Carraro India Ltd Directors Report

Dear Shareholders,

Your Directors are pleased to present herewith the Twenty Ninth (29 th ) Annual Report on the business and operations of the Company together with financial statements for the financial year ended 31 st March, 2026 (financial year under review).

SUMMARISED STATEMENT OF PROFIT AND LOSS:

in Million

Particulars	Standalone		Consolidated
	2025-26	2024-25	2025-26	2024-25
Revenue from operations	22,388.94	17,921.53	22,554.91	18,075.54
Other income	285.37	157.64	285.25	158.25
Total income	22,674.37	18,079.17	22,840.16	18,233.79
Cost of material consumed 1	16,562.35	13,136.72	16,562.35	13,136.72
Imployee benefit expenses	1,539.01	1,411.60	1,666.40	1,541.37
Finance Cost	194.28	224.21	194.84	225.83
Depreciation and amortization	441.77	434.68	457.00	451.96
Other expenses	2,155.42	1,711.75	2,136.79	1,691.28
Total expenditure	20,892.93	16,918.96	21,017.38	17,047.16
Profit before exception items and tax	1,781.48	1,160.21	1,822.78	1,186.63
Exceptional items	88.72	-	95	-
Profit before tax	1,692.76	1,160.21	1,727.78	1,186.63
Net tax expense	412.91	298.34	421.98	305.27
Net profit for the year	1,279.85	861.87	1,305.83	881.36

INDUSTRY OVERVIEW AND COMPANY S PERFORMANCE: Industry Overview

2025-26 unfolded against a complex and volatile global backdrop. The year began with persistent Russia-Ukraine conflict and renewed Middle East tensions, including the Israel-Gaza war drawing in regional powers, alongside Red Sea shipping disruptions that raised freight costs. Early in the fiscal year, the re-emergence of US-led trade protectionism with significant tariff announcements added uncertainty to global supply chains and markets. The situation escalated sharply in the final quarter, as US-Israeli strikes on Iran in late February, 2026 triggered the Strait of Hormuz crisis, disrupting a major oil chokepoint and causing sharp fuel price volatility through March.

Against this backdrop, global economic growth moderated. The International Monetary Fund (IMF) projected 2025 global growth at 3.2%, a downward revision from the 3.3% estimated at the start of the fiscal year, with risks tilted to the downside owing to trade policy uncertainty, elevated public debt levels, and geopolitical fragmentation. Inflation continued its gradual decline globally, though divergence persisted easing more rapidly in emerging markets while remaining above target in some advanced economies. Global financial markets navigated elevated volatility through the year, sensitive to evolving tariff developments and central bank policy signals.

Indias economy demonstrated resilience through this period of global uncertainty. The Second Advance Estimates released by the National Statistics Office (NSO) under MoSPI projected real GDP growth at 7.6% in 2025-26, up from 7.1% in 2024-25, underpinned by strong performance in the manufacturing and services sectors. The services sector, particularly financial and professional services as well as trade, hotels, transport, and communication, remained the primary growth engine. Manufacturing activity recorded double-digit growth during the year, supported by the governments continued emphasis on domestic production and infrastructure investment.

Headline inflation in India reached its lowest level since the inception of the CPI series. The average CPI inflation for April-December 2025 stood at 1.7%, a sharp decline driven by a broad-based moderation in food and fuel prices. This enabled the Reserve Bank of India to initiate monetary easing, with cumulative repo rate cuts of 100 basis points since February 2025, creating a more supportive environment for consumption and investment. Rural demand remained strong, supported by healthy agricultural output and improving farm incomes.

Indias diverse industry landscape continued to benefit from robust domestic fundamentals. Key sectors driving economic activity included automotive and driveline components, agriculture, construction, infrastructure, manufacturing,

This includes purchases of stock-in trade (traded goods) and changes in inventories of finished goods, stock-in trade and work-in-progress.

and services. The Central Governments sustained focus on infrastructure spending through programmes such as the National Infrastructure Pipeline and the PM GatiShakti initiative supported underlying demand for construction and agricultural equipment.

Agriculture retained its structural importance, contributing approximately 17% of GDP and supporting a large portion of Indias rural workforce. The sector benefited from above-normal monsoon conditions in 2025-26, with strong Kharif and Rabi output supporting rural incomes and farm mechanisation demand. The domestic tractor industry recorded its best-ever annual volumes during 2025-26, with wholesale sales crossing the 10 Lakh (1 Million) unit milestone, a first for the Indian tractor industry. The shift from 2-wheel drive (2WD) to 4-wheel drive (4WD) tractors accelerated meaningfully during the year, supported by a GST rationalisation that narrowed the price differential between the two configurations, significantly increasing the addressable market for 4WD axle manufacturers.

Indias manufacturing sector continued its growth trajectory, with double-digit growth recorded in 2025-26 under the revised GDP series. The sector is on course to increase its contribution to GDP, supported by the governments long-term ambition of raising manufacturings share toward 25% in the medium term (by around 2030-2035). Government-led initiatives such as Atmanirbhar Bharat, Make in India, enhanced localisation efforts, and the Production-Linked Incentive (PLI) schemes have continued to drive investment in domestic component manufacturing.

These measures are benefiting suppliers across the automotive and off-highway driveline space through deeper localisation and supply chain development.

The domestic construction equipment market experienced a contraction in 2025-26. According to the Indian Construction Equipment Manufacturers Association (ICEMA), domestic construction equipment sales declined approximately 7% to 1,13,229 units. This was attributed to slower infrastructure project execution, delays in project awards and slower adoption of BS-V compliant machines. However, construction equipment exports grew strongly up ~32% providing a remarkable offset and demonstrating healthy global demand, particularly from African, Middle Eastern, and Latin American markets.

The Indian off-highway vehicles market comprising agricultural equipment (tractors and harvesting equipment) and construction vehicles, showed a mixed picture in 2025-26. While the agricultural segment, driven by the structural 2WD to 4WD transition and record tractor volumes, outperformed expectations, the domestic construction equipment segment was weak. The off-highway industry continues to navigate structural shifts driven by tightening emission norms, evolving customer preferences around fuel efficiency and technology, and the early-stage emergence of electrification in the agricultural tractor segment. OEMs are increasingly required to look beyond traditional purchasing factors such as price, design, and brand, and invest in new product differentiation strategies including engineering and electrification roadmaps.

Companys Performance:

Given the global and domestic scenarios described above, the Company achieved consolidated revenue of 22,555 Million in 2025-26, registering a strong growth of 25% as compared to 18,076 Million in 2024-25. The revenue split for 2025-26 comprised of:

in Million

Sr. No. Particulars	2025-26	2024-25	% Change
1 Agricultural Vehicles	10,192	8,565	119%
2 Construction Vehicles	9,837	7,491	t31%
3 Others (Gears, Tools, etc.)	2,526	2,019	t25%

During 2025-26, the consolidated revenue from operations of the Company witnessed broad-based growth across all segments. Agricultural Vehicles applications grew 19%, led by accelerated domestic demand for 4WD axles following GST-related pricing changes that narrowed the gap between 2WD and 4WD configurations. Construction Vehicles applications grew 31%, driven by strong export traction in Tele Boom Handler (TBH) axles and Backhoe Loader (BHL) driveline systems. The Others segment (including gears, and engineering services) grew 25%, supported by early momentum in the Companys engineering services business.

Domestic vis-a-vis Export split of consolidated revenue:

in Million

Sr. No. Particulars	2025-26	2024-25	% Change
1 Domestic	14,430	12,155	119%
2 Export	8,125	5,921	t37%

During 2025-26, domestic sales stood at 14,430 Million, contributing 64% to total revenue. Export sales stood at 8,125 Million, contributing 36% to total revenue, reflecting a notable step-up in export share from 32.8% in the prior year. Export growth of 37% was led by construction equipment programs particularly TBH axles for a global OEM and recovering demand for tractor axles in international markets.

Profitability of the Company on consolidated basis stood at:

in Million

Sr. No. Particulars	2025-26	2024-25	% Change
1 Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA)	2,475	1,864	t33%
2 Profit After Tax (PAT)	1,306	881	148%

The Consolidated EBITDA of the Company grew by 33% and stood at 2,475 Million as compared to 1,864 Million in the previous fiscal. Profit After Tax increased by 48% to 1,306 Million as compared to 881 Million in the previous fiscal. EBITDA margin improved to 10.8% from 10.2% in 2024-25, and PAT margin expanded to 5.7% from 4.8% in

2024- 25. This performance underscored the continued strength of the Companys business model and its capacity to convert volume growth into superior profitability.

Margin expansion during the year was driven by operating leverage on higher volumes, disciplined cost management, continued localisation gains, and a richer product mix with greater contribution from high-value 4WD axles and TBH programs. The engineering services business generated approximately 100 Million in revenue in 2024-25, with the Company signing an engineering services agreement with Montra Electric (TICMPL) for e-transmission development for electric agricultural tractors, marking early entry into the EV driveline space.

The Standalone basic and diluted EPS of the Company stood at 22.51 for the Financial Year ended 31 st March, 2026, as against 15.16 for the Financial Year ended 31 st March, 2025.

DIVIDEND:

The Board of Directors, at its meeting held on 26 th May, 2026, had recommended a final dividend of 6.75 per equity share of 10 each (@ 67.50%), for the financial year

2025- 26, which is subject to approval of members at the ensuing Twenty Ninth Annual General Meeting (AGM).

Dividend Distribution Policy

This policy has been framed and adopted in terms of Regulation 43A ofthe SEBI (Listing Obligations and Disclosure

Requirements) Regulations, 2015 (Listing Regulations), which, inter alia, lays down various parameters relating to declaration / recommendation of dividend. The policy is placed on the Companys website at

public/676/08b/cb8/cil dividend distribution policy 67608bcb870c0008893296.pdf

Transfer to reserves

The Company has not transferred any amount of profits to reserves.

BUSINESS OF THE COMPANY AND ITS SUBSIDIARY INCLUDING COMMENCEMENT OF ANY NEW BUSINESS LINES:

The Company continues to operate as a leading provider of integrated driveline solutions for off-highway vehicles, serving prominent OEMs in the agricultural tractor and construction equipment sectors. Through its manufacturing, engineering and product development capabilities, the Company designs and produces axles, transmissions, gears and related components that address the evolving requirements of customers in India and international markets. Its long-standing expertise, customer-centric approach and commitment to quality have enabled the Company to establish itself as a trusted technology partner within the off-highway industry.

Over the years, the Company has evolved from a manufacturing-focused organisation into an integrated engineering and technology-driven enterprise. This transformation was further strengthened through the integration of Carraro Technologies India Private Limited and its engineering centre in Pune, enhancing synergies between design, product development, validation and manufacturing

activities. The strengthened engineering platform enables the Company to deliver customised solutions, accelerate product development cycles and support customers throughout the entire product lifecycle.

During Fiscal Year 2025-26, the Company continued to consolidate its position in its core agricultural and construction equipment markets while pursuing opportunities in higher value-added and technology-intensive applications. Particular emphasis was placed on advanced driveline solutions, next-generation transmission systems and products designed to improve performance, efficiency and sustainability. The Company further strengthened collaboration with customers through co-development initiatives, application engineering support and tailored product solutions that meet specific market requirements.

Operational excellence and responsible business practices remain central to the Companys strategy. Continuous efforts were undertaken to enhance manufacturing efficiency, strengthen quality standards, develop employee capabilities and promote workplace safety. The Company also continued to focus on resource optimisation, environmental responsibility and sustainable value creation across its operations, reinforcing its commitment to long-term stakeholder value.

Innovation and technology development continue to be key drivers of the Companys future growth. Leveraging its engineering expertise and advanced manufacturing capabilities, the Company is actively engaged in the development of future-ready driveline technologies, including advanced transmission systems, electrification-ready architectures and specialised solutions for agricultural and construction equipment applications. Access to the broader technological know-how and international experience of the Carraro Group further enriches these initiatives, while allowing the Company to maintain a strong and distinctive identity within its markets.

Looking ahead, the Company remains focused on strengthening its competitive position, expanding customer relationships, enhancing technological capabilities and pursuing sustainable growth opportunities in both domestic and international markets. Through its integrated approach to engineering, manufacturing and innovation, the Company is well positioned to support the evolving needs of OEM customers and create long-term value for all its stakeholders.

CHANGE IN NATURE OF BUSINESS:

There was no change in the nature of business during the period under review.

CONSOLIDATED FINANCIAL STATEMENTS:

As per Regulation 33 of the Listing Regulations and Section 129 of the Companies Act, 2013 (Act) read with the rules

made thereunder, consolidated financial statements of the Company for the financial year 2025-26 have been prepared in compliance with applicable accounting standards. The audited financial statements of the Company and its subsidiary have been approved by the board of directors of respective entities.

During the year under review, the Board of Directors reviewed the affairs of the subsidiary company in accordance with Section 129(3) of the Act. Consolidated financial statements together with the statutory auditors report thereon form part of this Annual Report.

SUBSIDIARY:

The Company has one subsidiary i.e. Carraro Technologies India Private Limited (CTIPL) as on 31 st March, 2026 and as on the date of this report.

In terms of Section 129(3) of the Act, a statement in Form AOC-1, containing salient features of the financial statements of the Companys subsidiary, forms part of the Annual Report. A copy of the audited financial statements of CTIPL will be available for inspection by any shareholder of the Company at its registered office during business hours. These financial statements are also placed on the Companys website at investor-information/subsidiary-financial-statements

SHARE CAPITAL:

The paid-up equity share capital of the Company as on 31 st March, 2026, was 568,515,380. During the year under review, there has been no change in authorised, issued, subscribed and paid up share capital, including any reclassification or sub-division thereto. The Company has not issued shares with differential voting rights, sweat equity shares, neither has it granted any employee stock options nor has issued any convertible securities.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Changes in Board of Directors and Key Managerial Personnel

> Dr. Balaji Gopalan, Managing Director, basis the recommendation of the Nomination and Remuneration Committee and Board of Directors, was re-appointed in the 28 th Annual General Meeting held during the year, commencing from 4 th February, 2026 up to and including 8 th August, 2029.

> Mr. Sudhendra Mannikar, Whole-Time Director and Chief Operating Officer, basis the recommendation of the Nomination and Remuneration Committee and Board of Directors, was re-appointed in the 28 th Annual General Meeting held during the year, commencing from 15 th March, 2026 up to and including 8 th August, 2029.

> Mr. Nakul Shivaji Patil, a qualified Company Secretary and an Associate Member of the Institute of Company Secretaries of India (Membership No. A39990), had resigned from the position of Company Secretary and Compliance Officer of the Company effective from the closing business hours of 20 th November, 2025. The Board placed on record its appreciation for the contributions made by Mr. Nakul S Patil during his tenure.

> Mr. Mohith Kumar Khandelwal, a qualified Company Secretary and a Fellow Member of the Institute of Company Secretaries of India (Membership No. F11243) on the recommendation of the Nomination and Remuneration Committee, was appointed as the Company Secretary and Compliance Officer of the Company by the Board of Directors at its meeting held on 11 th February, 2026.

Brief profile of the directors and key managerial personnel of the Company, is given below:

Mr. Ettore Francesco Sequi, (DIN: 10734894), is the Chairman and Independent Director of the Company. He holds a pre-reform degree in political science from the University of Cagliari. He also serves as the national representative of Italy within the Board of Government Representatives of the Einstein Telescope Infrastructure. He has over 38 years of experience in the field of foreign affairs. He was previously associated with the Ministry of Foreign Affairs and International Cooperation, Italy in various capacities from year 1985 to 2023.

Mr. Tomaso Carraro, (DIN: 00592312), is the Vice-Chairman and Non-Executive Director of the Company. He is also one of the Promoters of the Company. He has been associated with the Company since 21 st April, 2015. He holds a masters degree in business administration from the Graduate School of Business, University of Chicago. He has over 27 years of experience in the manufacturing sector.

Dr. Balaji Gopalan, (DIN: 07108093), is the Managing Director of the Company. His association with the Company dates back to 1 st September, 1998 when he joined the Company as an employee and over the years of his employment was successfully elevated to the leadership role. In the AGM held on 11 th September, 2025, he was reappointed as the Managing Director of the Company for a term of approximately 3 Years and 6 Months and 5 days commencing from 4 th February, 2026 up to and including 8 th August, 2029. He holds a degree of doctor of philosophy in human resource management from the University of Pune. He has over 26 years of experience in the manufacturing sector.

Mr. Sudhendra Mannikar, (DIN: 07483321), is the

Whole-time Director and Chief Operating Officer of the Company. His association with the Company dates back to

2 nd August, 1999 as an employee and over the years of his employment was successfully elevated to the leadership role. In the AGM held on 11 th September, 2025, he was reappointed as the Whole-time Director & Chief Operating Officer of the Company for a term of approximately 3 Years and 4 Months and 25 days commencing from 15 th March, 2026 up to and including 8 th August, 2029. He holds a bachelors degree in engineering (production) from University of Pune and a masters degree in business administration from Savitribai Phule Pune University. He has over 26 years of experience in the field of supply chain, purchase and operations.

Mr. Davide Grossi (DIN: 10252992), is the Whole-time Director and Chief Financial Officer of the Company. He holds an undergraduate degree in business administration from Bocconi University, Italy and a masters degree of science in accounting, corporate finance, and control from Bocconi University. He has 14 years of experience in the field of finance.

Mr. Enrico Gomiero, (DIN: 00588074), is a Non-Executive Director of the Company. He holds a diploma of accountant and commercial expert from the Technical Institute for Commercials and Surveyors of Padua, Italy. He has over 30 years of experience in the manufacturing sector. He was also previously associated with Carraro S.p.A. (ultimate holding company) in his capacity as a manager.

Mr. Andrea Conchetto, (DIN:10669692), is a

Non-Executive Director of the Company. He holds a diploma in electrotechnical engineering from the University of Padua, Italy. He is currently associated with the Carraro Group, including Carraro S.p.A., Carraro Drive Tech Italia S.p.A., Carraro China Drive Systems Co. Ltd, and Siap S.p.A. He has over 24 years of experience in the manufacturing sector. He was previously associated with AEG Electric Motors as a commercial-technical engineer and with Carraro S.p.A. (ultimate holding company) as a manager.

Mrs. Uma Manoj Mandavgane, (DIN: 03156224), is an

Independent Director of the Company. She holds a bachelors degree in commerce from the University of Mumbai. She is a member of the Institute of Chartered Accountants of India and a certified information systems auditor. She has over 15 years of experience in the field of advisory and consulting. She was previously associated with Deloitte Touche Tohmatsu India Private Limited in the capacity of a manager in the enterprise risk services department.

Mr. Kishore Mukund Saletore, (DIN: 01705850), is an

Independent Director of the Company. He is an associate at the Institute of Chartered Accountants of India and is also a Post Graduate in Management from the Indian Institute of Management, Bangalore. He was previously associated with Bharat Forge as the Whole time Director and Group Chief Financial Officer.

Mr. Mohith Kumar Khandelwal is the Company Secretary, Compliance Officer and Senior Manager - CS, Legal & Compliance of the Company. He is a Fellow Member of the Institute of Company Secretaries of India, having membership no. F-11243. He has over 11 years of experience in the legal and secretarial domain. He has handled several key assignments, including preferential issues, QIPs, corporate restructuring, and amalgamations. Prior to this, he was associated with Balaxi Pharmaceuticals Limited and Power Mech Projects Limited, Hyderabad.

Retirement of directors by rotation

In terms of Section 152(6) of the Act, Mr. Davide Grossi (DIN: 10252992), Whole-Time Director & Chief Financial Officer and Mr. Andrea Conchetto (DIN: 10669692), Non-executive Director, who retires by rotation at the ensuing Annual General Meeting (AGM) and being eligible, has offered themselves for re-appointment. Information as required under Regulation 36(3) of the Listing Regulations is provided in the Notice convening the AGM.

Key Managerial Personnel:

The following officials were the Key Managerial Personnel of the Company in terms of the provisions of Sections 2(51)

and 203 of the Act during the 2025-26 and as on the date of this Report:

i. Dr. Balaji Gopalan, Managing Director;

ii. Mr. Sudhendra Mannikar, Whole-time Director and Chief Operating Officer;

iii. Mr. Davide Grossi, Whole-time Director and Chief Financial Officer;

iv. Mr. Nakul Patil, Company Secretary & Compliance Officer and Assistant General Manager - CS, Legal and Compliance. (Ceased w.e.f. 20 th November, 2025);

v. Mr. Mohith Kumar Khandelwal, Company Secretary & Compliance Officer and Senior Manager- CS, Legal and Compliance. (Appointed w.e.f. 11 1h February, 2026).

Committees of Board of Directors:

We have in place all the Committees of the Board which are required to be constituted under the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A detailed note on the Board and its Committees is provided under the Corporate Governance Report which forms part of this Annual Report.

The Composition of various Committee(s) of the Board as on the date of this report is hereunder:

Name of the Committee(s)	Composition of Committee(s)
Audit Committee	i. Mrs. Uma Manoj Mandavgane, Independent Director and Chairperson; ii. Mr. Kishore Mukund Saletore, Independent Director and Member; and iii. Mr. Davide Grossi, Whole-time Director and Chief Financial Officer and Member.
Nomination and Remuneration Committee	i. Mr. Kishore Mukund Saletore, Independent Director and Chairperson; ii. Mr. Ettore Francesco Sequi, Independent Director and Member; and iii. Mr. Andrea Conchetto, Non-Executive Director and Member.
Corporate Social Responsibility Committee	i. Mr. Tomaso Carraro, Non-Executive Director and Chairperson; ii. Mr. Ettore Francesco Sequi, Independent Director and Member; iii. Dr. Balaji Gopalan, Managing Director and Member; iv. Mr. Sudhendra Mannikar, Whole-time Director and Chief Operating Officer and Member; and v. Mr. Davide Grossi, Whole-time Director and Chief Financial Officer and Member.
Stakeholders Relationship Committee	i. Mr. Kishore Mukund Saletore, Independent Director, Chairperson; ii. Mrs. Uma Manoj Mandavgane, Independent Director and Member; and iii. Mr. Enrico Gomiero, Non-Executive Director and Member.
Risk Management Committee	i. Mrs. Uma Manoj Mandavgane, Independent Director and Chairperson; ii. Mr. Andrea Conchetto, Non-Executive Director and Member; iii. Dr. Balaji Gopalan, Managing Director and Member; and iv. Mr. Davide Grossi, Whole-time Director and Chief Financial Officer and Member.

The Company Secretary & Compliance Officer of the Company acted as the Secretary to the above-mentioned committees.

During the year under review, all recommendations made by the various committees including audit committee were considered and accepted by the Board.

Board of Directors and its Committee meetings

Board and Committee meetings of the Company are conducted as per the provisions of the Act, the Listing Regulations and Secretarial Standard-1.

Based on the dates of meetings decided by the Board, adequate notice is given to all directors and Committee members; an agenda with detailed notes thereon and reference annexures are sent at least seven days before the respective meeting. If any board meeting is to be held at a shorter notice, permission of at least one independent director is ensured. The notes to agenda contain relevant information and supporting documents along with recommendation from the management, for meaningful deliberation and / or decision on the agenda items.

During the financial year under review, the Board met five (5) times. A detailed update on the Board, its composition and attendance of the Directors at each meeting is provided in the Corporate Governance report, forming part of this Annual Report.

The Board has constituted five Committees, namely, Audit Committee, Nomination and Remuneration Committee, Corporate Social Responsibility Committee, Stakeholders Relationship Committee and Risk Management Committee. A detailed charter including terms of reference of various Board constituted committees, number of committee meetings held during the financial year under review and attendance of members at each meeting, also forms part of the Corporate Governance report.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 134(3)(c) of the Act, the Directors, based on the representation received from the management, confirm that:

i. in the preparation of the annual accounts for the year ended 31 st March, 2026, the applicable Indian

Accounting Standards (Ind AS) have been followed along with proper explanation relating to material departures;

ii. the directors 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 and loss of the Company for that period;

iii. the directors 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;

iv. the directors have prepared the annual accounts on a going concern basis;

v. the directors have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and are operating effectively; and

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

DECLARATION BY INDEPENDENT DIRECTORS:

In terms of Section 149(7) of the Act & Rules made thereunder and Regulation 16(1)(b) and Regulation 25 of the Listing Regulations, the Independent Directors of the Company have submitted their declarations confirming compliance with the criteria of independence as stipulated thereunder. The Directors have further confirmed that they are not debarred from holding the office of the director under any SEBI Order or any other such authority.

Opinion of the Board with regard to integrity, expertise and experience (including proficiency) of the Independent Directors:

The Board is of the opinion that the Independent Directors of the Company are professionally qualified and well experienced in their respective domains and meet the criteria regarding integrity, expertise, experience and proficiency.

Their qualifications and experience in varied fields help in strengthening the Companys systems and processes to align the same with good industry practices and beliefs of corporate governance.

DIRECTORS REMUNERATION POLICY AND CRITERIA FOR MATTERS UNDER SECTION 178 OF THE ACT:

In terms of Section 178 of the Act, the Nomination and Remuneration Policy covers Directors, Key Managerial Personnel and Senior Management Personnel of the Company. The policy, inter alia, lays down the principles relating to appointment, cessation, remuneration and evaluation of Directors, Key Managerial Personnel and Senior Management Personnel of the Company.

Details of the Companys policy on directors appointment and remuneration, including criteria for determining qualifications, positive attributes, independence of a director and other matters as stipulated under Section 178(3) of the Act, forms part of the Corporate Governance report.

The policy is placed on the Companys website at

public/66b/213/d32/nomination and renumeration policy 66b213d32e3ad427839307.pdf

PERFORMANCE EVALUATION:

An annual performance evaluation was conducted for the Board as a whole, its individual members, and its Committees. The evaluation framework was developed after considering the requirements of the Companies Act, 2013, the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the guidance notes issued by SEBI, and the Companys Nomination and Remuneration Policy. The assessment was carried out through a structured questionnaire covering various parameters, including the composition and structure of the Board, the effectiveness of Board processes, the quality and adequacy of information flow, the functioning of the Board and its Committees,

commitment to corporate governance principles, and the Boards contribution to the effective management and strategic direction of the Company etc.

In a separate meeting of the Independent Directors held on 10 th February, 2026, the performance of the Non-Independent Directors and the Board as a whole was evaluated. The Independent Directors also assessed the performance of the Chairman, taking into account the views of the Executive and Non-Executive Directors. Further, they reviewed the quality, adequacy, and timeliness of information flow from the Management to the Board to enable the effective discharge of its responsibilities. The outcome of these evaluations was discussed at the Board meeting held subsequently on 11 th February, 2026, and the performance of the Independent Directors was evaluated by the entire Board, excluding the Director being evaluated at that meeting.

As an outcome of the above exercise, the Board expressed its satisfaction with the evaluation process.

RISK MANAGEMENT

The Company has constituted a Risk Management Committee and formulated a Risk Management Policy in accordance with the Companies Act, 2013 and Regulation 21 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The details of Committee and its terms of reference are set out in the Corporate Governance Report forming part of the Boards report. The risk Management Policy of the Company is hosted on the website of the Company at

uploads/public/66b/213/8c7/risk management policy 66b2138c7e1c6942389796.pdf

SECRETARIAL STANDARDS:

The Company is compliant with the Secretarial Standards on Meetings of Board of Directors (SS-1) and General Meetings (SS-2).

CREDIT RATING:

Post closure of financial year and between the date of this report, India Ratings and Research Pvt. Ltd. (a Fitch Group company), a credit rating agency registered with the Securities and Exchange Board of India, vide their communication dated 13 th July, 2026 has revised the Outlook on Carraro India Limiteds (CIL) bank loan facilities to Positive from Stable while affirming the rating at IND A+ and upgraded the short-term rating to IND A1+. The instrument-wise rating actions are as follows:

( in Million)

Credit Facility rated	Aggregate amount of Credit facility	Rating for 2025-26	Rating for 2026-27	Rating Action
Long Term Credit Facilities:
Long term facility	846.25	IND A+/ Stable	IND A+/ Positive	Outlook Upgraded
	(reduced from
	1,292.10)
Proposed Term facility (Unallocated)	800.00	-	IND A+/ Positive	Assigned
Short Term Credit Facilities:
Fund based WCL	1,490.00	IND A+/ Stable	IND A+/ Positive	Outlook Upgraded
Non-fund based WCL	580.00	IND A1	IND A1 +	Upgraded

Note: WCL stand for Working Capital Limits

INTERNAL FINANCIAL CONTROLS:

The Board of your Company has laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and operating effectively. Your Company has adopted policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial disclosures.

CORPORATE GOVERNANCE:

In compliance with Regulation 34 of the Listing Regulations, a separate report on Corporate Governance along with a certificate from the statutory auditors towards compliance with the provisions of Corporate Governance, forms an integral part of this Annual Report.

The Managing Director and the Whole-time Director & Chief Financial Officer have certified to the Board with regard to financial statements and other matters as required under Regulation 17(8) read with Schedule II to the Listing Regulations forms part of this Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS:

Pursuant to the provisions of Regulation 34(2)(e) of the SEBI Listing Regulations, a Report on Management Discussion and Analysis forms an integral part of this Annual Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT:

Pursuant to Regulation 34(2)(f) of the SEBI Listing Regulations, the Business Responsibility and Sustainability Report (BRSR) is shown in separate section forming part of this Annual Report and is also available on the Companys financial-information/annual-reports

CODE OF CONDUCT FOR PREVENTION OF INSIDER TRADING AND FAIR DISCLOSURE OF UNPUBLISHED PRICE SENSITIVE INFORMATION:

The Company in terms of the SEBI (Prohibition of Insider Trading) Regulations, 2015 (PIT Regulations), has adopted a Code of Conduct to Regulate, Monitor and Report trading by Designated Persons and their Immediate Relatives (PIT Code) and Code or Practices and Procedures for Fair Disclosure of Unpublished Price Sensitive Information (UPSI Code). These Codes provide a framework for the protection and fair disclosure of UPSI and regulate trading in the Companys securities to prevent insider trading and ensure compliance with applicable regulations.

The PIT Code and the UPSI Code are drawn up on the principle that the Companys directors and employees owe a fiduciary duty, inter alia, to the shareholders of the Company to place the interest of shareholders above their own and conduct their personal securities transactions in a manner that does not give rise to any conflict of interest.

The PIT Code and UPSI Code are placed on the Companys website at:

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

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

CORPORATE SOCIAL RESPONSIBILITY INITIATIVES:

In terms of Section 135 of the Act read with Schedule VII to the Act and Companys Corporate Social Responsibility (CSR) Policy, the CSR projects and programmes undertaken are recommended by the CSR Committee and approved by the Board. These are primarily aimed towards enhancing employability by imparting skill-building training to unemployed youth, providing community facilities, etc.

Salient features of the CSR Policy are available on the Companys website at . The Annual Report on CSR activities is attached as Annexure II to this Report.

I n terms of Section 135 of the Act read with Rule 4(5) of the Companies (Corporate Social Responsibility Policy) Rules, 2015, the Whole-time Director & Chief Financial Officer of the Company has provided requisite certificate that the funds disbursed by the Company during the financial year 2025-26 have been utilised for the respective purposes and in the manner as approved by the Board.

Expenditure towards CSR activities

As per the requirements under the Act, the Company earmarked an amount of 17.26 Million towards CSR activities for the financial year 2025-26, based on the average net profit, calculated in terms of Section 198 of the Act of the immediately preceding three financial years. The Board of Directors approved the following projects / programmes to be undertaken as CSR activities during the financial year 2025-26, and all of these activities were as per Schedule VII to the Act and the CSR Policy of the Company:

i. Tech Skill Development Programme;

ii. Development of Childrens playpark; and

iii. Project Kanyadaan.

During the financial year 2025-26, the Company spent a total of 17.34 Million on approved CSR projects and programmes, in compliance with Section 135 of the Act.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS:

During the financial year under review, no instances of fraud have been reported under Section 143(12) of the Act.

AUDITORS:

Statutory Auditors

M/s. Deloitte Haskins & Sells LLP (FRN: 117366W/ W-100018) (Deloitte), were appointed as the Statutory Auditors of the Company for a second term of five consecutive years commencing from the conclusion of the Twenty Fourth AGM till the conclusion of the Twenty Ninth AGM of the Company to be held in the year 2025-26.

The Statutory Auditors of the Company have issued an unmodified opinion on the financial statements, both standalone and consolidated, for the financial year ended 31 st March, 2026. The Auditors Report for the financial year ended 31 st March, 2026 on the financial statements of the Company forms part of this Annual Report.

As the second term of the existing statutory auditors concludes at the ensuing AGM, the Board of Directors at their meeting held on 11 th February, 2026, based on the recommendation of the Audit Committee, approved the appointment of M/s. M S K C & Associates LLP (FRN: 001595S/S000168) as the Statutory Auditors of the Company for a term of five consecutive years, subject to the approval of the shareholders at the ensuing AGM. The resolution proposing the appointment of M/s. M S K C & Associates LLP as the statutory auditors of the Company forms part of the notice of the Twenty Ninth AGM of the Company.

Cost Auditors

As per the provisions of Section 148 of the Act and Rule 3 of the Companies (Cost Records and Audit) Rules, 2014, the Company is required to have the audit of its cost records conducted by a Cost Accountant.

The Board had appointed M/s Adawadkar Deshmukh & Associates, Cost Accountant (FRN: 000421) as Cost Auditor of the Company for the financial year 2025-26. The remuneration proposed was 3,40,000 and which was ratified by the shareholders of the Company at their Twenty Eighth AGM held on 11 th September, 2025.

Based on the recommendation of the Audit Committee, the Board at their meeting held on 26 th May, 2026, has re-appointed M/s Adawadkar Deshmukh & Associates, Cost

Accountant (FRN: 000421) as Cost Auditor of the Company for the financial year 2026-27 as well. It is proposed to retain the same remuneration as of previous year i.e. 3,40,000 which is subject to ratification by the shareholders at the ensuing AGM. The said remuneration is excluding applicable taxes and out-of-pocket expenses, if any, payable at actuals. The resolution seeking ratification of remuneration from the shareholders forms part of the notice of the Twenty Ninth AGM of the Company.

Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of the SEBI LODR Regulations, M/s. Mehta & Mehta, Practicing Company Secretaries, a firm registered under the Indian Partnership Act, 1932 having Firm Registration Number MU000019250, ICSI Firm Registration Number P1996MH007500 holding peer review certificate, were appointed as the Secretarial auditors of the Company for a period of five consecutive years commencing from 1 st April, 2025 up to 31 st March, 2030.

The Report of the Secretarial Auditor is annexed herewith as Annexure III.

Directors Response on the observations made by the Secretarial Auditors in the report:

Details of Observation	Response/ Reply
As per Regulation 23(4) of	Pursuant to SEBIs master
SEBI (Listing Obligations and	circular dated 11 th November,
Disclosure Requirements)	2024, the Company had
Regulations, 2015 (LODR)	obtained approval on
prior approval for material	material Related Party
Related Party Transactions	Transaction for 2025-26, at
(RPT) not availed for the	its Annual General Meeting
period 1 st April, 2025 tor	held on 11 th September,
10 th September, 2025.	2025.
Shareholders approval was later sought in the Annual General Meeting held on 11 th September, 2025.	The NSE had sought a clarification and the Company had provided a reply on the same.
	The response from the Exchange is awaited as on the date of this report.

Internal Auditors

Pursuant to the provisions of Section 138 of the Companies Act, 2013 and the Rules made thereunder, M/s A S Havaldar & Associates, a Firm of Chartered Accounts (FRN:140036W), held the office of Internal Auditors of the Company for the year under review. The internal audit reports and the suggestions made on a quarterly basis by the internal auditors, were duly noted by the Board and acted upon.

DISCLOSURES:

The Act and the Listing Regulations mandate formulation of certain policies for listed companies. During the year, the Board has framed and approved policies as required under the Listing Regulations as well as under the Act. The Company during year had further adopted few policies to align with the principles and disclosures of Business Responsibility and Sustainability Report.

The above-mentioned policies are available on the Companys website at the link i n vestors /co rpo rate - g ove rn a n ce/ po l i c i es

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES:

Disclosure of remuneration and other details 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 are annexed herewith as

Annexure IV.

A statement containing particulars of employees as required under Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report. In terms of Section 136 of the Act, the Annual Report and financial statements are being sent to the shareholders excluding the aforesaid annexure. The said annexure is available for inspection at the registered office of the Company during business hours and will be made available to any shareholder on request through email Company_ .

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The Company has not given any guarantees covered under the provisions of Section 186 of the Act. Particulars of loans, advanced and investments form part of the notes to standalone financial statements. Kindly refer note nos. 16, and 7.1 of the standalone financial statements for the details of investments made by the Company as on 31 st March, 2026.

DEPOSITS:

During the year under review, the Company has neither accepted any deposits from the public nor any amount from its directors.

VIGIL MECHANISM-CUM-WHISTLE BLOWER POLICY:

In terms of the provisions of Section 177(9) of the Act, read with Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, the Company has established a vigil

mechanism, which forms part of the Vigil Mechanism-Cum- Whistle Blower Policy in terms of Regulation 22 of the Listing Regulations for directors and employees. The objective of this policy is to provide a reporting mechanism for any person who observes any unethical behaviour, actual or suspected fraud, or violation of the Companys Code of Conduct for all members of the Board and Senior Management (Codes of Conduct). Such person can report the same to the Whistle Blower Officer (WB Officer) appointed under the policy. The said policy also encompasses reporting of instances of leak of Unpublished Price Sensitive Information (UPSI).

Protected disclosures can be made by a whistle blower to a dedicated e-mail ID and / or postal address of WB Officer, appointed under the policy. The policy has been hosted on the Companys website at . b07/whistleblowing vigil mechanism policy carraro india 66b213b07c99e706098897.pdf

A WB Officer has been appointed in terms of the provisions of the Act to independently investigate protected disclosures communicated under the policy and matters of violation to the Codes of Conduct.

MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION OF THE COMPANY BETWEEN 31 st MARCH, 2026 AND DATE OF BOARDS 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 and the date of this Report.

RELATED PARTY TRANSACTIONS:

In line with the requirements of the Companies Act, 2013 and the SEBI Listing Regulations, the Company has formulated a Policy on Related Party Transactions.

The policy can be accessed on the Companys website at public/66c/44c/946/related party transactions policy 66c44c946d248444192428.pdf

As per the Listing Regulations, all Related Party Transactions (RPT) and any modifications thereto are placed before the Audit Committee for approval. Further, the Audit Committee accords specific / omnibus approval for RPTs, which are

in ordinary course of business and satisfy the principles / conditions of being at arms length basis. Details of the RPTs entered pursuant to the specific and omnibus approval granted are placed on quarterly basis before the Audit Committee for review and update.

The Company did not have any contracts or arrangements with related parties in terms of Section 188(1) of the Companies Act, 2013. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC-2 is not applicable to the Company for 2025-26 and hence does not form part of this report.

However, the Company has obtained shareholders approval for material related party transaction in accordance with Regulation 23 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 at their 28 th Annual General Meeting held on 11 th September, 2025.

Details of related party transactions entered into by the Company, in terms of Indian Accounting Standard 24 (Ind AS-24) have been disclosed in the notes to the standalone/ consolidated financial statements forming part of this report.

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

The Company has adopted a Policy for Prevention of Sexual Harassment (POSH Policy) in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The POSH Policy aims to provide a safe, friendly, positive and productive working environment and promote an atmosphere in which employees can realise their maximum potential. This Policy applies to all the employees, workers, visitors and other persons (whether in the office premises or outside while on assignment) of the Company.

The Company observes zero tolerance towards any kind of violation of the POSH Policy. As per the POSH Policy, the Company has constituted Internal Committees (IC). The committee is chaired by a female employee and other senior management officials of the Company are its members along with an external member who has experience in dealing with cases relating to sexual harassment. The IC is responsible for redressal of complaints related to sexual harassment and follows the guidelines provided in the POSH Policy.

Pursuant to Rule 8 (5)(x) of the Companies (Accounts) Rules, 2014, the disclosure of the complaints received during financial year under review is given below:

Sr. No.	Particulars	Details
1.	No. of complaints of sexual harassment outstanding at the beginning of the year	Nil
2.	No. of complaints of sexual harassment received in the year	Nil
3.	No. of complaints disposed off during the year	Nil
4.	No. of cases pending for more than ninety days	Nil

DISCLOSURE UNDER THE MATERNITY BENEFIT ACT, 1961:

During the year under review, the maternity benefit leave of 26 weeks with remuneration was granted to a total 4 women employees of the Company including one (1) woman employee of Company subsidiary, CTIPL. The Company has observed compliance with the applicable requirements laid under the Maternity Benefit Act, 1961.

INDUSTRIAL RELATIONS:

During the year under review, the industrial relations remained cordial.

As on the date of this Report, the Company had entered into two agreements with labour unions for the Companys plants located at Ranjangaon (Dist. Pune, Maharashtra). There were no changes made into the agreements during the financial year under review.

INVESTOR EDUCATION AND PROTECTION FUND:

In accordance with the provisions of Sections 124 and 125 of the Act and the Investor Education and Protection Fund (Accounting, Audit, Transfer and Refund) Rules, 2016 (IEPF Rules), dividends of a company that remain unpaid or unclaimed for a period of seven years from the date of transfer to the Unpaid Dividend Account shall be transferred by such company to the Investor Education and Protection Fund (IEPF).

In terms of the foregoing provisions of the Act, no dividend amount or shares were required to be transferred to the IEPF by the Company during the year ended 31 st March, 2026.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATIONS:

During the financial year under review, there were no significant material orders passed by Regulators / Courts / Tribunals which would impact the going concern status of the Company and its future operations.

DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (IBC):

During the financial year under review, neither the Company made any application nor any proceedings were pending against the Company, under the IBC.

DETAILS OF 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:

The Company has not made any one-time settlement for loans taken from the Banks or Financial Institutions, and hence the details of 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 reasons thereof is not applicable.

ANNUAL RETURN:

In terms of Section 92(3) read with Section 134(3)(a) of the Act, the annual return of the Company for the financial year ended 31 st March, 2026 shall be available on the Companys financial-information/annual-returns

ACKNOWLEDGMENTS:

Your Directors take this opportunity to express their sincere appreciation for the commitment, hard work and support of all its employees and workmen during the year.

The Directors also express their gratitude to the shareholders, workmen unions, customers, vendors, dealers, bankers, government authorities of India and other countries where the Company operates and all other business associates for their continued support extended to the Company and for placing their confidence in the management. The management looks forward to their continued support in future.

	For and on behalf of the Board
Balaji Gopalan	Sudhendra Mannikar
Managing Director	Whole-time Director & COO
DIN: 07108093	DIN:07483321