Andrew Yule & Company Ltd

Dear Shareholders,

It is my privilege to present, on behalf of the Board of Directors of Andrew Yule & Co. Ltd, the 76th Annual Report of your Company for the financial year 2023-24, highlighting the Company's financial, operational, social and environmental performance.

The global economic landscape in FY24 continued to navigate through uncertainties, albeit with signs of resilience amidst lingering challenges. The Russia-Ukraine conflict, geopolitical tensions in Gaza and the Middle East put immense pressure on the global economy. Despite several challenges, the world economy " is projected to grow persistently. Amidst global uncertainties, India's economy stood as a beacon of stability Singh and growth in FY24. According to the RBI, India's GDP growth stood at 8.2%.

Financial Performance:

• Net Sales of your Company had decreased to Rs.305.29 crore in FY 2023-24 from Rs.372.04 crore as recorded in FY 2022-23.

• Total Income stood at Rs.348.53 crore in FY 2023-24 vis-a-vis Rs. 405.79 crore in FY 2022-23.

• Profit before tax stood at Rs.(73.18) crore in FY 2023-24 vis-a-vis Rs.8.98 crore in FY 2022-23.

Tea Division

During FY 2023-24, Tea Division has made substantial loss. Escalation in basic wages from INR 232 to INR 250 in October, 2023 has been one of the major reasons for increase in cost of production whereas price realization has not kept in pace with the increase in input cost, thereby largely affecting the profitability of the Tea Division. The incidence of fungal infestation and other secondary diseases like Violet Blight, Red Rust, Black Rot etc has increased over the last few years leading to severe loss of crop. However, the unit is expected to do well in the coming years considering measures being taken for improvement in quality of tea, improved brand image, cost control in spite of bearish tea prices in the Indian market. Retail presence is to be increased across India. With various certification, market penetration with AYCL teas (both domestic and international) and e-commerce outlets, the division consistently endeavouring to enhance its brand equity as well as profitability. Tea Division of AYCL is emphasising on both quality as well as quantity. By producing consistent quality tea, there shall be sustainability of growth. AYCL is closely working with Tea Research Association (TRA) in the above-mentioned fields to make it "Future Ready".

Electrical-Chennai Operations

Electrical-Chennai Operations has made profit in FY24 and is expected to do well in the coming years considering improvement in production, cost control etc. Unit has stepped up marketing effort to increase customer base across several states and has participated in various tenders for getting more job orders. Now the unit is geared up to meet the customer requirements with its quality products known for better quality compared to peers. E-CO is planning to expand the present manufacturing facilities by extending one of the bays. The unit will be operating with 3 (three) parallel production lines to increase revenue. Installation of VPD (Vapor Phase Drying unit), Dust free enclosure for coil winding and vertical winding machines, shall open up more market segment for its products.

Engineering Division

Engineering Division has made profit in FY24 and is expected to do well in the coming years considering improvement in in-house production, through increased marketing effort, product improvement and cost control etc. Engineering Division is planning to expand the present manufacturing facilities by repairing the sheds (No. 1, No. 2 & No. 4) to bring the area under manufacturing activity. Thus, the plant capacity will increase by another 100 nos fans. This will add another Rs. 20 to 30 crore to annual revenue depending upon the product mix. There is plan to install new state of art machineries to reduce the cycle time and increase productivity. Engineering Division will focus on to increase the business from Air Pollution Control (APC) and Water Pollution Control (WPC) from FY 2025-26 also. New test bed with 320kw motor to test fans simulating actual conditions as demanded by many clients will improve order intake. Upgradation of Design Software to simulate and design higher capacity fans shall further open the market.

Business Responsibility and Sustainability: During the year, your Company has published its ‘Business Responsibility and Sustainability Report' (BRSR) in the Annual Report. The BRSR indicates the Company's performance against the principles of the ‘National Guidelines on Responsible Business Conduct'. This would enable the members to have an insight into Environmental, Social and Governance initiatives of the Company.

Corporate Governance: Your Company always strives to attain the highest level of corporate governance practices. Implementation of integrity pact, adoption of code of conduct and a well-defined internal control framework add to the transparency of the Company's business practices. AYCL is complying the conditions of Corporate Governance, as stipulated in the Guidelines on Corporate Governance for Central Public Sector Enterprises (CPSEs) issued by the Department of Public Enterprises, Government of India and Regulation 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the Stock Exchanges. However, filling up of vacant posts of Independent Directors, which is one of the requirements of corporate governance, is under process at Government level. A report on corporate governance compliances has been made part of the Boards' Report. AYCL has got excellent rating from Department of Public Enterprises (DPE), Government of India for corporate governance compliance for FY'22 and expects the same for FY'23 and FY'24 also.

Before I conclude, on behalf of the Board of Directors, I wish to convey our sincere regards and deep gratitude to our valued stakeholders for their continued support and trust. You always have been the motivational force that has facilitated us to move ahead during the toughest time.

At the same time, I wish to acknowledge the valuable guidance given by the Board of Directors of the company and Ministry of Heavy Industries, Govt. of India, which was critical to lead the Company with energy and enthusiasm. We look forward to continued support and commitment from all stakeholders of the Company to reach new heights and to enhance stakeholders' value.