The Board of Directors of your Company present the Forty
First (41^st) Board Report on the business and operations
of Munjal Showa Limited ("the Company") together with
the Audited Financial Statements and the Auditors' Report
thereon for the financial year ended March 31,2026 ("year
under review").

FINANCIAL SUMMARY AND HIGHLIGHTS

The salient features of the Company's financial performance
for the year ended March 31, 2026 are as follows:

(INR in lakhs)

OPERATIONS & STATE OF THE COMPANY'S AFFAIRS

The Company has achieved a sales turnover (Net of
GST) including other income of INR 1,33,497.21 lakhs as
compared to INR 1,28,071.97 lakhs in the previous year. The
profit before tax in the current year was INR 2,957.75 lakhs
as compared to INR 3,516.45 lakhs in the previous year.

The State of affairs of the Company is detailed in the
"Management Discussion & Analysis Report" annexed as
Annexure-A and forms part of this report.

CREDIT RATING

The Company's financial discipline and prudence is reflected
in the credit ratings ascribed by CRISIL rating agency as
given below:

TRANSFER TO GENERAL RESERVE

The Company has not transferred any amount to General
Reserve during the financial year 2025-2026. The balance
amount of INR 31,094.93 lakhs (Previous Year INR 30,739.56
lakhs) will be retained as surplus in the statement of Profit
and Loss.

DIVIDEND

Your Board of Directors are pleased to recommend a final
dividend of 225% (i.e., INR. 4.50/- per equity share of INR.
2.00/- each fully paid up) on the paid-up Equity Share
Capital of the Company for the financial year ended March
31,2026 amounting to INR. 1,799.78 lakhs.

As per Regulation 43A of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 ("Listing
Regulations") read with SEBI (Listing Obligations and
Disclosure Requirements) (Second Amendment)
Regulations, 2021 dated May 05, 2021, the Company has
formulated the Dividend Distribution Policy of the Company
and the Dividend recommendation is in accordance with
the Dividend Distribution Policy of the Company, and such
policy is available at the Company's website at https://www.
munjalshowa.net/wp-content/uploads/2021/06/Dividend-
Distribution-Policy.pdf

In view of the changes made under the Income Tax Act,
2025, by the Finance Act, 2020, Dividend Distribution
Tax (DDT) which used to be payable by the Company has
been abolished and the dividend paid or distributed by the
Company shall be taxable in the hands of the Shareholders.
Your Company shall, accordingly, make the payment of the
Dividend after deduction of tax at source. The final dividend,
if approved by the shareholders, at the 41^st Annual General
Meeting shall be payable to the eligible shareholders
registered in the books of the Company and the beneficial
owners whose names are furnished by the depositories, as
on the cut-off date for determining the name of shareholder
for paying dividend i.e. Wednesday, August 05, 2026.

SHARE CAPITAL

The authorized share capital of the Company is
' 15,00,00,000 (INR Fifteen Crores only) divided into
7,50,00,000 (Seven Crores Fifty Lakh) equity shares of face
value of INR 2 (Rupees Two) each. The paid-up Share Capital
of the Company as on March 31, 2026 was INR 7,99,90,000
(Rupees Seven Crore Ninety-Nine Lakh Ninety Thousand
only) divided into 3,99,95,000 (Three Crore Ninety-Nine
Lakh Ninety-Five thousand) equity shares of face value of
INR 2 (Rupees Two) each.

During the year under review, there was no change in the
authorised, subscribed and paid-up share capital of the
Company from the last financial year.

During the year under review, the Company has not issued
any shares with differential voting rights nor granted any
stock options or sweat equity shares. The Company has not
issued or repaid any Debentures, Preference Shares, Bonds
and Security during the financial year. None of the Directors
of the Company hold any shares or security of the Company.
The Company does not have any Debentures or Preference
Shares as on March 31,2026.

FINANCE

Cash and cash equivalent as at March 31, 2026 was INR
98.08 Lakhs. The Company continues to focus on judicious
management of its working capital. Receivables, inventories
and other working capital parameters were kept under
strict check through continuous monitoring.

PARTICULARS OF LOANS, GUARANTEES OR
INVESTMENTS

During the year under review, the Company has neither
given any guarantee nor provided any security covered
under the provision of Section 186 of the Companies Act,
2013 ("the Act").

The Company has made investments in Mutual funds,
Alternative Investment Funds, Commercial paper & Market
linked debentures and has given loans/advances to its
vendors in the ordinary course of business. The details of
investments made, and loans given are provided in Note
No. 5A & 5B of the financial statements for the year ended
March 31, 2026.

CORPORATE GOVERNANCE

Your Company has been practicing the principles of good
Corporate Governance over the years. The Company has
complied with the Corporate Governance requirements
as stipulated under the Listing Regulations. In terms
of Regulation 34 of Securities and Exchange Board of
India (Listing Obligations and Disclosure Requirements)
Regulations, 2015, a separate section on Corporate

Governance along with a Certificate from M/s. Deloitte
Haskins & Sells LLP, Chartered Accountants, Statutory
Auditors of your Company confirming the compliance of
Corporate Governance is annexed as Annexure-B and forms
an integral part of the Annual Report.

TRANSFER TO INVESTOR EDUCATION AND
PROTECTION FUND

Pursuant to the provisions of Section 124 of the Act read
with Investor Education and Protection Fund Authority
(Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF
Rules") and subsequent amendment thereof, the amount
of dividends, which remained unpaid or unclaimed for
a period of seven consecutive years from the date of
transfer to Unpaid Dividend Account of the Company, and
underlying equity shares on which dividend has not been
paid or claimed by the members for seven consecutive years
are required to be transferred to the Investor Education and
Protection Fund (IEPF) Authority established by the Central
Government.

The amount of unclaimed dividend of ' 10,10,255 was
transferred into IEPF account in respect of financial year
2017-18 on October 28, 2025.

The Company has transferred 13,473 Equity Shares of ' 2.00
each on which the dividend remained unpaid or unclaimed
for seven consecutive years, on November 25, 2025 to the
IEPF Account, after following the prescribed procedure.

STATUTORY AUDITORS

Pursuant to Section 139 of the Act, read with the Companies
(Audit and Auditors) Rules, 2014, the Members of the
Company in 37^th Annual General Meeting ("AGM") approved
the appointment of M/s Deloitte Haskins & Sells LLP,
Chartered Accountants (ICAI Registration No. 117366W/
W-100018) as the Statutory Auditors of the Company for
the period of 5 years, whose term of office will come to
an end after conclusion of 42^nd Annual General Meeting
(AGM) of the Company. The shareholders of the Company
in its meeting held on 12^th August, 2022, approved the re¬
appointment of M/s Deloitte Haskins & Sells LLP, Chartered
Accountants (ICAI Registration No. 117366W/W-100018) as
the Statutory Auditor of the Company for a second term
of 5 consecutive years and who shall hold office up to the

conclusion of the 42^nd AGM of the Company to be held in
Year 2027.

There are no qualifications, reservation, adverse remark,
observations, comments or disclaimer given by the Auditors
in their Report.

SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204 of the Act and the
Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the members of the Company in 40^th
Annual General Meeting ('AGM") approved the appointment
of M/s AKU & Associates, Company Secretaries, New Delhi
(Certificate of Practice No17196) and FRN is S2016DE428500
as the Secretarial Auditor for a term of 5 consecutive years
and who shall hold the office from financial year 2025-26 till
the Financial year 2029-30. The Company had received their
written consent that the appointment will be in accordance
with the applicable provisions of the Act and rules framed
thereunder.

The Secretarial Audit Report is self-explanatory and do not
call for any further comments. There are no qualifications,
reservations, adverse remark, observations, comments or
disclaimer given by the Auditors in their Report except:

1. The Company falls under the category of top 2000 listed
entities pursuant to Regulation 3(2) of the SEBI (Listing
Obligations and Disclosure Requirements) Regulations,
2015 and consequent upon the resignation of Mr.
Kazuhiro Nishioka (DIN: 00602255) from the position of
Non-Executive-Non-Independent Director, the Company
did not have minimum number of Six (6) Directors
as prescribed in Regulation 17(1)(c) of SEBI (Listing
Obligations and Disclosure Requirements) Regulations,
2015 from April 08,2025 till May 26,2025.

2. There was an instance of a delayed submission under
Regulation 30 read with Schedule III of Securities and
Exchange Board of India (Listing Obligations and
Disclosure Requirements) Regulations, 2015 and Master
circular issued by Securities and Exchange Board of
India (SEBI) on November 11, 2024 read with circular
dated December 31, 2024 and Industry Standards Note
on Regulation 30 of the LODR Regulations, concerning
outcome of the Board Meeting held on May 26,2025 with

National Stock Exchange of India Limited (NSE) by about
3 hours 58 minutes.

3. The Company has in place a Structured Digital Database
(SDD) pursuant to the requirements of Regulation
3(5) & 3(6) of the SEBI (Prohibition of Insider Trading)
Regulations, 2015. However, during the course of our
review, it was observed that some instances relating
to sharing of Unpublished Price Sensitive Information
(UPSI) were not fully captured in the SDD maintained
by the Company. The management has represented
that necessary steps are being undertaken to further
strengthen the process and controls for comprehensive
recording and monitoring of UPSI sharing in the SDD.

4. The Company in adherence to the provisions of the
Companies Act,2013 and rules made thereunder, along
with Rule 7(2A) & (2B) of the Investor Education and
Protection Fund Authority(Accounting, Audit,Transferand
Refund) Rules, 2016, had duly approved the appointment
of Mr. Pankaj Gupta (CFO) as the Nodal Officer of the
Company. However, the statutory filing of e-Form IEPF-
2 being e-Form for filing details of Nodal Officer was
submitted/ filed beyond the prescribed timeframe. Based
on the records and information/explanation/justification
furnished before us by the company the delay was
technical in nature and occurred due to technical glitches
on the Ministry of Corporate Affairs (MCA) portal.

5. The company's adherence to the Secretarial Standards
prescribed by the Institute of Company Secretaries of
India (ICSI) relating to the Board, General and Committee
Meeting (s) including the Notice, Agenda and maintenance
of the Minute Book for Board, General and Committee
meeting(s) was observed to be satisfactory. The company
to endeavour adherence with the applicable Secretarial
Standards (SS) issued by the ICSI in respect circulation of
Minutes of the meetings of the Board of Directors and its
Committee(s).

MANAGEMENT RESPONSE:

1. The Company, being a top 2,000 listed entity, is
required to maintain a minimum of six (6) Directors on
its Board under Regulation 17(1)(c) of the SEBI (LODR)
Regulations, 2015. Following the resignation of Mr.
Kazuhiro Nishioka (DIN: 00602255) with effect from
April 08, 2025, the Board strength temporarily fell below

the prescribed minimum for a period of approximately
48 days till May 26, 2025. The Company was actively
engaged in identifying a suitable candidate during
the intervening period, and the shortfall was entirely
attributable to the time required for identification, due
diligence and completion of requisite appointment
formalities. The Board strength was duly restored
to the requisite minimum on May 26, 2025, and the
Company has since ensured full compliance with the
said requirement.

2. The outcome of the Board Meeting held on May 26,
2025 necessitated disclosures to NSE under multiple
sub-categories under Regulation 30 read with
Schedule III of the SEBI (LODR) Regulations, 2015. While
the submission under the Dividend sub-category was
made within the stipulated timeframe, the submission
under the Outcome of Board Meeting sub-category
was inadvertently delayed by approximately 3 hours
and 58 minutes. The Company acknowledges the
said delay and has since strengthened its internal
compliance mechanisms to ensure timely and accurate
submissions across all applicable sub-categories to
both stock exchanges going forward.

3. While the Company has a duly established SDD in
compliance with Regulation 3(5) and 3(6) of the
SEBI (PIT) Regulations, 2015, the Secretarial Auditors
observed that certain instances of UPSI sharing during
the period under review were not fully captured
therein. The management has taken cognizance of the
observation, and corrective steps including personnel
sensitization and strengthening of internal controls are
being undertaken to ensure comprehensive recording
and monitoring of UPSI sharing in the SDD.

4. While the Company had duly obtained Board approval
for the appointment of Mr. Pankaj Gupta, CFO, as Nodal
Officer under the applicable IEPF Rules, the statutory
filing of e-Form IEPF-2 was delayed due to technical
glitches on the MCA portal, which were beyond
the control of the Company. The form was filed at
the earliest opportunity upon resolution of the said
technical issue.

5. The overall adherence to applicable Secretarial
Standards with respect to Board, General and

Committee Meetings has been observed to be
satisfactory by the Secretarial Auditors. With respect
to the specific observation regarding timely circulation
of draft Minutes, the Company Secretary has assured
that strict adherence to the prescribed timelines for
circulation of Minutes shall be ensured going forward.

The Report given by the Secretarial Auditor for the financial
year ended on March 31, 2026 is annexed as Annexure-D
and forms an integral part of Annual report.

Further, no fraud has been reported by the Auditors in terms
of Section 143(12) of the Act during the financial year.

INTERNAL AUDITORS

M/s Vaish & Associates, Chartered Accountants perform
the duties of internal auditors of the Company and their
performance and reports are reviewed by the Audit
Committee.

CONSERVATION OF ENERGY, TECHNOLOGY
ABSORPTION AND FOREIGN EXCHANGE EARNINGS
AND OUTGO

The details pursuant to Section 134(3)(m) of the Act read
with Rule 8 of the Companies (Accounts) Rules, 2014
regarding Conservation of Energy, Technology Absorption
and Foreign Exchange earnings & outgo is annexed as
Annexure-E and forms an integral part of this report.

ANNUAL RETURN

In terms of provisions of Section 92(3), 134(3)(a) of the Act
read with Rule 12 of the Companies (Management and
Administration) Rules, 2014, the copy of annual return of
the Company for the Financial Year ended March 31, 2026
has been placed on the website of the company and the
same can be accessed by the any person through below
given web-link. https://munjalshowa.net/annual-return-3/.

PARTICULARS OF EMPLOYEES

The statement of particulars of employees as per Section 197
of the Act read with Rule 5 of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules, 2014, for
the year ended March 31, 2026 is annexed as Annexure-F
and forms an integral part of this report.

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

In terms of provisions of Section 135 of the Act and the
Companies (Corporate Social Responsibility Policy) Rules,
2014, the Corporate Social Responsibility (hereinafter
referred as 'CSR') Committee has formulated a CSR Policy
indicating the activities to be undertaken by the Company.
The constitution of CSR Committee is disclosed in
Corporate Governance Report which forms an integral part
of Annual Report.

The CSR policy may be accessed on the Company's website

i.e. https://munjalshowa.net/wp-content/uploads/2024/04/
CSR-POLICY.pdf

As part of its initiatives under CSR, the Company has
undertaken projects in the areas of Education, Health, Water
and Sanitation. These projects are largely in accordance
with Schedule VII of the Act and CSR Policy of the Company.
The annual report on CSR activities as required under the
Companies (CSR Policy) Rules, 2014 is set out as Annexure-G
and forms an integral part of this report.

Munjal Showa Limited considers Corporate Social
Responsibility as an integral part of its business activities
and endeavors to utilize the allocated CSR budget for the
benefit of the society.

The Company has incurred the CSR expenditure as follows:

* The Company has spent excess of 1,69,974 for CSR Expenses
in the financial year2025-26. In the Year2025-26, the Company
Adjusted INR 5,88,708 (excess expenditure done in FY2024-25)

against CSR Expenses liability of the said year. Therefore, INR
7,58,682 will be available for set off in succeeding financial
years.

For the subsequent years, the Company endeavors to spend
the budgeted CSR expenditure in accordance with the
statutory requirements.

MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments affecting
the financial position of the Company that have occurred
between the end of financial year and the date of the report.

ENVIRONMENT COMPLIANCE

We believe that "waste is a precious resource kept in a wrong
place". We further believe that "there is no waste as per the
law of the nature" Hence from the solid waste like Iron & Steel
from old scrap machines, we are collecting the raw material
and we are manufacturing "Lean and Low cost" machines
with a philosophy of Easy to run, Easy to maintain, Easy
to clean and Zero accident by meeting all the quality and
productivity standard. Everything is done in-house starting
from design up to finishing the machine. This concept of
reuse of metallic waste is highly appreciated by CII, ACMA
and international experts of our Japanese Collaborator. By
Regular training for workers and staff to prevent accident
related to mechanical, electrical, chemical, physiological,
and psychological safety the Company has made "Zero
incidents" as acceptable standard. Hazard Identification
and Risk Assessment (HIRA) is our primary focus to mitigate
and prevent the abnormalities. Because of our dedicated
and committed efforts in continual improvement of
Safety, Health, and Environment area, we had received two
National Awards from Ministry of Labour and Employment,
Government of India for safety. The Company is a regular
member of Haryana Environment Management Society.

The Company has started Green Vendor Development
Programme (GVDP) since 2009-10. The aim of the project
is to conserve water and energy, minimize generation of
waste, terminate hazardous chemicals with non-hazardous
chemicals, minimize carbon footprint and generate
pollution prevention awareness throughout the plant and
to achieve 100 percent legal compliance. The Company is
rigorously improving to create a better place for our next
generation.

TOTAL PRODUCTIVE MAINTENANCE

The Company has taken up the journey of Total Productive
Maintenance (TPM) with the help of JIPM (Japan Institute
of Plant Maintenance) Japan and CII, TPM Club India. Major
objectives of TPM are to increase (PQCDSME) Productivity,
to improve Quality, to reduce Costs, to ensure in time
Delivery, to increase Safety, to increase profitability, to
build Morale and to protect environment by formation of
small cross functional work groups and to improve overall
Plant efficiency. The other objectives are to procure and
install maintenance free plant and machinery; and to
achieve zero defects, zero breakdown, zero losses and zero
accidents. In nutshell, TPM is to identify 21 types of Losses
& converts them into Profit. We are able to reduce Repair &
Maintenance Cost and working very aggressively towards
reduction in Inventory Loss.

We have achieved TPM Excellency Award "Category A" for
Gurugram and Manesar Plants in the years 2008 and 2010
respectively from Japan Institute of Plant Maintenance. We
have been awarded by JIPM TPM Excellence Consistency
Award for both Gurugram & Manesar Plants in the year
2013. Now we have started TPM Journey in our Haridwar
Plant also & we had TPM Kick-Off Ceremony in November
2015.

LEAN TPM ACTIVITIES

We have clubbed TPM with lean manufacturing system.
Through Lean we are able to focus & control 8 types of
wastes. Now we are giving more focus on 3 M's - Muda, Mura
& Muri. Our Company has conducted Lean Manufacturing
System (Value Stream Mapping) Workshop through JMAC
Japan. We have converted huge & complicated machines
by using TPM & Lean Concepts. These machines consume
very less Electricity, occupy less space, take very less inputs
like consumables, manpower, tools, oils, compressed air,
less set-up time, less cycle time, etc. These machines are 10S
Machines (Safe, Simple, Small, Slim, Speed, Smart, Sturdy,
Superb, Sushil & Sunder) and help us in reducing Cost of
manufacturing. As on date we have built & rebuild 1162
machines.

Low-Cost Automation is the need of hour. In this area we
have achieved great success in a very short span of time
by manufacturing 16 numbers 2W Rod CNC machines
from manual to Automatic mode. Besides this Automation

has been achieved in most of Damper case & Bottom tube
Welding process in all the 3 Plants. Many other machines
in different lines. Resulting into Quality & Productivity
improvements in many folds. Another 7 major Projects are
there in pipeline & very soon we will achieve them. We are
also working towards Introduction & implementation of
Material Flow Cost Accounting.

Major breakthrough achieved by in-house manufacturing
of 27 SPM Machines for Floating Piston Technology in
Rear Cushion segment. Which has been successfully
launched with ADLA Hero Model. Also, we have successfully
manufactured 24 SPM machines for Front Inverted
Technology. Both the Floating Piston as well as the
Inverted Technology all the machines confirm to Industry
4.0 configuration. Inverted Front Fork Technology shock
absorbers for the prime segment Motorcycles.

Fully Automatic Valves counting & Dispensing Machine has
been developed In-house with a very high level of accuracy.
This is another breakthrough achievement besides this was
the requirement of all the Customers. And the 2^nd Auto Valve
counting machine for the Honda & Maruti Segment will be
launched by June 2026 end.

ISO/TS 16949/LATF16949 ACCREDITATION

Your Company's manufacturing facilities are located at
Gurugram, Haridwar and Manesar and we continue to
maintain and uphold the prestigious ISO/TS 16949:2009, ISO
14001:2015 and OHSAS 18001: 2007 (Occupational Health
& Safety Assessment Series) certifications from reputed
leading Indian and International Certification Institutions.

Further your Company is now an "ISO-45001" certified
Company. This Certificate for Safety Management System is
approved by the International Standard Organization. This
is an International Standard that specifies requirements for
an occupational health and safety (OH&S) management
system.

These certifications help in continuous improvements,
besides emphasis being laid on prevention of defects,
reduction of waste, prevention of near misses and to ensure
maximized customer delight.

LISTING

The shares of your Company are listed on the National Stock

Exchange of India Limited (NSE) and BSE Limited (BSE), and
pursuant to Clause C (9)(d) of Schedule V of SEBI Listing
Regulations, the annual Listing fees for the year 2026-27
has been paid to them well before the due date i.e. April
06, 2026. Annual Custody/Issuer fee for the year 2026-27
has been paid by the Company to the depositories viz. NSDL
and CDSL.

HUMAN RESOURCES

Promoting Human Resources management is the strength
of our Company and over a period of time, we have
changed our vision of employees from "Human Resources
Management" to "Human Capital Management".

Your Company believes that employees form the fulcrum
of growth and differentiation for the organization. The
Company recognizes that people are its principal assets and
that its continued growth is dependent upon the Company's
ability to attract and retain quality people. The total
headcounts were 2299 at the end of the year as compared to
2088 of the previous year. The Company encourages long¬
term commitment to the Company by rewarding its people
for the opportunities they create, and the value generated
for customers and shareholders. The Company conducts
several employee engagement and training Programmes to
upgrade the skills of the workforce and generate specialist
in quality, maintenance and manufacturing. As desired by
the Government of India we have started NEEM Scheme
and NAPS Scheme in order to enhance the technical skill
level of our unemployed youths.

Many initiatives have been taken to support business
through organizational efficiency, process change support
and various employee engagement Programmes which
have helped the organization achieve higher productivity
levels. A significant effort has also been undertaken
to develop leadership as well as technical/ functional
capabilities in order to meet future talent requirement.

BUSINESS RISK MANAGEMENT

The Company has a Risk Management Policy to identify,
evaluate business risks and opportunities. This framework
seeks to create transparency, minimize adverse impact
on the business objectives and enhance the competitive
advantage of the company. The business risk framework

defines the risk management approach across the
enterprise at various levels including documentation
and reporting.

The Company regularly conducts a study to develop a
comprehensive 360° view on the opportunities, risks and
threats to the business. These include areas such as market
trends, new competition, changing customer preferences,
disruptions in supplies, product development, talent
management etc.

The Board has identified following risks: -

Intensifying Competition, Declining margins, Imposition
of strict environmental / safety / regulatory regulations,
Increase in raw material/component prices, Dependence
on Collaborators, Over dependence on limited user
segment base, Economic downturn, Risk of natural or
manmade disasters, Product liability / recall, Single vendor
dependence for critical components , Investment risks in
expansion projects, Sales Catering only to Domestic Market,
Over Dependence on few customers base, Retention &
development of personnel and Inappropriate addressing of
customer grievances. We through qualitative products and
brand image, import only in case of cost advantage, regular
improvement in productivity, controls over overhead
and Labour cost through a robust control of approvals,
internal audit of environmental safety and regulatory
compliance, localization of components, insurance, TS
16949 certification, TPM certification, regular development
of alternate vendors where only single source, capturing
customer complaints and response to them, have effective
risk mitigating plans.

The website link is given below:

https://www.munjalshowa.net/wp-content/

uploads/2021/06/Risk-Management-Policy.pdf

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has established a vigil mechanism for the
Directors and Employees of the Company by adopting the
Whistle Blower Policy to report about the genuine concerns,
unethical behaviour, fraud or violation of Company's Code
of Conduct. Your Company hereby affirms that no Director/
Employee of the Company have been denied access to the
Chairman of the Audit Committee. The details of the Whistle

Blower Policy are explained in the Corporate Governance
Report which form an integral part of this Report and is also
posted on the website of the Company.

The website link is given below:

https://munjalshowa.net/wp-content/uploads/2025/05/

VIGIL-MECHANISM-POLICY.pdf

RECOMMENDATION OF THE AUDIT COMMITTEE

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

CHANGES IN THE NATURE OF BUSINESS

There is no change in the nature of the business of the
Company during the Financial Year 2025-26.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the financial year 2025-26, following changes took
place in the composition of Board of Directors and Key
Managerial Personnel of the company:

1. Mr. Kazuhiro Nishioka (DIN: 00602255) ceased to be
a Non-Executive Non-Independent Director of the
Company consequent upon his resignation with effect
from April 08, 2025.

2. Mr. Yogesh Chander Munjal (DIN: 00003491) and
Mr. Hitoshi Fukagawa (DIN: 10611378), Directors liable
to retire by rotation, retired at the 40th Annual General
Meeting of the Company held on August 20, 2025 and
being eligible, offered themselves for re-appointment
and were re-appointed as Directors of the Company at
the said meeting.

3. The Board of Directors, on recommendation of the
Nomination and Remuneration Committee and
approval by members of the Company in 40^th Annual
General Meeting (Remote E-voting) dated August
20, 2025 (being the last date of Remote E-voting),
approved the appointment of Mr. Abhaya Shankar
(DIN: 00008378) as a Non-Executive Independent
Director to hold office for a term of five consecutive
years, i.e. up to May 25, 2030, not liable to retire by
rotation and Mr. Neeraj Munjal (DIN: 00037792) and Mr.
Tetsuya Katsumata (DIN: 11096018) as a Non-Executive
Director, of the Company w.e.f. May 26, 2025, liable
to retire by rotation on such terms and conditions as
agreed between the Company and the concerned
Directors.

4. Mrs. Neha Bansal resigned from the position of
Company Secretary & Compliance Officer of the
Company effective as of the close of business hours on
August 23, 2025.

5. The Board of Directors, on recommendation of the
Nomination and Remuneration Committee appointed
Mr. Ravinder Sharma as the Company Secretary &
Compliance Officer w.e.f. November 14, 2025.

In accordance with the provisions of the Companies Act,
2013 not less than 2/3rd (Two-third) of the total number of
Directors (other than Independent Directors) shall be liable
to retire by rotation. Accordingly, pursuant to the Act read
with the Articles of Association of the Company, Mr. Neeraj
Munjal, Non - Executive Director and Mr. Tetsuya Katsumata,
Non - Executive Director are liable to retire by rotation at
the ensuing 41^st AGM and being eligible they have offered
themselves for re-appointment.

During the year under review, apart from the above-stated
facts, there is no change in the composition of Board of
Directors. Further, there was no change in the office of
the Key Managerial Personnel of the company except as
mentioned above.

Pursuant to the provisions of the SEBI Listing Regulations
and the Act, the profiles of all the Directors, seeking
appointment/re-appointment at the ensuing AGM, have
been provided in the Notice of 41^st AGM of the Company.

All Independent Directors have given individual declarations
that they meet the criteria of independence as laid down
under Section 149(6) of the Act and Listing Regulations.
All the Independent Directors have registered themselves
under data bank of Independent Directors created and
maintained by Indian Institute of Corporate Affairs.

With regard to integrity, expertise and experience (including
the proficiency) of the Independent Directors, the Board of
Directors is of the opinion that all the Independent Directors
are persons of integrity and possess relevant expertise and
experience and their continued association as Directors

will be of immense benefit and in the best interest of the
Company.

All Directors of the Company have also given declarations
that they are not debarred from holding the office of
Director by virtue of any SEBI order or any other such
statutory authority as required under the Circular dated
20^th June, 2018 issued by BSE Limited and National Stock
Exchange of India Limited.

The Company appreciates the dedicated and valuable
guidance given by all the Directors of the Company.

COMMITTEES OF THE BOARD

The Company has several Committees which have been
established in compliance with the requirement of the
relevant provisions of applicable laws and statutes.
As on March 31, 2026, the Board has five committees:
The Audit Committee, Nomination and Remuneration
Committee, Corporate Social Responsibility Committee,
Share Transfer/Stakeholders Relationship Committee and
Risk Management Committee. A detailed note on the
composition of the Board and its committees is provided in
the Corporate Governance Report, which forms an integral
part of the Board Report.

SUBSIDIARY COMPANIES, JOINT VENTURES OR
ASSOCIATE COMPANIES

During the year under review, the Company is not having
any subsidiary, joint venture, Associate Company. Further,
no Company became or ceased to be a Subsidiary/Joint
Venture/Associate of the Company.

BOARD EVALUATION

Pursuant to the provisions of the Act and Listing
Regulations, the Board in consultation with Nomination
and Remuneration Committee has carried out an annual
performance evaluation of its own, the Directors individually
as well as its various committees and the Chairman on
the criteria as recommended by the Nomination and
Remuneration Committee of the Company. The manner in
which the formal annual evaluation has been carried out
has been explained in the Corporate Governance Report,
which forms an integral part of this report. The performance
evaluation was found satisfactory.

NOMINATION AND REMUNERATION POLICY AND
REMUNERATION TO THE DIRECTORS

The Board on the recommendation of the Nomination &
Remuneration Committee has framed a policy for selection
and appointment of Directors, Senior Management
Personnel including Key Management Personnel and
affixing their remuneration. The salient features of the
Nomination and Remuneration Policy are mentioned below:

• The Nomination and Remuneration Policy of the
Company is designed to attract, motivate, improve
productivity and retain manpower by creating a
congenial work environment, encouraging initiatives,
personal growth, team work and inculcating a
sense of belongingness and involvement, besides
offering appropriate remuneration packages and
superannuation benefits.

• The Committee shall comprise at least three (3)
Directors, all of whom shall be non-executive Directors
and at least two-third shall be Independent.

• The Nomination and Remuneration Committee shall
meet at least once in a financial year.

• Quorum of the meeting shall be either two members or
one-third of the members of the committee, whichever
is greater, including at least one independent director
in attendance.

• The Role of the Committee includes: Periodically
reviewing the size and composition of the Board to
have an appropriate mix of executive and independent
Directors to maintain its independence and separate
its functions of governance and management and
to ensure that it is structured to make appropriate
decisions, with a variety of perspectives and skills, in
the best interests of the Company;

• Formulate the criteria for determining qualifications,
positive attributes and independence of a Director and
recommend to the Board, relating to the remuneration
for the Director, key managerial personnel and other
employees.

• Establishing and reviewing Board, KMP and Senior
Management succession plans in order to ensure and

maintain an appropriate balance of skills, experience
and expertise on the Board and Senior Management.

• The Board as per the criteria approved by the
Nomination and Remuneration Committee shall
carry out evaluation of performance of its own,
its committees, and individual Directors and the
Chairman.

The Nomination and Remuneration Policy is available on
the website of the Company at:

https://munjalshowa.net/wp-content/uploads/2025/07/

NRC-POLICY.pdf

The details of remuneration under Section 197 of the Act
paid to Directors are given in point No. IV of Corporate
Governance Report which forms an integral part of this
Report.

BOARD DIVERSITY POLICY

The Company recognizes and embraces the importance of
a diverse Board in its success. We believe that a truly diverse
board will leverage differences in thought, perspective,
knowledge, skill, regional and industry experience, cultural
and geographical background, age, ethnicity, race and
gender, which will help us, retain our competitive advantage.
The Board has adopted the Board Diversity Policy which
sets out the approach to diversity of the Board of Directors.

The Board Diversity Policy is available on our website at:

https://www.munjalshowa.net/wp-content/

uploads/2016/02/Boards-Diversity-Policy.pdf

MEETINGS OF BOARD OF DIRECTORS

A calendar of Meetings is prepared and circulated in
advance to the Directors. During the financial year, four (4)
Board Meetings were convened and held on May 26, 2025,
August 04, 2025, November 14, 2025, and February 07, 2026.
The details of Board and Committee Meetings and Board
members and Committee members who have attended the
meetings are given in the Corporate Governance Report
forming part of this Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors make the following statement in terms of
Section 134(3)(c) & (5) of the Act, which is to the best of their

knowledge and belief and according to the information and
explanations obtained by them:

a. In the preparation of the annual accounts for the
Financial Year ended March 31, 2026, the applicable
accounting standards had been followed and no
material departures were made from the same;

b. Appropriate accounting policies have been selected
and applied 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 financial year ended March 31, 2026 and of
the profits of your Company for that period;

c. Proper and sufficient care has been taken for the
maintenance of adequate accounting records
in accordance with the provisions of the Act, for
safeguarding the assets of your Company and for
preventing and detecting fraud and other irregularities;

d. The annual accounts have been prepared on a going
concern basis;

e. They 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. They have devised proper systems to ensure
compliance with the provisions of all applicable laws
and that such systems are adequate and operating
effectively.

RELATED PARTY TRANSACTIONS

During the year under review, all transactions entered by the
Company with Related Parties as defined under the Act and
Listing Regulations were in the ordinary course of business
and on an arm's length pricing basis and do not attract the
provisions of Section 188 of the Act. Hence, the requirement
of Form AOC-2 as required under Section 188(1) of the Act is
not applicable to the Company.

The Company has not entered into any material related
party transactions, i.e., transactions exceeding 10% of the
annual consolidated turnover or ' 1000 Crore, whichever is
lower, as per the last audited financial statements.

All transactions with related parties were periodically placed
before Audit Committee and committee has also given
omnibus approval for repetitive and foreseen transactions.
The Board and Audit Committee also noted these related
party transactions on a quarterly basis. The details of related
party transactions are given in Note No. 33 of Audited
Financial Statements.

The Related Party Transactions Policy is available on the
website of the Company at:

https://munjalshowa.net/wp-content/uploads/2025/11/

FINAL-RPT-POLICY.pdf

MAINTENANCE OF COST RECORDS

The provisions of Section 148 of the Act are not applicable
to the Company so the Company is not required to maintain
cost records under the aforesaid section.

INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

The Company has a comprehensive system of internal
control to safeguard the Company's assets against any loss
from unauthorized use and ensure proper authorization of
financial transactions.

The Company has internal control systems commensurate
with the size and nature of the business and has experienced
personnel positioned adequately in the organization to
ensure internal control processes and compliances. The
Company takes abundant care in designing, reviewing
and monitoring regularly the working of internal control
systems and their compliances for all important financial
internal control processes. The Audit findings are reported
on a quarterly basis to the Audit Committee of the Board
headed by a Non-Executive Independent Director.

The Company has robust ERP systems based on SAP
platform. This ensures high degree of systems-based checks
and controls. The Company has also upgraded from SAP
ECC to S4/ Hana w.e.f. January, 2026

The Company maintains a system of internal controls
designed to provide a high degree of assurance regarding
the effectiveness and efficiency of operations, the reliability
of financial controls and compliance with laws and
regulations.

Section 143(3)(i) of the Act requires the statutory auditors
to include in their audit report whether the Company has
adequate internal financial controls system in place and the
operating effectiveness of such controls in addition to the
reporting by Board of Directors in director's responsibility
statement. This reporting requirement has thrown up
many challenges. The Company has developed the internal
financial control processes and that was vetted by the
internal auditors during the year. The same has also been
verified by the statutory auditors, who have reported that
all the material Internal financial controls exist during the
financial year 2025-26.

The Company has developed a compliance tool for the
purpose of legal compliance of all the applicable Acts to the
Company.

COMPLIANCE OF THE SECRETARIAL STANDARDS

The Directors have devised proper systems to ensure
compliance with the provisions of all applicable Secretarial
Standards on Board and General meetings (SS-1 & SS-2)
issued by the Institute of Company Secretaries of India
(ICSI) and that such systems are adequate and operating
effectively. The board has complied with all the Secretarial
Standards applicable to the Company.

MANAGEMENT DISCUSSION & ANALYSIS

The Management Discussion & Analysis Report for the
year under review as stipulated under Regulation 34 of
the Listing Regulations is presented in a separate section
forming part of this Annual Report.

GENERAL

Your Directors state that no disclosure or reporting is
required in respect of the following items during the year
under review, except as stated below:

1. Details relating to deposits covered under Chapter V
of the Act - The Company did not invite/accept any
deposit within the meaning of Chapter V of the Act,
and the rules made thereunder.

2. No significant or material orders were passed by the
Regulators or Courts or Tribunals which impact the
going concern status and Company's operations
in future, except that the Registrar of Companies,

Haryana, passed an Adjudication Order dated May
21, 2026 under Section 454 of the Companies Act,
2013, imposing a penalty of INR 16,000/- each on the
Company and its Officers in default, in relation to a delay
in filing of e-Form MR-2 pertaining to the appointment
of Mr. Hitoshi Fukagawa (DIN: 10611378) as Joint
Managing Director of the Company under Rule 7(3) of
the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014. The said penalty
has been duly paid by the Company and the concerned
Officers in default.

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

The Company has in place a Policy on prevention of Sexual
Harassment at workplace in line with the requirements
of The Sexual Harassment of Women at the Workplace
(Prevention, Prohibition & Redressal) Act, 2013. Internal
Complaints Committee (ICC) has been set up to redress
complaints received regarding sexual harassment. All
employees (permanent, contractual, temporary, trainees)
are covered under this policy.

Your Directors further state that during the year under
review, no complaints were received, disposed off and
pending pursuant to the Sexual Harassment of Women
at Workplace (Prevention, Prohibition and Redressal) Act,
2013.

Various workshops and awareness Programmes w.r.t.,
prevention of sexual harassment has been carried out
during the F.Y. 2025-26.

PROCEEDING UNDER INSOLVENCY AND
BANKRUPTCY CODE, 2016

The Company has not made any application or any
proceeding pending under the Insolvency and Bankruptcy
Code, 2016 (31 of 2016) ("IBC Code") during the year.
Further, at the end of the year, Company does not have any
proceedings related to IBC Code.

THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE AT THE TIME OF ONE TIME
SETTLEMENT ANDTHE VALUATION DONE WHILETAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS
ALONG WITH THE REASONS THEREOF

During the year under review, the Company has not made one-time settlement therefore, the same is not applicable.
MATERNITY BENEFIT ACT, 1961

The Company recognizes the importance of supporting women employees at the workplace and remains committed to
fostering an inclusive and supportive work environment. During the financial year 2025-26, the Company has complied with
all the applicable provisions of the Maternity Benefit Act, 1961, as amended from time to time.

POLICIES

We seek to promote and follow the highest level of ethical standards in all our business transactions guided by our value
system. The SEBI Listing Regulations mandated the formulation of certain policies for all listed companies. All our corporate
governance policies are available on website of the company i.e. www.munjalshowa.net

ACKNOWLEDGEMENT

Your Directors place on record their appreciation of the co-operation and support extended to the Company by Government
of India, State Governments of Haryana and Uttarakhand, other local authorities, bankers, suppliers, customers and other
stakeholders whose continued support has been a source of strength to the Company. The continued dedication and sense
of commitment shown by the employees at all levels during the year deserve special mention.

The Directors also place on record their appreciation for the valuable assistance and guidance extended to the Company by
Astemo Ltd., (earlier Hitachi Astemo Limited) Japan and for the encouragement and assurance, which our collaborator has
provided from time to time for the growth and development of the Company.

The Directors also take this opportunity to express their deep gratitude for the continued co-operation and support received
from its valued shareholders.

For and on behalf of the Board

Sd/-

Yogesh Chander Munjal

Place: Gurugram (Chairman & Managing Director)

Date: May 29, 2026 (DIN 00003491)