1. The board is hereby pleased to present its report for the financial year ended March 31,2024.

(Rs. in lakhs)

3.1. Standalone and Consolidated Financial Statements for the financial year 2023-24 are prepared in compliance with the Companies Act, 2013, Indian Accounting Standards ('IND-AS') and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and are forming part of the Annual Report.

3.2. Statement in Form AOC-1 containing salient features of the financial statements of the subsidiary and joint venture companies, as required under Rule 5 of the Companies (Accounts) Rules, 2014, are annexed in Annexure - 1.

4.1. During the financial year under consideration, there was no change in the nature of the business of the Company.

5. There were no material changes and / or commitments affecting the financial position of your Company between April 01, 2024 and the date of this report.

6.1. During the year under review, the Company has not transferred any amount to the Reserves.

7.1. No company has become or ceased to be a subsidiary, joint venture or associate company during the year under consideration.

7.2. Report on performance of subsidiary and joint venture companies together with business details is given in Management Discussion and Analysis forming part of this report and is annexed to this report as Annexure-2.

7.3. Audited Annual Financial Statements of subsidiary and joint venture companies are disclosed on website of the Company and may be accessed through the following web link https://www.isgec.com/aboutus- subsidiaries-annual-reports-investor.php.

7.4. Hard copies of these financial statements are kept open for inspection by the Members at the Registered Office of your Company on all days except Saturday, Sunday and Public Holidays up to the date of ensuing Annual General Meeting i.e., August 28, 2024 between 11:00 a.m. to 5:00 p.m. as required under Section 136 of the Companies Act, 2013. Any member desirous of obtaining a copy of the said financial statements may write to the Company at its Registered Office or Corporate Office.

8.1. The statement containing details of Loans given, Investments made, Guarantees given, or Securities provided under Section 186 of the Companies Act, 2013 is annexed to this report as Annexure-3.

9.1. The Company has a Policy on Materiality of Related Party Transactions and on dealing with Related Party Transactions, in accordance with the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. This Policy is disclosed on the website of the company and may be accessed through the following web link https://www.isgec.com/pdf/PolicyonMaterialityof- RelatedPartyTransactionsandonDealingwithRelated- PartyTransactions1822020.pdf.

9.2. During the financial year under consideration, all contracts / transactions entered into by the Company with related parties were in the ordinary course of business and on arm's length basis. The Company has not entered into any contract / arrangement / transaction with related party(ies) which may be termed as material in nature and not executed in ordinary course of business and not on arm's length basis. Hence, details are not required to be furnished in Form AOC-2.

9.3. The Company took necessary approval from the Audit Committee before entering into related party transaction(s) as required under the provisions of the Companies Act, 2013 read with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Your Directors are pleased to recommend a final dividend of T 4/- per equity share of T 1 each. The dividend, if approved and declared in the forthcoming Annual General Meeting, would result in a total outflow of T 29,41,18,040 (Rupees Twenty Nine Crore Forty One Lakh Eighteen Thousand and Forty only).

10.2.1. The Company has transferred the unpaid or unclaimed dividends (Interim and Final) for past years to the unclaimed dividend accounts of the respective years and the details of the same are uploaded on the website of the Company. Details of unpaid or unclaimed dividend may be accessed through the following web link https://www.isgec. com/unclaimed-dividend-investor.php.

10.3.1. Details of unclaimed dividends transferred into Investor Education and Protection Fund Authority, during the financial year 2023-24, are as under:

Amount in T

10.3.2. The Company has transferred the unpaid or unclaimed Dividend for the financial year 2015-16 and financial year 2016-17 to the Investor Education and Protection Fund Authority on September 20, 2023 and February 28, 2024 respectively.

During the financial year 2023-24, the Company has transferred 21,150 equity shares to the Investor Education and Protection Fund Authority.

10.5.1. In compliance with Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has Dividend Distribution Policy in place. This policy is disclosed on the website of the Company and may be accessed through the following web link https://www.isgec.com/pdf/ Dividend-Distribution-Policy-1219.pdf.

11.1. As at March 31, 2024, the Authorized Share Capital was T 8,50,00,000 divided into 8,50,00,000 equity shares of T 1/- each and Issued, Subscribed and Paid-up Share Capital was T 7,35,29,510 divided into 7,35,29,510 equity shares of T 1/- each;

11.2. All issued equity shares in the capital of the Company are fully paid-up;

11.3. During the financial year 2023-24, no change has taken place in authorized, issued, subscribed and paid-up share capital of the Company;

11.4. The Company has only one class of shares i.e., equity shares;

11.5. The Company has not issued any kind of debt instrument (Convertible / Non-convertible) or any convertible instruments during the financial year under review.

12.1. The Company has obtained credit rating for various fund based and / or non-fund based facilities from ICRA Ltd. The information on Credit Rating is tabulated as under:

13.1.1. Mr. Ranjit Puri, Non-Executive Director is liable to retire by rotation at the ensuing Annual General Meeting and being eligible, seeks re-appointment.

13.1.2. Based on the recommendation of the Nomination and Remuneration Committee, the Board recommends his re-appointment for consideration by the members at ensuing Annual General Meeting.

13.1.3. Brief details of Mr. Ranjit Puri are disclosed separately in the Notice of Annual General Meeting, in compliance with the provisions of Secretarial Standard-2 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

13.2.1. Ms. Rashi Sikka (DIN: 00320145) was appointed as an Independent Director on the Board of the Company for a period of three (03) years with effect from May 28, 2022. The tenure of her appointment is due to expire on May 27, 2025.

13.2.2. Based on the recommendation of the Nomination and Remuneration Committee, the Board approved re-appointment of Ms. Rashi Sikka as an Independent Director for second consecutive term of five (05) years with effect from May 27, 2025.

13.2.3. Her re-appointment is subject to approval of shareholders by way of passing Special Resolution in this regard. Accordingly, this matter with suitable resolution is proposed in the Notice of Annual General Meeting.

13.2.4. Brief details of Ms. Rashi Sikka are disclosed separately in the Notice of Annual General Meeting, in compliance with the provisions of Secretarial Standard-2 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

13.3. The Directors of the Company have also made required disclosures / confirmations under Section 164, 184 and other applicable provisions of the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. None of the Directors of the Company are disqualified to act as director on the Board of the Company.

13.4.1. In addition to the disclosures mentioned in Para 13.3 above, all Independent Directors have furnished declarations to the fact that they meet the criteria of Independence as laid down under

Section 149(6) of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014.

13.4.2. In the opinion of the Board, the Independent Directors possess requisite qualification, experience and expertise (including the online proficiency self-assessment test) and hold highest standard of integrity. They also fulfil the conditions as specified under the provisions of the Companies Act, 2013 and the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and are Independent of the management.

13.5.1. There has been no change in Key Managerial Personnel during the financial year 2023-24.

14.1. The Nomination and Remuneration Committee formulated the criteria for determining qualifications, positive attributes and independence of a director and recommended to the Board, a policy relating to the remuneration for the Key Managerial Personnel and other employees. While formulating the policy, the Committee has taken into account:-

i. that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors of the quality required to run the Company successfully;

ii. that relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

iii. that remuneration to Directors, Key Managerial Personnel and Senior Management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.

14.2. As per requirement of Section 178 of the Companies Act, 2013 read with Regulation 19 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company's Nomination and Remuneration Policy for Directors, Key Managerial Personnel, Senior Management and other employees of the Company is disclosed on the website of the Company and may accessed at the following web link https://www. isgec.com/pdf/NRC-policy.pdf.

15.1. During the financial year 2023-24, your Company has not accepted any deposits from the public falling within the ambit of Section 73 of the Companies Act, 2013.

16.1. In terms of Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management

and Administration) Rules, 2014, the Annual Return of the Company is available on the website of the Company and may be accessed through the following web link https://www.isgec.com/aboutus- financial-annual-return.php.

17.1. The Company is committed to adhere to the Corporate Governance requirements as stipulated under the Companies Act, 2013 read with the rules and regulations issued by the Securities and Exchange Board of India. Report on Corporate Governance for the financial year under review, as stipulated under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, is annexed to this report as Annexure - 4.

18.1. Composition of the Board and various committees of the Board including numbers of meetings held during the financial year 2023-24 and brief description of services, wherever required, is set out in the Corporate Governance Report, which forms part of this report.

19.1. Five (05) Board Meetings were held during the financial year ended March 31, 2024. Dates of the Board Meetings and attendance of the directors therein are disclosed in para 2.9 of the Corporate Governance Report, which is part of this report.

20.1. During the year under review, a separate meeting of Independent Directors of the Company was held on March 18, 2024 to consider:

I. the Performance of Non-Independent Directors and the Board as a whole;

II. the Performance of the Chairman of the Company, taking into account the views of Executive Directors and Non-Executive Directors; and

III. assess the quality, quantity and timeliness of flow of information between the Company's Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

21.1. The Board has carried out the annual performance evaluation of the directors individually including the Independent Directors, the Board as a whole and its committees and the Chairman, by assessment through a detailed questionnaire completed by individual directors.

21.2. Independent Directors have also evaluated the performance of Non-independent directors, the Board as a whole and the Chairman at a separate meeting of Independent Directors.

22.1. The Board has framed Vigil Mechanism/Whistle Blower Policy for Directors, Stakeholders, Individual Employees and their Representative Bodies in accordance with the Companies Act, 2013 read with the Securities and Exchange Board India (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015. The Vigil Mechanism Policy / Whistle Blower Policy is disclosed on the website of the Company and may be accessed through the following web link https://www.isgec.com/pdf/ VigilMechanismWhistleBlowerPolicy-10.06.2021.pdf.

23.1. Your Directors hereby confirm that:

a. In the preparation of the Annual Accounts for the financial year 2023-24, the applicable Accounting Standards have been followed and there are no material departures;

b. The Directors have selected such accounting policies with the concurrence of the Statutory Auditors and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for the financial year;

c. The Directors have taken proper and sufficient care, to the best of their knowledge and ability, for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013. They confirm that there are adequate systems and controls for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d. The Directors have prepared the Annual Accounts on a going concern basis;

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

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

24.1.1. M/s. SCV & Co. LLP, Chartered Accountants, having Firm Registration No. 000235N/N500089, were appointed as Statutory Auditors for a period of 05 years from the conclusion of 89^th Annual General Meeting until the conclusion of 94^th Annual General Meeting to be held in the year 2027.

They have confirmed their eligibility and independence to continue as Statutory Auditors for financial year 2024-25.

The Report of Statutory Auditors on Audited Annual Financial Statements does not contain any qualification(s), reservation(s) or adverse remark(s) or disclaimer, which calls for any comment(s) from the Board of Directors.

24.1.3. The details of total fees paid to the Statutory Auditors for rendering services to the Company and its subsidiaries are set out in the Corporate Governance Report.

The Auditors have not reported any incidence of fraud to the Audit Committee or the Board of Directors of the Company.

In the opinion of Statutory Auditors, the Company has, in all material respects, an adequate internal financial control system over financial reporting and such internal financial control systems over financial reporting were operating effectively as at March 31, 2024. Reference may be made to "Annexure- B" of Independent Auditors' Report.

24.2.1. The Board of Directors has appointed M/s Pramod Kothari & Co., Company Secretaries, as Secretarial Auditors to conduct the audit of secretarial records for financial year 2023-24.

24.2.2. The Secretarial Auditors Report does not contain any qualification(s), reservation(s) or adverse remark(s) and is annexed to this report as

24.2.3. The Secretarial Audit Report of the material wholly owned subsidiary i.e., Saraswati Sugar Mills Limited, is annexed to this report as Annexure- 5. This report also does not contain any qualification(s), reservation(s) or adverse remark(s).

24.3.1. The Cost Audit Report of last preceding financial year does not contain any qualification(s), reservation(s) or adverse remark(s) or disclaimer.

24.3.2. The Board of Directors had appointed M/s. Gopinathan Mohandas & Co., Cost Accountants (Firm Registration Number: 101499) as Cost Auditors to conduct the audit of the Cost Accounting records of the Company for the financial year 2023-24.

24.3.3. On account of unfortunate demise of Mr. Gopinathan Mohandas, proprietor of M/s. Gopinathan Mohandas & Co., Cost Accountants, the Board of Directors appointed M/s. Neeraj Sharma & Co., Cost Accountants (Firm Registration Number: 100466) as Cost Auditors for the financial year 2023-24, to fill the casual vacancy.

24.3.4. The Board of Directors of the Company have appointed M/s. Neeraj Sharma & Co., Cost Accountants (Firm Registration Number: 100466)

as Cost Auditors for the financial year 2024-25, on a fee of Rs. 1,75,000 which is subject to the approval of shareholders of the Company at ensuing Annual General Meeting.

The Company has obtained Annual Secretarial Compliance Report for the financial year 2023-24 from a Company Secretary in Practice. The report does not contain any qualification(s), reservation(s), adverse remark(s) or disclaimer.

25.1. The statement of disclosure of remuneration as required under Section 197 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is annexed as Annexure- 6.

25.2. Certain details with respect to the employees who are in receipt of remuneration of not less than One Crore and Two Lakh Rupees throughout the financial year or Eight Lakh and Fifty Thousand Rupees per month during any part of the year, is not annexed with the Board's Report. Such details are available for inspection by any member at the registered office of the Company during working hours, 21 days before the date of the Annual General Meeting, on all days except Saturday, Sunday and Public holidays between 11:00 a.m. to 05:00 p.m.

26.1. The Business Responsibility andSustainability Report for the period under consideration as required under Regulation 34(2)(f) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, is disclosed on website of the Company and may be accessed through the web link https://www.isgec.com/pdf/ BusinessResponsibilityandSustainabilityReport.pdf

27.1. The information on Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and Outgo, is given in Management Discussion and Analysis forming part of this report is annexed to this report as Annexure-2.

28.1. Detailed information on Audit Committee covering composition, meetings and brief terms of reference is disclosed in Corporate Governance Report in terms of requirement of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015. Corporate Governance Report forms part of this report and is annexed to this report as Annexure-4. Detailed information is not given in the Board's Report to avoid duplication of information.

29.1. The Company has in place a Corporate Social Responsibility Committee in conformity with the provisions of Section 135 of the Companies Act, 2013 read with the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

29.2. Composition of Corporate Social Responsibility Committee and attendance of the Members at the meeting held during the financial year 2023-24 is given below:

Mr. Sachin Saluja, Company Secretary & Compliance Officer of the Company acts as Secretary to Corporate Social Responsibility Committee.

29.3. The Company has a policy on Corporate Social Responsibility, which is disclosed on the website of the Company and may be accessed through the following web link https://www.isgec.com/aboutus- csr-policy.php.

29.4. Annual report on Corporate Social Responsibility activities for the financial year 2023-24 as required under section 1 34 and 1 35 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility) Rules, 2014 and the Companies (Accounts) Rules, 2014, is annexed to this report as Annexure-7.

30.1. The Company has a Risk Management Policy to monitor and evaluate risks associated at financial, operational and sectoral levels. The committee takes requisite steps or actions from time to time to mitigate the risks in order to protect the interest of the stakeholders and to achieve the business objective.

30.2. The Risk Management Policy is disclosed on the website of the Company and may be accessed through the following web link https://www.isgec. com/pdf/RiskManagementpolicynew1.pdf.

31.1. The Company complies with all the applicable Secretarial Standards issued by the Institute of Company Secretaries of India.

32.1. The Equity Shares of the Company are listed on two stock exchanges viz. BSE Limited and National Stock Exchange of India Limited.

33.1. There is no significant or material order passed by the regulators or courts or tribunals impacting the going concern status and Company's operations in future.

34.1. The Company has in place a Policy of Prevention on Sexual Harassment in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Complaint Committee has been set up to redress complaints received regarding sexual harassment.

34.2. During the year under review, no complaint was received under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

35.1. The Board confirms that:

i. No application has been made or any proceedings pending under Insolvency and Bankruptcy Code, 2016 as at the end of the financial year 2023-24;

ii. Details of difference between the amount of valuation at the time of one time settlement and valuation done while taking loans from banks or financial institutions are not applicable.

iii. The Whole-time Directors or Managing

Director of the Company do not receive any remuneration or commission from any of its subsidiaries and joint venture companies, except Mr. Sanjay Gulati, who is drawing remuneration from Isgec Hitachi Zosen Limited i.e., subsidiary and joint venture company.

36.1. The Board wishes to express its appreciation to all the employees of the Company for their contribution to the operations of the Company during the year.

37.1. Your Directors take this opportunity to thank the Financial Institutions, Banks, Government Authorities, Regulatory Authorities, and the Shareholders for their continued co-operation and support to the Company.

For and on behalf of the Board of Directors of Isgec Heavy Engineering Limited