Stove Kraft Ltd Directors Report

Compliance with SEBI LODR Regulations

The Company has complied with all the applicable provisions of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 [SEBI LODR Regulations or Listing Regulations].

FINANCIAL HIGHLIGHTS

FINANCIAL AND BUSINESS PERFORMANCE

A detailed analysis of the financials and business performance of the Company during the year under review is detailed in Management Discussion and Analysis which is provided separately in the Annual Report.

SUBSIDIARIES, ASSOCIATES AND JOINT VENTURE COMPANIES

The Company does not have any Subsidiaries, Associates or Joint Ventures etc. The Companys Policy for determining Material Subsidiary, as formulated by

DIVIDEND

The Board has recommended dividend of Rs. 3.50 per share (35%) for FY26, subject to the approval of the shareholders at the ensuing AGM. In accordance with the provisions of the Income Tax Act, 1961 the aforesaid

dividend will be taxable in the hands of shareholders but liable for Tax Deduction at Source (TDS) by the Company at the applicable rates.

Dividend Distribution Policy: The Dividend Distribution Policy formulated by the Board is posted on the Companys website. The web-link to access the said policy is as follows:

UNCLAIMED DIVIDEND:

The respective due dates on which unclaimed amounts of dividends pertaining to the prior years will be transferred to Investor Education and Protection Fund (IEPF), constituted by the Ministry of Corporate Affairs, are given below:

ENVIRONMENTAL SUSTAINABILITY

Water conservation remains a key focus area for the Company. To ensure sustainable water management, Sewage Treatment Plants (STPs) and Effluent Treatment Plants (ETPs) are operated for the treatment and reuse of wastewater. The treated water is utilized for horticulture, landscaping, and plantation purposes within the premises. The Company has also established rainwater harvesting recharge pits at multiple locations across the plant to enhance groundwater recharge, with rooftop runoff being directed into these structures. Additionally, more than three acres of the plant area are maintained as a green belt, supporting environmental preservation and biodiversity.

The Company has transitioned to a closed-loop system by commissioning an RQ (Reverse Osmosis) Plant, thereby reducing dependence on groundwater.

The Company has three-tier recycling approach i.e., STP treated water is used for gardening and sand mixing; ETP water is used for cooling / paint spray pit recharging; and strategic RQ reject reuse for flushing. Active Rainwater Harvesting further recharges the water table. The implementation of efficient water management and recycling has led to a 30%-35% reduction in total water consumption. By minimizing dependency on external sources and borewells through internal reuse and the 500 KL STP, the company significantly lowers operational costs and efficiently utilizes the water.

OCCUPATIONAL HEALTH & SAFETY

The Company remains committed to fostering a safe and healthy workplace by prioritizing Qccupational Health and Safety (OH&S) across all its operations. Daily safety briefings are conducted by Plant Heads to create awareness and reinforce safe work practices among employees and workers. Comprehensive safety induction programs, periodic refresher sessions, and job-specific training are provided to equip personnel with the knowledge and skills necessary to perform their duties safely. The Safety Head regularly communicates key safety messages and monthly updates to strengthen the culture of safety throughout the organization. In addition, fire safety awareness programs and mock drills are conducted at regular intervals to enhance emergency preparedness and response capabilities. The Companys manufacturing facilities are certified under ISO 9001:2015 for Quality Management Systems, reflecting its commitment to operational excellence and continuous improvement.

TRANSFER TO RESERVES

The Board of Directors of the Company doesnt propose to transfer any amount to the General Reserve from the Net Profit for FY2025-26.

SHARE CAPITAL

As on 31 March 2026, the Authorized Share Capital of the Company was Rs. 400,000,050/- divided into 40,000,005 Equity Shares of Rs. 10/- each and the Issued, Subscribed and Paid-up Share Capital of the Company was Rs. 331,073,210/-.

Change in Authorized, Issued, Subscribed and Paid-up Share Capital of the Company during FY2025-26 was as follows:

Please note that increase in issued, subscribed and paid up Capital of the Company during FY2025-26 was due to allotment of shares pursuant to exercise of ESOPs.

EMPLOYEE STOCK OPTION PLAN

Pursuant to the resolution passed by the Board of Directors on 10 July 2018 and resolutions passed by shareholders on 10 September 2018 and on 29 September 2018 respectively the Company has adopted Stove Kraft Employee Stock Option Plan 2018 ("ESOP Plan"). Pursuant to the ESOP Plan, options to purchase Equity Shares may be granted to eligible employees (as defined in the ESOP Plan) with a view to attracting and retaining the best talent, encouraging employees to align individual performances with Companys objectives, and for promoting increased participation in the growth of the Company. Pursuant to the said resolutions, ESOP pool of 813,000 options was approved and created under the ESOP Plan.

The disclosure as stipulated under the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations 2021 as on 31 March 2026 is attached as Annexure - 1 to the Boards Report. The details of the Plan form part of the notes to accounts of the Financial Statements of this Annual Report. BMP & Co. LLP, Secretarial Auditors have issued a certificate certifying that the scheme has been implemented in accordance with SEBI (Share Based Employee Benefits and Sweat Equity) Regulations,2021 and the Resolutions passed by the Shareholders. The said certificate will be available for inspection during AGM.

Further, based on recommendation of Nomination and Remuneration Committee, the Board of Directors at its meeting held on 12 May 2026, has Approved amendment of Stovekraft Employee Stock Option Plan 2018 inter alia to increase the ESOP pool under the Plan from 813,000 stock options to 10,25,000 Stock Options and also certain other amendments, subject to approval of the shareholders and other regulatory approvals, Stock Options as may be required. A copy

of the Plan together with modifications is available on website of the Company for perusal of members. The Board recommends modifications to the Plan, for approval of members at ensuing AGM.

AUDIT COMMITTEE

The details pertaining to composition and terms of reference of the Audit Committee are included in the Corporate Governance Report, which forms part of this annual report. The Board has accepted all the recommendations of the Audit Committee made during the year.

RELATED PARTY TRANSACTIONS

All Related Party Transactions that were entered during FY2025-26 were on an arms length basis and in the ordinary course of business and were in compliance with the applicable provisions of the Act and the Listing Regulations. There were no materially significant Related Party Transactions during the year that required shareholders approval.

None of the transactions with related parties fall under the scope of Section 188(1) of the Act. Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Act in Form AOC-2 is not applicable to the Company for FY2025-26.

DEPOSITS

Your Company has not accepted any deposit and as such no amount of principal and interest was outstanding as at the Balance Sheet date.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of loans, guarantees and investments covered under the provisions of Section 186 of the Companies Act, 2013 form part of the notes to the Financial Statements.

DIRECTORS Retirement by rotation

Pursuant to the provisions of section 152 of the Companies Act, 2013, Mrs. Neha Gandhi retires by rotation at the ensuing AGM and being eligible, offers herself for reappointment. The Board recommends her reappointment.

Independent Directors

Mrs. Shuba Rao Mayya, Mr. Natrajan Ramkrishna, Mr. Anup Sanmukh Shah and Mr. Avinash Gupta continues to be Independent Directors of the Company. Pursuant to the provisions of Section 149 of the Act, the aforesaid Independent Directors have submitted declarations that they continue to meet the criteria of independence as provided in Section 149(6) of the Act along with Rules framed thereunder and Regulation 16(1)(b) of Listing Regulations. During the year, there has been no change in the circumstances affecting the status of Independent Directors of the Company.

The Board of Directors, based on the declarations received from the Independent Directors after duly verifying the veracity of such declarations, hereby confirms that the Independent Directors fulfil the conditions of independence specified in the Listing Regulations and are independent of the management of the Company.

Please also note that as per Schedule IV of the Companies Act, 2013 the Independent Directors had a separate meeting on 31 January 2026.

Reappointment of Mr. Anup Sanmukh Shah

At the Annual General Meeting held on 12 September 2022, Mr. Anup Sanmukh Shah, (DIN 00317300) was reappointed as an Independent Non-Executive Director of the Company for a period of five years from 02 November 2021 to

01 November 2026.

Based on the recommendation of Nomination and Remuneration Committee and based on the report of performance evaluation, the Board of Directors at its meeting held on 03 August 2026, has reappointed Mr. Anup Sanmukh Shah as an Independent Director of the Company for a 2nd term of five years from

02 November 2026 to 01 November 2031, subject to the approval of shareholders at the ensuing AGM.

Mr. Anup Sanmukh Shah has submitted declarations to the Company that he continue to fulfil the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and the SEBI (Listing Obligations

and Disclosure Requirements) Regulations, 2015. The Board is of view that Mr. Anup Sanmukh Shah has immensely contributed to the proceedings of the Board and its Committees, and further believes that his continued association would be of immense benefit to the Company. Therefore, it is desirable to continue to avail his services as a Non-Executive Independent Director for a second term.

His skills, background and experience in the field of compliance, legal, corporate governance, strategic planning, finance, audit, etc., are aligned to the role and capabilities identified by the Nomination & Remuneration Committee. The Board opines that Mr. Anup Sanmukh Shah possess the desired integrity, expertise, experience and proficiency that is required from him as an Independent Director. The Board recommends his reappointment by the members in the ensuing AGM.

Reappointment of Executive Director

At the Annual General Meeting held on 31 August 2021, Mrs. Neha Gandhi, (DIN 07623685) was reappointed as the Executive Director of the Company for a period of five years from 30 September 2021 till 29 September 2026.

The Board of Directors based on recommendation of Nomination and Remuneration Committee, at its meeting held on 03 August 2026 has approved the reappointment and remuneration of Mrs. Neha Gandhi, as Executive Director of the Company for a period of five years from 30 September 2026 to 29 September 2031, subject to the approval of shareholders at the ensuing Annual General Meeting.

Mrs. Neha Gandhi is looking after People, Process, and Technology functions, spearheading strategic initiatives in organisational development, digital transformation, and operational excellence. The Board is of the opinion that Mrs. Neha Gandhi possesses the requisite expertise, experience and competency that is required from her as an Executive Director. The Board recommends the reappointment of Mrs. Neha Gandhi as Executive Director.

Appointment of Non-Executive Director and Advisory Fees

Based on recommendation of Nomination and Remuneration Committee, the Board of Directors at its meeting held on 02 July 2026 has appointed Mr. Chandru Kalro as a Non-Executive Non Independent Director (Additional Director) and designated him as a Vice Chairperson.

REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL AND PARTICULARS OF EMPLOYEES

The information required to be disclosed in the Boards Report pursuant to Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached to this report as Annexure - 2. In accordance with the provisions of Section 136 of the Act, the Boards Report and the financial statements for the financial year ended 31 March 2026 are being sent to the members and others entitled thereto, excluding the details to be furnished under Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 which are available for inspection by the members at the Registered Office of the Company during business hours on all working days up to the date of the ensuing Annual General Meeting. If any member desires to have a copy of the same, he may write to the Company Secretary in this regard.

MEETINGS OF BOARD AND COMMITTEES

The number of meetings of the Board and various Committees of the Board including composition are set out in the Corporate Governance Report which forms part of this annual report.

STATUTORY AUDITORS

Members of the Company at the 22^nd Annual General Meeting held on 31 August 2021, appointed Price Waterhouse Chartered Accountants LLP (Firm Registration Number 012754N/N500016) as Statutory Auditors of the Company to hold office for a term of

5 consecutive years from the conclusion of 22^nd Annual General Meeting until the conclusion of 27^th Annual General Meeting.

In view of the end of first term of statutory auditors, the Board of Directors on recommendation of Audit Committee has decided to recommend to the shareholders the reappointment of Price Waterhouse Chartered Accountants LLP, Chartered Accountants as Statutory Auditors of the Company for another term of five years i.e., from conclusion of 27th AGM till conclusion of 32nd AGM for conducting statutory audits commencing from FY2026-27 until FY 2030-31.

The Company has received written consent and certificate of eligibility from Price Waterhouse Chartered Accountants LLP, Chartered Accountants in accordance with Sections 139, 141 and other applicable provisions of the Companies Act, 2013 and Rules made thereunder. They have confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India (ICAI) as required under the SEBI Listing Regulations.

A resolution proposing reappointment of Price Waterhouse Chartered Accountants LLP, Chartered Accountants, Chartered Accountants as Statutory Auditors of the Company from the conclusion of the ensuing AGM until 32nd AGM of the Company forms part of the Notice of ensuing AGM.

The observations of the Auditors in their report on Financial Statements read with the relevant notes are self-explanatory. The Independent Auditors Report does not contain any qualification, reservation, or adverse remarks.

SECRETARIAL AUDIT

Pursuant to Regulation 24A of Listing Regulations, Members of the Company at the 26th Annual General Meeting held on 26 September 2025, appointed BMP

6 Co. LLP. (Firm Registration No. L2017KR003200),

Practicing Company Secretaries as Secretarial Auditors of the Company for term of five consecutive years from FY2025-26 to FY2029-30. They have confirmed that they continue hold a valid certificate issued by the Peer Review Board of the Institute of Company Secretaries of India (ICSI) as required under the SEBI Listing Regulations.

The Secretarial Audit Report for financial year ended 31 March 2026 is attached to this report as Annexure - 3. The said report does not contain any qualification, reservation or adverse remark.

SECRETARIAL COMPLIANCE REPORT

REPORTING OF FRAUDS BY AUDITORS

During the year under review, neither the statutory auditors nor the secretarial auditors have reported to the audit committee, any instances of fraud committed against the Company by its officers or employees.

COST AUDIT

Your Company is maintaining Cost Records as specified by the Central Government under Section 148(1) of the Companies Act, 2013 and the Rules framed thereunder. The Cost Audit for FY2024-25 was conducted by M/s. GS & Associates, Cost Accountants and the Cost Audit Report for FY2024-25 was duly filed with the Ministry of Corporate Affairs, Government of India. The Audit of the cost accounts of the Company for FY2025-26 is also being conducted by the said firm and the Report will be filed within the stipulated time.

Further the Board of Directors on the recommendation of the Audit Committee, has reappointed M/s. GS & Associates, Cost Accountants to audit the cost records of the Company for FY2026-27 at a remuneration of Rs. 1,25,000/- plus applicable taxes and out of pocket expenses. As required under the Companies Act, 2013, the remuneration payable to the cost auditor is required to be placed before the Members in a general meeting for ratification. Accordingly, a Resolution seeking Members approval for the remuneration payable to M/s. GS & Associates, Cost Auditors is included in the Notice of the Annual General Meeting. The Board recommends the said resolution for approval of the members.

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

Your Company continues to be compliant with the provisions relating to the constitution of Internal Committee and other provisions under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the year under review, no complaint was received under the said Act and no complaint was pending at the beginning and end of FY2025-26.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

RISK MANAGEMENT

Risk Management is an integral part of the Companys strategy and planning process. Like any other industry, the Company faces several business risks. The Companys business is exposed to internal and external risks which are identified and revisited every year. For proper risk management, the Company has the Risk Management Policy and a well-defined Risk framework. The Company has in place a Risk Management Committee to look into risk assessment and minimization. More details on risk management is furnished in Management Discussion & Analysis which forms part of the Annual report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

In terms of Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Corporate Social Responsibility Policy has been hosted on the Website of Company. The Annual Report on CSR activities together with brief outline of CSR Policy of the Company is annexed herewith as Annexure - 4.

INTERNAL FINANCIAL CONTROLS

The Company has in place relevant internal controls, policies, and procedures to ensure orderly and efficient conduct of its business. Standard Operating

Procedures (SOPs) and Risk Control Matrix (RCM) have been designed for critical processes across all operations. The internal financial controls are tested for operating effectiveness through managements ongoing monitoring and review processes. In our view the internal financial controls are adequate and are operating effectively.

DIRECTORS RESPONSIBILITY STATEMENT

The Financial Statements are prepared in accordance with the Indian Accounting Standard (Ind AS) notified under the Companies (Indian Accounting Standard) Rules, 2015 as amended from time to time, the provisions of the Companies Act (to the extent notified) and guidelines issued by the Securities and Exchange Board of India.

Pursuant to Section 134 of the Companies Act 2013, the Directors state that:

a) in the preparation of the annual accounts for the financial year ended 31 March 2026, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) they have selected such accounting policies and applied them consistently and made iudgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of your Company as at 31 March 2026 and of the profits of the Company for the period 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 Act for safeguarding the assets of your 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 were 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.

OTHER INFORMATION

Management Discussion & Analysis

Management Discussion & Analysis for the year under review, as stipulated under Regulation 34(2)(e) of SEBI (LODR) Regulations, forms part of the Annual Report.

Business Responsibility and Sustainability Report (BRSR)

Business Responsibility and Sustainability Report for FY2025-26 is attached and forms part of the Annual Report.

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

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) read with Rule 8 of the Companies (Accounts) Rules, 2014 is attached to this report as Annexure - 5.

Corporate Governance Report

Your Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by Securities and Exchange Board of India. The report on Corporate Governance as stipulated under the Listing Regulations forms part of this Annual Report. The certificate from BMP & Co LLP., Practicing Company Secretaries confirming compliance with the conditions of corporate governance is attached to the Corporate Governance Report.

A certificate furnished by Mr. Rajendra Gandhi, Managing Director and Mr. Ramakrishna Pendyala, Chief Financial Officer in respect of the financial statements and the cash flow statement for the financial year ended 31 March 2026 is annexed as Annexure-6 to this Report.

Disclosure under Schedule V(F) of the SEBI(LODR) Regulations,2015

Your Company does not have shares in the demat suspense account or unclaimed suspense account.

Listing

The Equity Shares of the Company are listed on the National Stock Exchange of India Limited and BSE Limited. Annual listing fee for the Financial Year 2025-26 has been paid to the National Stock Exchange of India Limited and BSE Limited.

Annual Return

Material changes and commitments affecting financial position from the end of financial year till the date of this report

There have been no material changes and commitments which affect the financial position of the Company that have occurred from the end of the financial year to which the financial statements relate till the date of this report.

Cautionary Statement

Statements in the Boards Report and the Management Discussion & Analysis describing the Companys objectives, expectations or forecasts may be forward looking within the meaning of applicable laws and regulations. Actual results may differ from those expressed in the statements.

The Company has not made any application nor any proceedings is pending under the Insolvency and Bankruptcy Code, 2016 during the year.

Others

1. The Company complies with all applicable mandatory Secretarial Standards issued by the Institute of Company Secretaries of India;

2. The Company does not have any scheme of provision of money for the purchase of its own shares by employees or by trustees for the benefits of employees;

General

Your Directors confirm that no disclosure or reporting is required in respect of the following items as there was no transaction on these items during the year under review:

a) Issue of equity shares with differential voting rights as to dividend, voting or otherwise.

b) No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Companys operations in future.

Acknowledgement

The Directors express appreciation to all stakeholders namely customers, bankers, suppliers, distributors, dealers, and contractors for their unwavering support, collaboration, and trust. Special thanks to our dedicated employees for their consistent hard work and valuable contributions towards the Company. We also acknowledge the confidence and trust placed in us by our shareholders. Furthermore, we express gratitude to the Central Government and the Government of Karnataka for their support and cooperation.