Your Directors hereby present the sixty-fifth Annual Report of Elgi Equipments Limited (“Elgi/the Company”) along with the audited financial statements for the financial year ended March 31, 2025.

Financial Results

The highlights of the standalone and consolidated performance of your Company during the fiscal year are given hereunder:

Review of Business Operations

Consolidated revenue of the Company from operations was ' 35,104 million in FY25, which was 9% higher than the consolidated revenue of '32,178 million in FY24. The consolidated net profit was at ' 3,502 [10%] in FY25 as compared to '3,121 [9.7%] in FY24.

Standalone revenue of the Company from operations was ' 20,809 million in FY25, which was 12% higher than the revenue of ' 18,434 million in FY24. The net profit was at ' 3,501 [16.8%] in FY25 as compared to ' 3,222 [17.5%] in FY24.

The details of division-wise performance and other operational details are discussed at length in the Management Discussion and Analysis section. There was no change in the nature of business of the Company during the financial year ended March 31, 2025.

Share Capital

During the year under review, there were no changes in the issued and paid-up share capital of the Company. The issued and paid-up share capital of the Company consists of 31,69,09,016 equity shares of face value of ' 1/- each, amounting to ' 31,69,09,016/- as on the date of the report.

Transfer to reserves

The Company has not transferred any amount to the General Reserve during the year under review. However, an amount of ' 2,826 million of the current profits has been carried forward under the heading ‘Retained Earnings’.

Dividend

Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“SEBI Listing Regulations”), the Dividend Distribution Policy of the Company is hosted in the Company’s website at https://www.elgi.com/in/wp-content/uploads/2020/02/ Dividend-Policy.pdf.

For the financial year 2024-25, in line with the Dividend Distribution Policy, the Board of Directors at its meeting held on May 28, 2025, has recommended a dividend of ' 2.20 per share (220%) on the paid-up share capital of 31,69,09,016 equity shares.

Subject to the approval of shareholders, an amount of ' 697.20 million will be paid as dividend after deducting applicable taxes (Previous Year '633.82 million).

Transfer of Unclaimed Dividend/Shares to Investor Education and Protection Fund

In terms of Sections 124 and 125 of the Companies Act, 2013 (“CA 2013”), unclaimed or unpaid dividends relating to the financial year 2017-18 are due for remittance to the Investor Education and Protection Fund (“IEPF”) established by the Central Government.

Further, pursuant to Section 124(6) of the Act, read with IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016, 17915 equity shares of ' 1/- each on which dividend had remained unclaimed for a period of 7 years have been transferred to the credit of demat account identified by the IEPF Authority during the year under review.

Annual Return

The Annual Return of the Company for the financial year 2024-25 as required under Section 92(3) of the CA 2013 is available on the website of the Company and can be accessed on the Company’s website at the link https://www.elgi.com/in/financials/.

Board Meetings held during the year

During the year, six meetings of the Board of Directors were held. The details of the meetings are furnished in the Corporate Governance Report which is attached to this Report.

Committees

As on March 31, 2025, the Company has Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee, Risk Management Committee and Corporate Social Responsibility Committee. Detailed note on the composition of the Board and its Committees are provided in the Corporate Governance Report attached to this Report.

Statement on compliance with Secretarial Standards

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards, and such systems are adequate and operating effectively.

Directors' Responsibility Statement

Pursuant to the requirement under Section 134(3)(c) of CA 2013, with respect to Directors’ Responsibility Statement, it is hereby confirmed that:

a. In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures from those standards;

b. The Directors have selected such accounting policies 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 that period;

c. The Directors have taken proper and sufficient care for 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. 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 that such internal financial controls are adequate and were operating effectively; and

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

Details in respect of frauds reported by Auditors under Section 143(12) of CA 2013, other than those which are reportable to the Central Government

There were no instances of frauds identified or reported by the Statutory Auditors during the course of their audit pursuant to Section 143(12) of CA 2013.

Declaration of Independent Directors

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed both under CA 2013 and SEBI Listing Regulations and that their name is included in the data bank as per Rule 6(3) of the Companies (Appointment and Qualification of Directors) Rules, 2014 (as amended).

Nomination and Remuneration policy of the Company

The Board has based on the recommendation of the Nomination and Remuneration Committee, framed a

policy for fixing and revising remuneration of Directors, Key Managerial Personnel, Senior Management Personnel and other employees of the Company.

The salient features of Nomination and Remuneration policy as formulated by the company is as follows:

1. To formulate the criteria for appointment, reappointment, removal of Director, Key Managerial Personnel, Senior Management and other employees in the Company.

2. To formulate the manner and criteria for determining qualification, positive attributes of an independent director;

3. To create a transparent system of determining the appropriate level of remuneration throughout all levels of the Company aimed at attracting, retaining and motivating people required to run the Company successfully;

4. To encourage people to perform to their highest level of competence;

5. Allow the Company to compete in each relevant employment market;

6. To ensure the relationship of remuneration to performance is clear and meets appropriate performance benchmarks.

The Nomination and Remuneration policy of the Company can be accessed on the Company’s website at the link https://www.elgi.com/in/wp-content/ uploads/2019/05/Remuneration-Policy.pdf.

Comments on Auditors' Report

The Report of Statutory Auditors and Secretarial Auditors for the FY 2024- 25 forms part of the report. The Statutory Auditors Report and Secretarial Auditors Report do not contain any qualification, reservation or adverse remark.

Further Secretarial Auditor in its report highlighted an observation related to delayed intimation to stock exchanges by the Company pertaining to an event covered under Regulation 30 read with Schedule III of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Board has noted the observation regarding a delayed disclosure under Regulation 30 of the SEBI (LODR) Regulations, 2015.

The delay was due to unforeseen medical exigencies within the secretarial team during a transition period. Despite the circumstances, the Company disclosed on a

Suo-moto basis shortly thereafter and also provided a detailed explanation to the Stock Exchanges, which was accepted without further action.

The Board reaffirms its commitment to timely compliance and has taken steps to strengthen internal processes to avoid such delays in the future.

Particulars of Loans, Guarantees or Investments made under Section 186 of CA 2013

Details of loans given, investments made, guarantees given and securities provided pursuant to the provisions of Section 186 of CA 2013 have been given in the notes to the Financial Statements in Note No.7.

Particulars of contracts or arrangements with Related Parties

All transactions entered into with related parties as defined under CA 2013 and Regulation 23 of the SEBI Listing Regulations during the financial year 2024-25 were in the ordinary course of business and on an arm’s length pricing basis.

There are no contracts or arrangements entered into with related parties referred to in Section 188(1) of CA 2013 that are material in nature.

The Audit Committee and the Board of Directors have approved the Related Party Transactions Policy and can be accessed on the Company’s website at the link https://www.elgi.com/in/wp-content/uploads/2019/05/ Related-Party-Transactions-Policy.pdf.

The Policy intends to ensure that proper reporting, approval and disclosure processes are in place for all transactions between the Company and related parties.

Material Changes and commitments affecting the financial position of the Company

There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year as on March 31, 2025, and the date of this report.

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

The information on foreign exchange earnings and outgo, technology absorption, conservation of energy stipulated under Section 134(3)(m) of CA 2013, read with Rule 8 of the Companies (Accounts) Rules, 2014 is annexed herewith as Annexure A.

Risk Management

Pursuant to the requirement of Regulation 21 of the SEBI Listing Regulations, the Company has constituted a Risk Management Committee (“RMC”), consisting of Board members and senior executives of the Company.

The Company has in place a Risk Management framework to identify, evaluate business risks and challenges across the Company, both at the corporate level and also separately for each subsidiary. At present, the Company has not identified any element of risk that may threaten its existence.

The top 10 risks for the Company have been mapped by the operating management (with additional support of external guidance) after extensive deliberations on

the nature of the risk being a gross or a net risk, and thereafter, in a prioritized manner presented to the Board for their inputs on risk mitigation/management efforts. Based on this framework, a Risk Management policy has been adopted.

The RMC engages in the Risk Management process and has set out a review process so as to report to the Board the progress on the initiatives for the major risks of each of the businesses in which the Company is into.

The RMC reviews the top risks. The results of the mitigation measures implemented by the Company are given below:

Corporate Social Responsibility Initiatives

The brief outline of the Corporate Social Responsibility (“CSR”) Policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out as Annexure B to this report in the format prescribed in the Companies (CSR Policy) Rules, 2014. For other details regarding the CSR Committee, refer to the Corporate Governance Report, which is a part of this report. The policy is available on the website of the Company and can be accessed on the Company’s website at the link https://www.elgi.com/in/wp-content/ uploads/2019/05/CSR-Policy.pdf.

Performance Evaluation of the Board, its Committees and the Directors

Pursuant to the provisions of CA 2013 and SEBI Listing Regulations, the Board of Directors has carried out annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its committees. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report attached to this report.

Statement regarding opinion of the Board with regard to integrity, expertise and experience (including the proficiency) of the Independent Directors

The Board of Directors have evaluated the Independent Directors during the year 2024-25 and opined that the integrity, expertise and experience (including proficiency) of the Independent Directors are satisfactory.

Directors and Key Managerial Personnel

Mr. Sudarsan Varadaraj, Non-Executive Non-Independent Director retires by rotation at the ensuing AGM and being eligible, offers himself for re-appointment. Your directors recommend his re-appointment.

A resolution seeking approval of the Members for the re-appointment of Mr. Sudarsan Varadaraj as Director has been incorporated in the Notice to the AGM of the Company along with brief details about him.

Mr. Mohan Nambiar, Independent Director retired on April 10, 2024. Further Dr. Ganesh Devaraj, Mr. M Ramprasad and Mr. B. Vijayakumar, Non-Executive Independent Directors of the Company ceased to be the Directors of the Company from closure of business hours on August 01, 2024.

The Board wishes to place on record its appreciation for the invaluable services rendered by them during their tenure as independent directors of the Company.

Pursuant to the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company, at its meeting held on May 27, 2024, recommended the appointment of Mr. Suman Kumar Das, Mr. Srinivasan Ravindran, and Mr. Srinivasan Krishnamurthi as Independent Directors of the Company for a term of five consecutive years, effective July 31, 2024. The said Directors were appointed as Independent Directors from the same date after obtaining the requisite shareholders’ approval.

Ms. Aruna Thangaraj was re-appointed as an independent director of the company for a second term of 5 consecutive years commencing from August 02, 2024, after obtaining shareholders’ approval and shall not be liable to retire by rotation.

Pursuant to the resignation of Ms. Vaishnavi PM as the Compliance Officer of the Company, effective May 27, 2024, Ms. Devika Sathyanarayana was appointed as the Company Secretary, Key Managerial Personnel and Compliance Officer effective the same date.

Pursuant to the provisions of Section 2(51) and 203 of the Act, the Key Managerial Personnel of the Company are Mr. Jairam Varadaraj, Managing Director, Mr. Anvar Jay Varadaraj, Executive Director, Mr. Indranil Sen, Chief Financial Officer and Mrs. Devika Sathyanarayana, Company Secretary. Further, consequent to her resignation, Ms. Devika Sathyanarayana would cease to be the Company Secretary and Compliance Officer of the Company w.e.f. June 09, 2025.

Subsidiaries, Joint Ventures and Associate Companies

The highlights of the performance of subsidiaries, associates and joint venture companies and their contribution to the overall performance of the Company during the period under review have been disclosed in the Management Discussion and Analysis Report.

At the beginning of the year under review, the Company has 25 subsidiaries and 9 joint ventures/ associate entities. The statement pursuant to Section 129(3) of CA 2013, containing the salient features of the financial statements of subsidiary companies, in Form AOC-1 forms part of this Annual report. Out of 9 joint ventures, 3 entities viz., G3 Compressors LLC, CS Industrial Services LLC and Compressed Air Solutions of Texas LLC, cease to exist as on the date of this report.

Elgi Compressors USA Inc., Elgi Compressors Europe S.R.L, and Patton’s Inc., are the material subsidiaries of the Company based on the financials for the year

ended March 31, 2025. The Board has approved a policy for determining material subsidiaries which is available on the website of the Company and can be accessed on at the link https://www.elgi.com/in/wp-content/ uploads/2019/05/Policy-for-Material-Subsidiaries.pdf.

The consolidated financial statements of the Company and its subsidiaries prepared in accordance with the applicable accounting standards have been annexed to the Annual Report. The annual accounts of the subsidiary companies are hosted on the website of the Company viz. www.elgi.com and will also be kept open for inspection by the shareholders at the registered office of the Company till the date of AGM. The Company will also provide a copy of the annual accounts of subsidiary companies to the shareholders upon their request.

Deposits

Your Company has not accepted any deposit within the meaning of provisions of Chapter V of CA 2013, read with the Companies (Acceptance of Deposits) Rules, 2014 for the year ended March 31, 2025.

Details of significant and material orders passed by the Regulators or Courts or Tribunals

There are no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and Company’s operations in future.

Internal Control Systems and their Adequacy

The Company has adequate internal control systems to monitor business processes, financial reporting and compliance with applicable regulations. The systems are periodically reviewed for identification of control deficiencies and formulation of time-bound action plans to improve efficiency at all levels. The Audit Committee of the Board constantly reviews internal control systems and their adequacy, significant risk areas, observations made by the internal auditors on control mechanisms and the operations of the Company and recommendations made for corrective action through the internal audit reports. The Committee reviews the statutory auditors’ report, key issues, significant processes, and accounting policies. The Directors confirm that the Internal Financial Controls are adequate with respect to the operations of the Company.

A report of Auditors pursuant to Section 143(3) (i) of CA 2013 certifying the adequacy of Internal Financial Controls is annexed with the Auditors Report.

Statutory Auditors

Price Waterhouse Chartered Accountants, LLP (Firm Reg. No.: 012754N/N500016) Chartered Accountants, Chennai was appointed as the Statutory Auditors of the Company for a second term of five years at the Sixty Second AGM of the Company held on August 12, 2022, till the conclusion of the sixty seventh AGM to be held in the year 2027.

Secretarial Auditors

Pursuant to the provisions of Section 204 of CA 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed MDS & Associates LLP, Company Secretaries, Coimbatore to undertake the secretarial audit of the Company for the FY 2024-25. The report of the secretarial auditor is attached as Annexure C.

Cost Auditors

Pursuant to the provisions of Section 148(3) of CA 2013, the Board of Directors had appointed M/s. STR & Associates, Cost Accountants, Trichy (Firm Registration No.: 000029), as Cost Auditors of the Company, for conducting the audit of cost records for the financial year ended March 31, 2025. The Audit is in progress and report will be filed with the Ministry of Corporate Affairs within the prescribed period.

The cost accounts and records as specified by the Central Government under sub-section (1) of Section 148 of CA 2013, are made and maintained by the Company.

Details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the year

No applications have been made and no proceedings are pending against the Company under the Insolvency and Bankruptcy Code, 2016.

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

The disclosure under this clause is not applicable as the Company has not undertaken any one-time settlement with the banks or financial institutions.

Human Resources and Industrial Relations

The Company continues to enjoy a cordial relationship with its employees at all levels. The total strength of employees as on March 31, 2025, was 2138.

Particulars of Employees

In terms of the provisions of Section 197(12) of the CA 2013, read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, a statement showing the names of the top ten employees in terms of remuneration drawn and names and other particulars of the employees drawing remuneration in excess of the limits set out in the said rules forms part of this Report as Annexure D. Disclosures relating to remuneration and other details as required under Section 197(12) of the CA 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, forms part of this Report.

Having regard to the provisions of the second proviso to Section 136(1) of the Act and as advised, the Annual Report excluding the aforesaid information is being sent to the members of the Company. Any member interested in obtaining such information may write to the Secretarial department.

Elgi Equipments Limited Employee Stock Option Plan, 2019

The Company has implemented the Elgi Equipments Limited Employees Stock Option Plan 2019 (“Elgi ESOP 2019”) to enable the Company and its subsidiaries to attract, retain and reward appropriate human talent in its employment and to create a sense of ownership and participation amongst the employees. The Nomination and Remuneration Committee administers and monitors the Employees’ Stock Option Plan of the Company through the Elgi Equipments Limited Employee Stock Option Trust.

During the year, 3,53,600 Employee Stock Options were granted to the eligible employees of the Company. None of the Directors were issued any options.

Further, subsequent to the adoption of Elgi ESOP 2019, SEBI introduced various amendments, including the replacement of SEBI (Share Based Employee Benefits) Regulations, 2014 with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021. With the coming into force of the new regulations, several clauses of the Plan required alteration or deletion. Accordingly,

the Elgi ESOP 2019 was amended in accordance with shareholders’ approval dated July 31, 2024.

The disclosure pursuant to the provisions of Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 is given as Annexure E to this report and also available on the website of the Company at https://www.elgi.com/in/financials.

The Company has received a Certificate from the Secretarial Auditors that the above referred Scheme had been implemented in accordance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 and the resolutions passed by the members in this regard.

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

As per the requirement of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules made thereunder, your Company has constituted an Internal Complaints Committee. During the year under review, three cases were received/filed pursuant to the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The same was resolved during the year. As on March 31, 2025, no complaint is pending for investigation and resolution.

Business Responsibility and Sustainability Report

In terms of Regulation 34 of the SEBI Listing Regulations, read with relevant SEBI Circulars, new reporting requirements on ESG parameters were prescribed under Business Responsibility and Sustainability Report (“BRSR”). The BRSR seeks disclosure on the performance of the Company against nine principles of the “National Guidelines on Responsible Business Conduct’ (‘NGRBCs’). As per the SEBI Circulars, effective from the financial year 2023-24, filing of BRSR is mandatory for the top 1000 listed companies by market capitalisation.

Accordingly, for the financial year ended March 31, 2025, your Company being amongst top 1000 companies, BRSR is annexed as Annexure F to this Report.

Corporate Governance

A report on corporate governance is annexed as Annexure G to this report. The Company has complied with the conditions relating to corporate governance as stipulated in SEBI Listing Regulations.

Vigil Mechanism/Whistle Blower Policy

Pursuant to the provisions of Section 177(9) of CA 2013, read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulations 4 and 22 of the SEBI Listing Regulations and in accordance with the requirements of SEBI (Prohibition of Insider Trading) Regulations, 2015, the Company has a Whistle Blower policy to deal with unethical or improper practice or violation of the Company’s Code of Business Conduct or any complaints regarding accounting, auditing, internal controls or disclosure practices of the Company.

This Policy inter alia provides direct access to the Chairman of the Audit Committee. Your Company hereby affirms that no Director/employee has been denied access to the Chairman of the Audit Committee. Brief

details about the policy are provided in the Corporate Governance Report attached to this Report.

The Audit Committee of the Board reviews the Complaints received, redressed, objected, withdrawn and dismissed for, every quarter in its meeting. The Whistle Blower policy is available on the website of the Company at the link https://www.elgi.com/in/wp-content/uploads/2019/10/Whistle-Blower-Policy.pdf.

Acknowledgement

Your Directors thank the shareholders, customers, suppliers, bankers and all other stakeholders for their continued support during the year. Your Directors also place on record their appreciation of the contributions made by employees at all levels towards the growth of the Company.