Kirloskar Oil Engines Ltd Directors Report

To the Members of Kirloskar Oil Engines Limited

Your Directors are pleased to present this 17 th Annual Report together with the Audited Statement of Accounts for the Financial Year ended 31 st March, 2026 of Kirloskar Oil Engines Limited (KOEL or the Company).

1. Companys Financial Performance (Standalone)

Your Companys sales from continuing operations for the financial year ended 31 st March, 2026 stood at Rs 5,603.85 Crores, as compared to Rs 4,481.46 Crores in the previous financial year, representing an increase of 25.05%. Profit before tax and exceptional item from continuing operations for the financial year ended 31 st March, 2026 was Rs 623.59 Crores as compared to Rs 502.76 Crores in the previous financial year, representing an increase of 24.03%.

Profit after tax from continuing operations for the financial year ended 31 st March, 2026 was Rs 441.50 Crores as compared to Rs 389.82 Crores in the previous financial year, representing an increase of 13.26%.

2. Financial Results (Standalone)

( Rs in Crores)

Particulars	2025-26	2024-25
Total Income from continuing operations	5,687.49	4,554.80
Profit before exceptional items and tax from continuing operations	623.59	502.76
Exceptional Items \u2013 (expense)/income	(29.68)	20.90
Profit before tax from continuing operations	593.91	523.66
Tax Expense (Current & Deferred Tax)	152.41	133.84
Net Profit for the year from continuing operations	441.50	389.82
Profit before tax from discontinued operations	26.09	56.28
Tax Expense (Current & Deferred Tax) on discontinued operations	6.57	14.17
Net Profit for the year from discontinued operations	19.52	42.11
Net Profit for the year from continuing and discontinued operations	461.02	431.93
Other Comprehensive Income/(Loss)	1.18	(3.07)
Total Comprehensive Income for the year, net of tax	462.20	428.86
Profit Brought Forward	2,315.54	1,973.63
Profit Available for Appropriation	2,776.56	2,405.56
Transfer to General Reserve	-	-
Dividend	94.44	87.07
Balance of the Profit carried forward	2,683.31	2,315.54

3. Dividend

Your Directors declared an interim dividend of 125% ( Rs 2.50/- per equity share) and also recommended a final dividend of 225% ( Rs 4.50/- per equity share) for the year ended 31 st March, 2026. The previous years dividend consisted of an interim dividend of 125% ( Rs 2.50 per equity share) and a final dividend of 200% (Rs 4/- per equity share).

The total dividend payout during the financial year ended 31 st March, 2026 was Rs 94.44 Crores. The payment of dividend was subject to tax deduction at source (TDS) at the applicable tax rate.

In terms of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 including amendments thereunder, the Dividend Distribution Policy of the Company is available on the Companys website (https://www.kirloskaroilengines. com/documents/6887317/2c1214b2-96a6-ce9c-5988-c9673c6cee2d).

4. Details of Significant Changes in Key Financial Ratios

Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, including amendments thereunder, we give below the key financial ratios:

1. Details of Key Financial Ratios of the Company as under:

Sr. No.	Particulars	Ratio as on 31 st March, 2026 #	Ratio as on 31 st March, 2025	Reason for significant change (change of 25% or more)
i.	Debtors\u2019 Turnover*	7.82	8.32
ii.	Inventory Turnover*	6.70	6.56
iii.	Interest Coverage Ratio	67.84	41.81	Increase mainly on account of decrease in current borrowings and part repayment of secured term loan and increase in net available earnings.
iv.	Current Ratio*	1.67	1.68
v.	Debt Equity Ratio*	0.04	0.06	Decrease mainly on account of decrease in current borrowings and part repayment of secured term loan availed for immovable property.
vi.	Operating Profit Margin (%)	10.60%	10.54%
vii.	Net Profit Margin (%)*	7.88%	8.51%

*Refer Note 47 of the Standalone Financial Statements.

# Figures derived based on items from Statement of Profit and Loss represent continuing operations only.

There are no sector specific equivalent ratios for disclosure by the Company.

2. Return on Net Worth:

The details of change in Return on Net Worth as compared to the immediately previous financial year is given below:

Sr. No.	Particulars	As on 31 st March, 2026	As on 31 st March, 2025	% of change	Reason for change
1	Return on Net worth #	13.95%	13.93%	0.16%	Marginal increase in operating profit with Sales growth

# Return derived based on figures from Statement of Profit and Loss represent continuing operations only. Comparative figures have been restated to exclude discontinued operations.

5. Companies which have become or ceased to be Subsidiaries, Associates and Joint Ventures

The Board of Directors at its meeting held on 11 th February, 2026 considered and approved the incorporation of a wholly owned subsidiary of the Company with a name Kirloskar Advanced Systems Private Limited (KASPL) or such other name as may be approved by the Statutory Authority(ies) therein and subject to such other approvals as may be required. Kirloskar Advanced Systems Private Limited has been incorporated on 30 th March, 2026.

6. Change in the Nature of Business

The Board of Directors of the Company in its meeting held on 10 th October, 2025 approved the transfer of the Companys Business to Customer (B2C) business segment i.e. Water Management Solutions (WMS) – Domestic & Exports Business by way of slump sale as a going concern to its wholly owned subsidiary, KOEL Fluid Dynamics Private Limited (KFD) [ Formerly known as La-Gajjar Machineries Private Limited (LGM)]. The consideration was in the form of issuance and allotment of 10,65,150 equity shares of KFD having face value of Rs 10/- each to the Company, on a private placement basis, on terms as set out in the Business Transfer Agreement executed on 10 th October, 2025. The aforesaid B2C business segment of the Company is transferred to KFD with effect from 11 th October, 2025.

7. Subsidiary Companies and Consolidated Financial Statements

On consolidated basis, for the financial year ended 31 st March, 2026, your Companys revenue from continuing operations stood at Rs 7,701.01 Crores (Previous financial year was Rs 6,329.14 Crores), Profit before tax and exceptional item from continuing operations was Rs 788.72 Crores (Previous financial year was Rs 612.47 Crores) and Profit after tax from continuing operations was Rs 557.72 Crores (Previous financial year was Rs 473.56 Crores).

The consolidated financial statements of the Company and its subsidiaries was prepared in accordance with Ind AS 110, issued by ICAI and notified by Ministry of Corporate Affairs and forms part of this Annual Report. A statement containing the salient features of the financial statements of the subsidiary companies forms part of the Financial Statements of the Company in Form AOC-1 (Refer Note 43 to the standalone financial statements).

Pursuant to the provisions of Section 136 of the Companies Act, 2013 and Rules thereof, including amendments thereunder, the financial statements along with relevant documents of the Company and its subsidiaries are available on the Companys website. The annual accounts of the Companys subsidiaries and related detailed information will be available for inspection in electronic form based on the members request raised by them on the dedicated email id of the Company at investors@kirloskar.com.

a) The details of financial performance of subsidiaries including step-down subsidiaries for the year ended 31 st March, 2026 and 31 st March, 2025 are as under:

			Turnover/Revenue ^		Profit/(Loss) after Tax ^
Sr. No.			( Rs in Crores)		( Rs in Crores)
	Name of the Company	Category
			FY 2025-26	FY 2024-25 #	FY 2025-26	FY 2024-25 #
1	Kirloskar Americas Corporation, USA (KAC)	Subsidiary Company	32.21	30.20	1.65	2.85
2	KOEL Fluid Dynamics Private Limited (formerly known as La-Gajjar Machineries Private Limited [LGM]) , Ahmedabad (KFD) *	Subsidiary Company	1,121.58	1,005.77	67.21	45.17
3	Arka Financial Holdings Private Limited, Mumbai (AFHPL)	Subsidiary Company	0.31	10.82	0.43	(2.47)
4	Arka Fincap Limited, Mumbai (AFL)	Step-down Subsidiary Company	873.68	774.27	68.60	80.36
5	Arka Investment Advisory Services Private Limited, Mumbai (AIASPL)	Step-down Subsidiary Company	2.62	5.63	(0.29)	(4.31)
6	Engines LPG, LLC dba Wildcat Power Gen, USA	Step-down Subsidiary Company	39.00	22.11	(24.20)	(25.77)
7	Kirloskar International ME FZE, UAE (KIME) w.e.f. 7 th January, 2025**	Subsidiary Company	54.48	-	5.90	(0.10)
8	Kirloskar Advanced Systems Private Limited, Pune (KASPL) w.e.f. 30 th March, 2026***	Subsidiary Company	-	NA	(0.23)	NA

*KFD purchased Business to Customer (B2C) business segment of the Company i.e. Water Management Solutions (WMS) – Domestic & Exports Business, on a going concern basis by way of slump sale. Accordingly, B2C business segment of the Company was transferred to KFD with effect from 11 th October, 2025. KFD restated the comparative figures of its financial statements as required under Appendix C of Ind AS 103 and stated in the accounting policy. Also the numbers for transferred business of Optiqua Pipes and Electricals Private Limited has been classified as discontinued operations. **KIME was incorporated on 7 th January, 2025 as wholly owned subsidiary of the Company and there were no commercial operations carried out upto 31 st March, 2025.

***KASPL was incorporated on 30 th March, 2026 as wholly owned subsidiary of the Company and there were no commercial operations carried out upto 31 st March, 2026.

^Above reported numbers represents continuing operations wherever applicable.

# Previous period figures are regrouped wherever required to make them comparable with the current period. b) Operational Highlights of subsidiaries including step-down subsidiaries during FY 2025-26 are as under:

i. Kirloskar Americas Corporation, USA – (KAC)

During the Financial Year under review, KACs revenue was contributed from Industrial, Powergen and Fluid Dynamic segments. KAC has stocking arrangements in Miami (FL) for engines, generating sets and spare parts. This enables faster deliveries of products to customers in North, Central and South America. The business environment in the USA was cautious after the announcement of tariffs of 25% in April 2025 which was increased to 50% in August 2025. This uncertainty had led cautious approach at customer end resulting into a lower demand coupled with some delays in procedures and documentation at the borders. The environment in Mexico was adversely affected due to continuously changing policies and interpretations holding up new investments and expansions. With introduction of higher capacity range through the Optiprime series, KAC successfully executed orders for a project in Belize and has offered Optiprime solutions for future projects in the Latam region. KAC is working on new avenues and ventures to succeed in these markets by pursuing to localize the products and meet local requirements. Relaxation of tariffs from 50% to 10% in the last quarter boosted customer sentiments in the last quarter of the financial year, which saw some good traction from business both in the US and Latam region.

KAC is playing a pivotal role for large scale projects by engaging with key players in the data centre segment to capitalise on unprecedented demand for larger capacity diesel and natural gasenginedrivengeneratorsolutionsintheUS.Simultaneously, KAC has initiated projects with multiple OEMs in the US for gas engine long blocks in the high horsepower segment that should bring significant opportunities in the coming 3 – 4 years. Currently three (3) new families of engine are in process of Tier 4 Final certification from US EPA and California Air Resources Board (CARB) and is expected to be completed in Financial Year 2026-27. These applications are being developed for Powergen and Industrial segment.

KAC participated at National Fire Protection Association expo in United States of Americas. Stocking and packaging of engines and accessories in the US has led to a penetration amongst the OEMs in Americas region. KAC has also increased its service reach in different countries in Central and South America which has been leading to positive response from end customers in contractors in the region.

ii. Engines LPG, LLC dba Wildcat Power Gen, USA

The business environment in the USA was cautious after the announcement of tariffs of 25% in April 2025 which was increased to 50% in August 2025. The same has resulted in lack of demand from distributor channel which has impact on Engines LPG LLC performance. In response, the organisation was right sized to align with business volume while prioritising foundational investments in enhancement of sales, service, support processes, and channel partner onboarding to build brand recognition. Technical milestones have showcased success, particularly with the Patriot series through multiple deliveries for mobile-rental applications and a promising product ramp-up cycle, alongside delivery of engineered solutions such as Natural Gas-driven engineered power solutions for agriculture application and drone-charging applications for irrigation. Further showcasing these capabilities are notable solutions under development, including genset solution for mobile EV charging station and a portable eye hospital application.

Engines LPG, LLC dba Wildcat Power Gen participated in the Powergen Show in Feb 2026 and showcased various products and solutions including Mobile Rental segment diesel gensets, Hybrid gensets with solar & battery integrated options and solutions where customer showed keen interest in our solution offerings.

To deliver sustainable growth, Engines LPG, LLC dba Wildcat Power Gen is working towards a comprehensive strategic overhaul that includes transitioning to a new leadership team, enhancing the partnership with its key vendors, and aggressively revamping the channel strategy to establish robust distributor partnerships and increase key-account focus. This strategy will be further reinforced by a broad investment in talent across sales, service, support, engineering, manufacturing, and assembly, which, combined with improved product availability, positions the organisation to course-correct with increased sales momentum in the coming quarters.

iii. KOEL Fluid Dynamics Private Limited (KFD) [ formerly known as La-Gajjar Machineries Private Limited ]

KFD continued to expand its network both in domestic and international markets and geographies. During the year under review, KFD has expanded its network in regions like Africa, South East Asia, Latin America. The Sanand plant has reached at reasonable level of capacity utilisation after setting up of the new plant during the year. Transfer of B2C business segment of KOEL to KFD resulted in, improving value chain efficiency. Additionally, the Rajkot plant reached a fulfillment of more than 80% capacity.

Market Segments -y Electric: Remained the largest topline contributor; focus is now on a renewed product portfolio and expanded channel outreach. y Diesel: Performance was strong and high market acceptance in the aftermarket. y Industrial: Launched specialty pumps (End Suction, Sewage, Mud) to offset seasonality in other segments. y International: Successfully expanded the KFD footprint to 55 countries across four continents.

Overall, the fiscal year focused on structural upgrades across the entire value chain to shape the KFDs roadmap.

iv. Arka Financial Holdings Private Limited (AFHPL)

AFHPL was founded with the aim of bolstering strategic flexibility to establish a dynamic and robust platform for its Financial services endeavours.

AFHPL is an unregistered Core Investment Company (CIC). Presently, AFHPL oversees two subsidiaries namely, Arka Fincap Limited and Arka Investment Advisory Services Private Limited.

v. Kirloskar International ME FZE, UAE (KIME)

During the Financial Year under review, KIME started its operations from 1 st October, 2025 after receipt of its VAT registration. KIMEs revenue drivers are Firefighting Engines, Industrial Engines and Spares in Middle East and North Africa territory. KIME has stocking arrangements in UAE for engines and spare parts. This enables faster deliveries of products to OEMs (customers).

KIME faced serious business revenue challenge due to loss of our largest OEM account to Chinese manufacturer, which created a significant short-term gap. The team responded with focused execution across the broader portfolio through accelerated engagement with existing and new customers across assigned territory. Due to which, KIME not only stabilised the business but also delivered growth across other accounts. During the financial year, KIME successfully established new Industrial revenue streams in the Construction and Automotive segments, with key wins in cement bulkers and mobile road sweeper applications. Also drove market expansion by acquiring new customers (OEMs) in strategic markets such as Saudi Arabia, Egypt, and Turkey thus, strengthening our regional footprint KIME expanded after-sales network by onboarding new service partners in Egypt and Saudi Arabia, significantly improving service reach, response time, and customer support in these critical markets.

vi. Arka Fincap Limited (AFL) - Step-Down Subsidiary

AFL is a Non-Deposit Taking Systemically Important Non-Banking Financial Company (NBFC). It operates as a subsidiary of Arka Financial Holdings Private Limited (AFHPL), which in turn, is a subsidiary of Kirloskar Oil Engines Limited (KOEL). AFL isprofessionallymanagedandspecialisesinprovidingstructured term financing solutions to Retail, Corporate, Real Estate, and Micro, Small, and Medium Enterprise (MSME) borrowers. With a customer-centric approach, a seasoned management team, and diligent monitoring of loan assets, AFL has witnessed significant growth since the inception of operations in fiscal year 2020. It operates in 3 main business segments: SME Lending, Wholesale Lending and recently launched Secured Retail Financing.

The launch of our Secured Retail vertical represents a defining shift in Arka Fincaps strategy, prioritising asset granularity and long-term balance sheet stability. As a primary growth catalyst, this segment leverages Secured Business Loans and Pre-Owned Wheels financing to bridge the credit gap for the MSME sector, fostering a more diversified and resilient portfolio. The speed of execution in Secured Retail has been remarkable; within a single year, we established a presence across 7 states with a robust network of 100+ Secured Retail branches. This rapid scale-up is powered by a dedicated team of over 1,000 retail professionals whose local insights have driven deep market penetration. Strategically, the retail segment now contributes ~9% of Arkas total AUM. More importantly, it is fundamentally shifting our asset composition toward greater granularity. By reducing concentration risk and increasing the number of touchpoints, we are building a scalable foundation that ensures long-term stability.

Within SME vertical, we provide higher ticket Loans against Property to Small and Medium Enterprises. Our Wholesale Lending business comprises of Corporate Lending, Real Estate & Urban Infra Lending and Syndication (Distribution) Business. Corporate Lending division excels in tailoring bespoke loans to precisely fit the unique needs of medium and large corporations. The Real Estate and Urban Infra Lending division is dedicated to facilitating the growth of Indias infrastructure and real estate sectors by providing either partial or complete capital infusion. With a keen focus on catering to the requirements of its esteemed clients, the division ensures a smooth and seamless process from initiation to completion. Syndication business offers comprehensive solutions to corporate clients encompassing project finance, capital expenditure, general corporate needs, last mile financing, and subordinated structured debt. Through advisory, syndicating, selldown, and co-lending strategies spanning various sectors, it ensures tailored financial assistance for every requirement.

Overall, Arka Fincap continued its upward trajectory in FY 26, achieving a 9.5% y-o-y growth in AUM to reach Rs 7,947 Crores. This growth was achieved alongside a deliberate focus on increasing granularity, ensuring a high-quality and resilient portfolio for the future.

With a customer-centric approach, a seasoned management team, and diligent monitoring of loan assets, upholding our motto of Lend wisely, serve deeply, we closed the year with a GNPA of ~1.2%. This asset quality underscores our ability to achieve rapid scale upholding our rigorous underwriting standards that define our business.

vii. Arka Investment Advisory Services Private Limited (AIASPL) - Step-Down Subsidiary

AIASPL was incorporated with an objective including managing or assisting in raising funds for alternative investment funds, venturecapitalfunds,privateequityfunds,debtfunds,structured finance funds, offshore funds, pension funds, property related funds or any other funds, undertaking the business of providing investment advisory services, act as an asset manager, advisor, sponsor, designated partner in respect of various investment or pooled investment vehicles and/or entities for managing and/or advising with respect to the assets/and/or investments of or by Alternative Investment Funds.

AIASPL was an Investment Manager to Arka Credit Fund, a fund registered as a Category II Alternative Investment Fund with SEBI and its scheme i.e., Arka Credit Fund I. Pursuant to the liquidation of the investments of Arka Credit Fund I and on an application made by AIASPL for surrendering the Certificate of Registration, SEBI cancelled the certificate of registration of Arka Credit Fund as Category II AIF. As at 31 st March, 2026, AIASPL is not acting as the Investment Manager to any active fund.

8. Kirloskar Oil Engines Limited – Employee Stock Option Plan 2019 (KOEL ESOP 2019)

The Members of the Company at the Annual General Meeting held on 9 th August, 2019, passed a resolution for introducing Employees Stock Option Plan 2019 – (KOEL ESOP 2019), for the benefit of employees of the Company. The resolution also accorded approval to the Board of Directors, to formulate the plan as per broad parameters outlined in the resolution, either directlyorthroughaNominationandRemunerationCommittee. The Members of the Company at the Annual General Meeting held on 12 th August, 2021, passed a resolution amending the Kirloskar Oil Engines Limited – Employee Stock Option Plan 2019 in terms of coverage of the KOEL ESOP 2019 to the eligible employees of its subsidiary company, in or out of India except such subsidiary company(ies) which are formed and engaged in financial service business including without limitation to the Arka Fincap Limited and also authorised the Board of Directors or the Nomination and Remuneration Committee of the Company to grant the Options to such employees of the Subsidiary Company(ies) from time to time.

The Securities and Exchange Board of India (SEBI) notified the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (SEBI SBEB Regulations) by repealing and merging the SEBI (Share Based Employee Benefits) Regulations, 2014 and the SEBI (Issue of Sweat Equity) Regulations, 2002 (collectively referred to as Erstwhile Regulations) with appropriate modifications which came into force from 13 th August, 2021. The Nomination and Remuneration Committee at its meeting held on 27 th October, 2021 further amended the KOEL ESOP 2019 to align and comply the requirements of the SEBI SBEB Regulations along with to bring flexibility provided under the SEBI SBEB Regulations. The Company had obtained in-principle approval from BSE Limited (BSE) and National Stock Exchange of India Limited (NSE) for listing of 14,00,000 equity shares under KOEL ESOP 2019, pursuant to Regulation 12 of the Chapter II of the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2014.

The Nomination and Remuneration Committee at its meetings held on 5 th March, 2021 approved the grant of 9,40,000 stock options exercisable into 9,40,000 Equity Shares of Rs 2/- each; on 18 th May, 2022 approved the grant of 2,75,000 stock options exercisable into 2,75,000 Equity Shares of Rs 2/- each; on 10 th August, 2023 approved the grant of 1,35,000 stock options exercisable into 1,35,000 Equity Shares of Rs 2/- each and on 6 th August, 2025, approved the grant of 21,129 stock options exercisable into 21,129 Equity Shares of Rs 2/- each of the Company to its specified employees of the Company. The Nomination and Remuneration Committee at its meeting held on 27 th October, 2021, approved the grant of 50,000 stock options exercisable into 50,000 Equity Shares of Rs 2/- each of the Company to the specified employees of KOEL Fluid Dynamics Private Limited (formerly known as

La-Gajjar Machineries Private Limited) , a wholly owned subsidiary company. The Nomination and Remuneration Committee at its meeting held on 7 th August, 2024, approved the grant of 4,63,367 stock options exercisable into 4,63,367 Equity Shares of Rs 2/- each of the Company to the specified employees of the Company and KOEL Fluid Dynamics Private Limited (formerly known as La-Gajjar Machineries Private Limited) , a wholly owned subsidiary company.

KOEL ESOP 2019 is in compliance with the applicable provisions of the Companies Act, 2013 and the Rules issued thereunder, the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (SEBI SBEB Regulations) and other applicable regulations, if any.

The disclosures as required under Companies (Share Capital and Debentures) Rules, 2014, including amendments thereunder as on 31 st March, 2026 is as under:

Options granted during the FY 2025-26	21,129
Options vested during the FY 2025-26*	168,633
Options exercised during the FY 2025-26**	156,717
The total number of shares arising as a result of exercise of option during the FY 2025-26***	148,268
Options lapsed during the FY 2025-26	178,314
Exercise Price	103.14/-
	128.88/-
	87.93/-
	267.36/-
	656.67/-
	519.06/-
Variation of terms of options during the FY 2025-26	No variation
Employee wise details of options granted during FY 2025-26 to:
1. Key Managerial Personnel	Nil
2. Any other employee who receives a grant of options in any one year of option amounting to five percent or more of options granted during the FY 2025-26: Mr. Prasad Dharmadhikari	21,129
3. Identified employees who were granted option, during any one year, equal to or exceeding one percent of the issued capital (excluding outstanding warrants and conversions) of the company at the time of grant during the FY 2025-26.	Nil

*6,875 options were vested to the specified employees of KOEL Fluid Dynamics Private Limited (formerly known as La-Gajjar Machineries Private Limited) , a wholly owned subsidiary company and 161,758 options were vested to the specified employees of the Company as per vesting schedule.

**It excludes 31,717 options exercised during the financial year 2024-25 and allotted during the financial year 2025-26. It includes 8,449 options exercised during the financial year 2025-26 and allotted during the financial year 2026-27. The exercise money for 8,449 equity shares is accounted as Share application money.

***It excludes 31,717 options exercised during the FY 2024-25 and allotted during the FY 2025-26.

There have been no material changes to the KOEL ESOP 2019 during the FY 2025-26.

The certificate from M/s. M. J. Risbud & Co., a proprietorship firm of Mr. Mahesh J. Risbud, Practicing Company Secretary (Certificate of Practice No. CP 185, Membership No. F810, Firm Registration No. S1981MH000400, Peer Review Certificate No. 7628/2026 dated 30 th January, 2026) Secretarial Auditors 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 Members of the Company at its Annual General Meetings held on 9 th August, 2019 and 12 th August, 2021, will be placed before the Members at the ensuing Annual General Meeting. A copy of the same will be available for inspection at the Companys website viz. www.kirloskaroilengines.com.

The disclosures on 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 SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 (SEBI SBEB Regulations) and can be accessed on the Companys website viz. www.kirloskaroilengines.com.

In line with the Indian Accounting Standards (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 recognised the same as employee compensation cost over the vesting period.

9. Capital Structure

Your Company allotted 1,79,985 equity shares of Rs 2/- each to the eligible employees of the Company and eligible employees of KOEL Fluid Dynamics Private Limited (formerly known as La-Gajjar Machineries Private Limited) during the financial year 2025-26 pursuant to KOEL ESOP 2019. Consequent to the aforesaid allotment, Issued Capital and Subscribed Capital of the Company increased from 14,51,79,689 equity shares of Rs 2/- each to 14,53,59,674 equity shares of Rs 2/- each and Paid-up Capital increased from 14,51,79,224 equity shares of Rs 2/- each to 14,53,59,209 equity shares of Rs 2/- each. Your Company allotted 8,449 equity shares of Rs 2/- each on 24 th April, 2026 and 12,286 equity shares of Rs 2/- each on 14 th May, 2026, upon exercise of options vested to the eligible employees of the Company and eligible employees of KOEL Fluid Dynamics Private Limited (formerly known as La-Gajjar Machineries Private Limited) pursuant to KOEL ESOP 2019.

10. Directors a) Changes in Composition of the Board of Directors

The details of changes in the composition of the Board of Directors of the Company during the Financial Year under review are as under: i. Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors in the meeting held on 11 th November, 2025, considered and approved the appointment of Mr. Srikumar Vijayasekharan (DIN 07810464), as an Additional Non-Executive Director in the capacity of an Independent Director for a first term of 5 (five) consecutive years, with effectfrom11 th November,2025.Furthertheshareholders by way of postal ballot on 15 th January, 2026, approved the appointment of Mr. Srikumar Vijayasekharan (DIN 07810464), as an Non-Executive Independent Director for a first term of 5 (five) consecutive years, with effect from 11 th November, 2025. The intimation of the said appointment was filed with BSE Limited and National Stock Exchange of India Limited on 11 th November, 2025 and 16 th January, 2026. ii. The term of office of Mr. Atul Kirloskar (DIN 00007387), as Chairman of the Company expired on 31 st March, 2026 (close of working hours). He expressed a desire not to renew term as Chairman and also tendered his resignation as Non-Executive Non-Independent Director with effect from 31 st March, 2026 (close of working hours). The intimation of the said resignation was filed with BSE Limited and National Stock Exchange of India Limited on 10 th March, 2026. iii. Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors in the meeting held on 10 th March, 2026, considered and approved appointment of Mr. Rahul C. Kirloskar (DIN

00007319), Non-Executive Director (Non-Independent Director) as the Chairman of the Company, with effect from 1 st April, 2026. The intimation of the said appointment was filed with BSE Limited and National Stock Exchange of India Limited on 10 th March, 2026. iv. The members of the Company at the Annual General Meeting (AGM) held on 7 th August, 2025, re-appointed Ms. Gauri Kirloskar (DIN 03366274), as a Whole-Time Director with the designation as the Managing Director of the Company to hold office for a period of 3 (three) years commencing from 20 th May, 2025. Based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors in its meeting held on 10 th March, 2026, have additionally designated her as the Vice Chairperson of the Company with effect from

1 st April, 2026. The intimation of the additional designation was filed with BSE Limited and National Stock Exchange of India Limited on 10 th March, 2026. v. Mr. Rahul C. Kirloskar (DIN 00007319) retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. vi. In compliance with Section 149 and 152 read with Schedule IV and other applicable provisions, if any, of the Companies Act, 2013 and the Rules made thereunder and Regulation 16(1)(b), 17(1C), 25(2A) and 25(8) including such other applicable provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, (including any statutory amendment, modification(s) or re-enactment thereof for the time being in force) based on the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company re-appointed Mr. Yogesh Kapur (DIN 00070038) as Non-Executive Independent Director with effect from 29 th September, 2026. The Company has received requisite notice in writing from a member proposing his candidature for office of Director. The resolution seeking approval of the Members by special resolution for the re-appointment of Mr. Yogesh Kapur for a second term of 5 (five) consecutive years, has been incorporated in the notice of the forthcoming Annual General Meeting of the Company.

The brief resume and other details relating to the Directors who are proposed to be re-appointed, as required to be disclosed under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 including amendments thereunder, forms part of the Notice of Annual General Meeting.

Other than the above, there are no other changes in the composition of the Board of Directors of the Company in the FY 2025-26.

b) Changes in Key Managerial Personnel

There are no changes in Key Managerial Personnel of the Company in the FY 2025-26.

c) Declarations from the Independent Directors

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(7) of the Companies Act, 2013 & Rules thereof including amendments thereunder and Regulation 16(1)(b) & 25(8) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 including amendments thereunder. The Company has also received declarations from all the Independent Directors of the Company confirming that they have complied with the Code for Independent Directors as prescribed in Schedule IV to the Companies Act, 2013, including amendments thereunder. The said Code is available on the Companys website.

All the Independent Directors of the Company have enrolled themselves in the data bank with the Indian Institute of Corporate Affairs, New Delhi, India and eligible Independent Directors have also completed the proficiency test.

There has been no change in the circumstances affecting their status as Independent Directors of the Company.

The Board of Directors of the Company have taken on record the declaration and confirmation submitted by the Independent Directors after undertaking due assessment of the veracity of the same.

d) A statement regarding opinion of the Board with regard to Integrity, Expertise and Experience (including the proficiency) of the Independent Directors appointed during the year

The Board of Directors considered that Mr. Srikumar Vijayasekharan (DIN 07810464) possess the requisite expertise and experience (including the proficiency) and he is the person of high integrity and repute and accordingly recommended his appointment as Independent Director which was approved by the Members by way of Postal Ballot on 15 th January, 2026.

Other than the above, there are no other appointment of Independent Directors by the Company in financial year 2025-26.

e) Board Evaluation

The Board of Directors carried out a formal review of the performance and effectiveness of the Board, Committees of the Board and of the individual directors including the Chairman of the Board for the FY 2025-26.

The performance of the Board was evaluated on the basis of criteria such as the board composition and structure, effectiveness of Board processes, participation in organisation strategy including Long Range Plan and Annual Operating Plan, inorganic growth opportunity evaluation, Enterprise Risk Management etc.

Using appropriate criteria, the performance of the various Committees was separately evaluated by the Board.

In separate meeting(s) of Independent Directors, performance of non-independent directors, performance of the Board as a whole, performance of the Chairman, taking into account the views of executive director and non-executive directors, was evaluated and inter-alia discussed the issues arising out of Committee Meetings and Board discussion including the quality, quantity and timely flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties. The outcome of the meeting was presented to the Board along with the course of actions taken for implementing the observations/ suggestions.

A separate exercise was carried out to evaluate the performance of individual Directors including the Chairman of the Board, who were evaluated on parameters such as achievement against key performance objectives, attendance at meetings, time devoted for the Company, contribution in the Board process etc.

Feedback was sought by way of a structured questionnaire covering various aspects of the Boards functioning such as adequacy of the composition of the Board and its Committees, Board culture, execution and performance of specific duties, obligations and governance and the evaluation was carried out based on responses received from the Directors.

The Independent Directors shared their inputs on effectiveness of the Board processes with the Chairman of the Board. The Directors expressed their satisfaction with the evaluation process. The result of evaluation was satisfactory and meets the requirements of the Company.

f) Nomination and Remuneration Policy

The Board of Directors, on the recommendation of the Nomination & Remuneration Committee, has adopted a policy that lays guidelines for selection and appointment of Directors, Key Managerial Personnel and Senior Management Personnel together with their remuneration, which has been amended in order to align with the provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, including amendments thereof and the Companies Act, 2013 read with Rules thereof including amendments thereunder. The Nomination and Remuneration Policy is available on the website of the Company. (Web – link https://www.kirloskaroilengines. com/documents/6887317/a010f0ef-8135-1da8-e35b-7e61be179ffc)

g) Number of meetings of the Board

During the financial year under review, 6 (Six) Board Meetings were held, the details of which form part of the Report on Corporate Governance.

h) Composition of Audit Committee and other Committees of the Board

The Composition including terms of references of Committees of the Board namely, Audit Committee, Nomination and Remuneration Committee, Risk Management Committee and

Stakeholders Relationship Committee forms part of the Report on Corporate Governance.

The Composition of Corporate Social Responsibility Committee forms part of Annexure A of this report.

During the financial year under review, the Board has accepted all the recommendations given by the Committees of the Board, which are mandatorily required.

11. Particulars of Loans, Guarantees or Investments

During the financial year under review, the Company has invested in Series A-1 Optionally Convertible Redeemable Non-Cumulative Preference Shares of Kirloskar Americas Corporation, USA, Equity share capital of Kirloskar International ME FZE, UAE and the Company has transferred its Business to Customer (B2C) business segment by way of slump sale as a going concern to KOEL Fluid Dynamics Private Limited (KFD) at a consideration in the form of 10,65,150 equity shares of KFD having face value of Rs 10/- each. The details are given in the Financial Statements, forming part of this Annual Report. The Company has not granted any Loans and Guarantees covered under Section 186 of the Companies Act, 2013 & Rules thereof including amendments thereunder.

12. Particulars of Contracts or Arrangements with Related Parties

All related party transactions that were entered into during the FY 2025-26 were on an arms length basis and in the ordinary course of business. None of the related party transactions entered into by the Company, were materially significant, warranting members approval under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 including amendments thereunder and the Companies Act, 2013 and Rules made thereunder and amendments thereof. Hence, there are no transactions to be reported in Form AOC-2. All Related Party Transactions are routinely placed before the Audit Committee for approval after being duly certified by the Independent Chartered Accountant. The Audit Committee had granted the omnibus approval for the proposed transactions other than those approved by the Audit Committee from time to time with Related Party during FY 2025-26, which are reviewed on quarterly basis by the Audit Committee after being duly certified by the Independent Chartered Accountant. The Company has adopted the policy on Related Party Transactions which was amended from time to time in order to align with the provisions of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, including amendments thereof and the Companies Act, 2013, read with rules thereof including amendments thereunder. The amended policy on Related Party Transactions is uploaded on the Companys website.

The disclosures as per Ind AS 24 for transactions with related parties are provided in Note 41.5.11 of the Standalone Financial Statements. The Company also discloses, in the prescribed format, on the Stock Exchange(s) viz. BSE Limited and National Stock Exchange of India Limited, transactions with the related parties on half yearly basis.

13. Risk Management, Internal Audit and Internal Control Framework

The Board recognises the importance of sound internal controls and risk management practices to good corporate governance. The Board is responsible for the governance of risk and ensures that management maintains a sound system of risk management and internal controls, to safeguard the interests of the Company and its shareholders. All material decisions of the Board take into relevant consideration the nature and extent of risks which the Company is willing to take in achieving its strategic objectives and value creation. The Companys internal control system is commensurate with the nature of the business, size and complexity of operations covering all businesses and functions of the organisation. In line with the commitment of a high standard of compliance with accounting, financial reporting, internal controls, corporate governance and auditing requirements and any legislation relating thereto, the Company has a Code of Business Conduct applicable to Company personnel covering a wide range of business practices and procedures. This includes, but is not limited to, compliance with laws, rules and regulations, avoidance of conflicts of interests, practicing ethical behavior, ensuring integrity of financial statements, protection of information, intellectual property and technology, diversity and inclusion and prevention of harassment and violence. The Companys risk management process is designed to facilitate identification, evaluation, mitigation and review of risks which may affect achievement of objectives. It is aligned with the strategy deployment processes of the organisation. A risk-based audit plan on a yearly basis is approved by the Audit Committee. Significant observations and progress of implementation of the action plan are reported to and reviewed by the Audit Committee. The enterprise risks and their mitigation plans are presented by the risk owners to the Risk Management Committee. The Enterprise Risk Management (ERM) framework is aimed at effectively mitigating the business and enterprise risks through strategic actions. The mitigation plans for enterprise and business risks are reviewed and updated on a periodic basis to the Risk Management, Audit Committee and the Board of Directors of the Company. The risk management process which has been established across the Company, addresses major types of risks which are at enterprise and business level. The risks are reviewed with respect to the likelihood and impact following a balanced bottom-up and top-down approach covering all businesses and functions of the Company. The review of the risks is done based on changes in the external environment, which have a significant bearing on the risks. The Risk Management Policy developed by the Company guides the risk management processes which is in line with size, scale and nature of the Companys operations. The risk management process works at various levels across the organisation. It is an ongoing process and forms an integral part of management focus. The Risk Management Committee oversees risk management standards, practices, and systems. The Risk Management Committee periodically reviews the effectiveness of the ERM system within the Company and evaluates the adequacy and effectiveness of administrative, operating, and accounting controls used by the Company. In addition to this, the control self-assessment framework complements the internal audits and helps the employees to monitor the internal controls they are responsible for. This system aids in building a robust control environment across the organisation.

14. InternalFinancialControlswithReference to the Financial Statements

The Company has in place adequate internal financial controls with reference to the Financial Statements commensurate with the size, scale and complexity of its operations.

15. Compliance Management

The Company has further strengthen the comprehensive and robust legal compliance management online tool, which is devisedtoensurecompliancewithallapplicablelaws.Automated alerts are sent to compliance owners to ensure compliances within stipulated timelines. The compliance owners certify the compliance status which is reviewed by compliance approvers and a consolidated dashboard is presented to the respective functional heads and Compliance Officer. A certificate of compliance of all applicable laws and regulations is placed before the Board of Directors on a quarterly basis.

16. Corporate Social Responsibility

The Company has always believed in working for the betterment and upliftment of society. Corporate Social Responsibility (CSR) has been practiced and ingrained over the years in the Company. The focus areas under CSR have remained consistent over the years and include education, health and hygiene, environment, disaster management and rural development etc.

The Company has adopted the CSR Policy which is further amended in lines with the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021.

The Composition of CSR Committee of the Board and Report on CSR activities is provided in Annexure A to this Report.

17. Vigil Mechanism/Whistle Blower Policy

The Company has adopted a Vigil Mechanism/Whistle Blower Policy. The Policy provides a mechanism for all directors, employees of the Company and persons dealing with the Company to report to the Chairman of the Audit Committee or Ethics Committee or Ethics Ombudsman any instance of unethical behaviour, actual or suspected fraud or violation of the Companys code of conduct or leakage of Unpublished Price Sensitive Information (UPSI), by any person, who is in possession of UPSI, to any other person in any manner whatsoever, except as otherwise permitted under the SEBI (Prohibition of Insider Trading) Regulations, 2015, or any other instance. The Whistle Blower Policy/Vigil Mechanism and Process flow has been made accessible to all employees. The Company adopted online Ethics Helpline to report any suspected violations of code of conduct or any other ethical concerns or raise concern under Whistle Blower/Vigil Mechanism, through email/hotline/webmode. The Company had a tie-up with an independent third party specialist service provider Integrity Matters to handle concerns reported. The Vigil Mechanism/Whistle Blower Policy is uploaded on the Companys website (weblink:https://www.kirloskaroilengines. com/documents/6887317/17b7fa36-d0ec-4acc-4d87-3c2c03873664) No person has been denied access to the Audit Committee Chairman in this regard. There were no complaints filed/ pending with the Company during the financial year under review.

18. Extract of Annual Return

As required under Section 92(3) read with Section 134(3)(a) of the Companies Act 2013 read with Rule 12 of the Companies (Management and Administration) Rules, 2014 including amendments thereunder, the Annual Return filed with the Ministry of Corporate Affairs (MCA) for the FY 2024-25 is available on the web-link (https://www.kirloskaroilengines. com/documents/6887317/7012932/Annual%20Return%20 F Y%202024-25.pdf/a2eb0c53-451b-b534-3016-2276e43fda4e) and the Annual Return for FY 2025-26 will be made available on the website of the Company once it is filed with the MCA.

19. Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and Outgo

Information relating to conservation of energy, technology absorption and foreign exchange earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 and Rules thereof, including amendments thereunder, are provided in Annexure B to this Report.

20. Environmental, Social and Governance (ESG) Journey

The Board continues to have a sharp focus on ESG agenda to ensure long-term value creation for all stakeholders through sustainable business practices.

The ESG Committee of the Company provides strategic guidance on ESG strategy. The review and progress made on ESG are reported to the Risk Management Committee, Audit Committee and Board of Directors periodically.

21. Key Initiatives with Respect to Stakeholder Relationship, Customer Relationship, Environment, Sustainability, Health, Safety and Welfare of Employees

The key initiatives taken by the Company with respect to stakeholder relationship, customer relationship, environment, sustainability, health, safety and welfare of employees are provided separately under various Capitals and Business Responsibility and Sustainability Report, as a part of this Report.

22. Particulars of Employees

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 including amendments thereunder, are provided in Annexure C to this Report. The particulars of employees pursuant to Section 197(12) of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 including amendments thereunder, forms part of this report. In terms of Section 136(1) of the Companies Act, 2013 and Rules thereof including amendments thereunder, the Boards Report is being sent to the shareholders without this Annexure. A copy of this annexure will be made available in electronic form to the members on request raised by them on the dedicated email id of the Company at investors@kirloskar.com.

23. Policy on Prevention of Sexual Harrassment (POSH)

The Company has in place a Policy for prevention of sexual harassment at workplace. This inter alia provides a mechanism for the resolution, settlement or prosecution of acts or instances of sexual harassment at work and ensures that all employees are treated with respect and dignity. The Company has complied with the provisions relating to the constitution of Internal Complaints Committee (ICC) under the Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act, 2013.

Code of Conduct Classroom training sessions have been conducted across the Company. The POSH Act, ICC as well as reporting mechanisms set up in the Company are covered as a part of this training.

There were no complaints filed/pending with the Company during the financial year under review.

24. Disclosure under Maternity Benefit Act, 1961

The Company has complied with the provisions of the Maternity Benefit Act, 1961 as amended from time to time. The Company has ensured the provisions of maternity benefits to eligible women employees in accordance with the requirements of the Maternity Benefit Act, 1961, and there has been no instance of non-compliance during the FY 2025-26.

25. General

During the FY 2025-26: a. There were no public deposits accepted by the Company pursuant to provisions of the Companies Act, 2013 and Rules thereof, including amendments thereunder. b. There was no instance of fraud during the financial year under review, which required the Statutory Auditors to report to the Audit Committee and/or Board under Section 143(12) of the Companies Act, 2013 and Rules thereof, including amendments thereunder. c. The Company has maintained cost records as specified by the Central Government under sub-section (1) of Section 148 of the Companies Act, 2013 and Rules thereof, including amendments thereunder. d. The Company has complied with all applicable mandatory Secretarial Standards issued by the Institute of Company Secretaries of India, New Delhi. e. To the best of our knowledge, the Company has not received any such order from Regulators, Courts or Tribunals, which may impact the going concern status or the operations of the Company in future. f. 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 under review of the Company to which the Financial Statements relate and the date of this Report. g. Neither any application has been made nor has any proceeding been pending against the Company under the Insolvency and Bankruptcy Code, 2016. h. Ms. Gauri Kirloskar (DIN: 03366274), Whole – Time Director designated as Vice Chairperson and Managing Director of the Company, received commission of Rs 8,00,000/- during the financial year 2025-26 from Arka Fincap Limited, Step-down Subsidiary Company. i. Details of unclaimed dividends and equity shares transferred to the Investor Education and Protection Fund authority have been provided as part of the Notice of the Annual General Meeting.

26.Auditors a) Statutory Auditors

The Members of the Company at their meeting held on 12 th August, 2021, appointed M/s. G. D. Apte & Co., Chartered Accountants, Pune (Firm Registration No. 100515W), as Statutory Auditors of the Company for a first term of 5 (five) consecutive years to hold office from the Annual General Meeting held on 12 th August, 2021 till the conclusion of the Annual General Meeting to be held in the year 2026.

It is proposed to re-appoint M/s. G. D. Apte & Co., Chartered Accountants, Pune (Firm Registration No. 100515W), as Statutory Auditors of the Company for a second term of 5 (five) consecutive years to hold office from the Annual General Meeting to be held in 2026 till the conclusion of the Annual General Meeting to be held in the year 2031. The resolution seeking approval of the Members for the reappointment of M/s. G. D. Apte & Co., Chartered Accountants, Pune (Firm Registration No. 100515W), as Statutory Auditors of the Company for a second term of 5 (five) consecutive years, has been incorporated in the notice of the forthcoming Annual General Meeting of the Company.

The Company has received from them the requisite certificate pursuant to Section 139 of the Companies Act, 2013 and Rules thereof, including amendments thereunder. The Report given by the Auditors on the Standalone and Consolidated financial statements of the Company for the financial year ended 31 st March, 2026, forms part of this Report and does not contain any qualification, reservation or adverse remark or disclaimer.

b) Cost Auditors

Your Company is required to maintain the cost records as specified by the Central Government under Section 148(1) of the Companies Act, 2013. The Board of Directors at its meeting held on 14 th May, 2026, on the recommendation of the Audit Committee, appointed M/s. Parkhi Limaye & Co. (Firm Registration No. 191), as the Cost Auditors of the Company for the Financial Year 2026-27 at a remuneration of Rs 8,75,000/- (Rupees Eight Lakhs Seventy-Five Thousand only). The remuneration payable to M/s. Parkhi Limaye & Co is subject to ratification by the shareholders at the ensuing Annual General Meeting.

The Cost Audit Report for the Financial Year ended 31 st March, 2026 will be filed as per the provisions of the Companies Act, 2013 and Rules thereof, including amendments thereunder with Ministry of Corporate Affairs (MCA). (Cost Audit Report for FY 2024-25 was filed on 3 rd September, 2025).

c) Secretarial Auditor

The Members of the Company in its meeting held on 7 th August, 2025 appointed M/s. M. J. Risbud & Co, a proprietorship firm of Mr. Mahesh J. Risbud, Practicing Company Secretary (Certificate of Practice No. CP 185, MembershipNo.F810,FirmRegistrationNo.S1981MH000400, Peer Review Certificate No. 7628/2026 dated 30 th January, 2026) as Secretarial Auditor of the Company for a term of 5 (five) consecutive years from and including the Financial Year ending 31 st March, 2026 to the Financial Year ending 31 st March, 2030.

The Company has received the requisite certificate pursuant to Regulation 24A(1A) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, including amendments thereunder.

M/s. M. J. Risbud & Co, a proprietorship firm of Mr. Mahesh J. Risbud, Practicing Company Secretary has conducted the Secretarial Audit of the Company for FY 2025-26, under Section 204 of the Companies Act, 2013 and Rules thereof including amendments thereunder.

The Secretarial Audit Report for the Financial Year ended 31 st March, 2026 is provided in Annexure D-1 to this Report and does not contain any adverse remark or qualifications. M/s. M. J. Risbud & Co, a proprietorship firm of Mr. Mahesh J. Risbud, Practicing Company Secretary, Pune, has submitted Secretarial Compliance Report as laid down in SEBI circular no. HO/49/14/14(7)2025-CFD-POD2/I/3762/2026 dated 30 th January, 2026 read with circular no. NSE/CML/2023/21 dated 16 th March, 2023 and circular no. NSE/CML/2023/30 dated 10 th April, 2023 issued by National Stock Exchange of India Limited and notice no. 20230316-14 dated 16 th March, 2023 and notice no. 20230410-41 dated 10 th April, 2023 issued by BSE Limited (Circulars), and has also confirmed that the Company has complied with of all applicable SEBI Regulations and circulars/guidelines issued thereunder, for the Financial Year ended 31 st March, 2026. The same was uploaded on the Stock Exchange(s) viz. BSE Limited and National Stock Exchange of India Limited.

d) Secretarial Audit of Material Unlisted Subsidiary

Arka Financial Holdings Private Limited (AFHPL) is material unlisted subsidiary of the Company. The Secretarial Audit of AFHPL for the FY 2025-26 was carried out pursuant to Section 204 of the Companies Act, 2013 and Rules thereof including amendments thereunder read with Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 including amendments thereunder. The Secretarial Audit Report of AFHPL has been submitted by M/s. Mayekar and Associates, Practicing Company Secretaries, Mumbai, FCS – 2071, COP – 2427, for the FY 2025-26.

The Secretarial Audit Report is provided in Annexure D-2 to this Report and does not contain any adverse remark or qualifications.

27. Management Discussion and Analysis Report and Report on Corporate Governance

The Management Discussion and Analysis Report and the Report on Corporate Governance as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, including amendments thereunder, forms part of this Annual Report.

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

28. BusinessResponsibilityandSustainability Report (BRSR)

Pursuant to Regulation 34 of SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, including amendment thereunder, the Business Responsibility and Sustainability Report (BRSR) for FY 2025-26 is forming part of this Annual Report. Pursuant to circulars issued by SEBI, the Company has carried out the Reasonable Assurance through BDO India Services Private Limited, for BRSR for FY 2025-26, which also forms part of this Annual Report.

29. Directors Responsibility Statement

Pursuant to Section 134 of the Companies Act, 2013, including Rules made thereof and amendments thereunder, the Directors, based on the representations received from the Operating Management, confirm that: a) In the preparation of the Annual Accounts, the applicable accounting standards have been followed and that no material departures have been made from the same; b) They have selected such accounting policies, and applied them consistently and made judgements 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 31 st March, 2026 and of the profit of the Company for the year ended on that date; c) They have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013, for safeguarding assets of the Company and for preventing and detecting fraud and other irregularities; d) They have prepared the annual accounts on a going concern basis; e) They have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively; and f) They have devised proper systems to ensure compliance with provisions of all applicable laws and such systems are adequate and operating effectively.

The aforesaid statement has also been reviewed and confirmed by the Audit Committee of the Board of Directors of the Company.

30. Cautionary Statement

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

31.Acknowledgements

On behalf of the Board of Directors, I would like to extend our sincere gratitude to our shareholders, investor community, bankers, suppliers, business associates for their continuous support and commitment. Your Directors are thankful to the esteemed shareholders for their continued support and the confidence reposed in the Company and its Management. I would like to express my appreciation to the Board of Directors for their valuable guidance, wisdom, and support in guiding the Companythroughthisyear.Ilookforwardtoworkingwiththemto drive KOEL to greater heights in coming years.

For and on behalf of the Board of Directors

	Sd/-
	Rahul C. Kirloskar
Date: 14 th May, 2026	Chairman
Place: Pune	DIN: 00007319