Greaves Cotton Ltd Management Discussions

ECONOMIC REVIEW Global Economy

The global economy demonstrated strong resilience in 2023, gradually navigating through an uncertain environment. The global economy recovered from the after-effects of the pandemic, the Russia-Ukraine war, and a global energy crisis. Inflation began to stabilise after a period of disruptions, moving closer to target levels across the world in 2023.

Central banks raised interest rates to curb inflation during the year, however, the positive supply trends kept the global economy on a growth path. The global headline inflation, which stood at 6.8% in 2023, is expected to decline to 5.9% in 2024, and then to 4.5% in 2025. According to the International Monetary Fund (IMF), the global economy grew at a growth rate of 3.2% in 2023, with similar figures projected for 2024 and 2025. Geopolitical issues like the Red Sea crisis and Israel-Palestine tensions disrupted supply chains across the globe in 2023. Despite challenges like reduced productivity, higher borrowing costs, and reduced fiscal support, the global economy has shown remarkable ability to withstand such challenges and is poised for steady growth in the upcoming years.

Advanced economies played a pivotal role in sustaining global resilience during the year. Despite considerable monetary

tightening, they continued to benefit from steady employment growth and a revival in consumer confidence during 2023. Such trend provided crucial support to the global economy and increased the overall growth momentum. In the United States, growth exceeded pre-pandemic levels, indicating robust demand and robust economic fundamentals. The Euro Area is projected to grow steadily in 2024, even while dealing with ongoing tight monetary policies and high energy costs.

In 2023, despite geopolitical tensions, high public debt, and unstable inflation rates, emerging market and developing economies (EMDE) found new avenues for economic growth. The EMDEs capitalised on shifts in global supply chains and increased trade flows, which contributed to the future adaptability and growth. The EMDEs are expected to maintain steady growth in future, with an estimated rate of 4.3% for 2023 and 4.2% for both 2024 and 2025.

The outlook for the global economy has remained cautiously optimistic, with steady growth anticipated in the coming period as markets adapt and businesses embrace innovation and enhance flexibility. The countries around the world are expected to focus on medium-term fiscal consolidation and promote multilateral cooperation over the coming period. Such a strategy would aid in overcoming the current challenges and build a strong foundation for sustained economic growth and development.

Indian Economy

In recent years, the Indian economy has weathered global headwinds and emerged as a beacon of resilience. The countrys enhanced physical infrastructure, digital and payment technologies advancements, improved ease of doing business, higher labour force participation, and better quality of fiscal spending have all contributed to Indias impressive growth potential during FY 2023-24. The National Statistics Organisations (NSO) second advanced estimates reveal a robust 7.6% growth for the Indian economy in FY 2023-24, surpassing the 7.0% growth recorded in the previous financial year, a testament to the economys resilience.

Indias GDP Growth (%)

(Source: NSO estimates dated February 29, 2024

RBI (Reserve Bank of India) MPC (Monetary Policy Committee) report dated 8^th February 2024)

This growth momentum has been bolstered by positive macroeconomic indicators, improved labour market conditions, heightened urban demand, and increased government focus on capital expenditure in FY 2023-24. Notably, the Reserve Bank of Indias (RBI) Monetary Policy Committee (MPC) has been a rock of stability, maintaining a steady policy repo rate of 6.5% throughout FY 2023-24. This steadfast commitment to a stable economic environment from the RBIs MPC instils confidence in the economy. The RBI remains steadfast in keeping headline inflation at 4% and has estimated an inflation rate of 5.4% for FY 2023-24.

An increase in private capital expenditure has driven this positive sentiment for economic growth in the country. An increase in private capital expenditure, enhanced business sentiments, and the solid financial standing of banks and corporations have driven this positive sentiment for economic growth in the country. The RBI has also projected a GDP growth rate of 7% for FY 2024-25. The global trade landscape has shown signs of improvement, and the increased integration into global supply chains is also expected to boost net external demand in India. However, potential challenges loom ahead, including geopolitical tensions, fluctuations in international

financial markets, and geoeconomic fragmentation, which could threaten the overall economic outlook. Despite encountering challenges such as high-interest rates, fluctuations in commodity prices, and trade-restrictive measures, global trade has avenues for growth and adaptability.

COMPANY OVERVIEW About the Company

Greaves Cotton Limited (hereafter referred to as Greaves or GCL or the Company) is a leading diversified multi-product and multi-location engineering Company renowned for its rich legacy and resilient brand trust for over 163 years. Greaves is a leading name in providing Fuel-Agnostic Powertrain Solutions, E-Mobility, Aftermarket & Retail with a significant focus on customer-centricity and sustainability. Greaves operates across various sectors, including Automotive, Non-Automotive, Aftermarket, Retail, Electric Mobility, Technology, and Finance. Leveraging upon the Companys extensive history of engineering prowess, Greaves has embarked on purposeful endeavours to drive the advancement of clean technology solutions, emphasising electric mobility significantly. These efforts have positioned the Company as a comprehensive player within Indias mobility ecosystem. The Companys capabilities include in-house design, engineering, product development, manufacturing, retail and finance to support sustainable last-mile mobility initiatives.

The Companys retailing network comprised approximately 10,000 retailers and over 130 distributors. Moreover, the Company has established partnerships with more than - 20,000 mechanics nationwide in FY 2023-24. The Company delivers world-class products and solutions through its thirteen state-of-the-art manufacturing facilities across India.

Within the non-automotive domain, GCL offers a comprehensive range of products that covers gensets, agricultural machinery, and applications across marine and other industrial sectors. The Company has also taken strategic steps to grow its legacy business in automotive and non-automotive engines. In FY 2023-24, GCL announced its acquisition of a majority stake in Excel Controlinkage Pvt Limited (Excel Controlinkage), a leading Indian manufacturer of mechanical and electronic motion control systems. Excels products are exported to over 80 countries, strengthening the Companys global presence. By integrating Excel into the Companys operations, GCL aims to leverage synergies, enhance its capabilities, and explore new avenues for growth.

GCL has consistently supported the governments Make-In-India initiative, contributing significantly to nation-building by prioritising local production and sourcing. The Company is dedicated to transforming the sustainable, cleantech, and green mobility landscape through innovative technologies, aiming to benefit a billion lives by 2030. Additionally, the Company actively implements initiatives to reduce its carbon footprint and promote environmental preservation, underscoring its commitment to sustainable practices and its ambition to create a positive impact locally and globally.

Company Performance

Greaves continued to advance steadily with its ongoing initiative to construct a forward-thinking fuel-agnostic portfolio. This strategic endeavour is designed to gradually reduce reliance on demand for diesel engines, ensuring readiness for the future. GCL has expanded its ICE (internal combustion engine) and Genset portfolio by introducing greener fuel-agnostic variants capable of utilising CNG (Compressed Natural Gas), biodiesel, and ethanol-blended fuels. Overall, the favourable economic conditions in India, the expanding

global customer base, the diversity of platform technologies and application areas, and the esteemed Greaves brand instil optimism about the future of the Company.

During FY 2023-24, the synergistic collaboration with Excel Controlinkage has brought new capabilities and opened fresh avenues of growth for the Company. The integration with Excel has progressed to the next stage, marked by the onset of cross-selling products and services during the year under review. Excels new product line leverages GCLs expertise in precision machining, aiding in rapid business growth. It has even resulted in a significant rise in the Companys exports to the United States and the European Union during the year under review.

Greaves is strategically expanding its range of products by entering the fields of mechatronics and electronics. GCLs enduring success stems from its unwavering commitment to capability enhancement, its compelling value proposition, and its ability to meet the diverse needs of its customer base. Please refer to the notes in the standalone financial statements for details on significant changes in vital financial ratios and any change in return on net worth as of 31^st March 2024.

CONSOLIDATED FINANCIAL PERFORMANCE

During FY 2023-24, the Company recorded consolidated revenue from operations totalling ? 2,633.19 crores, representing a decrease from ? 2,699.45 crores reported in FY 2022-23. Similarly, the Company reported consolidated loss after taxes amounting to ? 367.27 crores, compared to ? 69.75 crores gained in FY 2022-23. The net exceptional expense stood at ? 334.83 crores for FY 2023-24, compared to ? 12.50 crores in FY 2022-23. As part of Greaves diversification strategy, new business initiatives contributed to 61% of the total consolidated revenue for FY 2023-24.

SEGMENTWISE BUSINESS OVERVIEW

GCLs core business segments include engineering and subdivisions into automotive, non-automotive, and international business segments.

ENGINEERING BUSINESS

Automotive Engines Industry Overview

In FY 2023-24, the L5-3W industry witnessed the implementation of new regulatory standards, specifically the Onboard Diagnostic Device (OBD)-IIA, as an imperative for implementing the Bharat Stage 6 (BS6) emission regulations. It signalled a positive industry outlook with robust demand across all 3W (Three-Wheeler) segments. The growth in rural infrastructure drove the need for affordable mass mobility solutions. The ICE 3W industry experienced a year-on-year increase of ~41%. At the same time, e-commerce strengthened its demand in the cargo segment. By the end of FY 2023-24, overall volumes for the L-3 and L-5 segments reached an all-time high.

Business Overview

In FY 2023-24, GCL introduced a fuel-agnostic powertrain solution that complies with the OBD-IIA standards for the 3W industry. This solution was well-received in the market, which helped the Company achieve a 32% volume growth in the diesel segment. GCL maintained its leadership position with a 53% market share, volume growth of 27% and revenue growth of 22% in the same fiscal year.

During the year under review, GCL began exporting Euro-V-compliant diesel engines for micro-car applications. The Company is currently investing in developing a diesel 3-wheeler powertrain solution that meets OBD-IIB norms. These norms are expected to come into effect from 1^st April 2025. The Company has also successfully developed a lightweight bi-fuel CNG-gasoline engine that is compliant with both OBD-IIA and OBD-IIB norms. This engine is ideal for cargo applications and aims to gain traction in new markets.

Market Overview and Outlook

In the fiscal year 2024, the automotive engine market saw a rise in the number of units sold, surpassing pre-COVID-19 volumes. This growth is expected to continue during the fiscal year 2024-25. In terms of fuel usage, compressed natural gas (CNG) has the largest market share at 63%, followed by diesel at 21%. Electric vehicles account for the remaining 16%. Overall, while there has been volume growth across all fuel types, expansion of the CNG network has led to an increase in the number of CNG-fuelled three-wheelers. In the future, the Total Cost of Ownership (TCO) and government policies will determine the relative market share of the three essential fuels that power L5-3Ws.

Risks & Concerns

Government policies, particularly restrictions on diesel, may impact demand for diesel vehicles within the ICE 3W segment, especially vehicles for cargo carriage.

Non-Automotive Engines

During FY 2023-24, the non-automotive engines division maintained its growth trajectory by adding new customers and new OEMs. The Companys primary focus was engaging with domestic and global customers in its B2B OEM business while actively working towards growing export share of revenues. The Company has expanded its footprint to include both B2B and B2C domains. The overall growth in the non-automotive segment includes key applications such as power solutions, industrial engines, small engines, and farm equipment, as well as exports to the USA, Europe, the Middle East, Africa, and SAARC countries.

Industry Overview

The demand for industrial engines has returned to pre-pandemic levels through growth in several application areas, such as auxiliary standby power, infrastructure, and agriculture, further facilitated by increased government spending in many sectors.

The Auxiliary Power & Industrial Engines sectors grew 8% in FY 2023-24. During fiscal year 2023-24, mechanisation of farming and construction also contributed to industry growth. Federal government initiatives, such as Atmanirbhar Bharat, have helped create new domestic and export markets, with the industry adopting and adapting to fuel-agnostic solutions encompassing fossil and green fuels. As a result, the industry is expected to sustain robust growth rates going forward.

India has been experiencing a significant shift from traditional fossil fuel-powered engines to electric motors and battery-powered equipment, particularly in the low-tonnage auto segments and low-capacity infrastructure equipment. However, the adoption of mechanisation in the countrys farm, construction, and marine sectors is still relatively low, with room for industry expansion. The "Make-in-India" initiative empowers local players in critical sectors like agriculture and construction, accelerating growth. The agricultural sector in India mainly comprises small-scale farmers who often struggle to adopt mechanisation due to fluctuating incomes. These farmers rely on government subsidies and schemes to acquire farm equipment.

Initiatives like Make-in-India have also spurred demand for engines used in fire-fighting pumps, inland waterways transportation, and marine applications and generally facilitated higher institutional sales. While demand has grown in the large-engine fishing segment within the marine applications category, small-boat fishing continues to face challenges due to environmental factors and subsidy-related issues.

Business Overview

The Company operates across multiple sectors, specialising in auxiliary power solutions, including Diesel Generator Sets with CPCB-II and CPCB4+ compliant offerings, low-voltage and high-voltage power solutions, and turnkey power project solutions. The Industrial Engines

portfolio, comprising 1.5 HP to 700 HP engines, also caters to the construction, marine, agriculture, fire-fighting, and defence sectors. Geographically, GCL caters to both domestic and international markets in the B2B and B2C space, providing customers with options such as different fuel types, cooling systems, revolutions-per- minute (RPM) ranges, and regulatory certifications.

In FY 2023-24, in the auxiliary power and industrial engine applications, GCL grew by 14%. This growth is mainly due to the addition of new applications and OEMs. The extension and implementation of the Central Pollution Control Board (CPCB) IV+ regulations have accelerated sales of CPCB II sets in the current year to support the completion of ongoing government projects before the new regulations become applicable.

GCL has expanded its reach in new domestic and international markets by implementing forward and backward integration strategies. As a result, the Company has generated promising revenues from newly acquired international accounts. The Company has also taken initiatives to obtain certifications, such as those for 3W/4W tractors. Moreover, with the completion of certifications for the new range of 3000 RPM engines, GCL is well-positioned for the global market. The Company plans to invest in expanding its engine range and modernise its product portfolio for both international and domestic markets. The emphasis will be on improving aesthetics, enhancing safety features, and producing quieter engines for enhanced comfort during operation.

Market Overview

According to market projections, specific sub-segments of the electric power generation market are expected to remain stagnant or decline. However, other sub-segments, such as high-horsepower (HHP) gensets, are expected to grow primarily because data centres require highly reliable backup power support.

Market demand and liquidity remained strong throughout FY 2023-24. This led to some segments undergoing price rationalisation and margin consolidation due to softening commodity prices during the year under review. Industry players increasingly prioritise key domestic segments, applications, and export opportunities, which have grown significantly in recent years. Additionally, with changes in emission norms, there is a shift towards electronic engines, resulting in greater acceptance of such engines in the industrial segment. The new emission regulations are expected to impact the market for end customers, resulting in a likely decrease in demand during the second and third quarters of FY 2024-25. However, demand is anticipated to gradually recover as customers adjust to new price levels, particularly with the smoother transition to CPCB IV+.

Risks and Concerns

The market is gradually moving away from diesel engines to alternate greener fuel options, including electrical power. In anticipation, GCL continues to focus its R&D efforts on modernising its current portfolio and building capabilities in fuel-agnostic engines and electric motor controller powertrains.

Outlook

The ongoing government expenditure on infrastructure projects promises exciting opportunities for market expansion and revenue generation for our Company. GCLs involvement in numerous government-driven and non-government development programmes, such as those in the power sector, inland waterways in the northeast, and shipbuilding OEM sectors, has placed us in an advantageous position to build on this trend. Sales of non-automotive small engines have shown steady growth over the past 3-4 years, and we remain committed to introducing new products and expanding our customer base. We believe our dedication to customer-led innovation and customer satisfaction will enable us to thrive in this dynamic market.

Excel Controlinkage Business Overview

Excel Controlinkage is a prominent player in the field of customised solutions that control the motion of moving vehicles. Their products include push-pull cables, gear-shift levers, rubber accessories, mechanical conduits, and electronic sensors for the automotive, marine, agricultural, and infrastructure and construction industries. Established in 1994, the Company has steadily expanded its operations and portfolio of tailor-made solutions. They have achieved several certifications, including IATF, ISO, and CE, highlighting their commitment to quality and international standards. Excel Controlinkage has a diverse customer base. Moreover, exports constitute nearly a third of annual revenues. Additionally, Excel Controlinkage was awarded "Best Exporter in the Region" by the Vidarbha Industries Association (VIA).

Market Overview

The demand for efficient and reliable solutions across several industries drives the market for control linkages, cable assemblies, and electronic components. Excel Controlinkage has benefited from this demand by collaborating with its customers during the vehicle design stage. It consistently delivers high-quality products that meet stringent industry standards within the customers targeted timelines. Excel Controlinkage has a strong presence in both domestic and international markets. The Company serves clients globally with products that comply with all relevant regional certification norms. For instance, products sold in the EU hold relevant EU certifications. With a customer base spread across over seventy-five countries, Excel Controlinkage is renowned for its consistency, high quality, and reliability. The Company is always seeking new opportunities to expand its global footprint.

Excel Controlinkage, being a market leader, understands the significance of keeping up with the latest trends and meeting customer demands. This inspires their commitment to discovering new markets and emerging opportunities. Excel Controlinkage has a substantial market share in its current product portfolio, which gives it an advantage to use its expertise and resources to explore new business opportunities and expand its reach in other areas such as electronic components, rod-type gear shift unit assembly, combined drive platforms for operator controls, and gear-shift unit assemblies for small commercial vehicles.

Risks & Concerns

Despite its success, Excel Controlinkage has several inherent risks. These include a highly competitive landscape wherein domestic and international players often offer similar products. Excel Controlinkage continues to innovate and differentiate its offerings to maintain pricing power. The Company has built robust contingency plans to mitigate supply chain disruptions due to geography-specific trade and non-tariff barriers, raw material shortages, and transportation delays, which can impact production schedules and delivery timelines. Adherence to international standards and certifications is crucial for export-oriented companies, and regulatory changes or failure to comply with standards could lead to penalties or loss of market access. Therefore, the Company complies with international standards and certifications. Fluctuations in currency exchange rates, trade policies, and economic conditions in target markets can affect export volumes and profitability. Therefore, the Company is always prepared to face economic volatility to sustain profitability. Technological advancements require continuous investment in research and development to keep pace with evolving customer demands. As a market leader, Excel Controlinkage constantly monitors industry trends and consumer preferences to address shifts that could impact market position proactively.

Outlook

Excel Controlinkage has a proven track record of market leadership in its chosen product segments. It boasts a deep understanding

of the dynamics affecting the industry segments it caters to. As a result, the Companys business outlook is optimistic. This is further reinforced by its brand reputation, loyal customer base, culture of continuous innovation, diverse product portfolio, and unwavering commitment to quality and agility. The Company is confident in its ability to navigate challenges and leverage future growth opportunities successfully. The Company aims to strengthen its presence in existing markets while exploring opportunities in emerging sectors.

International Business Industry Overview

The Company has a growing presence in the global market spanning several industry segments such as manufacturing, power plants, healthcare, infrastructure, agriculture, services, fire-fighting pump sets, and mobility with a range of products that includes engines, diesel generating sets, and spare parts.

Business Overview

The Company has experienced ongoing growth in the European and Middle Eastern markets. It has secured strategic accounts in its portfolio and expanded its distribution network in Africa.

Risks & Concerns

Many countries face currency-related challenges, adversely impacting companies purchasing power in these regions. In addition, geopolitical tensions could continue to disrupt the supply chain.

Business Performance

The Companys presence in the European market has been strengthened by acquiring new critical accounts in Turkey and France, with growth anticipated in these regions. GCLs Euro-V

engine for microcars is already operational in European markets, and it is progressing in developing Euro V+ engines for the EU market. The Companys engine component business with US-based customers has also been growing, with further gains expected in this product category.

The Company has increased its export revenue from Africa. With its DG sets, it has secured a leading position in Ethiopias banking sector, resulting in a twofold increase in its auxiliary power business. The Company has also expanded its operations in Uganda, Madagascar, Kenya, and Ethiopia. The Company is in the advanced stages of collaboration in West Africa, which presents new opportunities for its products in the region. Additionally, the Company has initiated auxiliary power solution sales to Qatar and Oman and is also exploring the genset and engine market in Saudi Arabia.

Outlook

The Companys export growth is built on strengthening current relationships, expanding the customer base, creating synergies with customers of Excel Controlinkage, modernising and expanding the product portfolio, and exploring inorganic options.

GREAVES RETAIL

Greaves Retail is amongst the top 3 aftermarket companies in Indias small commercial vehicle segment (3w, e3w). Greaves Retail operates as an asset-light business and provides a wide array of services that cover sales, service, and spare parts. Its vehicle lineup includes 3W (across all fuel types), E3W (in L3 & L5 categories), and small commercial vehicles. L5 refers to a three-wheeled motor vehicle with a speed of over 25 kilometres per hour (km/h) and a motor power of over 0.25 Kilowatt (kW). At the same time, L3 or e-carts have a speed below 25 km/h and a motor power under 2 kW.

AutoEVMart, Indias premier EV dealership network, specialises in the retail and distribution of E2W and E3W. Greaves Care provides a complete suite of post-warranty services for commercial vehicles. Both AutoEVMart and Greaves Care outlets operate under a franchise model.

Greaves Retail has intensely focused on Tier 2 and 3 cities and towns, particularly in the North and East regions.

In FY 2023-24, Greaves Retail broadened its product range to include the Greaves Power Raja Battery and various EV components for the aftermarket, explicitly targeting the e-rickshaw segment. These components include motors, controllers, chargers, DC-DC converters, and more. The Company introduced several digital and technological initiatives, such as the Greaves Care app for 3W and 2W customers, facilitating digital management of service bookings and providing timely notifications for service schedules. With the increasing population of EVs, particularly e-rickshaws, the Company is actively expanding its distribution and retailing network to meet growing demand.

Greaves Retail is investing in digitalising the supply chain spanning mechanics and retailers (including multi-brand service workshops - Greaves Care); Digital is enabling superior-end customer experience and supply chain efficiencies. The introduction of the new Greaves Upahar app, designed as a mechanic loyalty program, along with various other digital initiatives, signifies Greaves Retails commitment to enhancing end customer engagement and optimising supply chain operations. The Companys latest vertical, "EV Solutions", has also experienced rapid growth, with an expanding product portfolio covering E-rickshaw batteries and electric vehicle components.

By leveraging a dedicated customer care centre, the Company ensures quality and prompt delivery of its services. Greaves Retail maintains a team of trained field managers who cater to the needs of customers and channel partners. The expansion of offerings resulted in a surge in per-outlet revenue growth during FY 2023-24. Additionally, with the addition of 71 new touchpoints during the same period, the network continues to evolve and expand based on consumer insights, thereby extending access to customers across broader geographical regions.

GREAVES SPARES (previously called After Market Business)

Greaves Spares has been the preferred supplier of spares and services in vital automotive and non-automotive sectors. Their comprehensive offerings cover a broad spectrum of applications, including 2W, 3W, SCV, and EV solutions in the automotive realm, as well as auxiliary power equipment, farm equipment, railway, and institutional energy management services.

With a robust nationwide network, Greaves Spares ensures swift access and availability of high-quality spares, catering to diverse

needs nationwide. The Company has developed a wide range of products across segments with around 5,000+ SKUs (Stock Keeping Units) to ensure response to diverse parts requirements. GCLs extensive network of well-trained sales and service personnel provides localised support. It encourages meaningful engagement opportunities for channel partners. Greaves Spares empowers mechanics and channel partners, enhancing their capabilities and contributing to their livelihood improvement through regular training and skill development initiatives. This inclusive approach extends to drivers and micro-entrepreneurs in smaller towns and cities, facilitating education on products and technologies while distinguishing genuine parts from counterfeit alternatives.

With a diverse product range across various segments within the 2W and 3W vehicle categories, the Company has recently ventured into the EV space for 2W and 3W Driven by its ongoing commitment to upholding high standards of maintenance and delivery, the Company is rapidly evolving into a provider of premium batteries and other EV components. As a part of this dedication, GCL has introduced multi-brand components and diagnostic/service equipment.

The Company offers numerous opportunities for business engagement. It provides localised support through its extensive network of well-trained sales and service personnel. Regular training and skill-building initiatives for mechanics and channel partners are undertaken to equip them with the necessary skills to enhance their livelihoods and contribute to achieving enterprise objectives. This initiative extends to include drivers and micro-entrepreneurs in smaller towns and cities. The activities are geared towards educating and training customers on products and technologies while also helping to distinguish genuine parts from counterfeit ones.

GREAVES CARE

Greaves Retails service and spares (2S) division, known as Greaves Care, offers comprehensive servicing and spare parts solutions for 3-wheel ICE vehicles, E3W, and small commercial vehicles nationwide in India. This business segment caters to traditional ICE and E2W vehicles from various brands and is expanding to include commercial electric vehicles.

As of March 2024, Greaves Care had over 138 outlets nationwide. This extensive network has become a pivotal hub for spares consumption and sales, serving as a vital channel for Greaves Spares. This network not only enhances customers accessibility to maintenance and repair services but also reinforces Greaves Cares position as a leading service provider in the automotive industry.

Greaves Care delivers a wide array of vehicle repair and maintenance services, covering aspects such as bodywork, engine, gearbox, electrical systems, rubber components, batteries, and lubricants. Greaves Care aims to streamline the vehicle servicing market. These service outlets affiliated with Greaves Care gain access to a diverse range of multi-brand spare parts, including those for electric vehicles, and

specialised technical support to ensure quality service delivery and enhance customer retention and return on investment (ROI) for channel partners. This support is facilitated through continuous training on BS-VI standards, EVs, and below-the-line (BTL) campaigns.

Greaves Care, recognised as Indias premier franchisee-owned and franchisee-operated (FOFO) network, continues to strengthen its foothold in the market. The Company has expanded its presence in North and East India, with a strategic focus on accommodating the burgeoning e-rickshaw market in these regions.

Over time, Greaves Care has established itself as the preferred destination for customers, consistently broadening its range of services and network. The retrofitting sector, catering to 2W and 3W, is experiencing increasing interest, and Greaves Care is actively facilitating this aspect of the ecosystem. New initiatives are in the pipeline to promote electric vehicle adoption among Greaves Care owners, including establishing charging stations, Battery as a Service (BaaS), Park & Sell facilities, and more.

AutoEVMart

The Companys AutoEVMart brand is one of the few organised one-stop shops that provide comprehensive end-to-end sales, service, and spares (3S) solutions across multiple brands.

Greaves Retail primarily serves customers in tier 2/3/4 cities, including local transporters, owners of e-autorickshaws, and last-mile delivery partners who operate independently or as part of fleet services. Additionally, the Company ensures its outlets are staffed with well-trained personnel, providing customers with a seamless in-store experience. Furthermore, Greaves Retail facilitates end-to-end dealer onboarding and offers a dealer information portal. Its extensive presence in the market has enabled the Company to negotiate customised financing solutions with non-banking financial companies (NBFCs) and dealers both nationally and in key micro markets.

Market Overview

The rising demand for efficient last-mile mobility solutions across various powertrain options drives an increased need for high-quality spares and services. The growing customer preference for organised service providers and genuine parts presents a positive outlook for Greaves. Moreover, the replacement demand for BS4/BS6 vehicle parts in the aftermarket, coupled with the sustained use of diesel powertrains in specific mobility applications, is expected to drive steady growth in the consumption of diesel powertrain/vehicle parts. Despite this growth being slightly below anticipated in multi-brand parts retail opportunities, the Company remains committed to achieving substantial growth in this sector. Competitive products will support the growth trajectory, increased by a high-quality supplier base and a heightened focus on secondary retail sales management. Additional efforts to stimulate demand and drive further growth include dedicated teams engaging with secondary market stakeholders to prioritise purchasing and patronising the Companys products.

The Company has initiated digital interventions to enhance the customer experience, improving communication and responsiveness to the distribution channel. The Company is already involved in Annual Maintenance Contract (AMC) businesses with institutional customers and railways, with efforts to enhance Product Quality, Cost, and Delivery (PQCD) aspects of service to ensure superior customer satisfaction and revenue growth. In addition, the Company is exploring new growth avenues in energy management services for these customers, leveraging its expertise in Energy Management Systems and extensive service infrastructure nationwide. In the non-auto segment, growth in spares and services is anticipated through optimisation of the supply chain to meet the demand for older parts. The Company has also introduced multi-brand parts to support the expansion of reliable and genuine parts usage in this critical segment.

Key Developments in FY 2023-24

• The Company expanded its network by appointing new channel partners to enhance reach and retail performance in both automotive and non-automotive segments. Most of these partners are composite auto parts distributors and providers of sales and services for non-auto equipment. This expansion increased revenue, contributing approximately 8% of overall sales, particularly in the automotive segment. With a focus on multi-fuel gensets, the Company ensures seamless operations and maintenance to meet the rigorous demands of these sectors

• The acceptance of multi-brand parts for three-wheelers (3Ws) saw significant growth during the year, driven by special promotional efforts and engagement with mechanics and workshops. These initiatives led to a high level of acceptance among customers

• The Mechanic Loyalty Program (MLP) significantly improved throughout the year, enhancing its attractiveness and accessibility. The migration of MLP to an in-house tech platform now involves 20,000 mechanics. This led to an increase in secondary sales and improved acquisition and retention of new customers

• In addition, the Company acquired additional customers in the railway business, expanding its presence into five new railway zones. Similarly, it secured three new customer accounts in institutional businesses

• During FY 2023-24, Greaves Spares expanded its business operations significantly, focussing on spares distribution across various vehicle segments. This distribution network has spread over both domestic and international markets, including regions such as the South Asian Association for Regional Cooperation (SAARC), Africa, and Latin America (LATAM)

• Greaves Spares has forayed into new business areas by introducing energy management services (EMS). These services are tailored for the telecom industry and leverage battery technology to offer innovative energy use and sustainability solutions

Risks & Concerns

• The gradual decline in diesel parts sales, replaced by multi-brand electric parts, poses a potential challenge as it may limit growth opportunities from a historically extensive and profitable portfolio

• Tight liquidity conditions and reduced credit availability to channel partners could hamper growth prospects in the automotive business

• High volatility in oil prices and adverse fluctuations in currency rates may impact pricing dynamics, affecting topline revenue and profitability

• Channel profitability in the distribution business remains a challenge due to intense competition and lower prices set by competitors, which could diminish the purchasing power of channels and lead to a shift towards cheaper parts

• Low supplier leverage increases the risk of heightened competition in the multi-brand parts segment

• A growing reliance on stockists and wholesalers may pose risks of lower channel profitability and territorial conflicts among channels

• Issues have arisen regarding the evolving regulatory norms for EV batteries. GCLs partner OEMs compliance with subsidy claims related to E2W/E3W vehicles is also a concern for the sectors growth

• There is a need for solutions in EV charging infrastructure to support prolonged, frequent electric operations

• Addressing the risks associated with battery storage and handling

The Company is proactively addressing these risks through adjustments to its sales and marketing policies in collaboration with relevant stakeholders.

Outlook

The Company has faced challenges driven by high operating costs affecting repair cycles and parts retailing, exacerbated by price increases and a growing preference for quality spares. In anticipation of a decline in the share of diesel vehicles in vehicle parts, theres a focus on introducing multi-brand parts early to address potential adverse vehicle parts composition. There has been a strategic shift towards expanding spares and services to multi-brand offerings, especially in the non-auto segment, aiming to diversify revenue streams and reduce dependency on any single segment. Moreover, the Company is also exploring energy management products and services through strategic supplier partnerships to diversify its business portfolio. Despite potential margin contraction from higher sales of non-diesel portfolio items, the Company is actively driving cost reduction initiatives and strategic sourcing, involving cross-functional teams to ensure effective implementation and mitigate profitability impacts.

GREAVES ELECTRIC MOBILITY

Greaves Electric Mobility Private Limited (GEMPL) serves as the electric mobility arm of Greaves Cotton Limited. Over the past years, GEMPL has been dedicated to advancing EV technology and manufacturing electric vehicles. With a robust customer base exceeding 2,50,000, GEMPL is committed to establishing an affordable ecosystem, ensuring seamless, connected, clean last-mile mobility solutions nationwide.

Ampere, the flagship electric scooter brand under GEMPL, stands as one of the premier e-scooter brands in the country, having a substantial presence in both the B2C and B2B sectors. In FY 2023-24, GEMPL surpassed the 2,00,000 mark in secondary sales of its E2W brand, Ampere. Additionally, GEMPL offers a range of 3W tailored for passenger and cargo mobility segments through its subsidiaries.

Eltra Cargo 3W has made substantial strides, with a robust pipeline of over 30 operators across six major cities. GEMPL has strengthened its financial partnerships, enhancing accessibility to seamless financing options for its customers. The new Electric Cargo 3W, Greaves Eltra, was eligible for the FAME (Faster Adoption and Manufacturing of Hybrid & Electric Vehicles) subsidy and listed on the NAB portal during the year under review. The Company foresees strong retail demand for its E3W business, including Eltra cargo and passenger vehicles.

Two-Wheeler Industry Overview

The electric two-wheeler industry has experienced a highly promising period in FY 2023-24. Despite encountering several challenges stemming from the reduction in FAME subsidy and uncertainties surrounding the disbursement of due subsidy amounts to OEMs, the industry has demonstrated remarkable resilience. It achieved a growth rate exceeding 25% and surpassed the milestone of 9,00,000 units during the year. The growth has been driven by customers increasing awareness and acceptance of electric vehicles, their clear cost advantages, and continued government support through subsidies and tax benefits.

Business Overview

GCL acquired Greaves Electric Mobility Private Limited (formerly Ampere Vehicles Private Limited) during FY 2018-19 to revolutionise everyday transportation and boost sustainable mobility in India. The acquisition combined innovation, technology, and sustainability to develop accessible EVs for all segments of society.

GEMPL, currently ranked among the top five players in the industry, operates a dealer network of over 400 dealer touchpoints across India. The Company continuously innovates and has introduced cutting-edge mobility solutions to its customers. GEMPLs offerings range from slow-speed (Reo) to city-speed (Magnus, Zeal) to high-speed (Primus) scooters. The newly launched Ampere Nexus, Indias high-performance family scooter, embarked on a remarkable 10,200+ km journey from Kashmir to Kanyakumari, covering 115+ cities in 45+ days as part of pre-launch promotions, garnering vital positive feedback nationwide. This state-of-the-art, high-speed, fully connected scooter is developed in-house by the GEMPL design team and will be manufactured at their EV mega site in Ranipet.

Through its diverse array of E2W and E3W, GEMPL is dedicated to democratising intelligent and sustainable mobility solutions. During FY 2023-24, GEMPL strengthened its foothold in the E2W market with the recent introduction of Reo, a low-speed E2W model. In December 2023, GEMPL announced its foray into the global market of its first showroom in Nepal in collaboration with Kedia Organisation, extending its presence beyond Indias borders to cater to the evolving needs of the Nepalese market.

Although GEMPLs volumes and market position in FY 2023-24 were impacted by the removal of FAME subsidy eligibility and the consequent product price increase, the Company remains committed to consumer interests. GEMPL refunded to the MHI the entire subsidy reimbursed, along with the accrued interest, without prejudice to its legal rights.

Risks & Concerns

• Decreased subsidy levels effective 1^st April 2024, and uncertainty regarding subsidy availability beyond July 2024

• Reinstatement of FAME eligibility

• Escalating competitive environment due to multiple product launches and the entry of new competitors

• Ongoing prevalence of aggressive pricing strategies across the industry, leading to margin pressures for all players

Outlook

The EV industry in India is poised for significant expansion in the upcoming years, fuelled mainly by the surge in the adoption of electric two-wheelers. Government initiatives such as the Production-Linked Incentive (PLI) scheme and the Electric Mobility Promotion Scheme (EMPS) continue to support this growth momentum. As one of the leading players in the sector, holding a robust nationwide presence, GEMPL is strategically positioned to capitalise on this EV boom and sustain its upward trajectory in the foreseeable future.

3W - Bestway Agencies Private Limited (BAPL)/ ELE (Electric 3W Brand)

Industry Overview

E-rickshaws are experiencing a consistent surge in demand, emerging as an economical last-mile transportation option in various regions of India. The industry has witnessed a remarkable growth of over 40% in volumes in FY 2023-24. Passenger vehicles dominated this segment, accounting for over 90% of the total e-rickshaw volumes during the year. The sector is characterised by a high level of fragmentation, with a significant portion of the volumes attributed to small-scale operators and manufacturers.

Business Overview

ELE provides a wide array of e-rickshaws catering to passenger and cargo transportation needs. With a wide variety of products in

e-rickshaws and cargo, the brand caters to the distinct requirements of B2B enterprises, retail establishments, and individual purchasers. ELE has witnessed considerable growth in sales volumes and market reach throughout FY 2023-24, owing to its commitment to offering top-notch products at competitive prices. With meagre operating costs, these vehicles offer significant earning potential for operators, making ELE a dependable choice for individual buyers and retail customers.

Risks & Concerns

• Increasing regulations and restrictions on e-rickshaw operations in key markets to reduce traffic congestion

• The e-rickshaw market is predominantly unorganised, with customers showing significant sensitivity to pricing

• Many traditional L3 markets are moving away from Lead-Acid battery-powered vehicles and towards lithium-ion battery-powered vehicles. Our sales predominantly use lead-acid batteries, and the new vehicles require market acceptance

Outlook

The increasing pace of urbanisation is fuelling the demand for cost-effective last-mile transportation options. Given their attractive operational economics and accessible pricing, e-rickshaws are poised to meet a substantial portion of this increasing demand.

3W - MLR Industry Overview

In FY 2023-24, the three-wheeler industry witnessed a remarkable growth of over 50% on a YoY basis, surpassing 6,00,000 units in total. The passenger segment contributed to over 80% of the overall

volumes during the year. With government initiatives promoting fleet electrification and corporate commitments towards achieving net-zero emissions, there has been a substantial emphasis on electrifying the three-wheeler segment in recent times. The electric three-wheeler segment has witnessed a threefold increase in growth over FY 2022-23, fuelled by incentives under the FAME scheme and the total cost of ownership benefits rising from significantly lower operating costs.

Business Overview

MLR Auto Limited (MLR) is prominent in the L5 category of three-wheelers, catering to passenger and cargo segments. Their product lineup in ICE includes BS-VI compliant three-wheelers running on diesel and CNG, prominently featuring the Powered by Greaves branding. MLR has enhanced its electric portfolio by introducing Greaves ELTRA, an advanced electric three-wheeler offering passenger and cargo models. The Greaves ELTRA is engineered to deliver superior performance, cutting-edge technology, cost savings, increased earnings potential, and enhanced reliability. With a diversified range of products, including various segments and fuel types, MLR is well-positioned to sustain its growth momentum.

Risks & Concerns

• Subsidy levels for electric three-wheelers will decrease beginning 1^st April 2024, coupled with uncertainty regarding subsidy availability beyond July 2024

• Rising competitive pressure in the electric vehicle market due to the entrance of established players and new competitors

Outlook

Driven by accessible financing options and a surge in demand for CNG-powered and electric three-wheelers for shared mobility and last-mile delivery purposes, the industry is poised for robust growth in FY 2024-25. In addition, the electric segment is anticipated to expand its market share due to its advantageous operating cost economics.

GROWTH BUSINESS

GREAVES FINANCE LIMITED

Business Overview

The Company ventured into retail financing via its wholly-owned subsidiary, Greaves Finance Limited (GFL); GFL provides financing for E2W through its 100% EV-focussed lending platform ev.fin, launched in June 2023.

In FY 2023-24, GFL has taken significant strides in its business updates, fortifying its presence as a preferred financial partner in the rapidly expanding E2W market. The Company extends its reach by providing E2W financing for eight OEMs, thus contributing to accelerating electric vehicle adoption on a broader scale. GFLs market penetration has experienced a substantial boost due to its quick turnaround time and competitive pricing strategies.

GFL has implemented a lending stack, enabling loan approvals in 3 minutes, enhancing efficiency and customer convenience. In August 2023, GFL announced its partnership with Ather Energy, Indias leading E2W manufacturer, to provide Ather Energys customers with exclusive access to a wide range of customised financing solutions tailored to their individual needs and preferences. To further enhance its market presence, the Company has initiated a co-lending partnership with Muthoot Capital Services Limited for financing electric two-wheelers as of February 2024.

During the year, GFL has undergone a comprehensive transformation, redirecting its focus towards EV financing and reflecting its commitment to sustainable mobility. Embracing a digital-first approach, the Company has revamped the consumer journey to ensure seamless interactions and transactions. Introducing "evfin", an innovative platform tailored for electric vehicle financing, marks a significant milestone, offering customers easy access to customised financing solutions. Moreover, GFL has pioneered innovative lifecycle services to expedite the adoption of sustainable mobility solutions.

GFL has introduced an end-to-end platform for E2W financing, enabling consumers, dealers, and OEM/channel partners to undergo a seamless digital journey, resulting in quicker credit assessment, fulfilment, and disbursement. The Company takes pride in its robust backend credit operations, technology-driven assessment processes, competitive pricing, stringent portfolio monitoring mechanisms, and risk-mitigation initiatives.

Further, to leverage its market position in the lending business to increase insurance penetration in the country and provide much-needed financial security to its existing and new customers from the lending business, the Company registered and licensed itself as a corporate agent to undertake Composite Corporate Insurance Agency business.

GFL intends to expand its operations and retail distribution network to accelerate growth in the E2W portfolio across India. Additionally, the Company plans to initiate retail financing for multiple E2W brands through its expanded retail distribution network across various states. This initiative aligns with the long-term strategic goal of promoting the widespread adoption of electric mobility nationwide.

Risks & Concerns

• The EV industry is in its developmental stage, marked by uncertainties around resale value, battery life cycle, and realisable value, posing stakeholder challenges

• In retail financing, intense competition from large banks and NBFCs heightens the cost of customer acquisition, necessitating innovative strategies and excellent customer service for success

Outlook

The adoption of electric vehicles is on the rise, aided by government subsidies that support their usage. This surge in demand is expected to continue, driven by increasing awareness of environmental concerns and the benefits of EVs. Despite this growth, the penetration of finance in EVs remains lower compared to internal combustion engine (ICE) vehicles, but this gap is anticipated to narrow rapidly over time. Leveraging its competitive advantage in digitalisation and technology-driven processes, the Company intends to capitalise on this trend by expanding into new territories and partnering with additional OEMs. In addition, the Company aims to explore cross-selling opportunities to increase its growth trajectory further.

GREAVES TECHNOLOGIES LIMITED

Business Overview

Greaves Technologies Limited (GTL) has emerged as a trusted full-service engineering R&D solutions provider, collaborating with industry giants like Stellantis (FCA & PSA) and DICV to drive innovation and enhance quality, cost-efficiency, and speed. A significant milestone in this journey was the establishment of the Daimler (DICV) "Variant Factory" in June 2022, aimed at producing various commercial vehicle models while adhering to Daimlers CVDS 4.1 process. Since its inception, the team has successfully delivered over 43 variants, strengthening the partnership between GTL and DICV. The recognition of GTLs innovative initiatives led to winning the prestigious award in the "Innovation" category at the Daimler Truck annual supplier meet in 2023.

GTL helps enterprises accelerate their transition towards sustainable mobility solutions, enabling them to embrace change swiftly. It offers comprehensive services, including design, virtual engineering, and Artificial Intelligence (AI)-powered digitalisation, guiding sustainable mobility projects from inception to completion.

The Computer-Aided Engineering/Virtual Environment (CAE/VE) business unit of GTL has been instrumental in supporting esteemed customers in the automotive, heavy equipment, and agriculture sectors, offering a wide range of engineering solutions.

Centre of Excellence (COE) was established to provide IT services to a global provider of digital solutions for Oil and Gas companies.

With seamless integration as a dynamic, innovative, and high-performing team, GTL ensures a strong focus on quality, efficient process management, and timely, cost-effective delivery. Leveraging its established platform in India, GTL is expanding its global presence through strategic alliances and partnerships, amplifying its impact and influence in the sustainable mobility sector worldwide.

Market Overview

The estimated global market size for Engineering Services Outsourcing (ESO) was USD 1.8 trillion in 2022 and is projected to reach USD 6.6 trillion by 2030, growing at a compound annual growth rate (CAGR) of 33.2%. Various engineering systems, including CAE, electronic design, automation software, computer-aided manufacturing, and computer-aided design and software, drove the expansion of the engineering services outsourcing market. The Companys key customers in India include the automotive sector, EVs, GCCs, large B2B & B2C corporates, government entities, and the public sector.

The primary sectors driving global consumption of engineering services outsourcing include automotive, manufacturing, heavy machinery, healthcare, oil and gas, and Environmental, Social, and Governance (ESG). Key areas of focus for IT technology spending include Cloud, Big Data Analytics (BDA), AI/Machine Learning/ Natural Language Processing (ML/NLP), Internet of Things/Edge Computing (IoT/Edge Computing), and Cybersecurity.

Risks & Concerns

• High pace of technological change

• Cybersecurity risks

• Intense competition for talent

• Generative AI

• Rapidly changing business models Outlook

The Company aims to empower organisations with comprehensive engineering R&D solutions to enhance quality, reduce costs, and accelerate market speed. To create intellectual property (IP) led differentiators, dynamic automation tools are required to reduce development time and enhance speed to market. At Greaves Technologies, innovation is essential for maintaining a competitive edge in the dynamic automotive industry.

The increasing demand for efficient solutions in the automotive and manufacturing sectors is propelling the growth of engineering R&D services. With automotive firms seeking to achieve more within shrinking R&D budgets, outsourcing becomes a strategic imperative. GTL is actively enhancing its capabilities to address the evolving needs of the industry, positioning itself to seize emerging opportunities and drive substantial growth in the future.

In todays globalised business landscape, GTL stands out for its ability to blend onshore and offshore operations seamlessly. Amid macroeconomic challenges, GCCs emerge as a solution, enabling companies to scale systems with agility and flexibility. By leveraging its expertise in the Indian GCC landscape, GTL offers a range of solutions and services for establishing GCCs. Through a flexible, subscription-based engagement model, GTL minimises traditional risks associated with global team formation and management, allowing organisations to focus on long-term success and growth while driving cost efficiencies. The Company aims to cultivate a strong brand identity, "GREAVES", recognised and admired by employees and clients worldwide.

INTERNAL CONTROL FRAMEWORK

The Company has developed a systematic internal control mechanism customised to suit the extent and magnitude of its operations and the unique characteristics of its industry. Its primary objective is safeguarding assets and ensuring optimal productivity and efficiency across all levels. The internal control systems and benchmarks adhere to the Committee of Sponsoring Organisations of the Treadway Commission (COSO) Internal Control-Integrated Framework (2013) in alignment with globally accepted standards. This internal financial framework effectively manages the financial systems throughout the organisation. Regular reviews are conducted, and necessary modifications are made to keep the systems updated with evolving norms.

The internal controls are designed to achieve several objectives:

• Vigilantly monitor systems to prevent fraud and errors

• Maintaining accurate and complete accounting records across all business segments

• Timely preparation of reliable financial information

• Enhance efficiency and effectiveness of operations

• Safeguard assets against potential risks

An audit firm conducts internal audits, engaging in comprehensive discussions with management regarding observations and recommendations. The internal audit team also conducts independent reviews to reinforce control measures further and incorporate environmental protection measures. The Company follows all applicable standard operating procedures (SOPs), policies, and guidelines. Regular monitoring and self-assessment procedures are being implemented, mandating employees to consistently adhere to the Code of Conduct.

A comprehensive whistle-blower policy is in place to detect and address any misconduct, unethical behaviour, or conflicts of interest. A self-monitoring mechanism promotes adherence to integrity and transparency principles. The Internal Auditors and Corporate Assurance Department monitor internal control systems. At the same time, the Corporate Assurance Department implements corrective actions and business process improvements. Moreover, they ensure compliance with all governing laws and statutory requirements. During FY 2023-24, key controls underwent thorough testing, and appropriate measures were taken to address deviations from standard practices. According to the Statutory Auditors, the Company possesses, in all material respects, an adequate internal financial control system over financial reporting, which was operating effectively as of 31^st March 2024.

INFORMATION TECHNOLOGY

The Company views Information Technology (IT) as a vital component of its growth strategy, deeply intertwined and harmonised with all business operations. The entire framework of business processes and regulations relies on the Enterprise Resource Planning (ERP) system, which has developed a peripheral application ecosystem. The Company prioritises its IT systems security, stability, and scalability to ensure efficient delivery to internal users, customers, and vendors. As a part of the Companys ERP roadmap, Greaves transitioned to the SAP-owned HANA database to enhance data retrieval performance within the Companys applications. The migration of the Employee self-service software (ESS) portal to an Advanced Business Application Programming (ABAP)-based stack further enhances performance and user experience while leveraging advanced features.

Greaves has undertaken significant IT initiatives to enhance its infrastructure and security to guarantee the uninterrupted

availability of IT services, including those for mobile devices. The Firewall consolidation onto a single platform streamlines management and enhances security across locations. The upgrades to Product Lifecycle Management (PLM) infrastructure with the latest version, Creo 9, and design workstation refresh facilitate innovation in product design, workflow, and approval processes within the systems and are seamlessly integrated with the Companys authorisation matrix, resulting in enhanced productivity and faster turnaround times.

Below are some of the digital and security-related initiatives undertaken by the Company:

• Greaves has implemented Industry 4.0 initiatives for digital manufacturing, such as an IoT production tracker, auto data recording and automatic end-of-line inspection station for efficiency in manufacturing engines & components

• Greaves implemented the Project System Module to oversee the execution of Turnkey Project-based business scenarios, focussing on activity-wise profitability monitoring

• The OEM warranty settlement process was digitalised through a workflow approval system integrated with SAP, streamlining the process for enhanced efficiency

• The Company digitised the Indirect Tax compliance processes using the SAP-certified E&Y DigiGST Solution, ensuring adherence to regulations while optimising operational efficiency

• To strengthen its Internal Financial Controls (IFC), the Company established a workflow-based internal approval mechanism for various Statement of Accounts (SoA) policies

• As part of the Companys digital initiative within the Greaves Spares Business, GCL implemented auto-provisioning and disbursement of various promotional sales schemes through SAP. This initiative aims to benefit GCLs channel network (distributors/mechanics) by providing better visibility into turnover targets

SUSTAINABILITY DRIVES

Over time, sustainability has gained significance for all stakeholders, including individuals, businesses, and governments. The Company acknowledges its environmental impact and remains committed to continuous efforts for a sustainable future. GCLs business model prioritises sustainable innovation, demonstrating its steadfast dedication to sustainability.

The Companys commitment to sustainability includes ensuring that current needs are fulfilled without compromising the ability of future generations to meet their own. The Company has adopted sustainability measures across three primary pillars - social, environmental, and governance. These core components efficiently ensure future sustainability, balancing business growth and shareholder value.

• Solar power plants installed at the Companys plants have collectively generated around 50 lakh units of electricity, further advancing its efforts to use renewable energy and promote environmental sustainability

• In April 2023, a 700 KW solar power plant was installed at the Industrial Engines Unit in Chikalthana Aurangabad. It is projected to generate approx. 10 lakh units of electricity, contributing significantly to renewable energy usage

• Implementing digitalisation initiatives for SOPs, check sheets, and reports on the shop floor has led to the adoption of paperless operations, enhancing efficiency and reducing environmental impact

• The Company is actively reducing its carbon footprint and greenhouse gas emissions by recycling and reusing aluminium scrap briquettes, collaborating with suppliers to promote recycling practices and minimise energy consumption in the aluminium heating and extraction processes

• Cold testing of industrial engines has been adopted to save electricity and diesel consumption, which would otherwise be utilised during hot testing

• Various product and process re-engineering projects undertaken at the shop floor have reduced consumption of consumables, energy savings, and minimised waste generation, showcasing the Companys commitment to sustainable practices

• In addition, the Company led numerous tree plantation initiatives, strengthening green coverage and promoting carbon absorption. These endeavours also improved air quality and biodiversity and highlighted the Companys commitment to environmental stewardship

ENVIRONMENT

The Companys dedication to environmental stewardship is evident across all operational facets, including manufacturing processes and technological advancements. The Company has been certified under ISO 14001:2015 and upholds various environmental standards. The Company recycles and reuses all water for gardening purposes and has introduced a kitchen garden concept at its Aurangabad plant, emphasising water conservation. On World Environment Day, the Company initiated a tree-planting campaign themed Each One Plant One.

Moreover, the Company implemented product and process re-engineering projects on the shop floor, reducing consumable usage, energy savings, and waste reduction. To mitigate carbon footprint and greenhouse gas emissions, the Company promotes the recycling and reuse of aluminium scrap briquettes, collaborating with suppliers to minimise energy consumption in the aluminium heating and extraction processes. Moreover, by adopting cold testing methods instead of hot testing for industrial engines, the Company conserves electricity and diesel usage, furthering its commitment to sustainable practices.

SOCIAL

The Company is dedicated to enhancing society and the environment while promoting inclusive community development. With certifications in ISO 9001, IATF 16949, EMS 14001:2015, and ISO 45001:2018, it underlines its commitment to upholding quality and safety standards. In addition, the Company has implemented numerous tree plantation programms, significantly contributing to expanding green cover, carbon sequestration efforts, and improving air quality and biodiversity.

GOVERNANCE

The Board assumes a central role in governance, serving as the ultimate decision-making authority. The Board comprises qualified individuals possessing diverse skills, expertise, and competencies deemed essential for the Companys effective functioning. Key areas of expertise identified include Global Economics, ESG Proficiency, Finance Expertise, Sales, Marketing and Commercial, Merger and Acquisitions, Manufacturing, Quality and Supply Chain, Corporate Governance, Technology, and People Management.

With a steadfast commitment to ethical conduct and compliance, the Company conducts its business as per applicable laws, regulations, and the highest standards of business ethics. Its Code of Conduct develops a culture of transparency, honesty, and accountability. It provides guidance for recognising and addressing ethical issues and provisions for reporting unethical conduct.

The Company upholds the principles of Pancha Tatva, comprising transparency, integrity, responsibility, passion for excellence, and respect as fundamental values guiding its operations. There have been no reported instances of unfair trade practices, irresponsible

advertising, or anti-competitive behaviour. All members of the Audit Committee and the Nomination and Remuneration Committee hold non-executive positions.

Behaviour and Business Ethics: The Company upholds the highest standards of business ethics, adhering to applicable laws, rules, and regulations. Its Code of Conduct aims to promote a culture of transparency, honesty, and accountability in guiding, recognising, and addressing ethical issues. In addition, it includes provisions for reporting unethical conduct and ensuring integrity throughout operations.

Governance Oversight Framework: The Board is central to the Companys governance, serving as the decision-making authority. All Audit, Nomination, and Remuneration Committee members are non-executive, ensuring independent oversight. The Companys commitment to good corporate governance is demonstrated through the effective Independent Board, separation of supervisory roles from executive management, and establishment of committees to monitor critical areas.

Board Skill Map Matrix: The Board consists of qualified members possessing relevant skills, expertise, and competence necessary for effective functioning. Identified skills and competencies include Global Economics, Mergers and Acquisitions, Sales Marketing and Commercial, Business Exposure, Manufacturing, Quality and Supply Chain, Technology, Corporate Governance, Financial Expertise, ESG Proficiency, and People Management, ensuring comprehensive oversight and strategic decision-making.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company is committed to improving lives and strengthening communities through its CSR project, centring on skill-building and employability enhancement. This initiative aims to generate a positive societal impact and instigate meaningful change. The primary objective is to empower youth from underprivileged backgrounds with technical skills, enabling them to secure employment and support their families, thereby promoting inclusive growth.

The Companys flagship program, DEEP (Development, Education, Empowerment, and Progress), focusses on upskilling and training youths from socio-economically deprived families for better employability and earning opportunities. Under this initiative, the Company has successfully trained over 150 youths, equipping them with the necessary skills to secure jobs in the rapidly expanding manufacturing sector.

During the year, the Company, under the aegis of the National Employability Enhancement Mission (NEEM), trained 48 youths from underprivileged families in and around Aurangabad District this year. The Company intends to provide various upskilling work and empower the local rural communities to get employment and support their families. Under the DEEP Upskilling project, through its local NGO partner, Yuvashakti Foundation, the Company ensures the development, education, empowerment, and progress of underprivileged families in various villages in Aurangabad District. This initiative has also promoted diversity, with over 45 girls trained and upskilled to become

The DEEP trainees undergo a comprehensive training module focussing on various key areas:

• They learn to identify different parts of automotive engines and understand their functions and importance

• They are equipped with the skills to assemble and disassemble engines independently

• They develop the ability to plan and organise work requirements and deliverables within specified timeframes

• They are taught to use resources responsibly, ensuring efficient utilisation

• They also learn to interact and communicate effectively with cross-functional teams, promoting collaboration and productivity

HUMAN RESOURCES

The Company emphasises human capital as a critical pillar of organisational growth. According to the Company, it encourages its employees to embrace new technology and be future-ready to adapt to changing times. The HR function constantly takes action to align employee goals with Company goals through scalable programs, with a strong focus on Diversity, Inclusion, and Belonging. A total of 8,000-man hours of training have been conducted to motivate employees. Leaders in the organisation strive to make all employees feel valued, heard, respected, and empowered. The Company has been certified as a "Great Place to Work", making it an "Employer of Choice", for the third consecutive year.

Exemplary employees who surpass expectations are acknowledged and rewarded in accordance with the Pancha Tatva values. High-growth potential employees are identified and further encouraged to outperform. Future-aligned skills training continues to enable employees to build competencies for future growth.

As of 31^st March 2024, the payroll count of permanent employees stood at 990. The past year was satisfactory regarding the Companys industrial relations with its employees and trade unions. The Company has outlined some unique initiatives undertaken during the year to motivate employees and give them a stronger sense of belonging.

Employee Wellness

Employee wellness stands as a crucial element within any organisation. For FY 2023-24, the Company arranged a series of webinars and activities dedicated to enhancing employee well-being. These included sessions on liver disorder prevention, workplace ergonomics, financial well-being, laughter yoga, summer care, in-house health checkups, CPR training, New Year resolutions, cancer awareness, and Zumba Garba. The Company introduced a doctor consultation initiative, providing round-the-clock access to medical advice through video and chat services. Health insurance

awareness programmes were conducted physically and through webinars and under the "know your policy" initiative to ensure employees remain informed about their health insurance benefits.

Family Day Celebrations

The Greaves Family Day celebration at the Aurangabad factory in February 2024 was a resounding success. The event, attended by employees and their families, showcased the spirit of the Greaves family. Dr. Arup Basu, Managing Director graced the occasion as the Guest of Honour. The festivities included cultural performances, games, and activities for families. Special recognitions were given and various awards were presented to Greaves Stars based on employee voting. The event highlighted the strong bonds within the Greaves family and served as a testament to the strength of the work family.

A similar celebration was held at the Pune location in June 2023. Over three hundred Greaves family members enjoyed various activities, including leadership addresses, music, singing, dancing, and performances by Greaves kids. The purpose of Greaves Family Day is to unite employees and their families and express gratitude for their support and contribution to Greaves growth.

Shaabash Initiative

The Shaabash initiative applauded the academic achievements of employees children who excelled in their 10^th and 12^th board examinations. This gesture uplifted employee morale and highlighted the importance of work-life balance. It strengthened the bond between employees and management, promoting a positive work atmosphere.

Festival Celebrations

Festival celebrations at Greaves promote inclusion and understanding among colleagues, allowing them to bond over shared experiences and create lasting memories. These celebrations strengthen connections and boost a sense of belonging within the team.

Skillverse and Greaves Learning Portal

Skillverse is a structured framework designed to organise and categorise skills, facilitating targeted skill development for employees. The Greaves Learning Portal centralises all learning resources, allowing employees to access relevant content for their professional growth.