Your Directors present the 103^rd Board Report and the Audited Financial Statements of the Company for the Financial Year ended March 31, 2023 together with the reports of the Auditors thereon.

FINANCIAL RESULTS

The financial results of the Company for the Financial Year 2022-23 as compared with the previous Financial Year are as under:

DIVIDEND

The Board of Directors have recommended a Dividend of ' 4.50 per equity share i.e. @ 225% of face value of ' 2/- each, for the Financial Year 2022-23 (' 3/- per equity share as Final Dividend for the Financial Year 2021-22) as per the Dividend Distribution Policy.

The total outflow towards dividend recommended for the Financial Year 2022-23 will be ' 357.30 million as against ' 238.30 million for the previous financial year.

Your Company has formulated a policy for Dividend Distribution which is disclosed on the website of the Company and can be accessed at https://www.kirloskarpumps.com/wp-content/ uploads/2021/09/Dividend-Distribution-Policy-2021.pdf

OPERATIONS OF THE COMPANY

The revenue from operations for the year under review is ' 25,399 million, which represents an increase of 17% compared to the previous financial year.

The Financial Year 2022-23 witnessed a significant revival of the economy, enabling the Company to operate all its plants without any restrictions, during the year. This, in turn, allowed the Company to provide its customers with the best possible products and services.

The Company experienced substantial growth in various industry sectors, including building & construction, chemical, pharma, steel, coal, sugar, oil & gas, and retail business. This growth was driven by a focus on value-added and sustainable products such as Lowest Life-cycle Cost (LLC) pumps, pressure boosting systems, dewatering pumps, micro-hydropower generator-PICO, process pumps, HVAC and autoprime pumps. The Company's signature loT-based remote pump monitoring system - KirloSmart also continued to gain acceptance, further contributing to the Company's success.

The Kirloskarvadi facility achieved remarkable results, setting a new record in annual performance with numerous accomplishments. The Kirloskarvadi facility recorded the highest sales ever and dispatched more than 55,000 pumps. The foundry also produced its highest-ever tonnage of 12,033 tons of cast iron.

During the Financial Year 2022-23, the Company executed 132 Vertical Turbine (VT) pumps (Small VT Medium VT Large VT) and successfully completed major irrigation projects in Uttar Pradesh, Madhya Pradesh, Gujarat and Odisha. The building and construction segment experienced a robust 26% growth during this financial year. Additionally, the Company secured significant orders from prestigious projects such as All MS Jammu, First Solar, Kanpur Metro, Oberoi Eternia and Enigma, and Reliance Model Economic Township Gurugram, further solidifying its market position.

To stay at the forefront of the fluid management business, Company's research and engineering development introduced various new product series in Financial Year 2022-23. These include the DBxe and GK series with superior efficiency for utility applications, the KW-LC series of Inline pumps for HVAC applications, and an extended range of pumps in the FM/UL series for firefighting. The Company also launched a series of energy-efficient pumps in the monobloc and submersible pump category to consolidate its position in the agricultural and residential segments.

The Company also focused on addressing offshore applications by developing various types and sizes of Butterfly Valves (BFV) and other specialized products for specific markets such as Oman and Naval dockyards.

The Company's international businesses delivered strong performances despite the challenges posed by increasing inflation pressure and global supply chain issues. In the UK, SPP Pumps experienced a 9% growth in industrial fire pumps order booking and its successful execution, while SPP Pumps Inc. in the USA witnessed a substantial increase in order booking. Kirloskar Brothers Thailand Limited (KBTL) successfully supplied FM/UL fire pumps for multiple metro stations in Bangkok and secured a contract for the supply of

concrete volute pumps for the Khlong Thawi Watthana storm water pumping station.

The Company remains committed to strengthening the capabilities of its channel partners for faster product delivery and service. To support this, the Company has opened Authorised Pumpset Original Equipment Manufacturer (APOEM) plants across the country.

The Company's service engineers demonstrated their commitment and high-class service capabilities by successfully overhauling 7 units of the large vertical turbine (VT) pumps in Gardabani Thermal Power Plant, Georgia within a span of 22 days. The Company's energy audit team also completed performance guarantee tests at various sites, resulting in successful project closures for numerous customers.

Furthermore, through its Vikas Charitable Trust (VCT), the Company actively engaged in various CSR initiatives, reflecting its commitment to giving back to the community.

AWARDS AND RECOGNITION

The Company received several awards and recognition, including the Gold Award from QCFI Coimbatore Chapter for the Kaniyur facility, a patent grant for Electrical Motor Assembly, and the “Winner-Excellence in Sustainability 2022” award for the Sanand plant. The Company was also recognized as one of Maharashtra's Best Employer Brands and received the “Pune Best Employer Brand Awards 2022” from the World Federation of HR Professionals. Additionally, the Company received an award at the Procurement Excellence Summit & Award 2023 organized by the Institute of Supply Chain Management, Mumbai (ISCM Forum).

There were no material changes or commitments to report that affected the Company’s financial position that occurred between the end of the Financial Year and the date of this report.

TRANSFER TO RESERVE

The Board has decided to retain the entire amount of profit for the Financial Year 2022-23 and not to transfer any amount to general reserve.

STATUTORY DISCLOSURES

1. SHARE CAPITAL

The Paid-up Equity Share Capital of the Company as on March 31, 2023 was ' 158.82 million comprising of 79,408,926 equity shares of ' 2/- each. The Company does not have any shares with differential voting rights or stock options or sweat equity.

2. ANNUAL RETURN

As per provisions of Section 92(3) read with Section 134 of the Companies Act, 2013 (‘the Act'), the Annual Return of the Company is placed on the website of the Company at https://www.kirloskarpumps.com/investors/ shareholders-meetings/

3. NUMBER OF MEETINGS OF THE BOARD

During the Financial Year under review, 7 Board meetings were held, the details of which are appearing in the Report on Corporate Governance.

4. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(3) (c) of the Act, the Board of Directors to the best of its knowledge and ability confirm that:

(a) in preparation of the annual accounts, the applicable accounting standards have been followed.

(b) t hey have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the Financial Year and of the profit of the Company for that period.

(c) t hey have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

(d) they have prepared the annual accounts on a going concern basis.

(e) they have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively.

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

5. INDEPENDENT DIRECTORS’ DECLARATION

All Independent Directors of the Company have given declaration under Section 149 (7) of the Act, that they meet the criteria laid down in Section 149 (6) of the Act.

6. DISCLOSURE REQUIRED UNDER SECTION 134(3)(e)

The Board has adopted a Board Diversity Policy which sets the criterion for appointment as well as continuance of Directors, at the time of re-appointment of director in the Company. As per the policy, the Board has an optimum combination of members with appropriate balance of skill, experience, background, gender and other qualities of directors required by the directors for the effective functioning of the Board.

The Nomination and Remuneration Committee recommends remuneration of the Directors, subject to overall limits set under the Act, as outlined in the Remuneration Policy. As per the policy, the Executive Director is entitled to fixed salary, commission based on performance evaluation and other non-monetary benefits. In case of Non-Executive Directors, apart from receiving sitting fees, they are entitled to commission on the basis of criterion as per the policy.

The Remuneration Policy is available on the website of the Company at https://www.kirloskarpumps.com/ investors/policies/. The salient features of this policy are as follows:

• Philosophy: The Company strongly believes that the system of Corporate Governance protects the interest of all stakeholders by inculcating transparent business operations and accountability from management towards fulfilling the consistently high standard of Corporate Governance in all facets of the Company's operations.

• Objective: Transparent process of determining remuneration at the Board and Senior Management level and appropriate balance between the elements comprising the remuneration.

• Coverage: The policy covers remuneration to Executive, Non-Executive Directors, Key Managerial Personnel and Senior Management Personnel.

7. REPORT OF AUDITORS

During the Financial Year under review, there are no qualifications, adverse remarks or disclaimers made by the Statutory Auditor on the financial statements of the Company and by the Secretarial Auditor in his Secretarial Audit Report, which is annexed herewith as an Annexure VI. There are no cases of fraud detected and reported by the Auditor under Section 143(12) during the Financial Year.

M/s. Sharp & Tannan Associates, Chartered Accountants (Firm Registration No. 109983W) have been appointed as Statutory Auditors for the second term of 5 consecutive years by the shareholders with effect from the conclusion of 102^nd Annual General Meeting till the conclusion of 107^th Annual General Meeting.

Mr. Shyamprasad Limaye (CP No. 572), Practicing Company Secretary was appointed as a Secretarial Auditor of the Company as per Section 204 of the Act, for the Financial Year 2022-23. Mr. Shyamprasad Limaye has been re-appointed as Secretarial Auditor of the Company for the Financial Year 2023-24.

M/s. Parkhi Limaye & Co. (Firm Registration No. 000191) have been appointed as Cost Auditor of the Company as per Section 148 of the Act, read with applicable rules made thereunder for the Financial Year 2023-24. Their remuneration is subject to the approval by the Members at the ensuing Annual General Meeting.

8. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186

The details of loans, guarantees or investments under Section 186 of the Act, are available under Note no.

The Corporate Social Responsibility Report in the required format is given as an Annexure II to this report.

13. BOARD EVALUATION

The Board has formulated a Board Evaluation Policy for evaluation of individual Directors as well as the entire Board and Committees thereof. The evaluation framework is divided into parameters based on various performance criteria as given in the policy available on the website of the Company. The evaluation process for the Financial Year ended on March 31, 2023 has been carried out.

In compliance with the requirements under Schedule IV of the Act, read with Regulation 25(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘the SEBI Listing Regulations, 2015'), a meeting of Independent Directors was held on March 22, 2023 primarily to discuss the matters mentioned under the said Schedule.

14. PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES, ASSOCIATE AND JOINT VENTURES

Following are the highlights of performance of subsidiaries, associate and joint venture companies and their contribution to the overall performance of the Company during the period under review.

i. Karad Projects and Motors Limited

The revenue for the year under review is ' 5,151 million which is 8% more as compared to the previous year. This constitutes 12% of gross consolidated revenue of your Company.

ii. The Kolhapur Steel Limited

The revenue for the year under review is ' 456 million which is 45% more as compared to the previous year. This constitutes 1% of gross consolidated revenue of your Company.

iii. Kirloskar Corrocoat Private Limited

The revenue for the year under review is ' 353 million which is 37% more as compared to the previous year. This constitutes 1% of gross consolidated revenue of your Company.

iv. Kirloskar Brothers International B.V. (consolidated with its overseas subsidiaries)

The revenue for the year under review is ' 11,777 million which is 34% more as compared to the previous year. This constitutes 27% of gross consolidated revenue of your Company.

v. Kirloskar Ebara Pumps Limited (Joint Venture)

The revenue for the year under review is ' 2,306 million which is 3% more as compared to the previous year.

The financial position of the subsidiaries and joint venture companies is given in AOC-1, in this Annual Report.

15. OTHER STATUTORY DISCLOSURES AS REQUIRED UNDER RULE 8(5) OF THE COMPANIES (ACCOUNTS) RULES, 2014

(i) Financial summary/highlights are included elsewhere in the Report.

(ii) There was no change in the nature of business during the year under review.

(iii) Details of the Directors are given in the Report of Corporate Governance, forming part of this Integrated Annual Report.

• Mr. Alok Kirloskar (DIN 05324745) is liable to retire by rotation at the ensuing Annual General Meeting and being eligible offers himself for re-appointment.

• Mr. Pradyumna Vyas (DIN 02359563) and Ms. Shailaja Kher (DIN 08450568) ceased to be Directors with effect from May 15, 2022 on completion of their term as an Independent Director of the Company.

• Dr. Rakesh Mohan (DIN 02790744) ceased to be Director with effect from July 27, 2022 on completion of his term as an Independent Director of the Company.

• Mr. Pratap Shirke (DIN 00104902) ceased to be the Non-Executive, Non-Independent Director of the Company with effect from March 15, 2023 consequent upon resignation due to his personal commitments.

• Mr. Sanjay Kirloskar - Chairman and Managing Director, Mr. Chittaranjan Mate - Chief Financial Officer and Mr. Devang Trivedi - Company Secretary, are the Key Managerial Personnel (KMP) of the Company.

During the year under review, there were no changes in the KMPs of the Company.

(iv) No company has become or ceased to be a subsidiary, joint venture or associate company of the Company, during the year.

Material Subsidiaries

Regulation 16 of the SEBI Listing Regulations 2015, defines a ‘material subsidiary' to mean a subsidiary, whose income or net worth exceeds ten percent of the consolidated income or net worth respectively, of the listed entity and its subsidiaries in the immediately preceding accounting year.

Under this definition, Karad Projects & Motors Limited Karad, Maharashtra (‘KPML'), incorporated

on 2^nd April 2001, an Unlisted Indian Subsidiary, SPP Pumps Limited, UK (‘SPP'), incorporated on February 15, 2010 and Kirloskar Brothers International B.V, The Netherlands (‘KBI BV'), incorporated on August 30, 2007, Unlisted Foreign Subsidiaries, are material subsidiaries of the Company.

The subsidiaries of the Company function independently, under the supervision and control of the Board of Directors of respective companies. For more effective governance, the minutes of Board Meetings of subsidiaries of the Company are placed before the Board of Directors of the Company for their review at every quarterly Meeting.

In addition to the above, Regulation 24 of the SEBI Listing Regulations, 2015 requires that at least one Independent Director on the Board of Directors of the listed entity shall be a Director on the Board of Directors of an unlisted material subsidiary, whether incorporated in India or not. For this provision, material subsidiary means a subsidiary, whose income or net worth exceeds twenty percent of the consolidated income or net worth respectively, of the listed entity and its subsidiaries in the immediately preceding accounting year. However, there is no Subsidiary which falls under this definition of unlisted material subsidiary for the Financial Year ended March 31,2023.

PG. Bhagwat LLP Chartered Accountants, Pune, are the statutory auditors of KPML. Saffery Champness, Chartered Accountants, UK, are the statutory auditors of SPP

The other requirements as prescribed under Regulation 24 of the SEBI Listing Regulations, 2015 for Subsidiary Companies have been complied with.

Secretarial Audit of Material Unlisted Indian Subsidiary

KPML, a material subsidiary of the Company carried out Secretarial Audit for the Financial Year 2022-23 pursuant to Section 204 of the Companies Act, 2013 and Regulation 24A of the SEBI Listing Regulations, 2015. The Secretarial Audit Report of KPML submitted by M/s. Dakhawe Apte & Associates, Company Secretaries is attached as Annexure VII to this Report and it does not contain any qualification, reservation or adverse remark or disclaimer.

(v) Details relating to Deposits

The Company has neither accepted nor renewed matured deposits since January 2003 and there were no deposits accepted by the Company as covered under Chapter V of the Act read with Rules made thereunder.

(vi) The details of Deposit which are not in compliance with the requirement of the Chapter V of the Act - NA.

(vii) No significant and material orders were passed by the regulators or court or tribunals impacting the going concern status and Company's operations in future.

(viii) Details in respect of adequacy of internal financial controls with reference to the financial statements:

The Company has adequate internal financial control systems in place. The control systems are regularly reviewed by the external auditors and their reports are presented to the Audit Committee.

The Company has an Internal Audit Charter specifying mission, scope of work, independence, accountability, responsibility and authority of Internal Audit Department. The internal audit reports are reported to Audit Committee along with management response.

(ix) Your Company is required to maintain the Cost records as required under Section 148(1) of the Act and accordingly, such accounts and records are maintained by the Company for the Financial Year ended on March 31,2023.

(x) The details of application made or any proceedings pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the Financial Year - Nil.

(xi) The details of the difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reason thereof - Nil.

(xii) Other disclosures required under the Companies Act, 2013 as may be applicable

• Composition of the Audit Committee has been disclosed in Corporate Governance Report.

• Establishment of Vigil Mechanism:

The Company has already in place a ‘Whistle Blower Policy' as a Vigil Mechanism since 2008. The details of the same are reported in Corporate Governance Report.

• Disclosures as required under Section 197(12)

of the Act read with the applicable rules and details as per Rule 5(2) of the Companies (Appointment and Remuneration of

Managerial Personnel) Rules, 2014 are given as Annexure III & Annexure IV, respectively to this report.

(xiii) Other Disclosure

• The Company has filed a suit against Kirloskar Proprietary Limited (KPL) relating to the use, assignment and ownership of the trademark “Kirloskar”. The Company has made appropriate pleadings in the said suit as advised by the Legal Advisors of the Company and has inter-alia, challenged the unlawful termination and sought declaration, injunction and other appropriate relief/s. KPL subsequently has withdrawn the termination letters with effect from March 3, 2020.

• I n compliance with the order of the Hon'ble Pune Commercial Court, the Company has been depositing the claimed Royalty amount by way of cheque in the safe custody of Ld. Nazir District Court, Pune Civil Court from the quarter ended October, 2018 until 3^rd quarter of the Financial Year 2022-23, without prejudice to its rights and contentions. The cheques upon their expiry have been replaced by fresh cheques in terms of the order of the Hon'ble Court, Pune.

• Kirloskar Industries Limited along with Mr. Atul Kirloskar and Mr. Rahul Kirloskar (‘the requisionists'), collectively holding more than one-tenth of the paid-up share capital of the Company had requisitioned for an Extra-ordinary General Meeting (‘EGM') of the shareholders of the Company for appointment of an independent and reputed external entity as an independent forensic auditor for conducting a forensic audit to investigate and i) verify the expenses incurred by the Company on legal, professional and consultancy charges over the past 6 (six) years, and the affairs of the Company; ii) verify all records, books of accounts, minute books, other documents of company; and iii) examine the conduct of Board of Directors of the Company including independent directors. Accordingly, Notice dated November 16, 2022 for convening EGM along with statement setting out material facts was sent to the shareholders of the Company and the EGM was conducted on December 8, 2022 by the Company. As per the voting results of the said EGM, the resolution as proposed by the requisitionists was defeated since it was not passed by a majority of the votes of the shareholders, present/ participating and voting.

16. CASH FLOW

Cash flow statement for the Financial Year ended on

March 31,2023 is attached to the Balance Sheet.

17. SECRETARIAL STANDARDS

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating efficiently.

SAFETY, HEALTH AND ENVIRONMENT Safety and Health

• Hazard identification is one the important element in Safety. A good safety culture is also said to be developed when all level employees identify the hazards. An Incident tracking system is being used by Staff employees whereas Safety yellow tag (SaY) system is developed for workmen. Corrective and preventive actions are assigned to rectify the hazards. There is significant improvement in the compliance of corrective and preventive actions compared to last year. It's more than 90% in almost all manufacturing plants.

• Safety audit is one of the important tool to identify the gaps in safety. All manufacturing plants are audited for safety by internal trained Safety officers using quantitative methodology.

• Safety training is one another method to improve the skill and knowledge of safety, which also improves the safety culture. We kept the target of 3 man-hours/ employee/year, which is achieved and surpassed in manufacturing plants.

• State of art Safety training centre is created in Kirloskarvadi plant.

• Special initiatives taken to high consequences area to improve safety like Grinding safety, Road safety, forklift safety etc.

• To improve the wastewater quality, in Kirloskarvadi plant, industrial waste streams like coolant waste, paint booth wastewater and acid pickling waste water are segregated from sewage stream. A new effluent treatment plant is installed to treat this segregated industrial waste.

Environment and Energy

Through sustainability policy, the Company is committed to achieve excellence in overall sustainable performance through integration of economic, environmental and social dimensions. As a part of its sustainability initiative, the Company focuses on various aspects to reduce adverse impact on the environment, which include conservation of natural resources, optimising the use of resources, reducing carbon emissions, developing products with low ecological footprint, promoting energy efficient products, promoting use of renewable sources of energy, conserving biodiversity, and engaging with stakeholders and communities for sustainability practices.

For the purpose of optimum utilization of resources and continual improvement, the Company monitors and reviews the important parameters impacting environment such as

carbon footprint, energy consumption, water consumption, material consumption and waste generation.

As a step towards enhancing the use of renewable energy sources and curtailing the scope 2 emissions, the Company has installed and made operational roof-top solar power panels at its manufacturing locations and Corporate Office with capacity of 4.6 MW, which is yielding green power with good efficiency. This is in addition to the generation of 4 MW wind power by Kirloskarvadi plant. Thus, the Company is able to satisfy around 23% of its energy requirement from renewable energy.

At its Dewas plant, the Company has developed “Kirloskar Centenary Forest” by taking input from Miyawaki afforestation concept (Special Process for Thick Forest). It has helped the Company in reducing carbon footprint and developing biodiversity to enrich the environment and society.

Rain-water harvesting system is encouraged to recharge groundwater for all manufacturing plants of the Company. Thus, the Company is able to save up to 30% of water by effective utilisation of water management practices. All plants of the Company are “zero waste water discharge” units.

Through Confederation of Indian Industry (CII), the Company has completed “Life Cycle Assessment (LCA)” study on a sample product to evaluate the impact of manufacturing on environment. Implementation of “High Pressure Moulding Line” (HPML)Technology for Company's foundry in Dewas plant will help it to reduce carbon emission by around 3-5%.

Similarly, the Company has also taken up product specific Carbon Mapping Project for a few of its pump models being regularly exported to the EU market. Actions have been suggested to reduce the impact of carbon emissions from the identified products. Similar exercise has been completed at Dewas Plant to establish measurement of carbon emission by Plant. Thus, the Company shall continue taking efforts to improve and contribute to help India achieve its commitment to be Carbon Net Zero by 2070.

Corporate office of the Company in Pune, Maharashtra is a Green building with LEED Platinum certification. Commitment towards environment is one of the Values of the Company. At corporate office and manufacturing locations, the Company has extensive daylight harvesting to save energy. 80% of Company's work stations are illuminated by natural light. Most pumps manufactured by the Company are BEE star labelled for efficiency.

Green initiatives like plantation of trees to minimize heat load on buildings, use of furnace slag for constructing internal roads and use of ply-boards and metallic frames instead of wood for packing are few other environmental practices adopted by the Company.

ACKNOWLEDGEMENTS

Your Directors wish to place on record their appreciation of the unstinted support and co-operation given by the banks and financial institutions. Your Directors would further like to record their appreciation of the efforts by the employees of the Company and wish to express their gratitude to the Members for their continued trust and support.

For and on behalf of the Board of Directors,

R>

Sanjay C. Kirloskar

Chairman & Managing Director Pune: May 11,2023 DIN 00007885