The Directors have the pleasure of presenting the 59^th Annual Report along with the first Business Responsibility and Sustainability Report (BRSR) for the year ended March 31, 2023.

Sustainability is not just a corporate responsibility but also an opportunity to create long-term value for stakeholders. The Company is committed to promote sustainable development and making a positive contribution to society.

Care for the environment is one of the core focus areas, as the Company is persistent to contribute in shaping a better future, which is safe, inclusive and sustainable.

Furthermore, the Company has designed business strategies that incorporate social well-being in everything it does.

BRSR prepared in accordance with the nine principles of 'National Guidelines on Responsible Business Conduct' (NGRBC) and SEBI Guidelines, which outlines our sustainability performance. This is backed by the solid foundation of our integral values of the Company. The Company undertakes multiple initiatives to minimize its environmental footprint and give back to society.

The Company is committed to reducing greenhouse gas emissions, promoting the use of renewable energy sources, implementing energy-efficient practices, exploring innovative technologies to reduce energy consumption and committed to become Carbon Neutral by 2045.

The Company is also committed to manufacture products which ultimately help in reducing the carbon footprint like manufacturing products specifically for CNG, ethanol blending and Hydrogen fuel applications for its customers.

Financial & Operational Performance

During the year, the Company witnessed growth in the Sales despite the challenges posed by geopolitical situation leading to multiple supply chain challenges.

Company's revenue from operations grew by 26% from Rs. 20,647 Million (previous year) to Rs. 26,050 Million (during the year) and the total income increased by 27% from Rs. 20,939 Million (previous year) to Rs. 26,513 Million (during the year). Profit before Depreciation and Taxes [before Other Comprehensive Income (OCI)], after all interest charges but before depreciation and taxes, grew by 52% from Rs. 3,223 Million (previous year) to Rs. 4,903 Million for the year.

The improvement in performance was contributed by factors like increase in production & sales, increase in productivity, streamlining of the supply chain, digitization, focused approach to meet customer requirements, effective management of cash flow and implementation of cost optimization measures including effective utilization of resources.

Based on the strength of its financials, the Company is well positioned to invest in various avenues for overall growth of business. The Company has already done some strategic investment into technology growth areas through SPR Engenious Limited (wholly owned subsidiary) in EMF Innovations Private Limited, which is Singapore backed electric motor design & manufacturing company. The Board has approved acquisition of 75% stake in Takahata Precision India Private Limited which manufactures a wide range of products such as automotive parts, office automation equipment parts, optical equipment parts, residential facilities parts and medical equipment parts. The Company aims to expand its presence in Electric Vehicle space to supply Electric Powertrain Components such as Motor & Controller covering all the vehicle segments from Two Wheelers, Three Wheelers, Passenger Vehicles, Commercial Vehicles and Buses.

The summarized standalone and consolidated results of the Company are as under:

Company's exports registered growth of almost 21% from Rs. 4,010 Million to Rs. 4,841 Million. This was due to strengthening of relationship with the existing customers, range expansion and entering new markets & product segments.

The Company continues to reap the benefit of investing in the right areas ahead of time. This helped the Company to increase its sales as the Covid pandemic abated globally and the global economy witnessed resurgence in business activity. The trend of increasing exports is expected to continue in this year as well. However, other global headwinds leading to uncertainties will be a critical factor for sales in the exports market.

The Company also improved its performance in the Aftermarket by re-designing its network strategy to increase the range and reach of its products.

The Company focuses on achieving the highest standards of quality, which has been well appreciated by all our customers.

The Company is taking persistent measures to de-risk its business as an integral part of Business Continuity Planning. The Company focuses on cost reduction by implementing affordable automation, digitization, interlinking of machines, energy conservation and productivity improvement across products, which helps the Company to remain cost competitive.

With a well-equipped Tech Centre, the Company is focusing on forward-looking technologies such as testing products for ethanol blending, solutions for hydrogen as a fuel and solutions for Non-ICE segments.

In the coming years, the Company is expected to face challenges due to the increased penetration of electric vehicles in two wheeler segment, uncertainty due to the Ukraine war and the on-going shortage of semi-conductor chips. The management is working to overcome these headwinds in the coming year and are also working diligently to find further avenues of growth for the Company.

Management is continuously focusing on the 6Ps (6 Principles) to transform the Company into a high performance organization. The 6Ps comprise of:

- Core Organization Values

- OTTT Framework

- Continuous Improvement through Challenging the Status quo,

- Creating a Learning Organization

- Culture of Execution and

- Appreciating and Motivating Performance at all levels.

Share Capital

During the year, there was no change in the authorized, issued, subscribed or paid up share capital of the Company.

During the year, the Company has not issued any equity shares with differential rights/sweat equity shares under the Companies (Share Capital and Debentures) Rules, 2014.

In Annual General Meeting held on 29.6.2022, Members of the Company accorded consent, to the Board to adopt and implement ESOP 2022 and to grant options and transfer shares on exercise of such options not exceeding 2% of the paid up equity capital of the Company as at March 31, 2022, to the eligible employees. However, it was decided to hold the implementation of ESOP 2022 plan till the stabilization of the new performance management system introduced last year.

Dividend

The Directors, in their meeting held on 8.5.2023, have recommended that equity shareholders be paid a special "Golden Jubilee" Dividend @ Rs. 5 per share for the year, apart from Rs. 10/- per share already paid as interim dividend. The equity dividend would absorb Rs. 330 Million against Rs. 220 Million last year and an amount of Rs. 2735 Million be transferred to the General Reserve Account.

Dividend Distribution Policy

In terms of Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosures Requirements) Regulations, 2015 ("Listing Regulations") the Board of Directors of the Company had formulated and adopted the Dividend Distribution Policy ('DDP'). The Board of Directors while taking decisions for recommendations of the dividend take guidance from this policy and maintain a consistent approach to dividend pay-out plans.

The Dividend Policy is available on the Company's website viz. www.shrirampistons.com under the link "Investors' Guide" (https://shrirampistons.com/investors-guide-2/).

New Projects and Capacity Expansion

The Company has been able to increase its market share across all customer segments. The Company expects the Aftermarket, OE spares, Off road applications and Exports to have a much longer life span, thereby de-risking its business model.

In order to meet the Company's vision for diversification and growth in areas other than IC Engines, the Company has been actively working on identifying suitable opportunities to diversify its existing product portfolio.

Change in the nature of business

During F.Y. 2022-23, there was no change in the nature of Company's business.

Material changes and commitment

No material change and/ or commitment affecting the financial position of the Company has occurred between 1.4.2023 and the date of signing of this Report.

Subsidiary Companies and their Annual Accounts

i. Closure of SPR International Auto Exports Limited:

SPR International Auto Exports Limited ("Subsidiary Company") was incorporated in 2005 but it could not commence any operations since then. The Board of Subsidiary Company in its meeting of 4.4.2022, resolved to make an application to the Registrar of Companies under Section 248(2) of the Companies Act, 2013 for removing the name of the Subsidiary Company from the Register of Companies.

The application was submitted on 13.9.2022. The name of the Company has been struck off by the Registrar of Companies vide Notice of Striking off and Dissolution in Form STK-7 dated 7.3.2023.

ii. Incorporation of SPR Engenious Limited:

SPR Engenious Limited has been formed as a wholly owned subsidiary ("WOS") of the Company for the purpose of diversifying its product portfolio in the area related to the automotive segment. The WOS has been incorporated with the Registrar of Companies (Delhi & Haryana) on 26.9.2022. The WOS has not commenced any operations yet, however it has started to take steps for commencement of operations.

Key Business developments:

i. Acquisition of 51% stake in EMF Innovations Private Limited ("EMFI")

The Company through its wholly owned subsidiary SPR Engenious Ltd. acquired 51% stake in the share capital (on a fully diluted basis) of EMFI (CIN: U29309TZ2016PTC027538), for a total consideration of INR 780.03 Mn.

EMFI is a Singapore backed electric motor design and manufacturing Company. EMFI is a young Technology company co-founded by engineering entrepreneurs with substantial R&D and operations in India and Singapore thereby providing localized cost effective e-mobility solutions to customers in India and abroad. EMFI has been leveraging on its strong power electronics & motors research base and extensive semi-automated manufacturing eco-system to deliver reliable EV Motors and Controllers for green mobility solutions and various other applications.

ii. Definitive Agreement to acquire 75% stake in Takahata Precision India Private Limited (TPIPL)

The Company through its wholly owned subsidiary SPR Engenious Ltd. has entered into definitive agreement to acquire 75% stake in the share capital (on a fully diluted basis) of TPIPL (CIN: U29220RJ2010FTC046888), at an Enterprise Value of INR 2,220 Mn. with adjustments for debt, debt like items and working capital to be calculated as on closing date subject to satisfactory completion of all conditions precedent.

TPIPL's existing portfolio of precision moulded parts, precision metal moulds parts, assembled parts having a variety of functional products for the automotive and other Industrial applications, fits into the Company's strategy of inorganic growth alongside de-risking its current business model.

Annual accounts of the Subsidiary Companies are available on Company's website and shall also be kept for inspection by any member in the Head Office & Registered Office. Copy of Annual Accounts of Subsidiary Companies would also be made available to members seeking such information.

In accordance with the Indian Accounting Standard (Ind AS-110) on consolidated financial statements, the consolidated financial statements are attached, which form part of the Annual Report.

The Policy for determining material subsidiaries is available on Company's Website viz. www.shrirampistons.com under the link "Investors' Guide"(https://shrirampistons.com/investors-guide-2/).

Board Meetings

During the year, Eight (8) meetings of the Board of Directors were held, details of which have been provided in the Report on Corporate Governance, Annexure-I to this Report.

Committees of the Board

The Committees of the Board focus on certain specific areas and make informed decisions in line with the delegated authority. The following Committees constituted by the Board function according to their respective roles and defined scope:

- Audit Committee

- Nomination and Remuneration Committee

- Corporate Social Responsibility Committee

- Stakeholder's Relationship Committee

- Risk Management Committee

Details of composition, terms of reference and number of meetings held for respective committees are given in the Report on Corporate Governance, which forms a part of this Annual Report. Further, during the year under review, all recommendations made by the various Committees have been accepted by the Board.

Audit Committee

As of 31.3.2023, members of the Audit Committee of the Company are Shri Inderdeep Singh (Chairman), Shri Pradeep Dinodia, Ms. Ferida Chopra and Shri Alok Ranjan.

During the year, the Board has accepted all recommendations made by the Audit Committee.

Whistle Blower Policy

The Company has a Whistle Blower Policy for Directors, Employees and Stakeholders to report any kind of misuse of Company's properties, mismanagement or wrongful conduct prevailing/executed in the Company. As per the policy, all Whistle Blowers are granted access to the Chairman of the Audit Committee in appropriate cases.

Nomination and Remuneration Policy

The Nomination and Remuneration Committee (NRC) of Board has formulated a Nomination and Remuneration Policy for remuneration of Directors, Key Managerial Personnel (KMP), Senior Management Personnel (SMP) and other employees of the Company.

The Nomination and Remuneration Policy covers the criteria for appointment of Directors (including Independent Directors), KMPs and SMPs. The Policy also covers the criteria for remuneration.

There was no change in the Policy during the year.

The level and composition of remuneration shall be reasonable and sufficient to attract, retain and motivate Directors, KMPs, SMPs and employees at all levels. It shall be determined taking into account the factors such as Company's performance and the remuneration structure as generally applicable in the industry.

The Directors affirm that remuneration paid to all Directors, KMPs, SMPs and all other employees is as per the remuneration policy of the Company.

The Nomination and Remuneration Policy of the Company is available on Company's website viz. www.shrirampistons.com under the link "Investors' Guide"(https://shrirampistons.com/investors-guide-2/).

As of 31.03.2023, the number of permanent employees on rolls of the Company are 3,907.

Related Party Transactions

The Company's contracts/arrangements/transactions with related parties are in the ordinary course of business and on an arm's length basis. Thus, provisions of Section 188(1) of the Companies Act, 2013 are not applicable. During the year, the Company has not entered into any contract/ arrangement/ transaction with related parties which could be construed to be "material" in accordance with the "Policy for determining material Related Party Transactions" approved by the Board. Thus, there are no

transactions required to be reported in Form AOC-2. Details of all transactions with related parties are given in Note No. 32 of Notes forming part of Financial Statements.

The Company has complied with the Accounting Standards, Companies Act and Listing Regulations on Related Party Transactions. Statutory Auditors

M/s Deloitte Haskins & Sells, Chartered Accountants, were re-appointed as Statutory Auditors of the Company for a period of five years to hold office till the conclusion of 59^th Annual General Meeting (AGM) to be held in the year 2023. They have served their 2 terms and are not eligible for further appointment.

As per recommendation of the Audit Committee, the Board in its meeting held on 29.3.2023 approved appointment of M/s Walker Chandiok & Co. LLP, Chartered Accountants (Firm's Registration No. 001076N/N500013) as Statutory Auditors of the Company for a term of five consecutive years to hold office commencing from the conclusion of 59^th Annual General Meeting (AGM) till the conclusion of 64^th Annual General Meeting to be held in 2028, subject to the approval of the members in ensuing AGM.

Internal Financial controls and their adequacy

The Company had appointed M/s Ernst & Young, M/s Grant Thornton and M/s RSM Astute as its Internal Auditors for F.Y. 2022-23, in addition to its in house team. The Internal Control System is commensurate with the size, scale and complexity of Company's operations. The Internal Auditors report to the Chairman of the Audit Committee.

The Internal Audit teams monitor and evaluate the efficacy and adequacy of internal control systems in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on their reports, the corrective actions in respective areas are taken to strengthen the controls and significant audit observations and corrective actions thereon are presented to the Audit Committee.

Reports forming part of Board's Report

Following reports which form an integral part of Boards' report are enclosed: -

1. Report on "Corporate Governance" - as per Annexure-I

2. Report on "Management Discussion and Analysis" - as per Annexure-II

3. Report on "Conservation of Energy", "Technology Absorption" and "Foreign Exchange Earning & Outgo" - as per Annexure-III

4. Data of "Employees" - as per Annexure-IV

5. "Report on CSR Activities Undertaken" - as per Annexure-V

6. "Secretarial Audit Report" - as per Annexure-VI

7. "Salient Features of Subsidiary Companies" - as per Annexure-VII

In terms of Listing Regulations, Business Responsibility & Sustainability report forms part of this Annual Report.

Disclosures on Company's website

The Company is committed to good corporate governance practice and corporate social responsibility. In line with the Company's principles/commitment, the following policies/ programmes/ reports are in place and are available on Company's website viz. www.shrirampistons.com under the link "Investors' Guide" (https://shrirampistons.com/investors-guide-2/).

1. Corporate Social Responsibility (CSR) Policy

2. Vigil Mechanism/ Whistle Blower Policy

3. Company's policy on dealing with Related Party Transactions

4. Nomination and Remuneration Policy

5. Familiarization programmes for Independent Directors

6. Policy for distribution of Dividend

7. Policy on Materiality of Events

8. Policy for determining Material Subsidiaries

9. Annual Return of the Company F.Y. 2022-23

10. Environment Protection Policy

11. Environment Social and Governance Policy

12. Equal Opportunity for Work and Pay Policy

13. Equal Opportunity Policy

14. Human Rights Policy

15. Sustainable Procurement Policy

16. Sustainable Supply Chain Policy

17. Archival Policy for disclosures of Events/lnformation

18. Policy on Preservation of Documents

19. Code of Practices & Procedures for Fair Disclosure of UPSI Directors' Responsibility Statement:

The Directors confirm that: -

1. in the preparation of the annual accounts, the applicable Accounting Standards issued by the Institute of Chartered Accountants of India and requirements of the Companies Act have been followed and there are no material departures from the same.

2. appropriate accounting policies have been selected and applied consistently, and have 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 as of 31^st March, 2023 and of the profit of the Company for the same year.

3. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

4. the annual accounts have been prepared on a going concern basis.

5. internal financial controls are followed by the Company and are adequate and operating effectively.

6. proper and adequate systems have been devised to ensure compliance with provisions of all applicable laws and such systems are adequate and operating effectively.

Other Disclosures:

1. During the year, no fraud has been reported by the Statutory Auditors to the Audit Committee or the Board under Section 143(12) of the Companies Act, 2013.

2. No orders were passed by the Regulator(s) or Court(s) or Tribunal(s) which could impact going concern status and Company's operations in future.

3. There are no disqualifications, reservations or adverse remarks or disclaimers in the Statutory Auditors' and Secretarial Auditors' Report.

4. No Director of the Company is receiving commission from the Subsidiaries of the Company.

5. The Company has given loans and made investment in Wholly Owned Subsidiary in compliance with the provisions as

contained under Section 186 of the Companies Act, 2013.

6. The Company has complied with applicable Secretarial Standards on Board Meetings and General Meetings.

7. The Company has not issued any of the following:

i) Equity Shares with differential rights,

ii) Sweat Equity Shares

iii) Shares issued pursuant to Employee Stock Option Scheme or Employee Stock Purchase Scheme

8. No application has been made or proceeding is pending against the Company under the Insolvency and Bankruptcy Code (IBC), 2016.

9. Disclosure w.r.t. difference between the amounts of the valuation executed at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions is not applicable.

10. As per the provisions of the Act and in compliance with Regulation 25(10) of the Listing Regulations, the Company has taken a Directors and Officers Liability Insurance (D&O) on behalf of all Directors including Independent Directors, Officers,

Managers and Employees of the Company for indemnifying any of them against any liability in respect of any negligence, default, misfeasance, breach of duty or breach of trust for which they may be guilty in relation to the Company.

Fixed Deposits

The Company has not renewed/accepted fixed deposits during the year. However, fixed deposits amounting to Rs. 11.33 Million accepted during the year, represents fixed deposits transferred in the name of nominee/joint holder in death cases. The fixed deposits amounting to Rs. 3.92 Million pertaining to 23 depositors remained unclaimed/ unpaid at the closing of the year. During the year, there was no default in the repayment of deposits and interest thereon. Fixed deposits accepted by the Company are in compliance with the requirements of Chapter V of the Companies Act, 2013.

Investor Education and Protection Fund

The amount lying in unpaid dividend accounts for the last seven years is Rs. 0.53 Million. Unclaimed final dividend amount of F.Y. 2015-16 is due to be transferred to the Investor Education and Protection Fund on 1.8.2023. Amount transferred to the Investor Education and Protection Fund during the year is Rs. 0.13 Million.

Disclosures w.r.t. shares lying in IEPF Account:

Maintenance of Cost Records and Cost Audit

As specified by the Central Government, the Company is required to maintain Cost Records and get these records audited by a Cost Accountant.

The Company is maintaining the Cost Records. The Cost Audit Report of the Company for the year ended March 31, 2022, duly audited by M/s Chandra Wadhwa & Co., Cost Accountants, New Delhi, was submitted to the Ministry of Corporate Affairs, Government of India on 31.8.2022, within the due date of filing the said report.

On the recommendation of Audit Committee, M/s Chandra Wadhwa & Co., Cost Accountants, New Delhi (Firm Registration No. 00239), has been appointed as Cost Auditors for the F.Y. 2023-24.

Details of CSR Activities undertaken by the Company

Against the requirement of Rs. 30.90 Million during the year, the Company has spent Rs. 28.81 Million on various CSR activities and an amount of Rs. 2.09 Million has been transferred to Unspent CSR Account 2022-23 which would be incurred in following years, as per the provisions of the Companies Act, 2013. Details of initiatives taken by the Company during the year in CSR activities and composition of the CSR Committee are provided in the Report on CSR Activities undertaken by the Company in 2022-23, Annexure-V to this Report.

Risk Management Framework

The Company has developed and implemented a Risk Management Policy including identification of elements of risk, if any, which in the opinion of the Board may threaten the existence of the Company. The Company has also constituted a "Risk Management Committee". As of 31.03.2023, Members of the Committee are Shri Pradeep Dinodia (Chairman), Shri Inderdeep Singh, Shri Alok Ranjan, Ms. Meenakshi Dass, Shri Krishnakumar Srinivasan and Shri Luv D. Shriram.

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

The Company has zero tolerance for sexual harassment at workplace. The Company has complied with provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Company has in place a policy on prevention of sexual harassment at workplace. The Company has also constituted Internal Complaints Committees under the Act. No complaint was received/ pending under the above Act during the year.

Changes in Directors/ KMPs during the year and Appointment/ Re-appointment of Directors in the ensuing AGM

Shri Yukio Tanemura, Non-Executive Director of the Company, resigned w.e.f. closing hours of 5.4.2022. Consequent to his resignation, Shri Kaoru Ito, Alternate Director to Shri Yukio Tanemura, also ceased to be the Director of the Company.

The Board on the recommendation of Nomination & Remuneration Committee, appointed Shri Masaaki Yamaguchi as Director in the casual vacancy caused pursuant to resignation of Shri Yukio Tanemura and Shri Yasunori Maekawa as Alternate Director to Shri Masaaki Yamaguchi w.e.f. 6.4.2022 and the same was approved by the Shareholders at the AGM held on 29.6.2022.

Shri Sascha Putz, Non-Executive Director of the Company, resigned w.e.f. closing hours of 30.4.2023.

The Board on the recommendation of Nomination & Remuneration Committee, appointed Shri Klaus Semke as Director in the casual vacancy caused pursuant to resignation of Shri Sascha Putz and Shri Sascha Putz as Alternate Director to Shri Klaus Semke w.e.f. 1.5.2023. Appointment of Shri Klaus Semke as Non-Executive Non- Independent Director of the Company shall be subject to Shareholders' approval in the ensuing AGM.

Shri Naveen Agarwal, Alternate Company Secretary superannuated w.e.f. closing hours of 28.2.2023.

Ms. Meenakshi Dass and Shri Pradeep Dinodia, Directors, retire by rotation and being eligible, offer themselves for re-appointment.

Brief resume and other details of Directors seeking appointment/re-appointment are given in the 'Notice of the Annual General Meeting'.

The Board appreciated the services rendered and significant contribution to the Company of the Directors, who have ceased to be Directors during the year.

Declarations from Independent Directors

Shri Hari S. Bhartia, Ms. Ferida Chopra, Shri Alok Ranjan, Shri Inderdeep Singh and Shri Shinichi Unno are Independent Directors of the Company and have given the declarations to the Board that they meet the criteria of independence, as provided under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the Listing Regulations and also confirmed that they have complied with the Code of Conduct of the Company. The Independent Directors have also confirmed that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence.

No Independent Director has resigned from the Company during the year under review.

In the opinion of the Board, Independent Directors possess relevant integrity, expertise and experiences required to perform their duties and fulfil the conditions specified in the Act and are independent of the management. Some of the Independent Directors are exempted from clearing the online proficiency test being conducted by Indian Institute of Corporate Affairs and the remaining Independent Directors are in the process of appearing for the same. They fulfil the conditions specified in the Act and are independent of the management.

Performance evaluation of Board, its Committees and Individual Directors

Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an annual performance evaluation of its own performance, evaluation of the working of its Committees and the Directors individually. The manner in which the evaluation has been carried out has been explained in Report on Corporate Governance, Annexure-I to this Report.

Appreciation

The Directors place on record their appreciation:

i) of the support extended to the Company by the Collaborators, the Bankers, its Business Associates and

ii) of the work of all ranks of Company's personnel during the year.

On behalf of the Board

New Delhi (PRADEEP DINODIA)

May 8, 2023 CHAIRMAN

DIN:00027995