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Director's Report


Change Company Name
Eicher Motors Ltd
Automobiles - Motorcycles / Mopeds
BSE Code 505200 ISIN Demat INE066A01021 Book Value 502.20 NSE Symbol EICHERMOT Div & Yield % 0.85 Market Cap ( Cr.) 118,853.55 P/E 33.83 EPS 128.3 Face Value 1

To the Members of Eicher Motors Limited

The Directors have pleasure in presenting the 41st Annual Report along with the Audited Financial Statements of your Company for the financial year ended March 31, 2023.

FINANCIAL RESULTS

Your Company has earned a total revenue from operations of Rs. 14,066.64 crores during the financial year 2022-23. The profit before depreciation and interest amounted to Rs. 3,393.50 crores, which is 24.1% of the total revenue. After accounting for other income of Rs. 639.84 crores, interest expense of Rs. 12.97 crores and depreciation of Rs. 512.05 crores, profit before tax amounted to Rs. 3,508.32 crores.

Profit after tax amounted to Rs. 2,622.59 crores after an income tax provision of Rs. 885.73 crores. Total Comprehensive income for the year, net of tax amounted to Rs. 2,632.54 crores.

The financial statements are summarised below:

Particulars

For the financial year ended March 31, 2023 For the financial year ended March 31, 2022

Net Revenue from operations

14,066.64 10,122.86

Profit before depreciation and interest

3,393.50 2,113.56
Interest 12.97 10.25
Depreciation 512.05 445.52

Profit before other income and tax

2,868.48 1,657.79
Other income 639.84 454.28

Profit before tax

3,508.32 2,112.07
Provision for tax (including Deferred tax) 885.73 525.85

Net profit after tax

2,622.59 1,586.22

Other comprehensive income

9.95 (9.13)

Total Comprehensive income for the year/period, net of tax

2,632.54 1,577.09
Balance in statement of profit and loss brought forward from previous year 10,112.61 8,993.44
Amount available for appropriation: 12,729.13 10,577.28
(Excluding exchange difference in translation of foreign operations)
Dividend for FY 2020-21, paid in FY 2021-22 - 464.67
Dividend for FY 2021-22, paid in FY 2022-23 574.19 -
Dividend proposed for FY 2022-23, to be paid in FY 2023-24 1,011.88 -
Earnings per share
- Basic (Rs.) 95.91 58.02
- Diluted (Rs.) 95.74 57.96

CHANGE IN THE NATURE OF BUSINESS, IF ANY

There is no change in the nature of business of the Company during the financial year under review.

MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY THAT HAVE OCCURRED AFTER MARCH 31, 2023 TILL THE DATE OF THIS REPORT

There have been no material changes or commitments affecting the financial position of the Company which have occurred after March 31, 2023 till the date of this report.

DIVIDEND

The Board of Directors at its meeting held on May 11, 2023, has recommended for approval of the shareholders, payment of dividend of Rs. 37/- per equity share of face value of Re. 1/- each (@ 3700%) out of the profits for the financial year 2022-23 in accordance with the Dividend Distribution Policy of the Company.

The dividend, if approved by the shareholders in the ensuing Annual General Meeting, shall be paid in the following manner: a) To all Beneficial Owners in respect of shares held in dematerialised form as per the data made available by the National Securities Depository Limited (NSDL) and the Central Depository Services (India) Limited (CDSL) as of the close of business hours on August 16, 2023 (record date);

b) To all Members in respect of shares held in physical form as of the close of business hours on August 16, 2023 (record date)

AMOUNTS TRANSFERRED TO RESERVES

During the financial year 2022-23, no amount to the General Reserve of the Company.

BRIEF DESCRIPTION OF THE STATE OF COMPANY'S AFFAIRS/BUSINESS PERFORMANCE

Your Company has sold 8,34,895 motorcycles in the financial year 2022-23, 38.6% higher when compared to 2021-22 sales of 6,02,268 motorcycles. Out of 8,34,895 motorcycles sold in 2022-23, 1,00,055 motorcycles were exported, an increase of 23.5% over previous year export volume of 81,032 motorcycles.

Net Revenue from operations for 2022-23 year was Rs. 14,066.64 crores, 39.0% higher when compared with previous year Rs. 10,122.86 crores. Net Sales of spare parts, gears and services increased to Rs. 1,855.07 crores in 2022-23 from Rs. 1,395.07 crores in the previous year, with a growth of 33.0%.

Your Company's profit before depreciation, interest and tax Rs. 3,393.50 crores in financial year 2022-23, higher by 60. over Rs. 2,113.56 crores recorded in financial year 2021-22.

MARKET AND FUTURE PROSPECTS

Please refer to the Management Discussion & Analysis Report which forms part of the Annual Report.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Information on conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be given pursuant to the provisions of Section 134 of the Companies Act, 2013 ("the Act"), read with the Companies (Accounts) Rules, 2014 is provided under Annexure-1.

DISCLOSURE REGARDING ISSUE OF SWEAT EQUITY SHARES AND EQUITY SHARES WITH DIFFERENTIAL RIGHTS

The Company has not issued any sweat equity shares or equity shares with differential rights during the financial year 2022-23.

CHANGES IN SHARE CAPITAL & THE

COMPANY'S EMPLOYEE STOCK OPTION PLAN, 2006 AND RESTRICTED STOCK UNITS PLAN, 2019

The paid-up Equity Share Capital of the Company as on March 31, 2023, was Rs. 27,34,81,570/-. During the year under review, the Company has issued 58,468 Equity Shares (Face value Re. 1/- each) pursuant to its Employees Stock Option Plan, 2006 ("ESOP, 2006"). No shares have been issued under the Company's Restricted Stock Units Plan, 2019 ("RSU Plan, 2019") during the year.

wastransferred A Statement giving complete details as at March 31, 2023, pursuant to Regulation 14 of the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 is available on the website of the Company and the web link for the same is https://www.eicher.in/content/dam/eicher-motors/ Eicher-Motors-ESOP-Statement-2022-23.pdf

ESOP, 2006 and RSU Plan, 2019, for grant of stock options have been implemented in accordance with the aforesaid

SEBI Regulations. A certificate from M/s. AGSB & Associates, Secretarial Auditors, in this regard will be available for inspection on the website of the Company under "Investors" Section on the date of Annual General Meeting. The Company has not changed its ESOP, 2006 and RSU Plan, 2019 during the year under review.

Further, details of options granted and exercised are included in Note no. 49 in the notes to accounts forming part of standalone financial statements. was

DEPOSITS

The Company has not accepted any deposits including from the public/members under Section 73 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014 during the financial year under review. The Company has not renewed/ accepted fixed deposits after May 29, 2009. There are no deposits that remain unclaimed.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with Section 149(7) of the Act and Regulation 25(8) of SEBI (LODR) Regulations, 2015, Independent

Directors of the Company have given written declarations to the Company confirming that they meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16 of SEBI (LODR) Regulations, 2015. As on March 31, 2023, all Independent Directors of the Company have valid registrations with the Independent Directors' databank maintained by Indian Institute of Corporate Affairs in terms of Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualifications of Directors) Rules, 2014.

Director liable to retire by rotation

In accordance with the provisions of Section 152 and other applicable provisions of the Act, Mr. Siddhartha Lal, Managing

Director, retires by rotation at the ensuing 41st Annual General Meeting and being eligible offers himself for re-appointment. The Board of Directors recommends his reappointment.

Reappointment of Directors

The Board of Directors of the Company at its meeting held on May 11, 2023, after taking into consideration recommendations of the Nomination & Remuneration Committee of the Company and subject to requisite approvals of the shareholders at the ensuing 41st Annual General

Meeting, have re-appointed: a) Mr. Inder Mohan Singh as Independent Director of the Company for second term of 5 (five) years with effect from November 12, 2023; b) Mr. Vinod Kumar Aggarwal as Non-Executive Non-Independent Director of the Company, liable to retire by rotation, for a period of 5 (five) years with effect from April 1, 2024.

In the opinion of the Board, Mr. Inder Mohan Singh and Mr. Vinod Kumar Aggarwal possesses requisite skills & expertise required for the business and operations of the Company. For details on skills, expertise, competencies of Mr. Singh and Mr. Aggarwal, please refer to the Corporate Governance Report forming part of this Annual Report.

In addition, the shareholders of the Company at the 40th Annual General Meeting held on August 24, 2022 approved the appointment of Mr. B. Govindarajan as the Whole-time Director of the Company for a period of 5 (five) years w.e.f. August 18, 2021.

Change in the Board and Key Managerial Personnel

Mr. Kaleeswaran Arunachalam resigned from the position of Chief Financial Officer of the Company with effect from of working hours of September 2, 2022. The Board of Directors pursuant to the recommendation of the Audit Committee and the Nomination & Remuneration Committee appointed Ms. Vidhya Srinivasan as Chief Financial Officer and Key Managerial Personnel of the Company w.e.f. November 18, 2022.

The Board at its meeting held on August 10, 2022, pursuant to the recommendation of Nomination and Remuneration

Committee appointed Mr. Atul Sharma as Company Secretary (Key Managerial Personnel) and Compliance Officer of the Company w.e.f. August 10, 2022.

There has been no other change in the Directors and Key Managerial Personnel of the Company during the financial year under review.

THE COMPANY'S POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION

The Company's Hiring & Employment Policy:

A number of factors are considered towards selecting candidates at the Board level which include: Ability to contribute to strategic thinking Proficiency in Governance norms, policies and mechanisms at the Board level

Relevant cross industry/functional experience, educational background, skills and experience Wherever relevant, independence of Directors in terms of applicable regulations

With respect to core competencies and personal reputation,

Company's practices ensure through the selection process that all Directors: Exhibit integrity and accountability Exercise informed judgement Are financially literate Are mature and confident individuals

Operate with high performance standards

Removal of Directors:

Under extreme circumstances and in highly unusual situations it may become necessary to remove a Director from the Board of the Company. Reasons for doing so, may relate to any of the following (indicative; other than as provided under the Companies Act, 2013): i. Breach of confidentiality in anyway ii. Failure to meet obligatory procedures in the disclosure of conflict of interest iii. Failure to fulfil the fiduciary duties of a Director for the Company iv. Acting in any other manner which is against the interests of the Company

Due process of law will be followed in this regard.

The Company's Remuneration Policy:

The Company's Compensation Strategy defines the principles underlying compensation philosophy for its employees. Compensation is a critical piece of overall human-resources strategy and broadly refers to all forms of financial returns and tangible benefits that employees receive as a part of their employment relationship.

The Remuneration/Compensation Policy of the Company is designed to attract, motivate and retain manpower. This Policy applies to Directors and Senior Management including Key Managerial Personnel (KMP) and other employees of the Company.

The remuneration of the Managing Director, Whole-time/ Executive Director, Key Managerial Personnel (KMPs) and

CXOs of the Company is recommended by the Nomination and Remuneration Committee based on criteria such as industry benchmarks, the Company's performance vis-a-vis the industry, responsibilities and performance assessment. The Company pays remuneration by way of salary, perquisites and allowances (fixed component), incentive remuneration and/or commission (variable components).

Loans/advances may be extended to employees for various personal purposes or to aid business functions, from time to time, on a case to case basis, in accordance with the relevant Human Resource guidelines/policies in force or as may be approved by the Chief Financial Officer, the Chief Human Resource Officer of the Company, or any person authorised them, including for relocation viz. school deposits/expenses, travel/logistics expenses, housing advance, housing deposits/ brokerage, any other expenses towards relocation; advance submission of tax deducted at source by the Company on behalf of employee; advance towards medical insurance premiums; loans granted to enable grantees exercise ESOPs and towards deposit of perquisite tax thereon; loans/advances covered under Employees Union recognised by the Company as per Union Agreement; medical emergency advances etc.

Additionally, in the event of exigencies arising due to calamities, the Company may provide financial assistance to any affected employee by way of extending interest-free loan in an amount not exceeding his/her two months' gross salary.

Remuneration by way of commission to the Non-Executive

Directors shall be decided by the Board of Directors within the ceiling of a sum, not exceeding 1% of the annual net profits of the Company in each of the financial year, calculated in accordance with the provisions of the Act.

Remuneration of KMPs and employees largely consists of basic remuneration, perquisites, allowances, performance incentives and employee stock options granted pursuant to the Employees Stock Option Plan, 2006 and Restricted Stock Units Plan, 2019 of the Company. The components of remuneration vary for different employee levels and are governed by industry patterns, qualifications and experience of the employee and his/her responsibility areas, employee performance assessment etc.

The said Policy is also available on the website of the Company at https://www.eicher.in/content/dam/eicher-motors/ Remuneration-Compensation-Policy.pdf

ANNUAL EVALUATION OF BOARD,

COMMITTEES AND INDIVIDUAL DIRECTORS

During the financial year under review, evaluation of the Board, its Committees and Individual

Directors was carried out pursuant to the Board Performance

Evaluation Policy of the Company and provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015 by the Board at its meeting held on February 14, 2023.

The Nomination and Remuneration Committee has specified the criteria for effective performance evaluation of the Board, its Committees and Individual Directors of the Company. The performance of the Board and Committees was evaluated after seeking inputs from all the Directors on the basis of the criteria such as Board/Committee constitution, frequency of meetings, effectiveness of processes etc. The performance of individual Directors (including Independent Directors) was evaluated by the Board (excluding the Director being evaluated) after seeking inputs from all Directors on the basis of the criteria such as thought contribution, business insights and applied knowledge. Once the evaluation process is complete, the Nomination & Remuneration Committee reviews the implementation of the manner specified by it for performance evaluation and effectiveness of the process.

Separate meeting of Independent Directors was also held on February 13, 2023, to review the performance of the Non-Independent Directors, performance of the Board as a whole and performance of the Chairperson of the Company.

Review of the performance of the Chairperson was done after taking into account the views of the Executive Directors and Non-Executive Directors (excluding the Chairperson being evaluated).

MEETINGS OF BOARD OF DIRECTORS

Six (6) meetings of the Board of Directors of the Company were conducted during the financial year under review. The details of Board/Committees/Shareholder meetings are provided under the Corporate Governance Report which forms part of the Annual Report.

DETAILS OF LOANS, GUARANTEES AND INVESTMENTS UNDER SECTION 186 OF THE ACT

The details of loans, guarantees and investments made by the Company during the financial year under review which are covered under Section 186 of the Companies Act, 2013 forms part of the notes to the financial statements provided in this Annual Report.

PARTICULARS OF RELATED PARTY TRANSACTIONS

All contracts/arrangements/transactions entered into by the Company during the financial year with related parties are in compliance with the applicable provisions of the Companies

Act, 2013 and SEBI (LODR) Regulations, 2015. The Board of

Directors has approved the criteria pursuant to which omnibus approval can be granted for related party transactions by the

Audit Committee. Requisite approvals of the Audit Committee, the Board and the shareholders, as required, were obtained by the Company for related party transactions. formal annual There were no materially significant Related made by the Company with Promoters, Directors or Key Managerial Personnel, subsidiaries, joint ventures and associate Companies which may have a potential conflict with the interest of the Company. Transactions that are required to be reported in Form AOC-2, are attached as Annexure-2 and forms part of this report. The details of the transactions with Related Parties are also provided in the Company's financial statements in accordance with Indian Accounting Standards.

The Company had obtained shareholders' approval at the

40th Annual General Meeting (AGM) held on August 24, 2022 for certain material related party transactions between VE Commercial Vehicles Limited (VECV), Subsidiary of the Company, and Volvo Group India Private Limited (VGIPL), a related party of VECV, for the financial year 2022-23 as per the amended provisions of SEBI (LODR) Regulations, 2015. Further, based on the recommendations of the Audit Committee and the Board, similar material related party transactions between VECV and VGIPL for the financial year 2023-24 are proposed at the ensuing 41st Annual General Meeting for the approval of the shareholders by way of Ordinary resolution. Please refer to the notice of 41st AGM for further details.

The Company has a Policy on materiality of and dealing with

Related Party Transactions, as approved by the Board, which is available on its website www.eichermotors.com.

AUDIT COMMITTEE

The Audit Committee of the Company is constituted pursuant to the requirements of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015. At present, members of the Audit Committee are:

SI. No.

Name of Members

1 Mr. S. Sandilya (Chairman)
2 Mr. Siddhartha Lal
3 Ms. Manvi Sinha
4 Mr. Inder Mohan Singh

DETAILS OF ESTABLISHMENT OF VIGIL MECHANISM

The Company has formulated a Whistle Blower Policy to establish a vigil mechanism for Directors, employees, dealers and vendors of the Company to report concerns about unethical behaviour, actual or suspected fraud or violation of the Company's Code of Conduct or Ethics Policy or to report genuine concerns or grievances including instances of leak or suspected leak of unpublished price sensitive information pursuant to SEBI (Prohibition of Insider Trading) Regulations, 2015. The Whistle Blower Policy of the Company is available at https://www.eicher.in/content/dam/eicher-motors/ Eicher-Whistle-Blower-Policy.pdf

SUBSIDIARIES, ASSOCIATE AND JOINT VENTURE COMPANIES

Highlights of performance of subsidiaries, associate and joint venture Companies and their contribution to the overall performance of the Company during the year under review.

Royal Enfield North America Limited (RENA)

RENA was incorporated in March 2015 as a 100% subsidiary of Eicher Motors Limited to manage the distribution and sales of Royal Enfield products and services including, motorcycles, spares and gear in North America. It sold 13,827 motorcycles (including 925 motorcycles sold to Royal Enfield Canada Limited, 100% subsidiary of RENA) during the year 2022-23 and achieved revenue of Rs. 528.21 crores (including revenue of Rs. 33.46 crores from sales to Royal Enfield Canada

Limited). As of March 2023, RENA had contracted with 154 multi brand outlets in the USA. The company participated in 22 Dealer Demo Events and continued to support American Flat Track and Build Train Race (BTR) Programmes with participation in 31 collective events.

Royal Enfield Canada Limited (RECA)

RECA is a 100% subsidiary of RENA. RECA was incorporated in April 2016 in Canada to manage the distribution and sales of Royal Enfield products and services including, motorcycles, spares and gear in Canada. During the year 2022-23, the company sold 870 motorcycles and achieved revenue of Rs. 33.48 crores. As of March 2023, RECA had contracted with 16 multi brand outlets in Canada. The Company participated in 12 dealer demo events.

Royal Enfield Brasil Comercio De Motocicletas Ltda

Royal Enfield started its operations in Brazil through a direct distribution company by the name of Royal Enfield Brasil Comercio de Motocicleta Ltda in 2016. During the year 2022-23, Eicher Motors Limited and RE Brazil entered into a tripartite agreement with Dafra da Amazonia Industria e Comercio de Motocicletas, a third-party CKD manufacturer, to assemble the components into motorcycles. The company sold 12,114 motorcycles in the financial year 2022-23 and achieved a revenue of Rs. 250.32 crores.

Royal Enfield (Thailand) Ltd

Royal Enfield (Thailand) Ltd. was incorporated on September 18, 2018 and commenced sales operations from September 2019. The Company's footprints have been 12 exclusive stores, 5 studio stores and 12 authorised sales and service points. The brand love has been demonstrated by the company's passionate Customers & Communities from various provinces in Thailand and thereby impacting the company's growing Mindshare & Market Share in the Kingdom of Thailand. Company is among the top #3 motorcycles in the Mid-segment with a market share of 16% in FY 2022-23.

The company has commenced its manufacturing operations through CKD and started selling motorcycles assembled in Thailand in 2021-22. During the year 2022-23, the company received four awards from the coveted Grand Prix group, three awards for "Bike of the Year 2023" for Classic 350 being the "Best Modern Classic over 250 cc". Hunter 350 bagged the "Best Modern Classic Light Weight" and SCRAM 411 bagged the "Best Touring Lightweight" motorcycle award. Also the company's newest Super Meteor 650 received "The Most Unique Bike Award" from Bangkok International Motor Show organisers 2023 as well. The company has sold 4,116 motorcycles and achieved revenue of Rs. 131.17 crores.

Royal Enfield UK Ltd

Royal Enfield UK Ltd, was incorporated in August, 2019 and commenced sales operations from June 2020. The company reflected steady growth in its footprints from 11 to 13 exclusive stores and 61 to 84 Authorised Sales & Service Points. During the financial year 2022-23, the company sold 7,546 motorcycles against the plan of 9,000 motorcycles, reflecting a rise in the mid-size market share in the UK from 18.6% in financial year 2021-22 to 20.4% in financial year 2022-23 and achieved a revenue of Rs. 186.71 crores in financial year 2022-23.

Eicher Polaris Private Limited (EPPL)

Eicher Polaris Private Limited, a joint venture company, was involved in manufacturing and sales of personal utility vehicles.

The Board of Directors and Shareholders of EPPL at their respective meetings held on February 18, 2020 approved voluntary liquidation (solvent liquidation) of EPPL and appointed an insolvency professional as the liquidator. The liquidation process is currently under progress.

VE Commercial Vehicles Limited and its step-down subsidiaries

Overview of performance covered separately in the Annual

Report.

Report containing salient features of financial statements of subsidiaries and joint venture Companies

Pursuant to the provisions of Section 129(3) of the Act, a report containing salient features of the financial statements of the Company's subsidiaries and joint venture Company in

Form AOC-1 is attached as Annexure-3.

COMPANIES WHICH HAVE BECOME OR CEASED TO BE THE COMPANY'S SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE FINANCIAL YEAR

VE Electro-Mobility Limited, incorporated on April 27, 2022, under the Companies Act, 2013, which is a 100% subsidiary of VE Commercial Vehicles Limited (Company's material subsidiary) became the subsidiary of the Company during the financial year 2022-23.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND THE COMPANY'S OPERATIONS IN FUTURE

There are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations. However, members' attention is drawn to the statement on contingent liabilities, commitments in the notes forming part of the financial statements.

DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

Details of internal financial control and its adequacy are included in the Management Discussion and Analysis Report, which forms part of the Annual Report.

CORPORATE SOCIAL RESPONSIBILITY

The Company has constituted a Corporate Social

Responsibility (CSR) Committee and has framed a Corporate Social Responsibility Policy and identified Local Area Development, Social Mission (Responsible Travel and environmental sustainability) and road safety, as themes which will be given preference while formulating Annual Action Plans.

The Company will continue to support social projects that are consistent with the Policy.

Corporate Social Responsibility Committee of the Company is constituted as follows:

1. Mr. S. Sandilya Chairman

2. Mr. Siddhartha Lal

3. Mr. Inder Mohan Singh

4. Ms. Manvi Sinha

Annual Report on CSR activities is annexed as Annexure-4.

CONSOLIDATED FINANCIAL STATEMENTS

The consolidated financial statements have been prepared by the Company in accordance with the requirements of Indian Accounting Standard ("Ind AS")-110 "Consolidated Financial Statements" and Ind AS 28 "Investment in Associates and Joint ventures", prescribed under Section 133 of the Companies Act, 2013, read with the rules issued thereunder. The consolidated financial statements are provided in the Annual Report. A statement containing the salient features of the financial statements of each of the subsidiary and joint venture in the prescribed Form AOC-1 is attached.

Pursuant to Section 136 of the Act, the financial consolidated financial statements and separate accounts of the subsidiaries are available on the website of the Company at www.eichermotors.com. These are also available for inspection by the shareholders at the Registered Office of the Company during business hours. The Company shall provide free of cost, the copies of the financial statements of the Company and its subsidiary Companies to the shareholders upon their request. The consolidated total Comprehensive income of the Company and its subsidiaries amounted to Rs. 2,922.49 crores for the financial year 2022-23 as compared to Rs. 1,657.44 crores for the previous financial year 2021-22.

AUDITORS

(a) Statutory Auditors and their report

M/s S.R. Batliboi & Co., LLP, Chartered Accountants (Firm Registration Number: FRN 301003E/E300005) were re-appointed as Statutory Auditors in the 40th (Fortieth) Annual General Meeting (AGM) of the Company for second term of five consecutive years, from the conclusion of 40th AGM till the conclusion of 45th AGM to be held in the year 2027. The Statutory Auditors have confirmed their eligibility under Section 141 of the Companies Act, 2013 and the Rules made thereunder to continue to act as Statutory Auditors of the Company.

The Statutory Auditors had carried out audit of financial statements of the Company for the financial year ended March 31, 2023 pursuant to the provisions of the Act. The reports of Statutory Auditors form part of the Annual Report. The reports are self-explanatory and do not contain any qualifications, reservations or adverse remarks.

(b) Secretarial Auditors and their report

The Board of Directors has appointed M/s. AGSB & Associates, Company Secretaries, to conduct Secretarial Audit for the financial year ended March 31, 2023. As required under Section 204 of the Companies Act, 2013, the Secretarial Audit Report is annexed as Annexure-5 to this Report. The Secretarial Auditors' Report is self-explanatory and there is no qualification or adverse remark in the report relating to the financial year 2022-23. The Secretarial Auditors provided two observations in its report as follows:

(a) The Company has filed an application with the Reserve Bank of India, Mumbai for the compounding of contravention of regulation 8(2) of erstwhile FEM (Transfer or Issue of Security by a Person Resident outside India) Regulations, 2000/FEMA 20 read with Master Circular No. 15/2015-16 dated July 01, 2015 as a result of omission to mention the name of a Non-Resident Indian/Overseas Citizen of India, in Form ESOP filed physically on October 26, 2016 with the Reserve Bank of India, New Delhi through AD Bank, intimating grant of Employee Stock Option under the Company's Employee Stock Option Plan, 2006;

(b ) The Company has filed an appeal before the Hon'ble

Securities Appellate Tribunal against the adjudicating order Ref. No. ORDER/SBM/KL/2022-2023/16885 dated June 01, 2022 passed by Securities and Exchange Board of India ("SEBI") imposing a monetary penalty of Rs. 10,00,000 (Rupees Ten Lakhs only) on the Company for violation of the provisions of clause 23 of General Norms for processing of documents under RRTI Circular no. 1 (2000-2001) dated May 09, 2001, Clause 3(e) of Listing Agreement read with Regulation 39(2) and 103(2) of the SEBI (LODR) Regulations, 2015 for not following the due process as prescribed under the above regulations while approving requests for duplicate shares certificates in few cases during the period from 2007 to 2012. The Company has filed an appeal against the order of SEBI before the Hon'ble Securities Appellate Tribunal.

The Board of Directors took note of the above observations and the corrective action taken by the Company. The management is advised to exercise more caution to avoid any such instance in the future.

Further, pursuant to provisions of Regulation 24A of the SEBI (LODR) Regulations, 2015, VE Commercial Vehicles Limited (VECV) is a Material subsidiary of the Company in terms of Regulation 16(1)(c) of the SEBI (LODR) Regulations, 2015. The Secretarial Audit

Report submitted by the Secretarial Auditors of VECV is also annexed as Annexure-6 to this Report.

(c) Cost Auditors

In terms of Section 148 of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, it is hereby confirmed that the cost accounts and records are made and maintained by the Company as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013.

M/s. Jyothi Satish & Co, a qualified Cost Accountant Firm (Firm registration No. 101197), has been appointed as the Cost Auditors to carry out audit of the cost records of the Company for the financial year 2022-23 pursuant to the provisions of the Companies Act, 2013. The Cost auditor shall submit its report to the Board of Directors within the time prescribed under the Companies Act, 2013 and the rules made thereunder.

DETAILS IN RESPECT OF FRAUD REPORTED BY AUDITORS

Pursuant to provisions of Section 143(12) of the Companies Act, 2013, the Statutory Auditors, the Secretarial Auditors and the Cost Auditors have not reported any incident of fraud to the Audit Committee or Board during the year under review.

CORPORATE GOVERNANCE, MANAGEMENT DISCUSSION & ANALYSIS AND BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORTS

As per SEBI (LODR) Regulations, 2015, Corporate Governance Report together with the Auditors' certificate regarding compliance of conditions of Corporate

Governance, Management Discussion & Analysis Report and Business Responsibility & Sustainability Report form part of the Annual Report.

INTEGRATED REPORT

The Company has voluntarily prepared an Integrated

Report which will help stakeholders to understand the Company's economic, environmental, social and governance performance more effectively and analysing the financial and non-financial performance of the Company. With this, stakeholders shall also have a better understanding of the Company's long-term perspective. The report is also available on the website of the Company at www.eichermotors.com.

ANNUAL RETURN

The Annual Return as required under Section 92 (3) read with Section 134(3)(a) of the Companies Act, 2013 is available on the website of the Company and the web link for the same is https://www.eicher.in/content/dam/eicher-motors/ Annual-Report-(Form-MGT-7)-2022-23.pdf.

DIRECTORS' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in terms of Section 134(3)(c) of the Companies Act, 2013: a) that in the preparation of the Annual Financial Statements for the year ended March 31, 2023, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

b) that such accounting policies as mentioned in Note no. 3 of the Notes to the Financial Statements have been selected and applied consistently and judgement and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2023 and of the profits of the Company for the year ended on that date;

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

d) that the Annual Financial Statements have been prepared on a going concern basis;

e) that proper internal financial controls to be followed by the Company have been laid down and that the financial controls are adequate and were operating effectively; and

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

PARTICULARS OF DIRECTORS & EMPLOYEES

Disclosures as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

1) Ratio of the remuneration of each director to the median remuneration of the employees of the Company and the percentage increase in remuneration of Directors & KMPs in the financial year:

Sl. No.

Name of the Director/ KMP

Designation

Ratio of Remuneration of Directors to Median Remuneration of Employees** Percentage Increase in Remuneration for FY 2022-23 over FY 2021-22
1. Mr. S Sandilya Chairman & Non-Executive Independent Director 6.7 14.1
2. Mr. Siddhartha Lal Managing Director 355.4 14.6
3. Mr. Govindarajan Whole-time Director and CEO-Royal Enfield 70.5 N.A.*
Balakrishnan
4. Mr. Inder Mohan Singh Non-Executive Independent Director 4.0 20.9
5. Ms. Manvi Sinha Non-Executive Independent Director 4.0 20.9

6.

Mr. Kaleeswaran Arunachalam

Chief Financial Officer (till September 2, 2022)

19.2

N.A.*
7. Mr. Atul Sharma Company Secretary (w.e.f. August 10, 2022) - N.A.*
8. Ms. Vidhya Srinivasan Chief Financial Officer (w.e.f. November 18, 2022) - N.A.*

*The % change in remuneration is not comparable as the said Directors/Key Managerial Personnel held their respective positions for a part of the year in either FY 2021-22 or in FY 2022-23 **Remuneration of Directors/Key Managerial Personnel who held their respective positions for a part of the year in either FY 2021-22 or in FY 2022-23 has not been annualised

Note:

1) Mr. Vinod Kumar Aggarwal, Non-Executive Director Non-Independent, is not drawing any remuneration by way of sitting fees or commission or otherwise, from the Company.

2) Percentage increase in the median remuneration of the employees in the financial year: 15%

3) Number of permanent employees on the rolls of Company as at March 31, 2023: 5,002 employees.

4) The average increase in median remuneration of the employees (other than managerial personnel) was 15% and the increase in the managerial remuneration was also 15%.

5) It is hereby affirmed that the remuneration is paid as per the Remuneration Policy of the Company.

Further, a statement containing particulars of top ten employees in terms of the remuneration drawn and employees drawing remuneration in excess of the limits set out in Rule 5(2) & (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, are provided as part of the Directors' Report. However, in terms of provisions of Section 136 of the said Act, the Annual Report is being sent to all the members of the Company and others entitled thereto, excluding the said statement. Any member interested in obtaining such particulars may write at investors@eichermotors.com.

The said information is also available for inspection at the Registered Office of the Company during working hours till the date of Annual General Meeting.

RISK MANAGEMENT

Requisite information is provided under Management

Discussion and Analysis Report which forms part of the

Annual Report.

COMPLIANCE OF SECRETARIAL STANDARDS

During the financial year under review, complied with applicable Secretarial Standards specified by the Institute of Company Secretaries of India pursuant to Section 118 of the Companies Act, 2013.

SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Requisite information is provided under the Corporate Governance Report which forms part of the Annual Report.

PROCEEDINGS UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016

No Corporate Insolvency Resolution Process has commenced against the Company during the financial years under the Insolvency and Bankruptcy Code, 2016.

ONE-TIME SETTLEMENT AND VALUATION DONE WHILE TAKING LOAN FROM BANKS AND FINANCIAL INSTITUTIONS

During the year under review, there was no one-time settlement with any Bank or Financial Institution. Hence, no valuation was required to be undertaken.

ACKNOWLEDGEMENT

We thank our customers, business associates and bankers for their continued support during the financial year.

We wish to convey our deep appreciation to the dealers of the Company for their achievements in the area of sales and service, and to suppliers/vendors for their valuable support.

We also place on record our sincere appreciation for the enthusiasm and commitment of the Company's employees for the growth of the Company and look forward to their continued involvement and support.