TO

THE MEMBERS

Your Directors are pleased to present their Eighty-Fifth Annual Report on the business and operations of your Company along with the audited financial statements, both standalone and consolidated, for the financial year ended 31 March 2022.

COMPANY PERFORMANCE

Your Company's standalone turnover from operations was `5,159 crore during the year under review, compared to `2,526 crore in the previous year representing a YoY growth of 104.24%, and the consolidated turnover was `5,561 crore compared to `2,964 crore in the previous year, representing a YoY growth of 87.62% over the previous year.

Details of consolidated segment-wise revenue and profit before interest and tax (‘PBIT') of the two key business segments – Power Systems and Industrial Systems - and how these compare with the previous financial year are given in Table 1. Your Company's financial performance for the year ended 31 March 2022 as compared to the previous year is given in Table 2.

THE BUSINESS

( in Rs. crore)

02 COMPANY FINANCIAL HIGHLIGHTS

(in Rs crore)

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 `3,953 Crore as compared to `2,092 Crore during the year 2020-21, registering a growth of approx. 88.96% as compared to previous year. The operating profit before interest and tax of Industrial Systems stood at

`482 Crore as compared to `201 Crore during the previous year, registering a growth of approx. 139.80%.

b) Power Systems:

The Power Systems recorded revenue of `1,594 Crore as compared to `862 Crore during the year 2020-21, a growth of approx. 84.92% as compared to previous year. The operating profit before interest and tax of Power Systems stood at `161 Crore as compared to loss before interest and tax of `82 Crore during the previous year, registering a growth of approx. 296.34%.

KEY ACCOMPLISHMENTS DURING THE YEAR a) CG House Debt Settlement

As mentioned in the previous Annual Report for the financial year 2020-21, the one-time settlement of funded facilities and restructuring of the non-funded facilities extended to and availed by the Company, as agreed with the then lenders of the Company ("Lenders") in November 2020, inter alia included payment of around `150 crore (Rupees One Hundred and Fifty Crore) to the Lenders, out of the proceeds from the sale of "CG House" property of the Company, within a period of five years ("CG House Debt").

During the year under review, the Company settled the CG House Debt by pre-payment of the discounted value of debt aggregating to `133 Crore and the CG House Property is now free of any encumbrance.

b) Settlement of guarantees issued for overseas subsidiaries

During the year under review, the Company has settled its guarantee obligations towards Standard Chartered Bank (Singapore) Limited of approx. Euro 26.176 Mn by issuance of 1,38,45,000 equity shares and cash settlement of approx. Euro 3.66 Mn (~`32 Crore). Further, the dues of IndusInd Bank of approx. USD 32.5 Mn relating to guarantee obligations of CG International BV, a subsidiary of the Company, were settled by cash settlement of approx. USD 6.5 MN (~ `49 Crore). Further, an agreement has also been reached with EXIM Bank for settlement of the Company's guarantee obligations to it.

During the year under review, the Company completed the sale of 3^rd tranche of land at Kanjurmarg for a sale consideration of `382 crore and used the sale proceeds for pre-payment of part of the existing term loan availed from State Bank of India.

DIVESTMENTS AND OTHER DEVELOPMENTS

As stated in the previous year's Annual Report of the Company, due to financial stress and unviable operations, decisions were taken from time to time to prune / close down certain subsidiaries of the Company. The status of divestments and other developments in respect of the subsidiaries of the Company are given below:

DIVIDEND

Considering the inadequacy of profits on account of the accumulated previous year losses, your Board does not recommend any dividend for the financial year ended 31 March 2022.

SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

As on 31 March 2022, your Company had 3 Indian and 10 foreign subsidiaries (excluding 2 subsidiaries in Belgium along with their subsidiaries declared as bankrupt; 4 subsidiaries in voluntary liquidation and 1 subsidiary declared insolvent). During the year under review, your Company has not incorporated or acquired any company.

Pursuant to Section 136 of the Companies Act, 2013 (‘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.

Highlights of performance of operational subsidiaries of the Company are given below:

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

CG Adhesive Products Limited ("CGAPL") is the Company's subsidiary in Goa. Its name was changed from CG-PPI Adhesive Products Limited to CG Adhesive Products Limited with effect from 15 March 2022. Your Company holds 81.42% of CGAPL's equity share capital. CGAPL manufactures and deals in specialty adhesive tapes and labels.

During the year under review, CGAPL recorded revenue of `23.24 crore (previous year:`15.30 crore) and registered profit before tax of `3.78 crore (previous year: `0.82 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 and supervisory control and data acquisition systems.

During the year under review, QEI, LLC recorded revenue of $10.33 Mn i.e. equivalent to `77.89 crore (previous year: $9.17 Mn i.e. equivalent to `67.06 crore). It registered profit before tax of $3.18 Mn i.e. equivalent to `23.96 crore (previous year: $2.45 Mn i.e. equivalent to `17.89 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 258.69 Mn i.e. equivalent to `208.19 crore (previous year: SEK 241.12 Mn i.e. equivalent to `208.52 crore) and registered profit before tax of SEK 7.11 Mn i.e. equivalent to `5.72 crore. (previous year: SEK 2.58 Mn i.e. equivalent to `2.23 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.

During the year under review, CG Drives & Automation Germany GmbH recorded revenue of €19.67 Mn i.e. equivalent to `165.78 crore (previous year: €15.64 Mn i.e. equivalent to `137.18 crore). It registered profit before tax of €0.80 Mn i.e. equivalent to `6.75 crore (previous year: €0.22 Mn i.e. equivalent to ` 1.96 crore).

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.

During the year under review, CG Drives & Automation Netherlands BV recorded revenue of €6.34 Mn i.e. equivalent to `53.42 crore. (previous year: €6.80 Mn i.e. equivalent to `59.59 crore) and registered profit before tax of €0.59 Mn i.e. equivalent to `4.99 crore. (previous year: €0.34 Mn i.e. equivalent to `2.99 crore).

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 Company's subsidiaries/ associates/ joint venture companies in Form AOC-1 is given in the notes to the financial statements in this Annual Report.

Pursuant to Regulation 16 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI LODR"), a policy for determining material subsidiary of your Company as approved by the Board of Directors is made available on the website under https://www.cgglobal.com/policy

MATERIAL ORDERS OF REGULATORS / COURTS / TRIBUNALS a) Re-opening of the books of accounts by the Ministry of Corporate Affairs

During the year under review, the books of accounts of the Company and its subsidiaries, for the financial years 2014-15 to 2018-19 were re-opened and re-cast pursuant to an order passed by the Hon'ble National Company Law Tribunal, Mumbai Bench (‘NCLT') on 5 March 2020 based on a petition filed by the Ministry of Corporate Affairs (‘MCA'). The audited recast financial statements, were submitted by the MCA to NCLT and the same were taken on record by the NCLT vide its order dated 26 October 2021.

b) Voluntary revision of financial statements

Considering that closing balances in the recast financial statements of the Company for the financial year ended 31 March 2019 will have to be carried forward as opening balances for the financial year 2019-20, the financial statements of the Company for the financial year 2019-20 and 2020-21 were required to be revised to give effect to the changes as stated above.

In view of the above, the Company had made an application to NCLT for voluntary revision of the financial statements of the Company for the financial years 2019-20 and 2020-21 in order to maintain consistency with the recast books of accounts. The NCLT, vide its order dated 22 December 2021, approved the said application and allowed the voluntary revision of financial statements of the Company for financial years 2019-20 and 2020-21. The revised financial statements for financial years 2019-20 and 2020-21 were then approved by your Board and thereafter adopted by the shareholders at the previous Annual General Meeting of the Company held on 31 January 2022.

UPDATE ON INVESTIGATIONS

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 Annual Report of the Company for the financial year 2020-21, 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.

STATUTORY AUDITORS

M/s. S R B C & CO LLP, Chartered Accountants (Firm Registration No. 324982E/E300003) (‘SRBC'), the existing Statutory Auditors of the Company, were appointed at the 81^st Annual General Meeting of your Company, to hold office for a term of five years up to the conclusion of 86^th Annual General Meeting of your Company.

The Auditor's Report on the financial statements of the Company for the year ended 31 March, 2022, 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 2021-22 as applicable for its product range.

During the year under review, the Company filed the Cost Audit Report for the financial year 2020-21 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., as Cost Auditor of your Company for financial year 2022-23 at a remuneration of `7,70,000/- (Rupees Seven Lakhs Seventy 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 2022-23 is included in the Notice convening the ensuing Annual General Meeting.

SECRETARIAL AUDITOR

Your Company had appointed M/s. Parikh & Associates, Practising Company Secretaries, Mumbai (Firm Registration Number: P1988MH009800), to undertake the Secretarial Audit of the Company for financial year 2021-22.

Your Company has generally complied with the Secretarial Standards and the Secretarial Audit Report is annexed in Form MR-3 for financial year 2021-22 as Annexure 4 to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

INTERNAL FINANCIAL CONTROLS

The Company has adequate internal controls consistent with the nature of business and size of the operations, to effectively provide for safety of its assets, reliability of financial transactions with adequate checks and balances, adherence to applicable statutes, accounting policies, approval procedures and to ensure optimum use of available resources. These systems are reviewed and improved on a regular basis. The Company has a comprehensive budgetary control system to monitor revenue and expenditure against approved budget on an ongoing basis.

BOARD OF DIRECTORS Composition

As on the date of this Report, your Company's 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 Non-Executive Independent Directors, and (iii) a Managing Director.

Mr. Vellayan Subbiah, Non-Executive Director, is the Chairman of your Board. Mr. P S Jayakumar, Mr. Shailendra Roy, Ms. Sasikala Varadachari and Mr. Sriram Sivaram 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 Non-Independent 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 Company's objectives and strategic goals.

Appointment of Directors during the year

During the year under review, based on the recommendations of the Nomination and Remuneration Committee, your Board had appointed Mr. Sriram Sivaram and Mr. Kalyan Kumar Paul as Additional Directors in the capacity of Non-Executive Independent Director and Non-Executive Non-Independent Director of the Company, respectively, with effect from 11 June 2021. Their appointment as Directors was approved by the Members through Postal Ballot on 30 December 2021.

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. M A M Arunachalam 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. M A M Arunachalam are contained in the Annexure accompanying the explanatory statement to the Notice of the ensuing Annual General Meeting.

INDEPENDENT DIRECTORS' DECLARATION

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, Practising 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 2021-22, your Board of Directors met 9 times, in accordance with the provisions of the Act, SEBI LODR and other statutory provisions.

Details of Board Meetings held and the attendance of Directors are given in the Section titled "Report on Corporate Governance", which forms part of this Annual Report.

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.

Details of composition of the statutory committees, number of meetings held and attendance of

Committee Members thereof during the financial year, are given in the Section titled "Report on Corporate Governance" forming part of this Annual Report.

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 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 on the date of this Report are:

• 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 Company's goals, while aligning the interests of employees, shareholders and all stakeholders in accordance with the Murugappa Group's 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 Company's Remuneration Policy is available on the website of the Company under: https://www.cgglobal.com/policy

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 23 March 2022, 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 Company's 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 Company's website: https://www.cgglobal.com/board_of_directors

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year under review were on arm's 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 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 Company's Related Party Transactions Policy is made available on the website of the Company under https://www.cgglobal.com/policy

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 2021-22 are given in the notes to the Financial Statements.

BUSINESS RESPONSIBILITY REPORT

Pursuant to Regulation 34 of the SEBI LODR, the Business Responsibility Report for the year 2021-22 highlighting the initiatives taken by the Company in the areas of environment, social, economic and governance is given in the Section titled "Business Responsibility Report", which forms part of this Report and is also available on the website of your Company under: https://www.cgglobal.com/financials

ENTERPRISE RISK MANAGEMENT (ERM) FRAMEWORK

Company's 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.

RESEARCH AND DEVELOPMENT (R&D)

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

Power Systems

• Developed and successfully conducted short circuit test of Trackside Transformer of 21.6/30.24 MVA, 110/27 kV for Indian Railways.

• Expanded product range by introducing three Phase Zig-Zag connected power transformer filled with Environment Friendly Ester oil and also developed high current (>6000 A) energy efficient distribution transformer.

• Added three new varieties of Capacitor Voltage Transformers (CVTs) to product basket to enhance the customer reach for wider applications and launched new design of Current Transformer (CT) with Internal Arc Test withstand capability to prove the safety and reliability.

• Successfully developed / launched new products such as

- 362 kV Instrument Transformers for exports

- New application condenser bushings i.e. Oil to Oil bushings for Transformer and Instrument Transformers meeting Indian Railways (RDSO) specifications

- SF6 Gas 145kV GIS Surge Arrester and Partial Discharge Sensor Suitable for Gas Insulated Switchgear

- SF6 Gas 145kV GIS with Compact Circuit Breaker with reduced size,

- 690 V, 5000A, 63 kA rating Vacuum Interrupter (VI) for low Voltage and high Current Circuit Breaker application.

- 36 kV Load Break Switch for switching of Transformers and 12 kV, 200 Amp (Capacitive current), 3 Pole Vacuum Contactor for Capacitor Switching application.

- 52 kV, 2000A Off Circuit Tap Changer (OCTC) for Railway's track side Power Transformers.

- Multiple variants of 12kV Ring Main Unit (RMU) family ‘Arista-S' for Smart Distribution application suitable for indoor and outdoor installation.

• Expanded product range in Instrument Transformer by developing polymeric insulator current and Inductive Voltage transformer for 0.5g seismic acceleration application.

Industrial Systems

• Completed Eco-design directive compliance for entire range of IP20 and IP54 drives which comply with the highest efficiency class as defined by IEC 61800-9-2.

• Developed and type tested the E2.1 frame for 75 and 90kW drives with 20% reduction in size with better competitiveness.

• Developed high power stacking blocks for drives greater than 200kW which reduces the floor space requirement in higher powers by approx. 30% and also developed DC-DC converter solutions for high power requirements in voltage range of 100 – 800 VDC which opens up application possibilities in renewable energy segment including fuel cell power generation and also for traditional sectors like automotive test beds and marine.

• Compact liquid cooled drives were developed primarily for marine segment in Europe which enables the company to offer 33% more power in the same volumes compared to earlier design.

• Developing Premium efficiency IE4 Non safe area application Motor (FLP series) for hazardous area to meet international and Indian standard requirements.

Railways

• Indigenously designed and developed two variants of BLDC Industrial fans - 65 W, 18" and 85 W, 24", providing performance parameters like Air delivery and speed comparable to that of 150 W, 18" and 200 W, 24" Induction motor based Industrial fans.

• Designed and developed Switch board cabinet for LHB AC coaches and also developed switch board cabinet for LHB Garib Rath AC coaches (including two cubicles under-slung and onboard) as per IEC 61439, which operates on 3 Phase 750V AC, 50 Hz and consists of all power and control switchgear for coach lighting, Air conditioning, Pantry, Pump control, Sanitary system, Public Addressing system and Head on Generation (HOG) filters selection etc.

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 (EHS) measures undertaken by your Company is given in the Section titled "Management Discussion and Analysis", which forms part of this Report.

MANAGEMENT DISCUSSION AND ANALYSIS

A detailed review of the operations, performance and future outlook of your Company and its businesses is given in the section titled "Management Discussion and Analysis", which forms part of this Report.

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, Practising 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)

Your Company is now a part of the Murugappa Group, which is known for its tradition of philanthropy and community service.

It may be noted that in view of the average net profits of the Company for past three financial years being negative, there was no statutory requirement to incur any CSR expenditure during the year under review. Accordingly, your Company has not incurred any CSR expenditure during the year under review.

However, your Company is committed towards inclusive growth and based on the recommendation of the Board-level CSR Committee; your Company will be identifying focus areas / CSR initiatives to be carried out in the coming financial years in order to have a maximum impact.

Details of the composition of the CSR Committee and CSR Policy of the Company are given in the Section titled ‘Annual Report on CSR initiatives for financial year 2021-22' in Annexure 2 of this Report.

REGISTRAR AND SHARE TRANSFER AGENT

Your Company has appointed Datamatics Business Solutions Limited (‘DBSL'), an entity which is registered with SEBI, as its Registrar and Share Transfer Agent. Contact details of DBSL are mentioned in the section titled "Report on Corporate Governance" of this Annual Report.

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 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 authorised 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 of the Company. ESOP 2021 is in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021.

During the year under review, your Company has granted 18,34,100 options to the eligible employees under ESOP 2021.

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 comprising 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 Company's operations. None of the Whistle Blowers was 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.

DIVIDEND DISTRIBUTION POLICY

Pursuant to Regulation 43A of the SEBI LODR, your Company has formulated a Dividend Distribution Policy. It is available on the website of the Company under: https://www.cgglobal.com/policy

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 2022.

SHARE CAPITAL

During the year under review, your Company has allotted equity shares on preferential allotment / private placement basis as follows:

a) On 5 July 2021, your Company allotted 1,38,45,000 equity shares to Standard Chartered Bank (Singapore) Limited on preferential allotment basis, for settlement of guarantee obligations of the Company under the Guarantee Obligations (SCB) Settlement Agreement.

b) On 11 February 2022, your Company allotted 9,00,00,000 equity shares to Tube Investments of India Limited ("TII") pursuant to conversion of 9,00,00,000 warrants by TII into equal number of equity shares, and receipt of the balance amount due on the warrants so exercised by them. Pursuant to the above conversion, the aggregate shareholding of TII has increased to 55.57% of the share capital of the Company. As on the date of this report, TII continues to hold the balance 8,52,33,645 warrants of the Company, which are exercisable on or before 25 May 2022.

Consequently, as on the date of this Report, the share capital of the Company is as follows:

• The authorised 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

`288,36,86,058/- (Rupees Two Hundred And Eighty Eight Crore Thirty Six Lakhs Eighty Six Thousand and Fifty Eight only) consisting of 144,18,43,029 equity shares of `2/- (Rupees two) each.

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

At the beginning of the financial year under review, the Company had 1,04,462 Global Depositary Receipts (GDRs). Pursuant to the approval of the Board of Directors on 5 February 2021, the trading of the GDRs of the Company on London Stock Exchange (‘LSE') was cancelled and the GDRs were delisted from LSE w.e.f. 24 May 2021. Company did not have any outstanding GDRs at the end of the financial year under review.

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 2022 is placed on the website of the Company and the same is available on the following link: https://www.cgglobal.com/financials

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)

The following entities had filed petitions under IBC in the previous year(s) in respect of amount dues to them. All their dues have since been paid, no-dues certificate obtained from them and consequently the petitions have been dismissed as withdrawn / in the process of being withdrawn:

- JMD Precision Equipments Private Limited

- ATO (I) Limited

- Permali Wallace Private Limited

- Hi-Tech Radiators Private Limited

- Cargill India Private Limited

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.

DIRECTORS' RESPONSIBILITY STATEMENT

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 2022 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 2022 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 Company's 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 the Company.

On behalf of the Board of Directors

Vellayan Subbiah

Chairman (DIN: 01138759)

ANNEXURE 1

Information pertaining to conservation of energy, technology absorption and foreign exchange earnings and outgo under Section 134 of the Companies Act, 2013 and rules made thereunder

1. ENERGY CONSERVATION MEASURES TAKEN

All the business units of the Company continued their efforts on conservation and optimal utilization of energy by improving operational efficiencies, minimizing consumption of natural resources and water while maximizing production volumes.

FHP unit replaced Higher HP drinking water pump with lower HP energy efficient pump with water level controller to optimize pump operation FHP unit installed one stop switch for all the lights and fans on assembly line, VFD for assembly conveyor belts and auto cut-off timer for feeder machines to switch off the machine during idle operation. LTM units 1 and 2 ensured optimum utilisation of melting furnace for die casting operation to reduce power consumption Stamping unit replaced old reciprocating compressor with VFD operated screw compressor for reducing power consumption and has installed online energy consumption monitoring system to check deviations for timely corrections

Initiatives like maintaining power factor above 0.95 resulted in reduction of energy cost Replacement of 30 industrial fans of 200W based on Induction motor technology with 85W BLDC motor based technology fans, resulted in good saving of energy consumption.

750 kVA Current Balance and Power Factor Correction (CBPFC) panel designed and developed for Composite Converter testing, in order to balance 3 Phase current at Grid Side (11 kV), which resulted in improving the power factor and reducing the reactive power consumption from the grid.

The Distribution Transformer Plant at Gwalior installed 35kW air compressor in place of 75kW for operation of heavy air consuming pneumatically operated equipment resulting in power saving of ~25% per month, and also implemented gas based heating system for oven. The Power Transformer plant at Bhopal installed timer on winding shop AC to ensure optimum use of AC, installed drive on another motor of cooling tower which is controlled by water temperature, installed VFD on 5T crane for LT movement for safety, replaced 35 street lights with LED lighting, Insulation of chilled water tank to restrict temperature loss. All these steps resulted in saving of 2700KWH per day

Completed conversion of high wattage conventional lighting to energy efficient LED lighting along with smart/intelligent lighting solutions resulting in 134KW reduction in lighting load.

Installation of 20HP VFD (AC Drive) along with PID Control Panel for MELCO Winding Machine Paper Preheating Air Handling Unit (AHU) and up-gradation of CVT Washing Station for Instrument and Transformer plant.

Rockwool hot insulation work turret tank of transformer oil filtration plant of 750kV EHV Lab.

Energy conservation of compressor through elimination of artificial demand, leakages, improving efficiency, condition monitoring of FRLs etc. (Optima Air Approach) in EHV & MV Switchgear Division.

Installation of 15HP VFDs (AC Drives) for 02 Roots Air Blowers of Sewage Treatment Plant for energy conservation in EHV & MV Switchgear Division.

Upgradation of chilled water system of Autoclaves & other process plants for Instrument Transformer and Bushing Plant.

Upgradation of Assembly Area Oven of EHV plant to reduce Heat Losses by installation of Thyristor along with PID Controller for efficient heating system (instead of On/Off Control)

Energy conservation for FY22 of Nashik Switchgear Plant is 2.50 Lakhs KWh with cost saving of `23.75 Lakhs.

2. ALTERNATE SOURCES OF ENERGY

Motors unit is harnessing around 25% of electricity requirement through the use of energy generated from roof top solar panels. Railways Business installed Roof top Solar Panels and is using green energy drive Under Power Purchase agreement, the Transformers Division carried out execution of Solar generation plant with capacity of 348KW for Distribution Transformer plant based at Gwalior. For FY22, 4.40 Lakhs solar units were generated from Solar plant and saving of `21.07 Lakhs were achieved. Under the ‘Solar as A Service' Model, execution of roof top solar panels (992kWp) for EHV and MV Switchgear plants based at Nashik were carried out. Achieved energy conservation of 12.49 Lakhs units and cost saving of ` 60.52 Lakhs.

3. CAPITAL INVESTMENT ON ENERGY CONSERVATION EQUIPMENT Industrial

Replacement of CFL office lamps with energy efficient LEDs Roof top solar panel installation at Stamping units at Goa and Ahmednagar

Replacement of motor generator based AC Traction motor Testing setup with Variac Transformer based setup resulting in reduction of 50% energy consumption in A.C traction motor testing

Changing the Alternator test setup from Direct current based to VFD based Alternating current resulting in a 35% saving in energy consumption in Traction Alternator testing.

Capital Investment of `5.78 Lakhs and 15 Lakhs was made in financial year 2021-22 by Distribution Transformer plants based at Gwalior and by EHV and MV Switchgear plants based at Nashik respectively

1. EFFORTS MADE TOWARDS TECHNOLOGY ABSORPTION

Motor Division and DAI is in the process of developing solution for EV application

Indigenously designed and developed 85W BLDC Technology based 24 inch Industrial fans. Developed Switch board cabinet for LHB AC coaches which operates on 3 Phase 750V AC, 50 Hz and consists of all power and control switchgear for coach lighting, Air conditioning, Pantry, Pump control, Sanitary system, Public Addressing system and Head on Generation (HOG) filters selection etc. Developed Switch board cabinet for LHB Garib Rath AC coaches which includes two cubicles underslung and on-board.

2. THE BENEFITS DERIVED LIKE PRODUCT IMPROVEMENT, COST REDUCTION PRODUCT DEVELOPMENT OR IMPORT SUBSTITUTION

Use of alternate grade of electric steel for cost optimization.

Lamination design optimization to improve utilization factor of steel sheet.

FHP Unit initiated the vendor development for Import substitution of mechanical switch LT Motors has completed its entire range development for IE4 DAI has gone ahead with digitization of online test reports which reduced the paper consumption of approx. 22.5 kg Per Month DAI launched new VSS Series up to 2.2 KW

Mainline Electric Multiple Unit application with On Board propulsion Electrics (MEMU-OB) is a complete solution to be offered to Indian Railways which comprises of Traction transformer, Traction converter, Auxiliary Power converter, Train control & management system and various other sub system components. Working on development of Composite Converter (CC) which is a hybrid product which comprises the features of both IGBT Power Converter & Hotel Load Converter (HLC).

3. IMPORTED TECHNOLOGY

The data for details of the technology imported is given in Table 1.

01 IMPORTED TECHNOLOGY

4. EXPENDITURE ON R&D

Details of the R&D expenditure is given in Table 2.

( in Rs.crore)

FOREIGN EXCHANGE EARNINGS AND OUTGO

The total foreign exchange earned and used by the Company during the year under review is given in

( in Rs.crore)

On behalf of the Board of Directors

Vellayan Subbiah

Chairman (DIN: 01138759)