Kirloskar Pneumatic Company Ltd Directors Report

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

1. COMPANY SPECIFIC INFORMATION

1.1 Financial Summary & Highlights

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

Particulars	Standalone	Consolidated
	2025-26	2024-25	2025-26	2024-25
Revenue from Operations	17,592.26	16,286.27	17,867.35	16,401.69
Other Income	270.78	221.11	277.25	222.47
Total Income	17,863.04	16,507.38	18,144.60	16,624.16
Profit before tax	3,422.33	2,806.53	3,378.78	2,808.34
Tax Expense (Current & Deferred tax)	838.22	695.83	835.94	695.51
Profit after tax	2,584.11	2,110.70	2,542.84	2,112.83
Other Comprehensive Income/(Loss), net of tax	(456.86)	13.49	(456.59)	14.22
Total Comprehensive Income for the year	2,127.25	2,124.19	2,086.25	2,127.05
Attributable to Shareholders of the Company	-	-	2,104.59	2,125.77
Non-controlling interest	-	-	(18.34)	1.28

1.2 Operating Results and Profits

Standalone revenue of the Company from operations was Rs.17,592.26 Million which was 8% higher than the revenue of Rs.16,286.27 Million in the previous financial year 2024-25. Your Company registered a standalone total income of Rs.17,863.04 Million for the financial year 2025-26, against Rs.16,507.38 Million of the previous year. Your Company earned a net profit of Rs.2,584.11 Million compared to Rs.2,110.70 Million earned last year. Your Company registered over 8% growth in Total Income and 22% growth in Net Profit as compared to previous year. Consolidated revenue of the Company from operations was Rs.17,867.35 Million which was 8.94% higher than the revenue of Rs.16,401.69 Million in the previous financial year 2024-25. The Net Profit stood at Rs.2,542.84 Million compared to Rs.2,112.83 Million earned last year.

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

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

1.3 Transfer to Reserves

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

1.4 Dividend

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

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

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

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

The Company has paid/recommended total dividend of Rs.12/- (600%) per equity share of Rs.2/- each for the year 2025-26. Pursuant to the Finance Act, 2020, dividend income is taxable in the hands of the Members with effect from April 1, 2020 and the Company is required to deduct tax at source from dividend paid to the Members at prescribed rates as per the Income Tax Act, 2025.

Pursuant to Regulation 43A of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (‘SEBI Listing Regulations), the Board of the Company had formulated a Dividend Distribution Policy. The Dividend Distribution Policy is available on the Weblink: h t t p s : // w w w . k i r l o s k a r p n e u m a t i c . c o m /d o c u -ments/3010307/3499608/Dividend+Distribution+Pol-icy.pdf/9195b0bb-2df4-f691-4ad0-1e285961e9d-a?t=1743677330696

1.5 Major events that occurred during the year

Production Linked Incentive (PLI) Scheme for White Goods:

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

During the reporting year, your Company has filed a PLI application to enter the Commercial Air conditioning space (Market size > Rs.5,000 Crores) with our unique ‘Zephyros C system.

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

Launch of New Products:

During the reporting year, your Company successfully launched "Tyche," a new semi-hermetic reciprocating compressor clearing all product & field testing. This product is specifically designed for the commercial refrigeration business segment, and its motor is manufactured in-house to ensure efficient supply & competitive price for our customers. Your Company also developed Cooling Tower Gearbox.

Drive to Commercialise Intellectual Property:

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

Backword Integration:

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

Certification:

During the reporting year, your Company has successfully completed:

Surveillance Audit for IMS

(ISO:9001,ISO:14001,andISO: 45001) for Hadapsar, Saswad Plant & Regional offices.

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

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

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

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

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

6 Segment-wise position of business and its operations

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

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

1.7 Subsidiary Company and Consolidated Financial Statements

Systems & Components (India) Private Ltd. (S&C) became a subsidiary of the Company with effect from December 4, 2024. As on March 31, 2026 the Company has only one subsidiary. The consolidated financial statements of the Company and its subsidiary have been prepared in compliance with the applicable provisions of the Companies Act, 2013 (‘the Act) and as stipulated under Regulation 33 of SEBI Listing Regulations as well as in accordance with the IND AS 110 notified under the Companies (Indian Accounting Standards) Rules, 2015. The audited consolidated financial statements together with the Independent Auditors Report thereon form part of this Annual Report.

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

Pursuant to the provisions of Section 136 of the Act and its Rules thereof including amendments thereunder, the Financial Statement along with relevant documents of the Company and its subsidiary are available on the Companys website viz. www. kirloskarpneumatic.com The Financial Statement of the subsidiary and related detailed information will be kept, for inspection by any member, at the Companys Registered Office and will also be made available to the members on demand, at any point of time.

Brief highlights of subsidiary company:

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

2. CAPITAL STRUCTURE

2.1 Increase in Share Capital

During the year, the Company allotted 60,800 Equity Shares of Rs.2/- each upon the exercise of the options granted to employees of the Company pursuant to KPCL Employee Stock Option Scheme 2019 (‘KPCL ESOS 2019 or ‘the Scheme). Out of the 60,800 equity shares, the Company has allotted 6,100 Equity Shares of face value of Rs.2/- each under the

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

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

2.2 Employee Stock Option Scheme

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

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

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

Date	Stock Options Granted	Exercisable into Equity Shares of Rs 2/- each
July 18, 2025	48,000	48,000
January 23, 2026	8,000	8,000

The details of options granted, vested, exercised, lapsed/ cancelled during the year 2025-26 and outstanding at the end of the year is provided in Note No. 28 to the standalone Financial Statement for the year ended March 31, 2026. During the year, 60,800 equity shares were allotted as a result of exercise of options resulting into realization of Rs.22,998,000/-. During the reporting year, the Company has not granted options to any Key Managerial Personnel. None of the employee was granted options in any one year amounting to five percent or more during the year. Further, no employee was identified to whom options granted one percent or more of the issued capital of the company at the time of grant during the year. During the year, the Company has not made any variations in the KPCL ESOS 2019. The certificate from M/s SVD & Associates, Company Secretaries, Secretarial Auditor of the Company, confirming that the Scheme has been implemented in accordance with the aforesaid regulations and in accordance with the resolution passed by the Company at its AGM held on July 20, 2019, will be available for inspection by the shareholders during the ensuing AGM. A copy of the same will be available for inspection at the Companys website and can be accessed on the weblink: https://www.kirloskarpneumatic. com/agm-egm The disclosures relating to implementation of the Scheme, details of options granted, changes to the Scheme, if any, etc. are placed on the website of the Company as required under the Employee Benefit Regulations and can be accessed on the following weblink: https://www.kirloskarpneumatic.com/ agm-egm In line with the IND AS 102 on ‘Share Based Payments issued by the Institute of Chartered Accountants of India ("ICAI"), your Company has computed the cost of equity

- settled transactions by using the fair value of the options at the date of the grant and recognized the same as employee compensation cost over the vesting period.

3. AWARDS

During the reporting year, your Company was recognized with prestigious and diverse external accolades which include: y "Golden Peacock HR Excellence Award - 2025" by Golden Peacock Awards Secretariat, Institute of Directors, India. y "Runner up Award for Highest IP Filing in the category of Large - Engineering/Manufacturing Companies in the 11th CII Industrial Intellectual Property Awards 2025. y Excellence in Innovation Award at the 13th Annual Manufacturing Today Conference & Awards 2025. y Energy Efficient Plant Award at the CII Energy Awards 2025 for its Saswad Plant. y Awards in 39th National Convention on Quality Concepts (NCQC – 2025)

• 5 "Excellence Award Trophy" y Awards in 40th Annual Chapter Convention on Quality Concepts (CCQC – 2025)

• 5 "Gold Award Trophy"

• 1 "Silver Award Trophy"

4. INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

Details of transfer/s to the IEPF made during the year are mentioned below:

During the reporting year, your Company transferred following amount and shares to the IEPF:

Dividend for the year 2017-18 (Final)	Rs.3,652,848
No. of shares of Rs.2/- each	47,720
Fractional Entitlement (2017-18)	Rs.2,283,187
Dividend 2018-19 (Interim)	Rs.1,459,456

Year wise amount of unpaid/unclaimed dividend lying in the unpaid account up to the year and the corresponding shares, which are liable to be transferred to the IEPF and the due dates for such transfer:

Year	Amount to be Transferred as on March 31, 2026	Corresponding Number of Equity Shares of the Company	Date of Transfer
1 Dividend 2018-19 (Final)	21,40,603.50	14,27,069	25-Aug-26
2 Dividend 2019-20 (Interim)	14,51,052.00	14,51,052	28-Feb-27
3 Dividend 2019-20 (Second Interim)	27,35,543.10	16,09,143	09-Apr-27
4 Dividend 2020-21 (Final)	43,92,502.00	12,55,001	25-Aug-28
5 Dividend 2021-22 (Interim)	17,79,386.80	11,12,117	05-Mar-29
6 Dividend 2021-22 (Final)	28,97,251.00	12,07,188	25-Aug-29
7 Dividend 2022-23 (Interim)	27,11,927.50	10,84,771	02-Mar-30
8 Dividend 2022-23 (Final)	16,51,550.00	5,50,517	25-Aug-30
9 Dividend 2023-24 (Interim)	12,08,795.50	4,83,518	01-Mar-31
10 Dividend 2023-24 (Final)	33,06,942.00	8,26,736	25-Aug-31
11 Dividend 2024-25 (Interim)	25,74,544.00	7,35,584	05-Mar-32
12 Dividend 2024-25 (Final)	49,52,436.50	7,61,913	27-Aug-32
13 Dividend 2025-26 (Interim)	24,98,437.00	7,13,839	28-Feb-33

5. PARTICULARS OF INVESTMENTS, LOANS AND GUARANTEES

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

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

6. DIRECTORS

6.1 Directors and Key Managerial Personnel

During the reporting year:

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

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

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

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

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

Mr. Rahul C. Kirloskar (DIN: 00007319) retires by rotation at the forthcoming AGM and being eligible offers himself for re-appointment. The necessary resolution for appointment of Mr. Rahul C. Kirloskar is proposed for approval in the forthcoming AGM. The Board also on the recommendation of the Nomination and Remuneration Committee and in accordance with provisions of the Act and SEBI Listing Regulations, has proposed the appointment of Mr. Rahul C. Kirloskar as Executive Director designated as ‘Executive Chairman from January 23, 2027 to January 22, 2032 for approval in the forthcoming AGM.

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

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

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

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

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

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

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

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

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

6.3 Directors Appointment and Remuneration Policy</p>

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

The Nomination and Remuneration Policy is available on the Companys website on the following weblink: https://www. kirloskarpneumatic.com/documents/3010307/3499608/ Remuneration+policy.pdf/22292a40-4296-0b74-c55b-39cc36aaac00?t=1743677334780

6.4 Board Evaluation

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

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

b) Interaction with Management;

c) Role and accountability of the Board;

d) Knowledge and proficiency; and

e) Strategic perspectives or inputs.

The evaluation involves assessment by the Nomination and Remuneration Committee and Board of Directors. A member of the Nomination and Remuneration Committee and Board does not participate in the discussion of his/her evaluation. Pursuant to the provisions of the Act and Regulation 17(10) of the SEBI Listing Regulations, the Board has carried out performance evaluation of its own performance and that of its committees and individual Directors.

6.5 Number of Meetings of the Board

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

6.6 Composition of Committee Meetings

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

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

6.7 Directors Responsibility Statement

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

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

b) Accounting policies as mentioned in the financial statements have been selected and applied consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31, 2026 and of the profit of the company for the year ended on that date;

c) Proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for prevention and detection of fraud and other irregularities;

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

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

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

7. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The policy on Related Party Transactions as approved by the Board is uploaded on the Companys website.

All related party transactions which were entered into during the financial year were on an arms length basis and in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters and Promoter Group, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large. The statement that the transactions are at arms length and in the ordinary course of business is supported by a certificate from the Managing Director and Chief Financial Officer on periodical basis as well as the certificate from Chartered Accountant on an annual basis.

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

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

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

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

8. RISK MANAGEMENT

The Board has adopted a Risk Management Policy. The policy is focused on sustainable business growth with stability and a pro-active approach in identifying, evaluating, mitigating and reporting risks associated with the Companies business. The Company has in place a Risk Management Committee of the Board, details of which form part of the Corporate Governance Report.

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

9. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

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

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

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

10. AUDITORS

10.1 Statutory Auditors

The Members of the Company appointed Kirtane & Pandit LLP, Firm Registration No 105215W/W100057, Chartered Accountants as the Statutory Auditors of the Company for a first term of 5 (Five) consecutive years from the conclusion of the 46th AGM till the conclusion of the 51st AGM of the Company. Accordingly, the term of Kirtane & Pandit LLP as Statutory Auditor will be completed at the conclusion of forthcoming AGM in terms of the said approval and Section 139 of the Act read with the Companies (Audit and Auditors) Rules 2014. There are no qualifications, reservations or adverse remarks or disclaimers made by the Statutory Auditors in their Audit Report for the year ended March 31, 2026.

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

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

10.2 Cost Auditors

The Board of Directors, had on the recommendation of the Audit Committee, appointed M/s Sudhir Govind Jog, a proprietary firm to audit the cost accounts of the Company for the financial year 2026-27 on a remuneration of Rs.0.65 Million. As required under the Act, the remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for their ratification. Accordingly, a resolution seeking Members ratification for the remuneration payable to M/s Sudhir Govind Jog, a proprietary firm as Cost Accountant for the year ended on March 31, 2027 is proposed for approval in the forthcoming AGM.

10.3 Secretarial Auditors

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

There are no qualifications, reservations or adverse remarks or disclaimer made by the Secretarial Auditors in their Secretarial Audit Report for the year ended March 31, 2026. M/s SVD & Associates has submitted Annual Secretarial Compliance Report as laid down in the Circular No. CIR/ CFD/ CMD1/27/2019 dated February 8, 2019 issued by Securities and Exchange Board of India and has also confirmed that the Company has complied with all applicable SEBI Regulations and circulars/guidelines issued in line thereunder, for the financial year 2025-26.

11. SECRETARIAL STANDARDS

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

12. REPORTING OF FRAUDS BY AUDITORS

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

13. CORPORATE GOVERNANCE

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

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

14. ANNUAL RETURN

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

15. CORPORATE SOCIAL INITIATIVES

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

As part of its Corporate Social Responsibility (‘CSR) initiatives, the Company continuest of ocuson Education, Environmentand Health, in alignment with Schedule VII of the Act, Sustainable Development Goals (‘SDGs), and ESG commitments.

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

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

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

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

y 1,600 to 2,000+ cases were handled every month

y 700 to 1,000+ animals were rescued monthly

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

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

y Awareness programs reached 1,000 to 15,000+ individuals per month

y 1,147+ individuals trained during National Safety Week

These figures reflect the organizations scale, responsiveness, and operational strength in managing wildlife emergencies.

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

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

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

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

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

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

The Company contributed Rs.5 Million to Kirloskar Institute of Management (‘KIM) towards promoting higher education. Detailed information on CSR activities is provided in the Management Discussion and Analysis Report. The CSR Policy is available on the Companys website.

CSR Policy in brief:

The focus of CSR activities will be on: y Education; y Environment; and y Health.

While devising projects, care would be taken to promote education, health and sanitation, protect the environment and minimize adverse impact, if any, on the society at large. The Company shall spend at least 2% (Two percent) of the average Net Profits, calculated in accordance with the provisions of the Act and rules thereunder, made by it in three immediately preceding financial years, in every financial year. The Annual Report on CSR Activities is annexed herewith as Annexure "2".

16. CONSERVATION OF ENERGY, TECHNOLOGY

ABSORPTION AND FOREIGN EXCHANGE

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

17. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

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

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

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

19. MAINTENANCE OF COST RECORDS

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

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

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

21. VIGIL MECHANISM/WHISTLE BLOWER

POLICY

Your Company has adopted Whistle Blower Policy/Vigil Mechanism with the objectives of enhancing the standards of ethical conduct for the highest degree of transparency, integrity, accountability and corporate social responsibility. The policy provides adequate safeguards against victimisation and direct access to the Chairman of the Audit Committee in appropriate or exceptional circumstances. The weblink of the policy is provided in the Corporate Governance Report. Your Company has established a vigil mechanism for Directors and Employees of the Company and other persons dealing with the Company to report their genuine concerns, details of which have been given in the Report on Corporate Governance. To encourage the employees, the Company has also provided Kirloskar Ethics Helpline to report their genuine concerns. During the year no complaints were reported.

22. FIXED DEPOSIT

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

23. PARTICULARS OF EMPLOYEES

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

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

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

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

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

During the reporting year, to create ongoing awareness, your Company has: y Continued with a PoSH Awareness Module in its employee induction program.

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

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

25. EMPLOYEES

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

In the FY 2025-26 your Company also conducted an internal survey of HR processes in which most of the processes were rated in the maintained category.

This year your Company has participated in the prestigious Golden Peacock HR Excellence Award (GPHREA) organized by the Institute of Directors (IOD), India and in the very first attempt has been awarded with prestigious "Golden Peacock HR Excellence Award 2025", in the Engineering sector. This award was presented in the 20th "International Conference on Corporate Social Responsibility" organized in Mumbai.

Your Company has 926 permanent employees and workers on its rolls as on March 31, 2026.

26. ACKNOWLEDGEMENT

The Directors wish to convey their appreciation to all employees for their individual efforts and collective contribution to your Companys performance in the rapidly changing environment. The Directors would also like to thank the shareholders, customers, dealers, suppliers, bankers and all other stakeholders for their continued support and confidence in the management of the Company.

	For Kirloskar Pneumatic Company Ltd.
	Sd/-
	Mr. Rahul C. Kirloskar
	Executive Chairman
Date: April 27, 2026	DIN: 00007319
Place: Pune