Pitti Engineering Ltd Directors Report

SHARE CAPITAL

During the year under review there has been no change in the authorised and paid-up share capital of the Company. The Company has not issued shares with differential voting rights, employee stock options and sweat equity shares.

DIVIDEND

The Board of Directors have recommended a final dividend of 2.50/- (50%) per fully paid equity share of 5/- for the financial year ended 31^st March 2026. The record date for payment of dividend is Friday, 11^th September 2026. The final dividend is subject to the approval of members at the ensuing 42^nd AGM and will be paid within 30 days from the conclusion of the AGM. In accordance with the provisions of the Income-tax Act, 1961, the dividend shall be subject to deduction of income tax at source.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

As on 31^st March 2026, the Company had two wholly owned subsidiaries, namely Pitti Industries Private Limited (Formerly Bagadia Chaitra Industries Private Limited) ("PIPL") and Dakshin Foundry Private Limited ("DFPL"). PIPL is engaged in the manufacture of electrical steel laminations, assemblies, and die-cast rotors at its manufacturing facility located in Tumakuru, Karnataka. DFPL operates a manufacturing facility in Hosakote, Karnataka, where it produces high-quality castings in ductile iron, grey iron, low-carbon steel, alloy steel, and SIMO iron, in addition to providing value-added services such as pattern making.

During the year under review, the Board reviewed the performance and affairs of the subsidiaries, and there was no material change in the nature of their business. Pursuant to Section 129(3) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, the statement containing the salient features of the financial statements of the subsidiaries in Form AOC-1 forms part of the consolidated financial statements and hence not repeated here.

The Company does not have any joint venture or associate companies.

CONSOLIDATED FINANCIAL STATEMENTS

The audited consolidated financial statements of the Company for the financial year ended 31^st March 2026, forming part of this Annual Report, have been prepared in accordance with the applicable provisions of the Companies Act, 2013, the SEBI Listing Regulations and the Indian Accounting Standards (IndAS) on Consolidated Financial Statements (IndAS-110) as notified by the Ministry of Corporate Affairs.

MATERIAL CHANGES

There have been no material changes and commitments affecting the financial position of the Company between the end of the financial year and the date of this report. Further, it is hereby confirmed that there has been no change in the nature of business of the Company during the year.

PUBLIC DEPOSITS

During the year under review, the Company has not accepted any deposit within the meaning of Section 73 and 74 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014.

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

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Companies Act, 2013, read with the Rule 8(3) of the Companies (Accounts) Rules, 2014 is provide in Annexure-1 to this report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant and material orders passed by the regulators or courts that would impact the going concern status of the Company and its future operations.

There are no proceeding pending under the Insolvency and Bankruptcy Code, 2016 and there are no instances of onetime settlement with any Bank or Financial Institution.

DIRECTORS & KEY MANAGERIAL PERSONNEL

During the year under review, Shri S Thiagarajan (DIN: 02721001) completed his second consecutive term as an Independent Director and ceased to be a Director of the Company with effect from 24^th April 2025 upon completion of his tenure. The Board places on record its sincere appreciation for his valuable guidance and contributions during his tenure.

Further, Shri Gummalla Vijaya Kumar (DIN: 00780356) was appointed as a Non-Executive Non-Independent Director with effect from 5^th February 2026. His appointment was approved by the Members through a Postal Ballot on 4^th April 2026.

In accordance with the provisions of Section 152 of the Companies Act, 2013, Shri Akshay S Pitti (DIN: 00078760), Managing Director & Chief Executive Officer, retires by rotation at the ensuing Annual General Meeting and, being eligible, offers himself for re-appointment. Details of his re-appointment are provided in the Notice convening the 42^nd Annual General Meeting of the Company.

None of the Directors of the Company are disqualified from holding office under the provisions of the Companies Act, 2013 and the SEBI Listing Regulations, 2015. The certificate of nondisqualification of Directors pursuant to SEBI Listing Regulations is annexed to this Report.

The Independent Directors of the Company have submitted a declaration confirming that they meet the criteria of independence as provided in Section 149(6) of the Companies Act, 2013 and Regulation 16 (1) (b) of the SEBI Listing Regulations and that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge duties with an objective independent judgement and without any external influence. In the opinion of the Board, all Independent Directors are independent of the management.

In terms of Section 150 of the Companies Act, 2013 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014, all the Independent Directors of the Company have registered themselves with the databank maintained by the Indian Institute of Corporate Affairs. Further all Independent Directors are exempted from the requirement to undertake online proficiency selfassessment test as required under the said rules. The Board is of the opinion that all directors, including those appointed or reappointed during the year, have the necessary qualifications, experience, and expertise, and uphold the highest standards of integrity.

The following are the Key Managerial Personnel of the Company as on the date of this report.

Shri Sharad B Pitti, Founder & Chairman, Shri Akshay S Pitti, Managing Director & Chief Executive Officer, Shri M Pavan Kumar, Chief Financial Officer and Kum Mary Monica Braganza, Company Secretary & Chief Compliance Officer.

MEETINGS OF THE BOARD

Four meetings of the Board were held during the year. The details of composition of the Board, particulars of meetings held and attended by each Director are detailed in the Corporate Governance Report, which forms part of this Report.

COMMITTEES OF THE BOARD

Detailed composition of the Board committees, number of meetings held during the year under review and other related details are set out in the Corporate Governance Report, which forms a part of this Report.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and the SEBI Listing Regulations, the Board carried out the annual performance evaluation of the Board, its Committees and the Individual Directors. The performance of the Independent Directors was evaluated by the entire Board, excluding the Director being evaluated, while the performance of the Founder & Chairman and the Managing Director & Chief Executive Officer and Non-Executive, Non-Independent Director was evaluated by the Independent Directors. The evaluation was conducted through structured questionnaires covering various aspects of the functioning of the Board, its Committees and Individual Directors, based on the criteria approved by the Nomination and Remuneration Committee.

Based on the evaluation, the Board was satisfied that it, along with its Committees and Individual Directors, continued to discharge their respective roles and responsibilities effectively. The evaluation reflected the Boards continued focus on strong governance practices, constructive engagement among members and a clear focus on long-term value creation for stakeholders. The Independent Directors expressed satisfaction with the Boards overall functioning and reaffirmed their confidence in its ability to guide the Company towards sustainable long-term growth, creating enduring value for all stakeholders.

REMUNERATION POLICY

PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

The information relating to remuneration and other details as required pursuant to Section 197 of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, as amended, is provided as an Annexure-2 to this report.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Directors of the Company confirm that:

a) i n the preparation of the annual accounts for the financial year ended 31^st March 2026, the applicable Accounting Standards have been followed and there are no material departures from the same.

b) such accounting policies as mentioned in the notes to the financial statements have been applied consistently and judgements and estimates that are reasonable and prudent have been made 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) 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 preventing and detecting fraud and other irregularities.

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

e) proper internal financial controls laid down by the Directors were followed by the Company and that such internal financial controls are adequate and operating effectively and

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

INDUSTRIAL RELATIONS

The Company continues to view its employees as a key asset and remains committed to their development while aligning performance with business goals. Through regular training and development initiatives, performance-linked rewards, and employee welfare programmes, the Company seeks to enhance employee engagement while aligning individual performance with organisational objectives. Long-term wealth creation opportunities, including the Employee Stock Ownership Plan (ESOP), reinforce a culture of ownership, recognise performance, and support talent retention.

Industrial relations remained cordial throughout the year. As on 31^st March 2026, the Company had 1,982 employees on its rolls.

PREVENTION OF SEXUAL HARASSMENT

The Company has formulated a policy for the prevention of sexual harassment at the workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 (POSH Act). The policy aims to ensure a safe, respectful, and inclusive working environment by preventing and addressing any form of sexual harassment, while also outlining procedures for the resolution and redressal of complaints.

The Company is committed to upholding a workplace culture that fosters equality, dignity, and mutual respect, and maintains zero tolerance towards any violation of its Code of Conduct, including its sexual harassment policy. An Internal Complaints Committee has been duly constituted in compliance with the said Act. Details of complaints received / disposed during the year under review have been provided in Corporate Governance report.

COMPLIANCE WITH MATERNITY BENEFIT ACT, 1961

During the year under review the Company has complied with the applicable provisions relating to maternity benefits prescribed under the Maternity Benefit Act, 1961.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has adopted a whistle blower policy and has established necessary vigil mechanism as defined under Regulation 22 of the SEBI Listing Regulations and section 177 of the Companies Act, 2013 for stakeholders including directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Companys code of conduct or ethical policy. The policy provides for adequate safeguards against victimisation of employees who avail of the mechanism.

RISK MANAGEMENT

The Company has an established risk management framework for identifying, assessing, monitoring, and mitigating risks that may impact its business objectives. Risk management is integrated into the Companys governance and decision-making processes. In compliance with the applicable provisions of the Companies Act, 2013 and the SEBI Listing Regulations the Company has adopted a Risk Management Policy and constituted a Risk

Management Committee, details of which are provided in the Corporate Governance Report. The risk management framework is periodically reviewed by the Board and the Audit Committee. The major risks which may pose challenges are set out in the Management Discussion and Analysis which forms an integral part of this report.

CORPORATE SOCIAL RESPONSIBILITY

Corporate Social Responsibility (CSR) remains an important part of the Companys values and culture. During the year under review, the Company undertook various CSR initiatives in the areas of education, healthcare, and animal welfare, in accordance with the provisions of Section 135 of the Companies Act, 2013.

Pursuant to the provisions of Section 135(5) of the Companies Act,

2013, the Company was required to spend a minimum of Rs. 130.10 Lakhs towards CSR activities for financial year 2025-26 (being 2% of average net profits amounting to Rs. 191.62 Lakhs, less Rs. 61.52 Lakhs available for set-off from the previous year).

During the year, against the approved CSR budget of Rs. 574.26 Lakhs, the Company incurred CSR expenditure of Rs. 517.44 Lakhs, resulting in an excess spend of Rs. 387.34 Lakhs. This excess amount shall be set off against the CSR obligation for the next 3 financial years, commencing from financial year 2026-27, in accordance with the applicable provisions of the Act. Further an amount of 46.12 Lakhs was transferred to the CSR Unspent Account, and Rs. 10.69 Lakhs was recognised as an advance towards CSR expenditure and will be utilised for the approved projects during financial year 2026-27.

The Annual Report on CSR activities, as required under Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules,

2014, read with Sections 134(3) and 135(2) of the Companies Act, 2013, forms part of this Report and is annexed as Annexure-3.

The Companys CSR policy is available on its website at

The CSR Annual Action Plans are available on the Companys website. The CSR Committee confirms that the implementation and monitoring of the CSR Policy were carried out in compliance with the CSR objectives and policy of the Company.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The details of loans, guarantees and investments under the provisions of Section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014 as of 31^st March 2026, are given in Notes to the standalone financial statements of the Company.

RELATED PARTY TRANSACTIONS

The Company has been entering into transactions with related parties for its business purposes. All transactions entered with related parties during the year under review were on arms length basis and in the ordinary course of business and is in accordance with the provisions of the Companies Act, 2013 and the SEBI Listing Regulations. The material related party transactions entered by the Company are made with the approval of the Members. The information on transactions with related parties is given in Annexure-4 in Form No.AOC-2 and the same forms part of this report.

All related party transactions are placed before the Audit Committee and omnibus approval is obtained for transactions which are of repetitive nature.

PITTI ENGINEERING LIMITED EMPLOYEES STOCK OPTION SCHEME 2024

The shareholders of the Company approved the Pitti Engineering Limited Employees Stock Option Scheme 2024 ("Pitti ESOP Scheme 2024" or "Scheme") with the objective of attracting, retaining and motivating talented employees, aligning their interests with the long-term growth of the Company, and fostering employee ownership through wealth creation opportunities. Under the Scheme, vesting of stock options is linked to achievement of performance parameters, length of service, and such other criteria as may be determined by the Nomination and Remuneration Committee ("NRC") from time to time.

The Scheme is being implemented and administered through the trust route in accordance with the provisions of the Companies Act, 2013 and the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SEBI SBEB Regulations"). For this purpose, the Pitti Engineering Limited Employee Welfare Trust has been established and may acquire equity shares of the Company through secondary acquisition and/or subscribe to fresh issue of shares by the Company, in accordance with the provisions of the Scheme and applicable laws.

The NRC, at its meeting held on 13^th March 2025, approved the first grant of 7,87,500 stock options under the Scheme at an exercise price of 736.72 per option. The grant was made to eligible employees of the Company and its subsidiaries out of the shareholder-approved limit of 13,00,000 stock options. The NRC also approved the creation of the ESOP pool through a combination of primary issuance and secondary acquisitions.

As on 31^st March 2026, the Trust held 7,40,000 equity shares of the Company. The shareholding of the Trust is disclosed under the category of "Non-Promoter and Non-Public Shareholding" in the shareholding pattern of the Company, in accordance with applicable regulatory requirements.

The disclosures relating to the Scheme, including the details of stock options granted and other information required under the SEBI SBEB Regulations, are provided in Annexure-5 to this Report. A certificate from the Secretarial Auditor confirming that the Scheme has been implemented in accordance with Regulation 13 of the SEBI SBEB Regulations is provided as Annexure-6.

EXTRACT OF ANNUAL RETURN

SECRETARIAL STANDARDS

During the year under review, the Company has complied with all the applicable secretarial standards. The same has also been confirmed by Secretarial Auditors of the Company.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report on the operations of the Company as required under SEBI Listing Regulations is provided in a separate section and forms an integral part of this Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

The Business Responsibility and Sustainability Report as stipulated under Regulation 34 (2)(f) of the SEBI Listing Regulations is applicable to the Company and the same forms an integral part of this Report.

CORPORATE GOVERNANCE REPORT

As per Regulation 34(3) read with Schedule V of the SEBI Listing Regulations, a detailed report on corporate governance, together with a certificate from the Companys Auditors confirming compliance forms an integral part of this Report.

INTERNAL AUDIT AND INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has established an adequate internal financial control framework and effective internal control systems that are commensurate with the nature, size, and complexity of its operations. These controls are designed to ensure compliance with applicable laws and regulations, safeguard the Companys assets, enhance operational efficiency, and ensure the accuracy and reliability of financial reporting. The internal control systems are periodically reviewed and strengthened to address evolving business requirements and regulatory expectations. During the year under review, the internal audit function was carried out by M/s. Laxminiwas & Co., Chartered Accountants. The internal auditors conduct regular audits and submit their observations and recommendations to the Audit Committee for review. The Audit Committee continuously monitors and evaluates the adequacy and effectiveness of the Companys internal control and internal audit systems and provides guidance for further strengthening these mechanisms wherever necessary. The Company also has a sound Management Information System (MIS), which forms an integral part of its overall control and monitoring framework.

The Statutory Auditors of the Company have also issued an attestation report on internal control over financial reporting (as defined in section 143 of Companies Act, 2013) for the financial year ended 31^st March 2026, which forms part to the Statutory Auditors Report.

AUDITORS AND AUDITORS REPORT Statutory Auditors

In terms of Section 139 of the Companies Act, 2013 and the rules made thereunder Talati & Talati LLP, Chartered Accountants, (ICAI Firm Registration Number 110758W/ W100377) were appointed as Statutory Auditors of the Company for a term of five consecutive years to hold office from conclusion of 38^th Annual General Meeting ("AGM") till the conclusion of the 43^rd AGM of the Company.

The Statutory Auditors have confirmed that they continue to meet the eligibility criteria prescribed under the Companies Act, 2013 and are not disqualified from holding office as Statutory Auditors of the Company. The Audit Report on the standalone and consolidated financial statements for the financial year ended 31^st

March 2026 contains an unmodified opinion and does not include any qualification, reservation, adverse remark, or disclaimer. The notes to the financial statements referred to in the Auditors Report are self-explanatory and, therefore, do not call for any further comments by the Board.

Cost Auditors

The Company is required to maintain cost records as specified by the Central Government under section 148(1) of the Companies Act, 2013 and accordingly such accounts and records are maintained by the Company.

The Board of Directors, on the recommendation of Audit Committee has appointed M/s. S S Zanwar & Associates, Cost Accountants (Firm Registration No.100283) as the Cost Auditors of the Company for the financial year 2026-27. The Cost Auditors have confirmed their eligibility and that they are not disqualified from holding such appointment under the applicable provisions of the Companies Act, 2013. As required under the Companies Act, 2013 a resolution seeking Members ratification for the remuneration payable to the cost auditor forms part of the notice convening the 42^nd AGM.

Secretarial Auditor

In accordance with Regulation 24A of the SEBI Listing Regulations, Shri Ajay Kishen, Practicing Company Secretary (FCS No: 6298 CP No. 5146) was appointed as the Secretarial Auditor of the Company, for a term of 5 (five) consecutive financial years, commencing from the financial year 2025-26 to the financial year 2029-30, at the 41^st AGM held on 26^th September 2025.

The Secretarial Audit Report for the financial year ended 31^st March 2026 is annexed as Annexure -7 to this Report. The Secretarial Audit Report does not contain any qualification, reservation or adverse remark. Shri Ajay Kishen has confirmed that he is not disqualified from continuing as the Secretarial Auditor of the Company.

Reporting of Frauds by Auditors

None of the Auditors of the Company has identified and reported any fraud as specified under the Section 143(12) of the Companies Act, 2013.

SECRETARIAL AUDIT REPORT OF MATERIAL UNLISTED SUBSIDIARY

As per Regulation 24A of the SEBI Listing Regulations, listed companies are required to attach the Secretarial Audit Report of

their material unlisted subsidiaries to the Annual Report.

Pitti Industries Private Limited (Formerly Bagadia Chaitra Industries Private Limited) ("PIPL") has been identified as material unlisted subsidiaries of the Company for the financial year 2025-26. Accordingly, the Secretarial Audit Report of PIPL is annexed as Annexure 8 to this report.

ACKNOWLEDGEMENT

The Board of Directors places on record its sincere appreciation for the continued trust and confidence reposed by the Companys

shareholders, the valued partnership of its customers, and the commitment of its employees. The Board also expresses its gratitude to the Companys bankers, suppliers, business associates, and the communities in which it operates for their continued support and cooperation.