II. DIVIDEND:

Your Directors recommend 130% dividend, i.e., H 13 per equity
share of H 10 each (Previous year dividend 130%, i.e., H 13 per
equity share of H 10 each) for the Financial Year ended 31
March 2026.

In terms of Regulation 43A of the SEBI (Listing Obligations
and Disclosure Requirements), Regulations, 2015, including
amendments thereunder, the Company has adopted
the Dividend Distribution Policy. A copy of the same is
available at the website of the Company, viz.https://www.
kirloskarindustries.com/documents/779558/f226fda0-971c-
110f-7fe7-086920ce9c7e.

III. MANAGEMENT DISCUSSION AND ANALYSIS
REPORT:

A. GLOBAL ECONOMY
OVERVIEW

During 2025, the global economy remained resilient, with
GDP growth sustained at around 3.4%, supported by
accommodative financial conditions, policy support, and
strong technology-led investment. Improved liquidity, a
relatively weaker US Dollar, and easing inflation through

much of the year helped stabilise demand, particularly
across emerging markets.

However, evolving trade policies, especially US tariff
measures and sector-specific restrictions introduced
uncertainty in global trade flows, impacting cross-border
supply chains and moderating export momentum in
several regions. While partial rollbacks and temporary
truces provided some stability, policy uncertainty
remained elevated.

Entering 2026, the West Asia conflict introduced
additional pressures by disrupting energy supply routes,
resulting in higher fuel and logistics costs. Given the
region’s critical role in global oil and gas transit, this led to
increased input costs for energy-importing economies
across Asia and Africa. As a result, the earlier easing in
price pressures reversed, with global inflation rising from
4.1% in 2025 to around 4.4% in 2026.

OUTLOOK

The global economy enters 2026 amid renewed
uncertainty following the West Asia conflict. Over the
past year, headwinds from trade barriers and policy
uncertainty were partly offset by strong tailwinds,
including technology-led investment, accommodative
financial conditions supported by a weaker US Dollar,
and continued policy support. The conflict is now exerting

additional pressure through its impact on commodity
prices, inflation expectations, and financial conditions.

Under a baseline assumption of a contained conflict with
easing disruptions by mid-2026, global GDP growth is
projected at 3.1% in 2026 remaining below the long-term
average of 3.7% (2000-19). The impact is uneven, with
advanced economies relatively stable, while commodity¬
importing emerging markets face greater downside risks.
Growth is projected to improve to 3.2% in 2027, with
inflation easing to 3.7%, indicating gradual normalisation.

However, risks remain tilted to the downside. Prolonged
conflict or sustained energy price increases could further
weaken growth and raise inflation, particularly affecting
emerging economies. Broader risks from geopolitical
tensions, trade fragmentation, supply chain disruptions,
and fiscal pressures persist, although gains from artificial
intelligence and easing trade tensions could provide some
upside. Policy focus on price stability, fiscal discipline, and
structural reforms will be critical to sustaining growth in
an increasingly uncertain environment.

B. INDIAN ECONOMY

Despite heightened global trade tensions and policy
uncertainty, India remained the fastest-growing major
economy in Financial Year 2025-2026, with GDP
growth accelerating to 7.7% from 7.1% in Financial
Year 2024-2025. This was driven by robust domestic
demand, supported by low inflation, income tax
and Goods and Services Tax (GST) reductions, and
accommodative monetary policy. While net exports
weighed on growth due to faster import expansion, strong
performance in manufacturing and services sustained
overall momentum.

Inflation moderated significantly, with headline inflation
averaging 1.9% between April 2025 and February 2026,
compared to 4.7% in the previous year, largely driven by
falling food prices. Wholesale price inflation also eased to

0.4%. This enabled the Reserve Bank of India to reduce
policy rates by a cumulative 125 basis points to 5.25%
between February and December 2025.

On the supply side, manufacturing strengthened, driven
by automobiles and fast-moving (perishable) consumer
goods. Services sector activity benefitted from strong
urban demand, reflected in retail trade, hospitality,
transportation, and real estate services and buoyant
exports of financial and professional services.

OUTLOOK

India’s GDP growth is projected to moderate to 6.6% in
Financial Year 2026-2027, primarily due to headwinds
from the ongoing West Asia conflict, including elevated
energy prices, supply chain disruptions, and increased

uncertainty. Assuming normalisation in global energy
markets, GDP growth is expected to recover to 7.2% in
Financial Year 2027-2028..

Higher global oil and gas prices are expected to increase
inflationary pressures, which may dampen private
consumption despite earlier tax and GST reductions.
Government consumption is likely to moderate due
to higher subsidy outlays, particularly for fuel and
fertilisers. Investment growth may also slow amid
elevated uncertainty, while net exports are expected to
weaken further due to disruptions in shipping and softer
external demand.

Risks to the outlook remain tilted to the downside, largely
due to uncertainty around the duration and intensity of
the West Asia conflict. Prolonged disruptions to global
energy supplies could sustain high oil and gas prices,
increase input costs, and put pressure on inflation, the
external balance, and fiscal position. Additional risks
include potential weakening of remittance inflows from
Gulf economies and continued volatility in financial
markets and the currency.

India’s strong macroeconomic buffers provide resilience;
however, the evolving global environment underscores
the importance of accelerating energy diversification,
maintaining prudent fiscal management, and advancing
trade diversification. Strengthening renewable energy
adoption, sustaining fiscal discipline, and expanding
trade partnerships through free trade agreements
will be critical to enhancing long-term resilience and
sustaining growth.

C. INDUSTRY OVERVIEW

I. REAL ESTATE INDUSTRY

India’s residential real estate sector sustained strong
momentum in 2025, reaching a historic H7.3 lakhs
crores in housing sales across Tier-1 cities, marking
a 2.15x increase since 2021. The sector’s economic
significance continues to rise, contributing around
6% to GDP, with long-term potential to expand
to ~13% by 2047 as India advances towards a
developed economy.

Growth has been driven by strong end-user demand,
rapid urbanisation, rising incomes, moderating
inflation, expectations of repo rate easing, improving
affordability and buyer sentiment. Structurally, the
sector is evolving into a value-driven and premium-
led market, with higher ticket sizes and sustained
demand for mid-to-premium and luxury housing,
even as volumes stabilise in some segments.

Demand remains concentrated in key urban
centres, with National Capital Region (NCR) and

Mumbai Metropolitan Region (MMR) accounting
for nearly half of total housing value, followed by
Bengaluru and Hyderabad. NCR continues to lead
growth, supported by strong demand in Gurugram
and Noida and ongoing price appreciation.

The sector is expected to play a pivotal role in
India’s ‘Viksit Bharat 2047’ vision, supported
by infrastructure development, formalisation,
digitalisation, and increasing participation of
organised players. The market reflects a structurally
strong, value-led growth cycle, underpinned by
premiumisation, urban demand concentration, and
supportive macroeconomic conditions.

II. FERROUS INDUSTRY

India’s ferrous sector maintained strong momentum
in Financial Year 2025-2026, supported by robust
domestic steel demand, infrastructure activity,
and continued capacity expansion. The industry
remains structurally growth-driven, underpinned by
long-term consumption growth and policy support
for manufacturing and construction.

Steel production has recorded healthy expansion
during April 2025-February 2026, with crude
steel output at 153.6 million tonnes (MT), up 11.2%
YoY, and finished steel production at 146.8 MT, up
10.4% YoY. Consumption of finished steel reached
147.7 MT, up 7.2% YoY, reflecting sustained end-
use demand. India also continues to strengthen
its global position, with crude steel output rising to
15.14 MT in January 2026, up 10.5% YoY.

Trade flows remain dynamic, with India largely
a net importer since April 2024, though April-
February Financial Year 2025-2026 reflects a net
export position of 0.40 MT, supported by stronger
export performance in select categories. HR coils/
strips led exports with a 127.7% YoY increase, while
imports declined sharply across key products such
as HR coils (-48.2%) and plates (-40.5%), indicating
improving domestic substitution.

On the cost front, iron ore lump prices increased to
~H4,700/tonne in February 2026, while TMT, HRC,
and CRC prices rose 2.8-4.4% MoM, reflecting
firm domestic demand and input cost pressures.
Global coking coal prices also remained elevated
at around USD 246/tonne, sustaining raw material
cost sensitivity for steelmakers.

The sector is expected to remain in a steady
expansion phase, driven by strong domestic
demand, infrastructure-led growth, and ongoing
capacity additions. However, performance

will remain cost-sensitive, influenced by raw
material volatility, global steel cycles, and evolving
trade dynamics.

D. OPERATIONS OF THE COMPANY:

The Company is an unregistered Core Investment
Company and continues to hold investments in
group companies.

REAL ESTATE ACTIVITIES:

The Company owns lands and buildings thereon and
apartments and offices in Pune, New Delhi and Jaipur. The
Company has given most of these lands, buildings and
offices on a leave and license basis to group companies
and other occupants. The Company continues to optimise
revenue from these licensed properties.

During the year under review, the Company generated
revenue amounting to H 16.00 crores from its leased
properties (H 20.89 crores as on 31 March 2025).

Avante Spaces Limited (Avante), a Wholly-Owned
Subsidiary of the Company, successfully delivered its
maiden commercial project, ‘One Avante’, (the Project),
situated in Kothrud, Pune, in the previous year. The
Project has been awarded a Platinum Certification from
the Indian Green Building Council (IBGC) for being a leader
in sustainable practices across the ‘One Avante’ building.
This achievement reflects Avante’s commitment towards
sustainable development and building a legacy that
protects the environment.

During the year under review, the Company has further
advanced H 92.50 crores (net) as an unsecured loan to
Avante for its real estate business.

WINDMILLS:

As reported in earlier years, the Company had divested
its windmill business on a going-concern basis to ISMT
Limited as part of its strategic objective of focusing
on its core real estate business and that of its Wholly-
Owned Subsidiary, while optimising returns on its
investment portfolio.

Pursuant to the Scheme of Arrangement and Merger
under Sections 230 to 232 and other applicable
provisions of the Companies Act, 2013, approved by the
Hon'ble National Company Law Tribunal, Mumbai Bench,
vide its order dated 24 July 2024, ISMT Limited was
amalgamated with Kirloskar Ferrous Industries Limited.
Upon the Scheme becoming effective on 8 August 2024,
the business undertakings and operations of ISMT
Limited, including the windmill business acquired from
the Company, stood transferred to and vested in Kirloskar
Ferrous Industries Limited.

Subject to receipt of the requisite statutory approvals
and permissions, the windmill business shall henceforth
be operated and managed by Kirloskar Ferrous
Industries Limited.

Pending completion of the necessary formalities,
the windmill business has been classified as a
discontinuing operation in accordance with applicable
Accounting Standards.

During the year under review, the Wind Energy
Generators (WEGs) have generated net wind energy of
around 0.94 crores units of electricity in the period under
review as against 0.96 crores units of electricity in the
previous year.

During the year under review, the Company has also sold
15,894 RECs, which has resulted in revenue of H 0.56
crores (previous year H 0.08 crores). The Company is
holding 13,685 unsold RECs as on 31 March 2026.

OTHERS:

The Company continues to invest its surplus funds in
fixed deposits and mutual funds. These investments
stood at H 195.63 crores as on 31 March 2026 (Previous
year H 218.16 crores). During the year under review, the
Company has deployed part of the funds towards the real
estate business.

E. COMPANY PERFORMANCE:

During the year under review, your Company earned a
total income of H 127.00 crores (previous year H 120.57
crores).

During the year under review, the Company received a
total dividend of H 66.71 crores (previous year H 62.80
crores) declared by the investee companies.

The Profit Before Tax (PBT) is at H 99.18 crores (previous
year H 101.57 crores).

F. HUMAN RESOURCES:

During the year under review, Mr. George Verghese was
appointed as the Managing Director of the Company with
effect from 20 May 2025.

As on 31 March 2026, the Company had 47 employees
on its rolls, as compared to 35 employees in the previous
year. This includes employees of Avante Spaces Limited,
a Wholly-Owned Subsidiary of the Company. The
employee count also includes the Managing Director and
the Executive Director of the Company.

G. KIRLOSKAR INDUSTRIES LIMITED - EMPLOYEES
STOCK APPRECIATION RIGHTS PLAN 2019:

The ‘Kirloskar Industries Limited - Employees Stock
Appreciation Rights Plan 2019’ (KIL ESARP 2019) was
introduced in accordance with the SEBI guidelines for

the employees of the Company and its subsidiaries.
The Company obtained in-principle approval for the KIL
ESARP 2019 from BSE Limited (BSE) and the National
Stock Exchange of India Limited (NSE) on 3 December
2020 and 19 January 2021, respectively.

During the Financial Year 2023 - 2024, the members of
the Company approved the amendment to the KIL ESARP
2019, by creating 3,00,000 additional Employees Stock
Appreciation Rights (ESARs), increasing the existing
ESAR pool from 4,85,000 ESARs to 7,85,000 ESARs,
through special resolution passed by Postal Ballot on
30 April 2023. The Company also obtained in-principle
approval for the amendment to the KIL ESARP 2019 from
BSE and NSE on 3 July 2023.

KIL ESARP 2019 is administered by the Nomination and
Remuneration Committee of the Board of Directors of
the Company.

KIL ESARP 2019 is in compliance with the applicable
provisions of the Companies Act, 2013, and its Rules,
SEBI (Share Based Employees Benefits) Regulations
2014, read with SEBI (Share Based Employees Benefits
and Sweat Equity) Regulations, 2021, (hereinafter
referred to as Employee Benefits Regulations) and other
applicable Regulations. A certificate from M. J. Risbud
& Co., Practising Company Secretaries, Proprietorship
firm of Mr. M. J. Risbud (Membership No. F810, Certificate
of Practice No. 185), Pune, Secretarial Auditors of the
Company, confirming that the KIL ESARP 2019, has been
implemented in accordance with Employees Benefits
Regulations and the Special Resolution(s) passed by the
members of the Company through Postal Ballot on 29
December 2019, and amendment thereto passed by the
Board on 3 February 2022 to bring it in consonance with
the Employees Benefits Regulations. KIL ESARP 2019
was further amended by special resolutions passed
by the members through a postal ballot held on 30
April 2023. A copy of the same will also be available for
inspection at the Company’s Registered Office.

Pursuant to the KIL ESARP 2019, the Company has,
till date, granted a total of 7,25,498 ESARs comprising
4,84,498 ESARs at an exercise price of H 500 per ESAR
and 2,41,000 ESARs at an exercise price of H 1,800 per
ESAR. These ESARs were granted to eligible employees
of the Company and employees of Avante Spaces
Limited, a Wholly-Owned Subsidiary of the Company.

In accordance with the terms of the KIL ESARP 2019,
the ESARs shall vest after a minimum period of one year
and within a maximum period of four years from the date
of grant.

During the previous Financial Year 2024-2025, 640
unvested ESARs (issued at an exercise price of H 500
per ESAR) and 1,96,000 unvested ESARs (issued at
an exercise price of H 1,800 per ESAR) were forfeited
due to the resignation or early retirement of identified

employees. These forfeited ESARs were returned to the
ESAR pool. In view of the above, total granted ESARs had
been reduced by 1,96,640 unvested ESARs, which were
forfeited, bringing the total number of granted ESARs to
5,28,858 from 7,25,498 under KIL ESARP 2019 as on 31
March 2025.

During the year under review, 3,470 vested ESARs
(issued at an exercise price of H 500 per ESAR) were
lapsed. Further, 3,240 unvested ESARs (issued at an
exercise price of H 500 per ESAR) and 25,000 unvested
ESARs (issued at an exercise price of H 1,800 per ESAR)
were forfeited due to the resignation of the respective
employees. These lapsed / forfeited ESARs have been
returned to the ESAR pool.

I n view of the above, the total granted ESARs have
been reduced by 31,710, which are lapsed / forfeited,
bringing the total number of granted ESARs to 4,97,148
from 5,28,858 ESARs under KIL ESARP 2019 as on 31
March 2026.

Details of KIL ESARP 2019, as required under Rule 12
(9) of the Companies (Share Capital and Debentures)
Rules, 2014, read with Regulation 14 of the Employees
Benefits Regulations, as on 31 March 2026, are set out
in ‘Annexure I’ to this Report and are available on the
Company’s website athttps://www.kirloskarindustries.
com/investors/disclosure-under-reg-14.

H. CAPITAL STRUCTURE

During the year under review, the Company allotted a
total of 96,327 equity shares of H 10 each upon exercise of
Employees Stock Appreciation Rights (ESARs) vested to
the eligible employees, and employees of Avante Spaces
Limited, a Wholly-Owned Subsidiary of the Company,
pursuant to the ‘Kirloskar Industries Limited - Employees
Stock Appreciation Rights Plan 2019’ (KIL ESARP 2019).

Consequent to these allotments, the Issued and
Subscribed Share Capital of the Company increased from
1,04,13,076 equity shares of H 10 each to 1,05,09,403
equity shares of H 10 each, and the Paid-up Share Capital
increased from 1,04,13,045 equity shares of H 10 each to
1,05,09,372 equity shares of H 10 each.

As at 31 March 2026, the Paid-up Share Capital of the
Company stood at H 10,50,93,720, comprising 1,05,09,372
equity shares of H 10 each.

I. CONCERNS AND THREATS:

The Board of Directors has constituted a Risk
Management Committee (the Committee) to identify the
risks, mitigate the same and monitor the development
and deployment of risk mitigation action plans for the
businesses of the Company.

The Company has deployed a risk management process
that includes risk identification, assessment and its
treatment, mitigation, monitoring, and reviewing actions.
The Company prioritises and manages the risks identified
through its Risk Registers.

The Committee regularly presents the risk assessment
and mitigation procedures adopted to assess the
reliability of the risk management structure and
efficiency of the process before the Audit Committee
and the Board of Directors of the Company at their
respective meetings.

The Committee meets every quarter, discusses all
the mapped risks, evaluates future risks and reviews
the mitigation plan for the identified risks for all
business segments.

J. PROSPECTS:

The Company continues to evaluate opportunities to
invest in the Group companies and deploy capital to
support their investment plans and / or improve the
Company’s stakes in those companies.

The real estate sector, our core focus area going forward,
has performed remarkably in the last Financial Year. The
sector is expected to be benefitted by a benign inflation
environment and interest regime. While commodity price
inflation and availability of labour continue to be a risk, we
believe the overall economic scenario bodes well for our
real estate business.

The sector is likely to continue to strengthen in the
quarters ahead and we will be focused on opportunities
for the development of own land parcels and new project
acquisitions. A consolidation in the real estate sector is
expected to continue, leading to an increase in the market
share of corporate and/or organised players such as
your Company.

Your Company will be guided by superior long-term
shareholder value growth in all its endeavours by
maximising returns through timely execution, optimal
financing and fiscal discipline.

K. INTERNAL CONTROLS SYSTEM AND THEIR
ADEQUACY:

The Company has in place an adequate internal controls
system to ensure operational efficiency, accuracy, and
promptness in financial reporting and compliance with
various laws and regulations.

The internal controls system is supported by the internal
audit process. An Internal Auditor has been appointed
for this purpose. The Audit Committee of the Board
reviews the Internal Audit Report and the adequacy and
effectiveness of internal controls periodically.

L. CAUTIONARY STATEMENT:

Statements in this Report, particularly those which relate
to Management Discussion and Analysis, describing
the Company’s objectives, projections, estimates,
and expectations, may constitute ‘forward-looking
statements’ within the meaning of applicable laws and
regulations. Actual results may differ materially from
those either expressed or implied.

M. SEBI REGULATIONS AND LISTING FEES:

The annual listing fees for the year under review have
been paid to the BSE Limited and the National Stock
Exchange of India Limited, where your Company’s shares
are listed.

N. DETAILS OF MATERIAL SUBSIDIARY:

In accordance with the provisions of the Companies Act,
2013 and the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (the Regulations),
Kirloskar Ferrous Industries Limited (KFIL) is a material
subsidiary of the Company.

As on 31 March 2026, the Company holds 45.93% of the
total shareholding in KFIL.

During the year under review, KFIL has not sold / disposed
off and leased assets more than 20% of its assets.

O. SUBSIDIARY COMPANY AND CONSOLIDATED
FINANCIAL STATEMENTS:

The Hon'ble National Company Law Tribunal, Mumbai
Bench (‘NCLT’), vide its Order dated 2 June 2026, has
sanctioned the Scheme of Arrangement and Merger by
absorption of Oliver Engineering Private Limited (‘Oliver’)
and Adicca Energy Solutions Private Limited (‘Adicca’)
(collectively, the ‘Transferor Companies’) with Kirloskar
Ferrous Industries Limited (‘KFIL’ or the ‘Transferee
Company’) and their respective shareholders, pursuant to
the provisions of Sections 230 to 232 and other applicable
provisions of the Companies Act, 2013 (the ‘Scheme’).

The Scheme became effective on 11 June 2026 upon
filing a certified copy of the aforesaid Order together with
a copy of the Scheme with the Registrar of Companies,
Pune, on 11 June 2026.

The Company has the following subsidiaries as on 31
March 2026:

1. Avante Spaces Limited, a Wholly-Owned
Subsidiary Company;

2. Kirloskar Ferrous Industries Limited (KFIL),
Subsidiary Company;

Subsidiaries of KFIL, Step-down subsidiaries of
the Company:

1. Structo Hydraulics AB, Sweden (under liquidation);

2. Tridem Port and Power Company Private Limited;

3. Nagapattinam Energy Private Limited;

4. Best Exim Private Limited;

5. Success Power and Infraprojects Private
Limited; and

6. Marshall Microware Infrastructure Development
Company Private Limited.

The Consolidated Financial Statements of the Company
and its subsidiaries, prepared in accordance with IND AS
110, issued by the Ministry of Corporate Affairs, form part
of this Annual Report. A statement containing the salient
features of the Financial Statement of the subsidiary
companies is attached to the Financial Statements of
the Company in Form AOC-1.

Pursuant to the provisions of Section 136 of the
Companies Act, 2013 and its Rules thereof, including
amendments thereunder, the Financial Statements
along with relevant documents of the Company and its
subsidiaries, are available on the Company’s website, viz.,
https://www.kirloskarindustries.com/investors.

The Financial Statements of the subsidiaries and related
detailed information will be kept for inspection by any
member at the Company’s Registered Office and will
also be made available to the members on demand, at
any point of time.

BRIEF HIGHLIGHTS OF BUSINESSES OF SUBSIDIARY
COMPANIES:

AVANTE SPACES LIMITED

Project Update - One Avante

Avante Spaces Limited (Avante) has successfully
delivered its maiden commercial project, ‘One Avante’
(the Project), located in Kothrud, Pune, in the previous
year, marking a significant milestone in its growth
journey. The Project has been awarded the prestigious
Platinum Certification by the Indian Green Building
Council (IGBC), underscoring its leadership in sustainable
design, construction and operations.

Asset and facility operations for the building is outsourced
to the asset and facility management agency under
the supervision of Avante Management. The focus for
the team is to operate the asset safely, efficiently and
sustainably. Efforts are being made to increase occupant
satisfaction, optimise operating costs and prolong asset
lifecycle. The team is deeply committed to sustainability,
integrating eco-friendly practices across all operations.

During the year under review, Avante was recognised
by various industry bodies for excellence in innovation,
facility management and sustainability in the corporate
real estate sector, reflecting its continued commitment
to best-in-class development and operational practices.

1) iNFHRA Diamond award for excellence in
Water management

2) iNFHRA Recognition award for excellence in
Energy Management

3) iNFHRA Silver award in excellence in Safety and
Security Management

4) FM Globalnet award for excellence in
Facility Management

5) Procon Media award for excellence and leadership
in Admin and Facility Management

Further strengthening its commitment to global
standards, Avante has successfully obtained ISO
9001, ISO 14001 and ISO 45001 certifications for ‘One
Avante’, reaffirming its focus on quality management,
environmental stewardship and occupational health
and safety.

Ongoing Development - Mixed-Use Project, Kothrud

Avante is currently developing Avante Business Park
- Phase II at Kothrud, Pune, which represents a key
milestone in its growth trajectory. The project, with a
leasable area of approximately 1.6 million sq. ft., is being
developed as a Grade A commercial office space in
one of Pune’s prominent micro-markets, catering to the
evolving requirements of multinational corporations,
global capability centres, Banking, Financial Services,
and Insurance (BFSI) and technology-driven
enterprises.

During the year under review, Avante completed a
branding exercise to establish a formal nomenclature for
its ongoing developments. The building currently under
construction has been named “Infinia.” Furthermore,
the entire campus comprising “Infinia” and “One Avante”
towers, along with all amenities and landscape areas, has
been officially designated as Avante Business Park.

The ongoing development of 'Infinia' in the adjoining
plot (Plot C A D) will be referred to as Avante Business
Park Phase-II. Specific updates pertaining to individual
towers will continue to be referenced by their distinct
building names.

The development is progressing in line with planned
timelines, with all requisite statutory approvals in
place, and is targeted for completion by Financial Year
2027-2028. The project is being designed with a strong
emphasis on creating a differentiated workplace
environment, integrating curated social infrastructure,
wellness-oriented spaces and a campus-like ecosystem
aimed at enhancing user experience, collaboration
and productivity.

The project has received platinum pre-certification
from USGBC and IGBC. On completion, this project
is envisioned to redefine the Kothrud area of Pune by
transitioning it from a prime residential locality into a
dynamic Business District for commercial spaces.

Avante is providing certain amenities and facilities in
One Avante building and has generated revenue, which
is recognised in the Audited Financials. The profit
(loss) before tax for the year under review stood at
H (18.04) crores.

KIRLOSKAR FERROUS INDUSTRIES LIMITED

Kirloskar Ferrous Industries Limited (KFIL) is in the
business of manufacture of pig iron, castings, steel
and tubes and has its manufacturing facilities located
at Bevinahalli village and Hiriyur in Karnataka, Jejuri,
Baramati, Ahilyanagar, and Solapur in Maharashtra and
Rajpura in Punjab.

During the year under review:

KFIL achieved Net Sales of H 6,888.57 crores as
compared to H 6,564.22 crores in the previous year. Profit
before Tax (after Exceptional Items) for the year stood at
H 494.18 crores as compared to H 405.86 crores for the
previous year.

KFIL continued to maintain the market leadership position
in the domestic casting business. KFIL sold 1,52,568
MT of castings aggregating to H 1,876 crores during the
Financial Year 2025-2026 as compared to 1,32,242 MT
castings aggregating to H 1,654 crores for the previous
Financial Year.

KFIL made sales of 5,10,080 MT of pig iron valued at
H 1,937 crores as compared to 5,11,787 MT of pig iron
valued at H 2,076 crores in the previous financial year.
The reduction in the sale value is basically on account
of drop in sales realisation of pig iron by 6% from
around H 40,600 per MT in the previous year to around
H 38,000 per MT this year due to margin pressure in the
pig iron business.

KFIL sold 1,88,704 MT of Tubes valued at H 2,130 crores
in the Financial Year 2025-2026 as compared to

1,68,804 MT of Tubes valued at H 2,103 crores in the
previous Financial Year.

KFIL sold 85,644 MT of steel valued at H 605 crores in the
Financial Year 2025-2026 as compared to 73,002 MT of
Steel valued at H 541 crores in the previous Financial Year.

Operational performance of KFIL:

Pig Iron

During the year under review, iron ore prices remained
relatively firm, with lump ore prices fluctuating between
H 6,000 per MT to H 6,500 per MT, while iron ore fines
prices ranged between H 6,000 per MT to H 6,450 per MT.
Coal prices remained stable during the first half of the
financial year; however, the second half witnessed an
upward trend due to an increase in international coking
coal prices, bunker charges, and logistics costs. The
blended average coal price during the year was in the
range of USD 170 to USD 210 per MT.

Castings

During the year under review, the production of castings
increased by 17% as compared to the previous year.
KFIL continuously worked on developing new products,
reduction in operational costs, and increasing the
machining and proto business.

During the year under review, the casting division
witnessed strong demand across tractor, commercial
vehicle, passenger vehicle and engine segments. The
Company increased its supplies to key OEM customers
through consistent quality and operational reliability.

Steel and Tubes

During the year under review, KFIL recorded strong growth
in both its Tube and Steel businesses. Increase in Tube
sales was driven by robust demand from Automotive,
Bearing and Power sectors, improved customer retention
and enhanced delivery performance. However, the OCTG
segment witnessed a decline due to subdued demand
from oil exploration companies and high inventory levels
at customer locations.

Growth in steel business was supported by deeper
engagement with existing customers, addition of new
customers and expansion in the Automotive and Bearing
Steel segments. While market pricing remained under
pressure due to competition from blast furnace - basic
oxygen furnace route steel mills and lower raw material
costs, KFIL continued to focus on securing new customer
approvals to support future growth.

Finance costs

During the year, term loans have been borrowed at
competitive rates for financing capex requirements.
KFIL has overall reduced term loans and working capital
loans compared to the previous year, thereby reducing
the borrowings and finance cost. The year witnessed
high volatility in exchange fluctuation with Indian Rupee
depreciating by 11% against the US Dollar. By regular
monitoring of movement in the exchange rates and taking
forward covers, the impact of the exchange fluctuations
risk was minimised.

Update on customers

During the year under review, KFIL strengthened its
customer engagement, expanded export presence and
secured strategic long-term business partnerships
across its operating segments.

Financial Year 2025-2026 marked a strong performance
in pig iron sales driven by continuous customer
engagement, strategic focus on freight advantaged
markets and successful new customer development
efforts that added new customers to the portfolio. In
parallel, finalised long-term slag sales contracts with
cement companies, strengthening strategic market
position and providing a stable foundation for future
business growth.

I n castings business, KFIL benefitted from strong
demand across tractor, commercial vehicle, passenger
vehicle and engine segments during the Financial Year
2025-2026. KFIL achieved growth ahead of the tractor
market and maintained strong performance in other key
segments despite supply chain disruptions and input
cost pressures towards the end of the financial year.
Strategic customer development initiatives, including
production expansion plans, transition to in-house engine
manufacturing, single source supplier nominations for
new engine platforms and ramp up of key production
programmes are expected to support future growth and
strengthen KFIL’s market position.

In steel and tubes business, KFIL made its maiden export
of 300 MT steel bars to a North American customer at
Costa Rica for a very critical application. Securing new
customer approvals for further growth has been the main
driver during the year and KFIL continues the efforts in
on-boarding new customers to the business.

These developments reflect the KFIL's continued
focus on customer diversification, export growth and
strengthening long-term strategic relationships.

Jambunatha mines in the state of Karnataka

KFIL has been declared as a preferred Bidder for the

Jambunatha Iron Ore Mine and is in the process of

obtaining necessary regulatory clearances from the

environmental and the forest authorities.

Update on Projects

The following major projects were completed during the

Financial Year under review:

1. Installation of pig casting machine at Koppal plant
for improvement of liquid metal yield from 95.6% to
96.6% through reduction in skull generation.

2. Implementation of coke drying system at Koppal
plant for reduction of coke consumption by
12 kg/THM by lowering coke moisture content from
5% to 3%.

3. Installation of iron ore fines screening system at
Koppal plant for enhancement of nut ore recovery
by 10% and reduce sinter return fines by 5%.

4. Cooling line fume extraction system - Regulatory
compliance, environmental protection and
improvement in shop floor working conditions
through efficient extraction of furnace fumes.

5. Runner and riser cleaning system - Improved metal
recovery and resource utilisation, reduction in
melting losses and slag generation and lower energy
consumption in melting operations.

6. Fume Extraction System at Jejuri - regulatory
compliance, environmental protection, improved
working conditions.

7. Fuel conversion in furnaces - Reduce fuel cost,
improve environmental performance.

8. Hot finishing section shed extension with finishing
equipment - Finishing capacity enhancement,
debottlenecking and increase storage capacity.

The Board of Directors of KFIL declared an interim
dividend of H 3 (60%) per equity share on 10 February
2026 and paid on 6 March 2026.

The Board of Directors of KFIL, in its meeting held on
12 June 2026, has also recommended a final dividend of
H 3 (60%) per equity share for the Financial Year ended
31 March 2026.

Accordingly, the total dividend (inclusive of the interim
dividend declared and paid) for Financial Year 2025-2026
is 120%.

IV. PARTICULARS OF INFORMATION FORMING PART
OF THE BOARD’S REPORT PURSUANT TO SECTION
134 OF THE COMPANIES ACT, 2013, RULE 8 OF
THE COMPANIES (ACCOUNTS) RULES, 2014 AND
RULE 5 OF THE COMPANIES (APPOINTMENT AND
REMUNERATION OF MANAGERIAL PERSONNEL)
RULES, 2014:

1. EXTRACT OF ANNUAL RETURN:

In terms of the provisions of Section 92(3) read with the
provision of Section 134 (3) (a) of the Companies Act,
2013, read with Rule 12 of the Companies (Management
and Administration) Rules, 2014, including amendments
thereunder, the Annual Return filed with the Ministry of
Corporate Affairs (MCA), for the Financial Year 2024¬
2025, is available on the website of the Company, viz.,
https://www.kirloskarindustries.com/investors/annual-
returnsand the Annual Return for the Financial Year
2025-2026, will be made available on the website of the
Company once it is filed with the MCA.

2. NUMBER OF MEETINGS OF THE BOARD:

During the year under review, five (5) Board Meetings were
convened and held, the details of which form part of the
Report on Corporate Governance. The intervening gap
between the Meetings was within the period prescribed
under the Companies Act, 2013.

3. DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to the requirements under Section 134 (5)
of the Companies Act, 2013, in respect of Directors’
Responsibility Statement, your Directors state that:

a) in the preparation of the Annual Financial
Statements for the year ended 31 March 2026, the
applicable accounting standards had been followed
and there were no material departures;

b) accounting policies as mentioned in Note No. 2 of
the Notes forming part of the Financial Statements
have been selected and applied consistently.
Further, judgments 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 31 March 2026 and of the Profit of the Company
for the year ended on that date;

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 the Company
and for preventing and detecting fraud and
other irregularities;

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

e) proper internal financial controls were in place and
that the internal financial controls were adequate
and were operating effectively; and

f) proper systems to ensure compliance with the
provisions of all applicable laws were in place, and
were adequate and operating effectively.

4. A STATEMENT ON DECLARATION BY INDEPENDENT
DIRECTORS:

Your Company has received necessary declarations from
all its Independent Directors stating that they meet the
criteria of independence as laid down under Section 149
(6) of the Companies Act, 2013, and Rules thereunder
including amendments thereto and Regulation 16 (1) (b)
and 25 (8) of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, including amendments
thereto and also confirmed that they have complied
with the Code for Independent Directors prescribed in
Schedule IV to the Act.

Further, pursuant to Sub-rule (1) and (2) of Rule 6 of the
Companies (Appointment and Qualifications of Directors)
Rules, 2014 and amendments thereto, all Independent
Directors confirmed that they have enrolled their names
in the data bank with the Indian Institute of Corporate
Affairs, New Delhi, India, within the prescribed time period.

In the opinion of the Board, each of the Independent
Directors appointed / re-appointed during the year
under review possess the requisite integrity, expertise,
and experience for acting as an Independent Director of
the Company.

The Company has laid down a Code for the Board of
Directors and Senior Management of the Company
(Code of Conduct). The Code of Conduct is available
on the Company’s website, viz.,https://www.
kirloskarindustries.com/investors/code-of-conduct.

All the Board Members and Senior Management
Personnel of the Company have affirmed compliance
with the Code of Conduct.

5. COMPANY’S POLICY ON DIRECTORS’ APPOINTMENT
AND REMUNERATION:

The Board has, on the recommendation of the Nomination
and Remuneration Committee, adopted a policy for the
selection and appointment of Directors, Key Managerial
Personnel and Senior Management Personnel and
their remuneration.

The Nomination and Remuneration Policy is available
on the website of the Company, viz.,https://www.
kirloskarindustries.com/investors/policies.

6. AUDITORS:

a. Statutory Auditors:

Kirtane and Pandit LLP, Chartered Accountants,
(Firm Registration Number 105215W/W100057),
Pune, were appointed as the Statutory Auditors of
the Company under Section 139 of the Companies
Act, 2013, (the Act), for a first term of 5 (five) years
from the conclusion of the Annual General Meeting
(AGM) held on 10 August 2021, till the conclusion of
the AGM of the Company, to be held in the year 2026.

They continue to hold office as Statutory Auditors
of the Company until the conclusion of the
ensuing AGM.

Pursuant to provisions of Section 139 of the
Companies Act 2013, read with the Rules thereof,
and based on the recommendation of the Audit
Committee, the Board of Directors has, subject to
the approval of the Members at the ensuing Annual
General Meeting (AGM), recommended the re¬
appointment of Kirtane and Pandit LLP, Chartered
Accountants, (Firm Registration Number 105215W/
W100057), Pune, as the Statutory Auditor of the
Company for a second term of five consecutive
years, from the conclusion of the ensuing AGM
until the conclusion of the 37th AGM, to be held in
year 2031.

The proposed Statutory Auditors have provided
their written consent to act as Statutory Auditors
of the Company and have confirmed that their
appointment, if made, shall be in compliance with
the provisions of Sections 139 and 141 of the Act
and the Rules framed thereunder. The Company has
also received a certificate confirming their eligibility
under Section 141 of the Act.

The requisite resolution seeking approval of
the Members for the re-appointment of and
remuneration payable to Kirtane and Pandit LLP,
Chartered Accountants, forms part of the Notice
convening the ensuing AGM of the Company.

b. Cost Auditors:

Pursuant to the Companies (Cost Records and Audit)
Rules, 2014, dated 31 December 2014, the Company
was not required to have its cost records audited for
the Financial Year 2025-2026.

c. Secretarial Auditors:

Pursuant to the amended provisions of Regulation
24A of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (‘Regulations’),
Section 204 of the Companies Act, 2013 (‘the Act’),

and the Companies (Appointment and
Remuneration of Managerial Personnel) Rules,
2014, the Members of the Company approved
the appointment of M. J. Risbud & Co., Practising
Company Secretaries, a Peer Reviewed
Proprietorship firm of Mr. M. J. Risbud (Membership
No. F810, Certificate of Practice No. 185, UIN:
S1981MH000400, Peer Review Certificate
No. 1089/2021 dated 9 February 2021 valid for
five years), Pune, as Secretarial Auditors of the
Company for a term of five consecutive years,
commencing from the conclusion of the 31st Annual
General Meeting ('AGM') until the conclusion of
the 36th AGM of the Company. Accordingly, M. J
Risbud & Co., Practising Company Secretaries, shall
undertake the Secretarial Audit of the Company for
the financial years ending from 31 March 2026 to 31
March 2030 (both inclusive).

The Firm holds a valid Peer Review Certificate No.
7628/2026, dated 30 January 2026, which is valid
for a period of five years from the date of issuance.

Pursuant to the provisions of Section 204 of the
Companies Act, 2013 read with the Companies
(Appointment and Remuneration of Managerial
Personnel) Rules, 2014 and Regulation 24A of
the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, M. J. Risbud &
Co., Practising Company Secretaries, Pune, have
carried out the Secretarial Audit of the Company
for the Financial Year 2025-2026.

The Report of the Secretarial Audit is annexed as
‘Annexure II’ to this Report.

M. J. Risbud & Co., Practising Company
Secretaries, Pune, has submitted the Secretarial
Compliance Report for the Financial Year 2025¬
2026 in accordance with SEBI Circular CIR/CFD/
CMD1/27/2019 dated 8 February 2019 and has

confirmed that the Company has complied with
the applicable provisions of SEBI Regulations and
the circulars / guidelines issued thereunder.

7. MAINTENANCE OF COST RECORDS:

Pursuant to the Companies (Cost Records and Audit)
Rules, 2014, dated 31 December 2014, the Company
was not required to maintain cost records relating to the
Electricity Industry (Windmill) in Form CRA - 1 for the
Financial Year 2025-2026.

8. EXPLANATION OR COMMENTS OF STATUTORY
AUDITORS AND SECRETARIAL AUDITORS:

There are no qualifications, reservations or adverse
remarks or disclaimers made by the Statutory Auditor

in their Audit Report or by the Practicing Company
Secretary in the Secretarial Audit Report for the year
ended 31 March 2026.

The notes to the Accounts referred to in the Auditors'
Reports are self-explanatory and therefore no further
clarifications are required.

9. PARTICULARS OF LOANS, GUARANTEES OR
INVESTMENTS UNDER SECTION 186 OF THE
COMPANIES ACT, 2013:

During the year under review, your Company has given a
loan of H 92.50 Crores (Total H 353.15 Crores outstanding
as on 31 March 2026) to Avante Spaces Limited (Avante),
a Wholly-Owned Subsidiary of the Company. Your
Company has not granted any guarantee.

10. PARTICULARS OF CONTRACTS OR ARRANGEMENTS
WITH RELATED PARTIES REFERRED TO IN SUB¬
SECTION (1) OF SECTION 188 OF THE COMPANIES
ACT, 2013:

Pursuant to the provisions of Section 134 of the
Companies Act, 2013, read with Rule 8 (2) of the
Companies (Accounts) Rules, 2014, the particulars of all
contracts or arrangements entered into by the Company
with related parties have been done at arm’s length
and are in the ordinary course of business. Hence, no
particulars are being provided in Form AOC - 2. Related
party disclosures as per the Indian Accounting Standard
24 (IND AS 24) have been provided in Note No. 41 to the
Financial Statements.

None of the related party transactions entered into by
the Company were materially significant, warranting
members’ approval under SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015, including
amendments thereunder. The Policy on related party
transactions is available on the website of the Company,
viz.https://www.kirloskarindustries.com/investors/
policies.

The Company also discloses related party transactions
on a half-yearly basis, in the prescribed format with the
Stock Exchange(s).

11. STATE OF COMPANY’S AFFAIRS:

Discussion on the state of the Company’s affairs has
been covered in the Management Discussion and
Analysis Report.

12. AMOUNTS PROPOSED TO BE CARRIED TO RESERVES:

The particulars of the amounts proposed to be carried
to reserves have been covered as part of the financial
performance of the Company.

13. MATERIAL CHANGES AND COMMITMENTS,
BETWEEN THE DATE OF THE BALANCE SHEET AND
THE DATE OF THE REPORT:

There have been no material changes and commitments
affecting the financial position of the Company which
have occurred between the end of the Financial Year of
the Company to which the Financial Statements relate
and the date of this Report.

14. CONSERVATION OF ENERGY, TECHNOLOGY
ABSORPTION, FOREIGN EXCHANGE EARNINGS, AND
OUTGO:

A. Conservation of Energy and Technology Absorption:

The Company has no particulars to report regarding
the conservation of energy and technology
absorption as required under Section 134 (3) (m) of
the Companies Act, 2013, read with Rules thereof,
including amendments thereunder.

B. Foreign exchange earnings and outgo:

15. RISK MANAGEMENT POLICY:

The Company has in place a mechanism to identify,
assess, monitor, and mitigate various risks to key business
objectives. Major risks identified are systematically
addressed through risk-mitigating actions on a continuing
basis. These are discussed at the meetings of the Risk
Management Committee, the Audit Committee, and the
Board of Directors of the Company from time to time.

The risk management process works at various levels
across the organisation. It is an ongoing process and
forms an integral part of the management focus.

16. CORPORATE SOCIAL RESPONSIBILITY:

The Company has been carrying out Corporate Social
Responsibility (CSR) activities. These activities are
carried out in terms of Section 135 read with Schedule
VII of the Companies Act, 2013, and the Companies (CSR
Policy) Rules, 2014.

The Annual Report on CSR activities includes details
about the CSR Policy developed and implemented by
the Company. CSR initiatives taken during the year are
annexed as ‘Annexure III’ to this Report.

17. BOARD EVALUATION:

Pursuant to the provisions of the Companies Act, 2013, and Regulation 17 (10) of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, the Board has carried out a performance evaluation of its own performance and that of
its committees and individual Directors. Performance evaluation has been carried out as per the criteria prescribed by the
Nomination and Remuneration Committee of the Board of Directors of the Company.

18. PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES (EXCLUDING STEP-DOWN SUBSIDIARIES),
ASSOCIATES, AND JOINT VENTURE COMPANIES:

#The Company does not have significant influence on Kirloskar Brothers Limited (KBL) as it does not participate in the management and / or financial decisions
of KBL. As such, KBL is not an Associate Company of the Company under the IND AS 24 and as such, its financials are not included in the Consolidated Financial
Statements of the Company. The aforesaid information is obtained from the website of KBL for the quarter and year ended 31 March 2026.

19. CHANGE IN THE NATURE OF BUSINESS, IF ANY:

In Financial Year 2025-2026, there was no change in the nature of the business of the Company.

20. DETAILS OF APPOINTMENT AND RESIGNATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Directors appointed / re-appointed during the year:

During the year under review, the following Directors were appointed / re-appointed:

Key Managerial Personnel appointed during the year:

During the year under review, the following Key Managerial Personnel were appointed:

1. Mr. George Verghese, Managing Director of the Company, was designated as Key Managerial Personnel of the Company
with effect from 20 May 2025.

2. The Board of Directors of the Company, in its Meeting held on 14 November 2025, based on the recommendation of
the Nomination and Remuneration Committee and the Audit Committee of the Company, appointed Mr. Bharathan
Gopalakrishnan as the Chief Financial Officer of the Company, with effect from 14 November 2025.

Directors and Key Managerial Personnel resigned during
the year 2025-2026:

During the year under review, the following Directors and
Key Managerial Personnel resigned / ceased:

1. The Members of the Company, at their meeting
held on 20 August 2020, had approved the
re-appointment of Mr. Tejas Deshpande (DIN:
01942507) as an Independent Director for a second
term of five consecutive years from 28 August
2020 to 27 August 2025. Accordingly, Mr. Tejas
Deshpande ceased to be a Director of the Company
upon completion of his tenure with effect from
28 August 2025.

2. Mr. Anandh Baheti tendered his resignation vide
letter dated 29 August 2025 from the position of
Chief Financial Officer of the Company as well as
from its Wholly-Owned Subsidiary, Avante Spaces
Limited (Avante). He was relieved from the services
of the Company with effect from 4 November 2025.
Consequently, he ceased to be the Key Managerial
Personnel of the Company and Avante.

3. The Members, at their meeting held on 9 August
2022, had approved the re-appointment of Mr. D.
Sivanandhan (DIN: 03607203) as an Independent
Director for a second term up to his attaining the age
of 75 years, i.e., up to 2 February 2026. Accordingly,
Mr. D. Sivanandhan ceased to be a Director
upon completion of his tenure with effect from
3 February 2026.

4. Mr. Ashit Parekh (DIN: 00821577) tendered his
resignation as Independent Director of the Company
vide letter dated 13 February 2026, with effect from
the close of business hours on 13 February 2026,
due to pre-occupations.

The Board places on record its sincere appreciation
for the valuable contributions, guidance, and support
provided by the above Directors and Key Managerial
Personnel during their respective tenures.

21. DIRECTORS PROPOSED TO BE APPOINTED / RE¬
APPOINTED AT THE ENSUING ANNUAL GENERAL
MEETING:

Pursuant to the provisions of Section 152 of the
Companies Act, 2013, read with the Rules made
thereunder and the Articles of Association of the
Company, Mr. Anil Alawani (DIN: 00036153) and
Mr. Vinesh Kumar Jairath (DIN: 00391684) retire by
rotation at the ensuing Annual General Meeting (AGM)
and, being eligible, offer themselves for re-appointment.

Mr. Anil Narayan Alawani has expressed his willingness to
be re-appointed as a Director for a further period of one
year, i.e., up to the conclusion of the next AGM to be held
in the year 2027.

The Company has received the requisite disclosures and
declarations from Mr. Anil Alawani and Mr. Vinesh Kumar
Jairath, as applicable.

The brief resume and other details of Mr. Anil Alawani
and Mr. Vinesh Kumar Jairath who are proposed to be
re-appointed, as required under Regulation 36(3) of the
SEBI (Listing Obligations and Disclosure Requirements)
Regulations, 2015, form part of the Statement setting out
material facts annexed to the Notice of the ensuing AGM.

The relevant resolutions seeking approval of the Members
for the re-appointment of Mr. Anil Alawani and Mr. Vinesh
Kumar Jairath as Non-Executive Directors have been
included in the Notice of the ensuing AGM.

22. NAMES OF THE COMPANIES WHICH HAVE BECOME
OR CEASED TO BE ITS SUBSIDIARIES, JOINT
VENTURES OR ASSOCIATE COMPANIES DURING
THE YEAR:

The Hon'ble National Company Law Tribunal, Mumbai
Bench (‘NCLT’), vide its Order dated 2 June 2026, has
sanctioned the Scheme of Arrangement and Merger by
absorption of Oliver Engineering Private Limited (‘Oliver’)
and Adicca Energy Solutions Private Limited (‘Adicca’)
(collectively, the ‘Transferor Companies’) with Kirloskar

Ferrous Industries Limited (‘KFIL’ or the ‘Transferee
Company’) and their respective shareholders, pursuant to
the provisions of Sections 230 to 232 and other applicable
provisions of the Companies Act, 2013 (the ‘Scheme’).

Upon the Scheme becoming effective on 11 June
2026, Oliver and Adicca ceased to be the step-down
subsidiaries of the Company.

ISMT Enterprises SA, a Luxembourg based subsidiary
of KFIL, has been officially dissolved and deregistered
from the Luxembourg Trade Registry with effect from
1 September 2025, and consequently ceased to be
step-down subsidiary of the Company.

ISMT Europe AB, Sweden, a Sweden based subsidiary
of KFIL, initiated for liquidation on 9 January 2025 and
consequently, on 8 December 2025, the entity got
dissolved and ceased to be step-down subsidiary of
the Company.

23. DETAILS RELATING TO DEPOSITS, COVERED UNDER
CHAPTER V OF THE COMPANIES ACT, 2013:

During the year under review, the Company has not
accepted any deposits within the meaning of Chapter V
of the Companies Act, 2013 and Rules thereof.

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

To the best of our knowledge, the Company has not
received any such order from the Regulators, Courts or
Tribunals during the year, which may impact the going
concern status or the Company’s operations in the future.

25. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL
FINANCIAL CONTROL WITH REFERENCE TO THE
FINANCIAL STATEMENTS:

The Company has developed a strong two-tier internal
control framework comprising entity level controls
and process level controls. The entity level controls of
the Company include elements such as defined Code
of Conduct, Whistle Blower Policy / Vigil Mechanism,
rigorous management review and Management
Information System (MIS) and strong internal audit
mechanism. The process level controls have been
ensured by implementing appropriate checks and
balances to ensure adherence to Company policies and
procedures, efficiency in operations and also reduce the
risk of frauds.

Regular management oversight and rigorous periodic
testing of internal controls make the internal controls
environment strong at the Company. The Audit
Committee along with the Management oversees
the results of the internal audit and reviews the
implementation on a regular basis.

26. COMPOSITION OF THE AUDIT COMMITTEE AND
OTHER COMMITTEES OF THE BOARD:

Details of the composition of committees of the Board, viz.
the Audit Committee, the Nomination and Remuneration
Committee, the Stakeholders Relationship Committee
and the Corporate Social Responsibility Committee, are
provided in the Report on Corporate Governance.

27. No case of any fraud by any officer or employee of
the Company has been reported by any auditor of
the Company either to the Audit Committee or the
Board pursuant to provisions of Section 143(12) of the
Companies Act, 2013.

28. Neither any application has been made nor any
proceeding has been pending against the Company
under the Insolvency and Bankruptcy Code, 2016.

29. The Company has not accepted any public deposit
pursuant to the provisions of the Companies Act, 2013
and Rules thereof.

V. INFORMATION FORMING PART OF THE BOARD’S
REPORT PURSUANT TO RULE 5 OF THE COMPANIES
(APPOINTMENT AND REMUNERATION OF
MANAGERIAL PERSONNEL) RULES, 2014:

The relevant information pursuant to Rule 5 of the Companies
(Appointment and Remuneration of Managerial Personnel)
Rules, 2014, is annexed as ‘Annexure IV’ to this Report.

In terms of Section 136 (1) of the Companies Act, 2013, the
Board’s Report is being sent to the members without the
particulars of the top 10 employees pursuant to the aforesaid
Rules . The members interested in obtaining a copy of these
particulars may write to the Company Secretary at the
Company’s Registered Office.

VI. VIGIL MECHANISM:

The Company has a Whistle Blower Policy / Vigil Mechanism
(the Policy) to deal with instances of fraud, unethical behaviour,
etc. The Policy provides a mechanism for Directors and
employees of the Company and other persons dealing with
the Company to report genuine concerns including but not
limited to unethical behaviour, actual or suspected fraud
or violation of the Company’s Code of Conduct for Board of
Directors and Senior Management or ethics policy or leakage
of Unpublished Price Sensitive Information (UPSI), by any
person, who is in possession of UPSI, to any other person in
any manner whatsoever, except as otherwise permitted under
the SEBI (Prohibition of Insider Trading) Regulations, 2015, or
any other instance to the Chairman of the Audit Committee of
the Board of Directors of the Company. The Policy is placed on
the Company’s website, viz.,https://www.kirloskarindustries.
com/investors/policies. No case was filed during the year.

VII. DISCLOSURE UNDER THE SEXUAL HARASSMENT
OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION, AND REDRESSAL) ACT, 2013:

The Company has in place a Policy for Prevention of Sexual
Harassment at the workplace. This would, inter alia, provide a
mechanism for the resolution, settlements, or prosecution of

acts or instances of sexual harassment at the workplace and to
ensure that all employees are treated with respect and dignity.

During the year under review, the Company has complied
with the provisions relating to the constitution of the Internal
Committee (the Committee) under the Sexual Harassment of
Women at Workplace (Prevention, Prohibition and Redressal)
Act, 2013.

The Committee comprises four members, including one
external member.

During the year under review, four meetings of the Committee
were held on 10 April 2025, 14 July 2025, 16 October 2025 and
09 January 2026.

During the year under review, there was no complaint / case
filed / pending with the Company.

VIII. DISCLOSURE UNDER MATERNITY BENEFIT ACT, 1961

The Company has complied with the provisions of the Maternity
Benefit Act, 1961, as amended from time to time. The Company
has ensured the provision of maternity benefits to eligible
women employees in accordance with the requirements of the
Maternity Benefit Act, 1961, and there has been no instance of
non-compliance during the Financial Year 2025-2026.

IX. CASH FLOW:

A Cash Flow Statement for the year ended 31 March
2026 is attached to the Balance Sheet as a part of the
Financial Statements.

X. COMPLIANCES WITH RESPECT TO APPLICABLE
SECRETARIAL STANDARDS:

During the year under review, the Company has complied with
all the applicable Secretarial Standards.

XI. CORPORATE GOVERNANCE:

In terms of Regulation 34 (3) of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, a Report on
Corporate Governance along with a Compliance Certificate
issued by the Statutory Auditors of the Company, is attached
and forms part of the Annual Report.

A certificate from the Statutory Auditors of the Company
regarding compliance with conditions of corporate governance
as required under SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015, including amendments
thereunder, also forms part of this Annual Report.