Your Directors have pleasure in presenting this Report with Audited Annual Financial Statements of the Company for the year ended
March 31, 2026.

1. COMPANY SPECIFIC INFORMATION

1.1 Financial Summary & Highlights

The financial results for the year ended March 31, 2026 are summarized below:

1.2 Operating Results and Profits

Standalone revenue of the Company from operations was
R 17,592.26 Million which was 8% higher than the revenue of
R 16,286.27 Million in the previous financial year 2024-25. Your
Company registered a standalone total income of R 17,863.04
Million for the financial year 2025-26, against R 16,507.38
Million of the previous year. Your Company earned a net profit
of R 2,584.11 Million compared to R 2,110.70 Million earned last
year. Your Company registered over 8% growth in Total Income
and 22% growth in Net Profit as compared to previous year.

Consolidated revenue of the Company from operations was
R 17,867.35 Million which was 8.94% higher than the revenue of
R 16,401.69 Million in the previous financial year 2024-25. The
Net Profit stood at R 2,542.84 Million compared to R 2,112.83
Million earned last year.

During the year, your Company continues to maintain the
status of debt free company.

Please refer to the paragraph on Operating Results in the
Management Discussion & Analysis Report section for
detailed analysis.

1.3 Transfer to Reserves

During the reporting year, no amount has been transferred to
General Reserves of the Company.

1.4 Dividend

The Board of Directors is pleased to recommend a final
dividend of R 8.50 (425%) per Equity Share of the face value
of R 2/- each for the year 2025-26 which will be paid subject
to the approval of shareholders in the ensuing Annual General
Meeting (‘AGM’).

The Board has recommended the divided based on the
parameters laid down in the Dividend Distribution Policy and
dividend will be paid out of the profits of the year.

The said dividend, if approved by the Members at the ensuing
AGM will be paid to those Members whose name appears on
the Register of Members (including Beneficial Owners) of the
Company as on the record date.

During the reporting year, the Board of Directors declared an
interim dividend of R 3.50 (175%) per equity share of R 2/- each.

The Company has paid/recommended total dividend of T 12/-
(600%) per equity share of T 2/- each for the year 2025-26.

Pursuant to the Finance Act, 2020, dividend income is taxable
in the hands of the Members with effect from April 1, 2020 and
the Company is required to deduct tax at source from dividend
paid to the Members at prescribed rates as per the Income Tax
Act, 2025.

Pursuant to Regulation 43A of the Securities and Exchange
Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015 (‘SEBI Listing Regulations’),
the Board of the Company had formulated a Dividend
Distribution Policy. The Dividend Distribution Policy is
available on the Weblink:

https://www.kirloskarpneumatic.com/docu-
ments/301 0307/3499608/Dividend Distribution Pol-
icy.pdf/9195b0bb-2df4-f691-4ad0-1e285961e9d-
a?t=1743677330696

1.5 Major events that occurred during the year

Production Linked Incentive (PLI) Scheme for White
Goods:

The PLI Scheme for white Goods aims to create a robust
domestic component ecosystem for the Air Conditioner
Industry and position India as an integral part of the global
supply chains.

During the reporting year, your Company has filed a PLI
application to enter the Commercial Air conditioning space
(Market size > T 5,000 Crores) with our unique ‘Zephyros C
system’.

The Board of Directors are pleased to inform you that the
Government of India has selected your Company in the 4^th
round of PLI Scheme for manufacturing Compressors, Motors,
Heat Exchangers and Sheet Metal Components with a capital
commitment of T 320 Crores.

Launch of New Products:

During the reporting year, your Company successfully launched
"Tyche," a new semi-hermetic reciprocating compressor

clearing all product & field testing. This product is specifically
designed for the commercial refrigeration business segment,
and its motor is manufactured in-house to ensure efficient
supply & competitive price for our customers. Your Company
also developed Cooling Tower Gearbox.

Drive to Commercialise Intellectual Property:

KPCL has been recognized as a Top 30 IP driven company in
India - large category by CII. Your Company used this time to
strongly drive to commercialize the various IP’s that had filed
as well as to put the newly created manufacturing capabilities
to use for related industry.

Backword Integration:

Further in our ongoing effort to reduce costs and as part of our
backward integration strategy, your Company has established
a new foundry at Nashik, featuring lost foam castings
technology. Foundry in Nashik is environmentally friendly and
is based on circularity in manufacturing.

Certification:

During the reporting year, your Company has
successfully completed:

• Surveillance Audit for IMS (ISO: 9001, ISO: 14001, and ISO:
45001) for Hadapsar, Saswad Plant & Regional offices.

• Surveillance Audit for QMS (ISO 9001) for Nashik Plant.

• Surveillance Audit for 5S for Hadapsar and Saswad Plants.

• Re-certification Audit for 5S for Nashik Plant.

• Re-certification audit for ISO/IEC: 17025 (NABL
Accreditation) for the Metallurgy Laboratory.

• Surveillance audit for ISO/IEC: 17025 (NABL
Accreditation) for the Metrology Laboratory.

1.6 Segment-wise position of business and its
operations

In terms of provisions of Indian Accounting Standards (“IND
AS”) 108 - Operating Segments, during the reporting year,
the Chief Operating Decision Maker evaluates the Company’s
performance comprising various segments. Accordingly,
segmental information has been reported under Compression
Systems and other Non-Reportable Segments which include
remaining Non- Qualifying Segments.

Compression Systems registered a robust growth over
the previous year by earning revenue of T 16,437 Million as
compared to T 15,287 Million in the previous year.

1.7 Subsidiary Company and Consolidated Financial
Statements

Systems & Components (India) Private Ltd. (S&C) became a
subsidiary of the Company with effect from December 4, 2024.
As on March 31, 2026 the Company has only one subsidiary.

The consolidated financial statements of the Company and
its subsidiary have been prepared in compliance with the
applicable provisions of the Companies Act, 2013 (‘the Act’) and
as stipulated under Regulation 33 of SEBI Listing Regulations
as well as in accordance with the IND AS 110 notified under
the Companies (Indian Accounting Standards) Rules, 2015.
The audited consolidated financial statements together with
the Independent Auditor’s Report thereon form part of this
Annual Report.

Pursuant to Section 129(3) of the Act, a statement containing
the salient features of the financial statements of the subsidiary
company is included in the Notes to the Financial Statements
in Form AOC-1.

Pursuant to the provisions of Section 136 of the Act and its
Rules thereof including amendments thereunder, the Financial
Statement along with relevant documents of the Company and
its subsidiary are available on the Company’s website viz. www.
kirloskarpneumatic.com

The Financial Statement of the subsidiary 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 subsidiary company:

S&C was incorporated on October 31, 1989. It has been
in the business of Industrial Refrigeration (dealing in
design manufacture, installation and commissioning of
refrigeration products and projects required for industries
such as Agrochemicals, Chemicals, Petrochemicals, Drugs &
Pharmaceuticals, Dyes & Pigments, Food & Beverages, Dairy,
Seafoods, Textiles & Yarns, Soaps & Detergents, Breweries,
etc.) for over 30 years and having their manufacturing plant
at Murbad, Maharashtra and registered office situated at
Bhandup, Mumbai.

2. CAPITAL STRUCTURE

2.1 Increase in Share Capital

During the year, the Company allotted 60,800 Equity Shares
of T 2/- each upon the exercise of the options granted to
employees of the Company pursuant to KPCL Employee Stock
Option Scheme 2019 (‘KPCL ESOS 2019’ or ‘the Scheme’).
Out of the 60,800 equity shares, the Company has allotted
6,100 Equity Shares of face value of T 2/- each under the

KPCL ESOS 2019 on March 22, 2026 which was listed on BSE
Ltd. and National Stock Exchange of India Ltd. on April 1, 2026.

Issued Capital, Subscribed Capital and Paid-up Capital of
the Company therefore increased by T 1,21,600/- and was
T 12,99,16,380/- consisting of 6,49,58,190 equity shares of
T 2/- each as on March 31, 2026.

2.2 Employee Stock Option Scheme

Your Company introduced KPCL ESOS 2019 to motivate,
incentivize and reward its employees. Your Company views
employee stock options as an instrument that would enable the
employees to share the value they create for the Company and
align individual objectives of the employees with the objectives
of the Company.

The Scheme is in compliance with the applicable provisions
of the Act and the Rules issued thereunder, Securities and
Exchange Board of India (Share Based Employee Benefits)
Regulations, 2014 upto August 12, 2021, the Securities and
Exchange Board of India (Share Based Employee Benefits
and Sweat Equity) Regulations, 2021 w.e.f. August 13, 2021
(“Employee Benefit Regulations”) and other applicable
regulations, if any.

Pursuant to KPCL ESOS 2019, the Nomination and
Remuneration Committee has granted stock options to its
specific employees as follows:

The details of options granted, vested, exercised, lapsed/
cancelled during the year 2025-26 and outstanding at the
end of the year is provided in Note No. 28 to the standalone
Financial Statement for the year ended March 31, 2026. During
the year, 60,800 equity shares were allotted as a result of
exercise of options resulting into realization of T 22,998,000/-.

During the reporting year, the Company has not granted options
to any Key Managerial Personnel. None of the employee was
granted options in any one year amounting to five percent or
more during the year. Further, no employee was identified to
whom options granted one percent or more of the issued capital
of the company at the time of grant during the year. During the
year, the Company has not made any variations in the KPCL
ESOS 2019. The certificate from M/s SVD & Associates,
Company Secretaries, Secretarial Auditor of the Company,
confirming that the Scheme has been implemented in
accordance with the aforesaid regulations and in accordance
with the resolution passed by the Company at its AGM
held on July 20, 2019, will be available for inspection by the
shareholders during the ensuing AGM. A copy of the same will

be available for inspection at the Company’s website and can
be accessed on the weblink:https://www.kirloskarpneumatic.
com/agm-egm

The disclosures relating to implementation of the Scheme,
details of options granted, changes to the Scheme, if any, etc.
are placed on the website of the Company as required under
the Employee Benefit Regulations and can be accessed on
the following weblink:https://www.kirloskarpneumatic.com/
agm-egm

In line with the IND AS 102 on ‘Share Based Payments’ issued
by the Institute of Chartered Accountants of India (“ICAI”),
your Company has computed the cost of equity - settled
transactions by using the fair value of the options at the date of
the grant and recognized the same as employee compensation
cost over the vesting period.

3. AWARDS

During the reporting year, your Company was recognized with
prestigious and diverse external accolades which include:

• “Golden Peacock HR Excellence Award - 2025” by Golden
Peacock Awards Secretariat, Institute of Directors, India.

• “Runner up Award for Highest IP Filing in the category
of Large - Engineering/Manufacturing Companies in the
11^th CII Industrial Intellectual Property Awards 2025.

• Excellence in Innovation Award at the 13^th Annual
Manufacturing Today Conference & Awards 2025.

• Energy Efficient Plant Award at the CII Energy Awards
2025 for its Saswad Plant.

• Awards in 39^th National Convention on Quality Concepts
(NCQC - 2025)

• 5 “Excellence Award Trophy”

• Awards in 40^th Annual Chapter Convention on Quality
Concepts (CCQC - 2025)

• 5 “Gold Award Trophy”

• 1 “Silver Award Trophy”

5. PARTICULARS OF INVESTMENTS, LOANS AND
GUARANTEES

During the reporting year, your Company has made
investments in Mutual Funds and Fixed Deposits.

No Loans, Guarantees covered under the provisions of
Section 186 of the Act are given/provided/made during the
reporting year.

6. DIRECTORS

6.1 Directors and Key Managerial Personnel

During the reporting year:

i. Ms. Varsha Purandare (DIN: 05288076) was appointed
as Non-Executive Independent Director on the Board
of the Company from April 24, 2025 to April 23, 2030
by the Members of the Company in the AGM held on
July 22, 2025.

ii. Mr. Deepak Bagla (DIN: 01959175), has joined the
Government of India and to avoid any potential conflict
of interest, resigned from the Board as Non-Executive
Independent Director with effect from July 19, 2025.
The Board places on record their sincere appreciation
and extends gratitude to Mr. Deepak Bagla for his
invaluable contribution.

iii. Mrs. Nalini Venkatesh (DIN: 06891397), has ceased to be a
Non-Executive Independent Director of the Company on
completion of her tenure with effect from July 25, 2025.
The Board places on record their sincere appreciation
and extends gratitude to Mrs. Nalini Venkatesh for her
invaluable contribution over the years.

iv. Mr. Tejas Deshpande (DIN: 01942507) was appointed as
Non-Executive Independent Director on the Board of the
Company for second term of 5 (Five) consecutive years
from October 27, 2025 to October 26, 2030 by way of
postal ballot on September 25, 2025.

Mr. K Srinivasan (DIN: 00088424) was ceased to be a Director
and Managing Director of the Company w.e.f. April 1, 2026 upon
completion of his term. The Members of the Company have
appointed Mr. Aman Kirloskar (DIN: 09823056) as Director and
Managing Director of the Company w.e.f. April 1, 2026 by way
of postal ballot on March 22, 2026.

Mr. Rahul C. Kirloskar (DIN: 00007319) retires by rotation at
the forthcoming AGM and being eligible offers himself for
re-appointment. The necessary resolution for appointment
of Mr. Rahul C. Kirloskar is proposed for approval in the
forthcoming AGM. The Board also on the recommendation
of the Nomination and Remuneration Committee and in

accordance with provisions of the Act and SEBI Listing
Regulations, has proposed the appointment of Mr. Rahul C.
Kirloskar as Executive Director designated as ‘Executive
Chairman’ from January 23, 2027 to January 22, 2032 for
approval in the forthcoming AGM.

The Board on the recommendation of Nomination and
Remuneration Committee and in accordance with provisions
of the Act and SEBI Listing Regulations, has appointed
Mr. Ranganthan Nuggehalli Krishna (DIN: 00004044) as
an Additional Director in the category of Non-Executive
Independent Director on the Board from April 28, 2026 to
March 12, 2031 subject to approval of the Members in the
forthcoming AGM.

The Board of Directors is of the opinion that the Independent
Directors holds the highest standard of integrity and possess
necessary expertise and experience including proficiency in
the field in which the Company operates.

The disclosures required pursuant to Regulation 36 of the SEBI
Listing Regulations and the Secretarial Standards on General
Meetings (SS-2) are given in the Notice of AGM, forming part
of the Annual Report.

There is no change in the Key Managerial Personnel during the
reporting year.

6.2. Declaration from Independent Directors and
Statement on Compliance of Code of Conduct

Your Company has received necessary declarations from all
its Independent Directors stating that they meet the criteria
of independence as provided in Sub-section (6) of Section
149 of the Act and Regulation 16(1)(b) of the SEBI Listing
Regulations. In terms of Regulation 25(8) of the SEBI Listing
Regulations, the Independent Directors have confirmed that
they are not aware of any circumstance or situation, which
exists or may be reasonably anticipated, that could impair or
impact their ability to discharge their duties with an objective
independent judgement and without any external influence.
The Independent Directors of the Company have included their
names in the data bank of Independent Directors maintained
with the Indian Institute of Corporate Affairs, in terms of
Section 150 read with Rule 6 of the Companies (Appointment
and Qualification of Directors) Rules, 2014.

All the Directors and Senior Management Personnel have also
complied with the Code of Conduct of the Company as required
under SEBI Listing Regulations for its Directors and Senior
Management. The Independent Directors have complied with
the code for Independent Directors prescribed in Schedule IV
to the Act.

In the opinion of the Board, the Independent Directors possess
the requisite expertise and experience and are persons of high
integrity and repute. They fulfil the conditions specified in the

Act as well as the rules made thereunder and are independent
of the Management.

6.3 Directors Appointment and Remuneration
Policy

The Board, on the recommendation of the Nomination and
Remuneration Committee, adopted a policy for selection
and appointment of Directors, Key Managerial Personnel
(KMP) and Senior Management Personnel. Policy also
prescribes the guidelines for determining the remuneration
of Executive Directors, Non-Executive Directors, KMP and
Senior Management.

The Nomination and Remuneration Policy is available on the
Company’s website on the following weblink:https://www.
kirloskarpneumatic.com/documents/3010307/3499608/
Remuneration policy.pdf/22292a40-4296-0b74-c55b-
39cc36aaac00?t=1743677334780

6.4 Board Evaluation

The annual evaluation framework for assessing the
performance of Directors comprises of the following key areas:

a) Attendance in the meetings, participation and
independence during the meetings;

b) Interaction with Management;

c) Role and accountability of the Board;

d) Knowledge and proficiency; and

e) Strategic perspectives or inputs.

The evaluation involves assessment by the Nomination and
Remuneration Committee and Board of Directors. A member
of the Nomination and Remuneration Committee and Board
does not participate in the discussion of his/her evaluation.

Pursuant to the provisions of the Act and Regulation 17(10)
of the SEBI Listing Regulations, the Board has carried out
performance evaluation of its own performance and that of
its committees and individual Directors.

6.5 Number of Meetings of the Board

A calendar of meetings is prepared and circulated in advance
to the Directors. During the year, 5 (Five) Board Meetings were
convened and held, the details of which are given in the Report
on Corporate Governance. The intervening gap between the
meetings was within the period prescribed under the Act and
SEBI Listing Regulations.

6.6 Composition of Committee Meetings

The composition of the Audit Committee, Nomination and
Remuneration Committee, Stakeholders’ Relationship
Committee, Corporate Social Responsibility Committee and

Risk Management Committee constituted by the Board under
the Act and SEBI Listing Regulations as well as changes in the
composition, if any and number of meetings held during the
year forms part of the Report on Corporate Governance.

6.7 Directors’ Responsibility Statement

To the best of their knowledge and belief and according to the
information and explanation obtained by them, the Directors in
terms of clause (c) of Sub-section (3) of Section 134 state that:

a) In the preparation of the annual accounts, the applicable
Indian Accounting Standards (IND AS) have been followed
and there have been no material departures;

b) Accounting policies as mentioned in the financial
statements 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 as at March 31, 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 Companies Act,
2013 for safeguarding the assets of the company and for
prevention and detection of fraud and other irregularities;

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

e) Proper internal financial controls have been laid down for
the company and that such internal financial controls are
adequate and are operating effectively; and

f) Proper systems to ensure compliance with the provisions
of all applicable laws are in place and that such systems
are adequate and operating effectively.

7. PARTICULARS OF CONTRACTS ORARRANGEMENTS WITH RELATED PARTIES

The policy on Related Party Transactions as approved by the
Board is uploaded on the Company’s website.

All related party transactions which were entered into during
the financial year were on an arm’s length basis and in
the ordinary course of business. There are no materially
significant related party transactions made by the Company
with Promoters and Promoter Group, Directors, Key Managerial
Personnel or other designated persons which may have a
potential conflict with the interest of the Company at large.

The statement that the transactions are at arm’s length and in
the ordinary course of business is supported by a certificate
from the Managing Director and Chief Financial Officer on
periodical basis as well as the certificate from Chartered
Accountant on an annual basis.

Related Party Transactions have been placed before the
Audit Committee for their approval and to the Board, as and
when required.

In certain cases, prior omnibus approval of the Audit Committee
is obtained on a yearly basis. The transactions entered into
pursuant to the omnibus approval so granted are reviewed by
the Audit Committee on a quarterly basis.

The disclosures as per IND AS for transactions with
related parties are provided in the Financial Statements of
the Company.

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

8. RISK MANAGEMENT

The Board has adopted a Risk Management Policy. The policy
is focused on sustainable business growth with stability and a
pro-active approach in identifying, evaluating, mitigating and
reporting risks associated with the Companies business.

The Company has in place a Risk Management Committee
of the Board, details of which form part of the Corporate
Governance Report.

The Company has a Risk Management framework to identify,
evaluate business risks and opportunities. To strengthen the
risk management framework, Company has Segment Level
Risk Committees, Corporate Risk Management Committee
and Board level Risk Management Committee. This framework
seeks to minimize adverse impact on the business objectives
and enhance the Company’s competitive advantage.

9. INTERNAL CONTROL SYSTEMS AND THEIR
ADEQUACY

The Company has an Internal Control System commensurate
with the size, scale and complexity of its operations. The scope
of the Internal Audit is decided by the Audit Committee and the
Board. To maintain its objectivity and independence, the Board
has appointed an External Auditor, which reports to the Audit
Committee of the Board on a periodic basis.

During the reporting year, Internal Financial Controls laid down
by the Board were tested for adequacy & effectiveness and
no reportable material weakness in the design or operations
was observed. The Company has policies and procedures
in place for ensuring proper and efficient conduct of its
business, safeguarding of assets, prevention and detection of
frauds and errors, accuracy and completeness of accounting
records and timely preparation of reliable financial information.
Statutory Auditors have also given unmodified audit opinion on
adequacy of internal financial control systems with reference
to financial statements.

The Internal Auditor monitors and evaluates the efficacy and
adequacy of Internal Control Systems in the Company, its
compliance with operating systems, accounting procedures
and policies for various functions of the Company. Based on the
report of Internal Auditor, process owners undertake corrective
action wherever required in their respective areas and thereby
strengthen the controls further. Audit observations and actions
taken thereof are presented to the Audit Committee of the
Board on periodic basis.

10. AUDITORS

10.1 Statutory Auditors

The Members of the Company appointed Kirtane & Pandit
LLP, Firm Registration No 105215W/W100057, Chartered
Accountants as the Statutory Auditors of the Company for a
first term of 5 (Five) consecutive years from the conclusion of
the 46^th AGM till the conclusion of the 51^st AGM of the Company.
Accordingly, the term of Kirtane & Pandit LLP as Statutory
Auditor will be completed at the conclusion of forthcoming
AGM in terms of the said approval and Section 139 of the Act
read with the Companies (Audit and Auditors) Rules 2014.

There are no qualifications, reservations or adverse remarks
or disclaimers made by the Statutory Auditors in their Audit
Report for the year ended March 31, 2026.

The Audit Committee and Board of Directors of the Company
have therefore recommended the re-appointment of Kirtane
& Pandit LLP (Firm Registration No. 105215W/W100057),
Chartered Accountants as the Statutory Auditors of the
Company for a second term of 5 (Five) consecutive years from
the conclusion of the 51^st AGM till the conclusion of the 56^th
AGM of the Company at such remuneration plus applicable
taxes, and out of pocket expenses, as may be determined and
recommended by the Audit Committee in consultation with
the Auditors and duly approved by the Board of Directors of
the Company.

Details of the proposal for appointment of Kirtane & Pandit LLP
are given in the Explanatory Statement to the Notice of the 51^st
AGM as required under Section 102 of the Act. Accordingly,
the necessary resolution for appointment of Kirtane & Pandit
LLP, Chartered Accountants for a period of 5 (Five) years is
proposed for approval in the forthcoming AGM.

10.2 Cost Auditors

The Board of Directors, had on the recommendation of
the Audit Committee, appointed M/s Sudhir Govind Jog, a
proprietary firm to audit the cost accounts of the Company for
the financial year 2026-27 on a remuneration of R 0.65 Million.

As required under the Act, the remuneration payable to the
cost auditor is required to be placed before the Members in a
general meeting for their ratification. Accordingly, a resolution

seeking Members’ ratification for the remuneration payable to
M/s Sudhir Govind Jog, a proprietary firm as Cost Accountant
for the year ended on March 31, 2027 is proposed for approval
in the forthcoming AGM.

10.3 Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act and the
Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Company has appointed M/s SVD
& Associates, a partnership firm of Company Secretaries in
Practice to undertake the Secretarial Audit of the Company.
The report of the Secretarial Audit is annexed herewith as
Annexure “1”.

There are no qualifications, reservations or adverse remarks or
disclaimer made by the Secretarial Auditors in their Secretarial
Audit Report for the year ended March 31, 2026.

M/s SVD & Associates has submitted Annual Secretarial
Compliance Report as laid down in the Circular No. CIR/ CFD/
CMD1/27/2019 dated February 8, 2019 issued by Securities
and Exchange Board of India and has also confirmed that the
Company has complied with all applicable SEBI Regulations
and circulars/guidelines issued in line thereunder, for the
financial year 2025-26.

11. SECRETARIAL STANDARDS

Your Company is in compliance with the applicable Secretarial
Standards on Meetings of the Board of Directors (SS-1) and
Secretarial Standards on General Meetings (SS-2) issued by
the Institute of Company Secretaries of India.

12. REPORTING OF FRAUDS BY AUDITORS

During the reporting year, neither the Statutory Auditors, the
Cost Auditor nor the Secretarial Auditors have reported to
the Audit Committee, under Section 143(12) of the Act, any
instance of fraud committed against the Company by its
officers or employees. Therefore, no details are required to be
provided in the Board’s report.

13. CORPORATE GOVERNANCE

The Company strives to maximize the wealth of the
shareholders by managing the affairs of the Company with
pre-eminent level of accountability, transparency and integrity.
A report on Corporate Governance including the relevant
Auditors’ Certificate regarding compliance with the conditions
of Corporate Governance as stipulated in Regulation 34(3) read
with Part E of Schedule V of the SEBI Listing Regulations is
annexed and forms part of the Annual Report.

State of Company’s affairs and future outlook is provided in the
Management Discussion and Analysis Report, annexed hereto
forming part of Directors’ Report.

14. ANNUAL RETURN

The Annual Return as provided under Sub-section (3) of
Section 92 of the Act is available on the web-link:https://www.
kirloskarpneumatic.com/investors/annual-returns

15. CORPORATE SOCIAL INITIATIVES

The Board has constituted a CSR Committee to oversee
and monitor CSR activities of the Company. Based on the
recommendations of the CSR Committee, the Board continues
to implement the CSR Policy in line with the provisions of
the Act.

As part of its Corporate Social Responsibility (‘CSR’) initiatives,
the Company continues to focus on Education, Environment and
Health, in alignment with Schedule VII of the Act, Sustainable
Development Goals (‘SDGs’), and ESG commitments.

The initiatives in education (‘Bharari’ and ‘Youth Skilling’),
adolescence mental health (‘Relashani’), and School and
College Environmental Initiative were expanded and refined
for greater reach and impact. KaShi (‘Kanya Shiksha’) initiative
was extended to some more new locations.

The Company continued its focus on youth skilling and
employability in collaboration with S L Kirloskar CSR Foundation
and NTTF (‘Nettur Technical Training Foundation’). Students
were selected based on socio-economic criteria and Diversity,
Equity and Inclusion (‘DEI’) considerations. The Company
supported 151 students across Bengaluru, Dharwad and Pune
centres. All these students have successfully completed the
course and were placed 100% in different industries.

The April 2025 to March 2026 period showcases RESQ
Charitable Trust (‘Rescue, Treatment, Rehabilitation &
Conservation of Wild Animals’) as a highly effective, responsive,
and impactful organization in the field of wildlife conservation.
Through rapid action, scientific expertise, strong partnerships,
and community engagement, RESQ continues to safeguard
wildlife while promoting sustainable coexistence.

Throughout the year, RESQ maintained a high level of
operational activity and efficiency. On average:

• 1,600 to 2,000 cases were handled every month

• 700 to 1,000 animals were rescued monthly

• Field teams covered 33,000 to 41,000 kilometres per
month, indicating extensive outreach

• 2,000 helpline calls were attended monthly, showcasing
strong public engagement

• Awareness programs reached 1,000 to 15,000
individuals per month

• 1,147 individuals trained during National Safety Week

These figures reflect the organization’s scale, responsiveness,
and operational strength in managing wildlife emergencies.

• These initiatives have contributed significantly to
reducing fear, improving understanding, and promoting
responsible behaviour toward wildlife.

OGQ - (A Program of Foundation for Promotion of Sports and
Games) Support to Athletes and Para Athletes: Currently, 468
Athletes & Para Athletes are supported by OGQ .

The ‘Bharari’ initiative was further expanded to include
additional schools in Saswad and Hadapsar vicinity and
enhanced modules on life skills, scientific learning, and
psychological support.

The KaShi initiative continued with educational support
and promote education among girl students from socio¬
economically challenged backgrounds across multiple states.
Some new Locations were added this year.

The Relashani adolescence health program was scaled up
during the year, reaching a larger number of students through
structured workshops on mental health, well-being, and
healthy relationships. Focusing on educating students from
8^th to 11^th standard.

The Green Vasundhara School Initiative continued to create
awareness about environmental sustainability through
audio visual workshops, competitions, and engagement
programs. The Green Vasundhara Initiative further promoted
environmental awareness through festivals, film screenings,
and millet awareness programs in 15 schools and 10 Colleges
across Pune, Saswad and Nashik regions.

The Company contributed R 5 Million to Kirloskar Institute of
Management (‘KIM’) towards promoting higher education.

Detailed information on CSR activities is provided in the
Management Discussion and Analysis Report. The CSR Policy
is available on the Company’s website.

CSR Policy in brief:

The focus of CSR activities will be on:

• Education;

• Environment; and

• Health.

While devising projects, care would be taken to promote
education, health and sanitation, protect the environment and
minimize adverse impact, if any, on the society at large.

The Company shall spend at least 2% (Two percent) of
the average Net Profits, calculated in accordance with the
provisions of the Act and rules thereunder, made by it in three
immediately preceding financial years, in every financial year.

The Annual Report on CSR Activities is annexed herewith as
Annexure “2”.

16. CONSERVATION OF ENERGY, TECHNOLOGY
ABSORPTION AND FOREIGN EXCHANGE

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

17. BUSINESS RESPONSIBILITY AND
SUSTAINABILITY REPORT

Business Responsibility and Sustainability Report as required
under Regulation 34(2)(f) of SEBI Listing Regulations, as
amended, forms part of this Annual Report. The Company
took a step to take voluntarily assurance of its Business
Responsibility and Sustainability Report.

18. MATERIAL CHANGES AND COMMITMENTS,
BETWEEN THE DATE OF BALANCE SHEET AND
THE DATEOF REPORT

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

19. MAINTENANCE OF COST RECORDS

Your Company confirms that the maintenance of cost records
as specified by the Central Government under Sub-section
(1) of Section 148 of the Act, is required by the Company
and accordingly such accounts and records are made
and maintained.

20. SIGNIFICANT AND MATERIAL ORDERS
PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the
Regulators/Courts which would impact the going concern
status of the Company and its future operations. During the
year, no application was made or any proceeding was pending
under the Insolvency and Bankruptcy Code, 2016 against
the Company.

21. VIGIL MECHANISM/WHISTLE BLOWER
POLICY

Your Company has adopted Whistle Blower Policy/Vigil
Mechanism with the objectives of enhancing the standards
of ethical conduct for the highest degree of transparency,
integrity, accountability and corporate social responsibility.
The policy provides adequate safeguards against victimisation
and direct access to the Chairman of the Audit Committee in
appropriate or exceptional circumstances. The weblink of the
policy is provided in the Corporate Governance Report.

Your Company has established a vigil mechanism for Directors
and Employees of the Company and other persons dealing with
the Company to report their genuine concerns, details of which
have been given in the Report on Corporate Governance.

To encourage the employees, the Company has also provided
Kirloskar Ethics Helpline to report their genuine concerns.
During the year no complaints were reported.

22. FIXED DEPOSIT

Your Company has discontinued accepting fixed deposits
since 2001-02. As such, as of March 31, 2026 there are no fixed
deposits outstanding.

23. PARTICULARS OF EMPLOYEES

Disclosures with respect to the remuneration of Directors
and Employees as required under Section 197(12) of the
Act, read with Rule 5(1) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014 have been
annexed as Annexure “4” to this Report.

In accordance with the provisions of Section 197(12) of the
Act, and Rule 5(2) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014, the
names and other particulars of Employees are available at the
Registered Office of the Company during working hours for a
period of 21 days before the AGM and shall be made available
to any shareholder on request.

24. DISCLOSURE UNDER SEXUAL HARASSMENT
OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION AND REDRESSAL) ACT, 2013
AND MATERNITY BENEFIT ACT, 1961

Your Company has formulated ‘Prevention of Sexual
Harassment of Women at Workplace Policy’ and the highlights
are communicated to all Employees and also displayed across
all its locations as well as on its intranet.

Your Company has complied with provisions relating to
constitution of Internal Committee (IC) under the Sexual
Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013. IC meets every quarter and submits
the minutes of meeting to the employer i.e. Managing
Director. During the reporting year, 4 (Four) such meetings
were conducted and 1(One) complaint has been received and
disposed off within 90 (Ninety) days.

During the reporting year, to create ongoing awareness, your
Company has:

• Continued with a PoSH Awareness Module in its
employee induction program.

• Conducted total 15 programs including online programs
which covered 440 employees including GET and
contract employees.

Your Company has complied with the provisions of the
Maternity Benefit Act, 1961.

25. EMPLOYEES

Your Company has taken several initiatives for Human
Resource Development and manpower retention. Manpower
is classified under Frontend, Internal and Support functions
for better Customer Reach and Support. Assessment
of performance through a robust and interactive PMS
procedure, identifying Learning needs through the structured
training need identification process based on competency
assessment, Communication and listening mechanisms
across organization, Leadership development, mentoring
and coaching, focused functional capability building, Career
Counselling and Skill Development Programs are some of
the initiatives adopted by your Company. Training programs
are designed to enhance skills, knowledge and behaviour.
Employees are motivated through empowerment and
rewarded with structured rewards and recognition platforms
for good performance. Adoption of 5S across the Company
has led to a clean and healthy environment. Your Company has
achieved an India benchmark employee engagement score of
82 in the engagement survey 2025 conducted by an external
Independent Agency which is conducted every alternate year.