Risks	Disruptions in supplies due to concentration of manufacturing facilities in a single location and reliance on one or few suppliers present risks to business stability	The Company continues to explore responses to manufacturing concentration including strategic stocking in various parts of India and rest of the world in the short to mid-term and is planning to have assembly operations in global regions in the mid to long-term. Till the scale and volume justifies manufacturing and assembly in multiple locations, the company uses alternate mitigations such as warehousing in domestic and foreign location to prevent disruption of deliveries to its customers.
		The supplier base is being widened continuously to reduce dependence on fewer suppliers and geographies. While developing a global network of suppliers is a continuous activity, the company has road map to continuously mitigate suppliers concentration
		Further, the Company will continue to carry out strategic, selective backward integration such that manufacture of most critical parts are moved in-house.
7 Information Technology Risks	Cyber security risks could disrupt the Companys technology systems, infrastructure, and networks. Gaps in data protection could result in non-compliance of applicable regulations	The company is continuously monitoring, reviewing its infrastructure and tools to ensure security. • VAPT testing is carried out every quarter and any open issues are immediately address • Progressively all the applications and data are moved to cloud which is more secured. • Upgrade, implement latest tools that ensures high level of security at various levels including end points security • Security Information and Event Management (SIEM) solution is systematically implemented and being upgraded. • Annual IT security audit is conducted
8 Financial Risks	Exchange rate fluctuations in the various currencies that Company deals in could adversely affect the Companys financial performance	To minimize fluctuation risks, the Company has hedging process a policy in place, besides leveraging the natural hedge that is available. The Company also continuously monitors the exchange rates relevant for its geographies and takes suitable actions to offset adverse changes by adjusting selling prices and costs. During the year, the Company has not had any major impact.
		The Company gets timely advice from the bankers through our close, frequent interaction.
9 Environmental Risks	Global climate change and related regulations can negatively impact our business	The Company focuses heavily on Electric Powered Screw Air Compressors (EPSAC) and Oil Free Screw Air Compressors (OFSAC) for its future growth, gradually reducing the dependence on Diesel Powered Screw Air Compressors (DPSAC) in its overall portfolio. Environmental factors and regulatory changes taking place globally are closely monitored to effect appropriate actions to align the Companys products with these requirements.
		The Company had embarked on a major Environmental, Social & Governance (ESG) initiative. The ESG strategy was defined basis a comprehensive materiality survey, maturity assessment and compliance requirements. We have engaged a leading consultant partner to help us in this journey. Additionally, we have also initiated an assurance audit by a leading consulting firm.
		The Companys operations are constantly upgraded to adopt green manufacturing practices.
10 Strategic Risks	The Companys large dependence on India makes it susceptible to the economic fortunes of a single geography	The Companys revenue mix is now well spread across geographies and the dependence in India is consistently reducing India sales to total sales has gone down to 45%, compared to 56% in 2019. It is expected to go further down in the coming years.
		The Companys strategic plan for the mid-term and the strategic initiatives are aligned to this goal to diversify the revenue mix.

Corporate Social Responsibility Initiatives

The brief outline of the Corporate Social Responsibility ("CSR") Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out as Annexure D to this report in the format prescribed in the Companies (CSR Policy) Rules, 2014. For other details regarding the CSR Committee, refer to the Corporate Governance Report, which is a part of this report. The policy is available on the website of the Company.

Performance Evaluation of the Board, its Committees and the Directors

Pursuant to the provisions of the Act and SEBI Listing Regulations, the Board of Directors has carried out annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report attached as an Annexure to this report.

Statement regarding opinion of the Board with regard to integrity, expertise and experience (including the proficiency) of the Independent Directors

The Board of Directors have evaluated the Independent Directors during the year 2023-24 and opined that the integrity, expertise and experience (including proficiency) of the Independent Directors is satisfactory.

Directors and Key Managerial Personnel

Mr. Anvar Jay Varadaraj, Executive Director retires by rotation at the ensuing AGM and being eligible, offers himself for re-appointment. Your directors recommend his re-appointment.

A resolution seeking approval of the Members for the re-appointment of Mr. Anvar Jay Varadaraj as Director have been incorporated in the Notice to the AGM of the Company along with brief details about him.

Mr. Harjeet Singh Wahan, Non - Executive Director of the Company retired on November 5, 2023, and Mr. Mohan Nambiar, Independent Director retired on April 10, 2024. The Board wishes to place on record its appreciation for the invaluable services rendered by them during their tenure as independent directors of the Company.

Pursuant to the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company at their meeting held on May 27, 2024

have recommended the appointment of Mr. Suman Kumar Das, Mr. Srinivasan Ravindran and Mr. Srinivasan Krishnamurthi as Independent Directors of the Company for a term of consecutive five years with effect from July 31, 2024.

Ms. Aruna Thangaraj was appointed as an independent director of the company pursuant to Section 149 of the Companies Act, 2013 for the first term of 5 years and will hold officeupto August 1,2024. Consideringher knowledge, expertise and experience and the contributions made by her during her tenure as an independent director since her appointment, the Nomination and Remuneration Committee and the Board has recommended the re- appointment of Ms. Aruna Thangaraj as independent director on the board of the company, to hold office for the second term of five consecutive years commencing from August 2, 2024, and not liable to retire by rotation.

The company has also received declaration from the appointee directors that they fulfill the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 as well as Regulation 16(1)(b) of the SEBI Listing Regulations. Further, the Company has received notices from the members under Section 160(1) signifying their intention to propose the candidature of the aforesaid persons for the office of independent director(s) of the Company.

The board of directors recommends the appointment of the independent director(s).

Mr. Jayakanthan R relinquished his position as Chief Financial Officer with effect from March 18, 2024, and Mr. Indranil Sen was appointed as the Chief Financial Officer with effect from March 18, 2024. Mr. Prakash S resigned as the Company Secretary with effect from December 4, 2023, and Mrs. Devika Sathyanarayana was appointed as the Company Secretary with effect from May 27, 2024.

Pursuant to the provisions of Section 2(51) and 203 of the Act, the Key Managerial Personnel of the Company are Mr. Jairam Varadaraj, Managing Director, Mr. Anvar Jay Varadaraj, Executive Director, Mr. Indranil Sen, Chief Financial Officer and Mrs. Devika Sathyanarayana, Company Secretary.

Subsidiaries, Joint Ventures and Associate Companies

The highlights of performance of subsidiaries, associates and joint venture companies and their contribution to the overall performance of the Company during the period review have been disclosed in the Management Discussion and Analysis Report.

The Company has 25 subsidiaries and 9 joint ventures/ associate entities. The statement pursuant to Section 129(3) of the Act, containing the salient features of the financial statements of subsidiary companies, in Form AOC-1 forms part of this Annual report.

Elgi Compressors Vietnam LLC, a wholly owned subsidiary of the Company was wound up during the year.

Elgi Compressors USA Inc., Elgi Compressors Europe S.R.L, Rotair SPA, and Patton?s Inc., are the material subsidiaries of the Company based on the financials for the year ended March 31, 2024. The Board has approved a policy for determining material subsidiaries, which has been uploaded on the Company?s website viz. www.elgi.com.

The consolidated financial statements of the Company and its subsidiaries prepared in accordance with the applicable accounting standards have been annexed to the Annual Report. The annual accounts of the subsidiary companies are hosted on the website of the Company viz. www.elgi.com and will also be kept open for inspection by the shareholders at the registered office of the Company till the date of AGM. The Company will also provide a copy of the annual accounts of subsidiary companies to the shareholders upon their request.

Deposits

Your Company has not accepted any deposit within the meaning of provisions of Chapter V of the Act, read with the Companies (Acceptance of Deposits) Rules, 2014 for the year ended March 31, 2024.

Details of significant and material orders passed by the Regulators or Courts or Tribunals

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

Internal Control Systems and their Adequacy

The Company has adequate internal control systems to monitor business processes, financial reporting and compliance with applicable regulations. The systems are periodically reviewed for identification of control deficiencies and formulation of time bound action plans to improve efficiency at all the levels. The Audit Committee of the Board constantly reviews internal control systems and their adequacy, significant risk areas, observations made by the internal auditors on control mechanism and the operations of the Company and recommendations made for corrective action through the internal audit reports. The Committee reviews the statutory auditors? report, key issues, significant processes, and accounting policies. The Directors confirm that the Internal Financial Controls are adequate with respect to the operations of the Company. A report of Auditors pursuant to Section 143(3) (i) of the Act certifying the adequacy of Internal Financial Controls is annexed with the Auditors Report.

Statutory Auditors

Price Waterhouse Chartered Accountants, LLP (Firm Reg. No.: 012754N/N500016) Chartered Accountants, Chennai was appointed as the Statutory Auditors of the Company for a second term of five years at the Sixty Second AGM of the Company held on August 12, 2022, till the conclusion of the sixty seventh AGM to be held in the year 2027.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed MDS & Associates LLP, Company Secretaries, Coimbatore to undertake the secretarial audit of the Company. The report of the secretarial auditor is attached as Annexure E.

Cost Auditors

Pursuant to the provisions of Section 148(3) of the Act, the Board of Directors had appointed STR & Associates, Cost Accountants, Trichy (Firm Registration No.: 000029), as Cost Auditors of the Company, for conducting the audit of cost records for the financial year ended March 31, 2024. The Audit is in progress and report will be filed with the Ministry of Corporate Affairs within the prescribed period.

The cost accounts and records as specified by the Central Government under sub-section (1) of Section 148 of the Act, are made and maintained by the Company.

Details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the year

No applications have been made and no proceedings are pending against the Company under the Insolvency and Bankruptcy Code, 2016.

Details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof

The disclosure under this clause is not applicable as the Company has not undertaken any one-time settlement with the banks or financial institutions.

Human Resources and Industrial Relations

The Company continues to enjoy cordial relationship with its employees at all levels. The total strength of employees as on March 31, 2024, was 2172.

Particulars of Employees

In terms of the provisions of 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, a statement showing the names of the top ten employees in terms of remuneration drawn and names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules forms part of this Report as Annexure F. Disclosures relating to 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, forms part of this Report.

Having regard to the provisions of the second proviso to Section 136(1) of the Act and as advised, the Annual Report excluding the aforesaid information is being sent to the members of the Company. Any member interested in obtaining such information may write to the Company Secretary.

Elgi Equipments Limited Employee Stock Option Plan, 2019

The Company has implemented the Elgi Equipments Limited Employees Stock Option Plan 2019 to enable the Company and its subsidiaries to attract, retain and reward appropriate human talent in its employment and to create a sense of ownership and participation amongst the employees. The Compensation Committee administers and monitors the Employees? Stock Option Plan of the Company through the Elgi Equipments Limited Employee Stock Option Trust. The Compensation Committee has during the year under review issued 1,75,900 options at a grant price of 430/- per option to the eligible employees of the Company. No options were granted to the Directors.

The disclosure pursuant to the provisions of Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 is given as Annexure G to this report.

The Company has received a Certificate from the Secretarial Auditors that the above referred Scheme had been implemented in accordance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and the resolutions passed by the members in this regard.

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

As per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules made thereunder, your Company has constituted an Internal Complaints Committee. During the year under review, one case was received/filed pursuant to the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The same was resolved during the year. As on March 31, 2024, no complaint is pending for investigation and resolution.

Business Responsibility and Sustainability Report

In terms of Regulation 34 of the SEBI Listing Regulations, read with relevant SEBI Circulars, new reporting requirements on ESG parameters were prescribed under Business Responsibility and Sustainability Report ("BRSR"). The BRSR seeks disclosure on the performance of the Company against nine principles of the "National Guidelines on Responsible Business Conduct? (‘NGRBCs?). As per the SEBI Circulars, effective from the financial year 2023-24, filing of BRSR Core is mandatory for the top 1000 listed companies by market capitalisation. Accordingly, for the financial year ended March 31, 2024, your Company being amongst top 1000 companies, BRSR is annexed as Annexure H to this Report.

Corporate Governance

A report on corporate governance is annexed as Annexure I to this report. The Company has complied with the conditions relating to corporate governance as stipulated in SEBI Listing Regulations.

Vigil Mechanism/Whistle Blower Policy

Pursuant to the provisions of Section 177(9) of the Act, read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulations 4 and 22

of the SEBI Listing Regulations and in accordance with the requirements of SEBI (Prohibition of Insider Trading) Regulations, 2015, the Company has a Whistle Blower policy to deal with unethical or improper practice or violation of Company?s Code of Business Conduct or any complaints regarding accounting, auditing, internal controls or disclosure practices of the Company.

This Policy inter-alia provides a direct access to the Chairman of the Audit Committee. Your Company hereby affirms that no Director/employee has been denied access to the Chairman of the Audit Committee. Brief details about the policy are provided in the Corporate Governance Report attached to this Report.

The Audit Committee of the Board reviews the Complaints received, redressed, objected, withdrawn and dismissed for, every quarter in their meeting. The Whistle Blower policy is available on the website of the Company at the link https://www.elgi.com/in/policies/wb-policy.pdf.

Acknowledgement

Your Directors thank the shareholders, customers, suppliers, bankers and all other stakeholders for their continued support during the year. Your Directors also place on record their appreciation of the contributions made by employees at all levels towards the growth of the Company.

	For and on behalf of the Board
	Jairam Varadaraj	Anvar Jay Varadaraj
Place: Coimbatore	Managing Director	Executive Director
Date: May 27, 2024	DIN: 00003361	DIN:07273942