Our Company sold 1,03,290 tractors during the year under review as against 94,228 tractors sold during the last financial year.

The brief highlights of the Company's performance (Consolidated) for the financial year ended March 31,2023 are:

• Total income of the Company for FY 2023 stood at '8,709.62 crores ('7,456.45 crores in FY 2022).

• Profit from operations before Interest, Depreciation, Exceptional Items & Tax stood at '1,050.97 crores.

• Profit from operations before Tax (PBT) stood at '834.59 crores. Net profit for the period stood at '636.65 crores.

The details on the individual businesses of the Company are provided in the Management Discussion & Analysis section provided in this Annual Report.

Management Discussion & Analysis

In terms of the provisions of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred as the “SEBI Listing Regulations"), the Management Discussion and Analysis is set out in this Annual

Report and provides a detailed analysis on the performance of individual businesses and their outlook.

Dividend

Based on the Company's performance, your Directors are pleased to recommend, for approval of the members, Dividend @70% per share of face value of C10/- each (i.e. C7.00 per share) for the financial year ended March 31, 2023, payable on all outstanding shares except on the equity shares held by ‘Escorts Benefit & Welfare Trust'.

The dividend payout is subject to the approval of members at the ensuing Annual General Meeting (AGM).

The dividend payout for the period under review has been formulated in accordance with shareholders' aspirations and the Company's Dividend Distribution Policy to pay sustainable dividend linked to long-term growth objectives of the Company to be met by internal cash accruals.

The record date for the purpose of dividend will be June 30, 2023.

The dividend distribution policy is available on our website at https://www.escortsgroup.com/investors/governance.

Transfer to Reserves

During the FY ended March 31, 2023, no amount (previous year: C0.07 crores on account of vested employees stock options lapsed) transferred to general reserves.

Employee Stock Option Scheme (ESOS)

The Escorts Employees Stock Option Scheme (“Scheme”) is in line with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (“SBEB Regulations”) and there were no material changes to the scheme during the financial year 2022-23.

The Scheme is being implemented in accordance with the SBEB Regulations and the resolution(s) passed by the members. The

Secretarial Auditors Certificate would be available during the Annual General Meeting for inspection by the members. The details as required to be disclosed under the Act and/ or SBEB Regulations would be available on the Company's website at www.escortsgroup.com.

Change in Share Capital

During the FY 2022-23, there is no change in the share capital of the Company. However, the members of the Company had approved, the ‘scheme of reduction of share capital' (‘Second Capital Reduction'), vide postal ballot notice dated July 6, 2022 for reduction of 2,14,42,343 Equity Shares of nominal value C10/- each of the Company held by the Escorts Benefits and Welfare Trust (EBWT) without payment of any consideration, and the same has been filed before Hon'ble National Company Law Tribunal (NCLT), Chandigarh Bench, however, the order of the NCLT awaited.

Merger & Amalgamation

Based on recommendations of the Audit Committee and the Committee of Independent Directors, the Board of Directors, in their meeting held on September 15, 2022, has approved the scheme of amalgamation (the “Scheme”) under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013 and the rules framed thereunder. The Scheme, inter-alia, provides for amalgamation of Escorts Kubota India Private Limited, joint venture company of the Company, and Kubota Agricultural Machinery India Private Limited, joint venture company of the Company, with the Company. The same has been filed with BSE Limited and National Stock Exchange of India Limited on September 26, 2022 and September 27, 2022, respectively to get no objection letters as required under Regulation 37 of the SEBI Listing Regulations.

Utilisation of Funds

The reporting of the utilisation of funds, as on March 31,2023, raised through the preferential allotments are as follows:

Directors and Key Managerial Personnel

In accordance with the provisions of the Companies Act, 2013 (hereinafter referred as “the Act”) and Articles of Association of the Company, Ms. Nitasha Nanda (DIN: 00032660) and Mr. Yuji Tomiyama (DIN: 08779472), Directors of the Company, retire by rotation at the ensuing Annual General Meeting (AGM) and being eligible, offer themselves for re-appointment.

The shareholders at the AGM held on July 14, 2022 had appointed Mr. Vimal Bhandari, Ms. Reema Rameshchandra Nanavaty and Mr. Manish Sharma as Independent Directors and Mr. Yasukazu Kamada as non-executive nominee director and approved the appointment of Mr. Ravindra Chandra Bhargava and Mr. Kenichiro Toyofuku as Independent Directors and Mr. Shiro Watanabe as non-executive nominee director. Further, the shareholders of the Company also approved

an Independent Director in 2015 and completing the second term which will be ending in the ensuing AGM.

Further, Mr. Shailendra Agarwal has resigned from the position of directorship effective from February 3, 2023, due to his health condition.

The Company has received declarations from all Independent Directors of the Company that they meet the criteria of independence as prescribed under sub-section (6) of Section 149 of the Act and under Regulations 16 and 25 of SEBI Listing Regulations and there has been no change in the circumstances affecting their status as Independent Directors of the Company. The Company has also received a declaration from all the Independent Directors that they have registered their names in the Independent Director data bank and pass/ exempt requisite proficiency test conducted by Ministry of Corporate Affairs.

The policy on Appointment and Removal of Director's and Members of Senior Management was reviewed and amended by the Board at its meeting held on May 10, 2023. The said policy is annexed as Annexure - A and forms an integral part of this Report.

Annual performance evaluation of the Board, its committees and individual directors (including Independent Directors) pursuant to the provisions of the Act and the Corporate Governance requirements under SEBI Listing Regulations have been carried out. In accordance with the Policy, and the process, given in Report on Corporate Governance, was followed by the Board for evaluation of its own performance and its committees and individual directors including Independent Directors.

The remuneration policy for directors, key managerial personnel, senior management and other employees was reviewed and amended by the Board at its meeting held on May 10, 2023. The said policy is annexed as Annexure - B and forms an integral part of this Report.

The Company has devised a process whereby various presentations/ programs are being conducted to familiarise the directors with various developments at Industry level, new business initiatives and organisation strategies etc. The details of programme for familiarisation of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company - www.escortsgroup.com.

The Company recognises and embraces the importance of a diverse board in its success. Your Company believes that a truly diverse board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience,

cultural and geographical background, age, ethnicity, race and gender, which will help it retain its competitive advantage.

The brief resumes and other details relating to the directors who are proposed to be appointed/ re-appointed, as required to be disclosed as per the provisions of the SEBI Listing Regulations/ Secretarial Standard are given in the Annexure to the Notice of the 77th AGM.

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

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under Section 134(3)(m) of the Act read with Companies (Accounts) Rules, 2014 are provided as Annexure - C and forms an integral part of this Report.

Corporate Governance

Corporate Governance is about maximising shareholders value, ethically and sustainably. At Escorts Kubota the goal of corporate governance is to ensure fairness for every stakeholder. Your Company believes that strong corporate governance is critical to enhancing and retaining investor trust. Your Company also endeavours to enhance long term shareholder value and respect minority rights in all its business decisions.

Your Company reaffirms its commitment to the good corporate governance practices and has adopted the Code of Business Conduct which has set out the systems, processes and policies conforming to international standards. Pursuant to Regulation 34(3) of the SEBI Listing Regulations, Corporate Governance Report and a Certificate regarding compliance of conditions of Corporate Governance from Company Secretary in Practice are enclosed as Annexure - D and forms an integral part of this Report.

Corporate Social Responsibility (CSR)

The key philosophy of all CSR initiatives of the Company is to make CSR a key business process for sustainable development of the society. The initiatives aim at enhancing welfare measures of the society based on the immediate and long term social and environmental consequence of its activities. The Company intends to undertake other need-based initiatives in compliance with Schedule VII of the Act.

The CSR Policy and Impact Assessment Report may be accessed on the Company's website www.escortsgroup. com under Investors Information Section. During the year, the Company has spent H17.30 crores. {Including amount transferred to unspent CSR account (refer note 29 of the standalone financial statements)}.

The Annual Report on CSR activities is enclosed as Annexure - E and forms an integral part of this Report.

Consolidated Financial Statements

The Consolidated Financial Statements have been prepared in accordance with the Act and Indian Accounting Standard (IND AS) - 110 applicable to the Consolidated Financial Statements read with IND AS-28 on Accounting for Investments in Associates and IND AS-31 on Financial Reporting of Interests in Joint Ventures issued by The Institute of Chartered Accountants of India. The Audited Consolidated Financial Statements along with the Auditors' Report thereon are annexed with this Report.

Subsidiaries, Joint Ventures and Associate Companies

In accordance with Section 129(3) of the Companies Act, 2013, a statement containing salient features of the financial statements of the Subsidiary, Associates and Joint Venture Companies in Form AOC-1 is provided in this Report. The statement also provides details of performance and financial position of each of the Subsidiary, Associates and Joint Venture Companies. Audited Financial Statements together with related information and other reports of each of the subsidiary companies have also been placed on the website of the Company at https://www.escortsaroup.com/investors/annual-reports.

The details of the above investments/ disinvestment are provided in the note 7 of the notes to accounts of Standalone Financial Statements of the Company.

Contracts and Arrangements with Related Parties

All contracts/ arrangements/ transactions entered by the Company during the financial year with related parties were in the ordinary course of business and on an arm's length

html. The Consolidated Financial Statements presented by the Company include the financial results of its subsidiaries, associate and joint venture companies.

In terms of the Company's Policy on determining “material subsidiary”, during the financial year ended March 31, 2023, there is no material subsidiary of the Company whose income exceeds 10% of the consolidated income of the Company in the immediately preceding financial year.

During the FY ended on March 31, 2023, the Company has sold its entire 49% stake i.e. 7,27,65,000 equity shares of H10/-each of Tadano Escorts India Private Limited (TEIPL), a joint venture between the Company and Tadano Limited, Japan (Tadano), to Tadano, at H0.01 Cr. on November 9, 2022.

Further, the Company has also acquired the entire equity share capital of Escorts Corp Solutions Limited (ECSL), apart from the existing equity shares already held by the Company. Consequently, ECSL has become the wholly owned subsidiary of the Company w.e.f. January 18, 2023.

The complete list of subsidiaries, joint ventures and associate companies as on March 31,2023, in terms of the Act and IND-AS is provided herein below: basis. During the year, the Company had not entered into any contract/ arrangement/ transaction with related parties which could be considered material in accordance with the policy of the Company on the materiality of related party transactions.

The particulars of contracts or arrangements, with related parties referred to in Section 188(1) of the Act, in the prescribed Form AOC-2, is appended as Annexure - F to this report.

The Policy on materiality of related party transactions and dealing with related party transactions may be accessed on the Company's website at https://www.escortsgroup.com/ investors/governance.html.

Your Directors draw attention of the members to note 45 in the notes to accounts in the Standalone Financial Statements and to note 44 in the notes to accounts in the Consolidated Financial Statements which sets out related party disclosures.

Auditors and Auditors’ Report Statutory Auditors

Pursuant to the provisions of Section 139 of the Act read with rules thereunder, the shareholders of the Company at the 76th AGM held on July 14, 2022 had re-appointed M/s. Walker Chandiok & Co LLP, Chartered Accountants, New Delhi (Firm Registration No. 001076N/ N500013) as Statutory Auditors of the Company for a period of 5 years i.e. upto the conclusion of AGM to be held in the year 2027.

The comments given by M/s. Walker Chandiok & Co LLP, Chartered Accountants, Statutory Auditors, in their report read together with notes to accounts for the FY ended March 31, 2023 are self-explanatory and hence, do not call for any further explanations or comments under Section 134 of the Act.

Pursuant to provisions of the Section 143(12) of the Companies Act, 2013 neither the Statutory Auditors nor Secretarial Auditors nor Cost Auditors have reported any incident of fraud to the Audit Committee or the Board during the year under review.

Cost Auditors

Pursuant to the Section 148 of the Act read with rules thereunder, your Company is required to maintain the cost records and the said cost records are required to be audited.

The Company is maintaining all the aforesaid cost records.

The Board of Directors, on the recommendation of Audit Committee, has re-appointed M/s. Ramanath Iyer and Co., Cost Accountants (Firm Registration No. 000019), as Cost Auditors of the Company for conducting the audit of cost records for the FY 2023-24.

The due date of filing the Cost Audit Report for the year ended on March 31, 2022 was September 30, 2022 and the same had been filed on August 23, 2022.

Secretarial Auditors

The Board had appointed M/s. Jayant Gupta and Associates, Practicing Company Secretaries, as Secretarial Auditors to conduct secretarial audit of the Company for the FY 2022-23.

The Secretarial Audit Report of the Company as prescribed under Section 204 of the Act is annexed herewith as Annexure - G and forms an integral part of this Report.

The Secretarial Audit Report does not contain any qualification, reservation and adverse remarks and the comments given by the Secretarial Auditors in their report are self-explanatory and hence, do not call for any further explanations or comments under Section 204(3) of the Act.

The Board has also re-appointed M/s. Jayant Gupta and Associates, Practicing Company Secretaries to conduct secretarial audit of the Company for the FY 2023-24.

Risk Management

The Risk Management Committee of the Board has been entrusted with the responsibility to assist the Board in (a) Overseeing and approving the Company's enterprise wide risk management framework; and (b) Overseeing that all the risks that the organisation faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational and other risks have been identified and assessed and there is an adequate risk management infrastructure in place capable of addressing those risks.

The Company has laid down a Risk Management Policy and the same is available on the website of the Company at https:// wwwÝescortsaroupÝcom/investors/aovernanceÝhtml.

The details of constitution of Risk Management Committee of the Company is provided in Report on Corporate Governance at Annexure - D of the Directors' Report.

Internal Financial Control and its Adequacy

The Board has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to Company's policies, the safeguarding of its assets, the prevention and detection of fraud, error reporting mechanisms, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

The Company has in place adequate internal financial controls for ensuring the orderly and efficient conduct of its business.

During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

DisclosuresMeetings of the Board

Six meetings of the Board of Directors were held during the year. For further details, please refer Report on Corporate Governance annexed as Annexure - D to this Report.

Audit Committee

For constitution and other details of the Audit Committee, please refer Report on Corporate Governance annexed as Annexure - D to this Report.

All the recommendations made by the Audit Committee were accepted by the Board.

CSR Committee

For constitution and other details of the CSR Committee, please refer Report on Corporate Governance annexed as Annexure - D to this Report.

Annual Return

The Annual Return for Financial Year 2022-23 is available on the Company's website at https://www.escortsgroup.com/ other-documents.

Vigil Mechanism

The Company has adopted a Whistle Blower Policy establishing vigil mechanism for Directors and Employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company's Code of Conduct. The mechanism provides for adequate safeguards against victimisation of effected Director(s) and Employee(s). In exceptional cases, Directors and Employees have direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.

The Whistle Blower Policy is available on Company's website at https://www.escortsgroup.com/investors/governance.html.

Registrar and Share Transfer Agent

The Share Transfer and related activities are being carried out by M/s. KFin Technologies Limited (earlier KFin Technologies Private Limited), Registrar and Share Transfer Agent from the following address:

M/s. KFin Technologies Limited Selenium Building, Tower B, Plot No. 31-32,

Financial District, Nanakramguda, Serilingampally, Hyderabad, Rangareddy, Telangana - 500032

Particulars of Loans given, Investments made, Guarantees given and Securities provided

A statement regarding Loans/ Guarantees given and Investments covered under the provisions of the Section 186 of the Act is made in the notes to the financial statement.

Particulars of Employees and related disclosures

In terms of provisions of Section 197(12) of the Act, read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names and other particulars of the employees drawing remuneration in excess of the prescribed limits are available with the Company Secretary.

In terms of the first proviso to Section 136(1) of the Act, the Annual Report excluding the aforesaid information is being sent to the members of the Company. Any member interested in obtaining such particulars may write to the Company Secretary of the Company and the same will be furnished on request.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed as Annexure - H and forms an integral part of this Report.

Public Deposits

The Company has not accepted/ renewed any Fixed Deposit during the financial year under review and as such no amount of principal or interest was outstanding as of the Balance Sheet date.

Investor Education and Protection Fund (IEPF)

Pursuant to the applicable provisions of the Act, read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (‘the Rules'), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF established by the Central Government, after the completion of seven years. Accordingly, the Company has transferred H16.06 lakhs, pertaining to unclaimed dividend, during the period under review, to IEPF.

Further, according to the rules, the shares in respect of which dividend has not been paid or claimed by the shareholders for seven consecutive years or more shall also be transferred to the demat account created by the IEPF Authority. Accordingly, the Company has transferred 38,732 shares, during the period under review, to IEPF. The detailed information is available at our website www.escortsgroup.com.

As on March 31, 2023, no unclaimed deposits are pending which required to be transferred to IEPF.

Credit Rating

The present credit rating of the Company is as under:

CRISIL Limited and ICRA Limited granted long term rating as “AA with stable outlook” and Short-Term rating as “A1 ”

Material Changes and Commitment affecting the financial position

There are no material changes affecting the financial position of the Company subsequent to the closure of the FY 2023 till the date of this report.

Prevention of Sexual Harassment

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on Prevention, Prohibition and Redressal of Sexual Harassment at Workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules thereunder for prevention and redressal of complaints of sexual harassment at workplace. The Company is committed to provide equal opportunities without regard to their race, caste, sex, religion, colour, nationality, disability, etc. All women associates (permanent, temporary, contractual and trainees) as well as any women visiting the Company's office premises or women service providers are covered under this Policy. Though the Company's policy is gender neutral. All employees are treated with dignity with a view to maintain a work environment free of sexual harassment whether physical, verbal or psychological.

The Company has also complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Your directors further state that during the year under review, there were two cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the same have now been resolved.

Human Resources Management

Our professionals are our most important assets. We are committed to hiring and retaining the best talent being among the industry's leading employers. For this, we focus on promoting a collaborative, transparent and participative organisation culture, and rewarding merit and sustain high performance. Our human resources management focuses on

Directors’ Responsibility Statement

Pursuant to the requirement under Section 134(5) of the Act, with respect to Directors' Responsibility Statement, your Directors, to the best of their knowledge and ability, hereby confirm that:

(i) i n the preparation of the annual accounts for the year ended March 31, 2023, the applicable accounting standards read with requirements set out under Schedule III to the Act, have been followed along with proper explanation relating to material departures;

(ii) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2023 and of the profit of the Company for the year ended on that date;

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

(iv) the Directors have prepared the annual accounts for financial year ended March 31, 2023 on a ‘going concern' basis;

(v) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

(vi) t he Directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

General

Your Directors state that no disclosure or reporting is required in respect of the following items as there were no transactions on these items during the year under review:

1. Issue of equity shares with differential rights as to dividend, voting or otherwise.

2. Issue of shares (including sweat equity shares) to employees of the Company under any scheme save and except ESOS referred to in this Report.

3. Neither the Managing Director nor the Whole-time Directors of the Company receive any remuneration or commission from any of its subsidiaries.

4. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future. However, members attention is drawn to note 32 in the notes to accounts in the Standalone Financial Statements and to note 33 in the notes to accounts in the Consolidated Financial Statements which sets out information on Commitments and Contingencies.

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

Acknowledgement

Your Directors would like to express their sincere appreciation of the positive co-operation received from the Central Government, the Government of Haryana and Karnataka, Financial Institutions and the Company's Bankers, Customers, Dealers and all other business associates.

The Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers, workers, employee unions and staff of the Company resulting in the successful performance of the Company during the year.

The Board also takes this opportunity to express its deep gratitude for the continued co-operation and support received from its valued shareholders.