The Directors have pleasure in presenting this 28^th Annual Report with the Audited Annual Accounts of the Company for the year ended 31 March 2022.

I. FINANCIAL PERFORMANCE (STANDALONE):

II. DIVIDEND:

Your Directors recommend 100 % dividend, i.e., H 10 per equity share of H 10 each (Previous year dividend 100%, i.e., H 10 per equity share of H 10 each) for the Financial Year ended 31 March 2022.

In terms of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, including amendments thereunder, the Company has adopted the Dividend Distribution Policy. Copy of the same is available at the website of the Company, viz., www.kirloskarindustries.com

III. CLASSIFICATION OF THE COMPANY AS AN UNREGISTERED CORE INVESTMENT COMPANY (CIC):

The Company is an ‘Unregistered CIC’ regulated by the Reserve Bank of India (RBI), which cannot access the public funds and is complying with all the regulations required for an ‘Unregistered CIC’.

IV. ALTERATION OF MAIN OBJECT CLAUSE OF MEMORANDUM OF ASSOCIATION OF THE COMPANY

The members of the Company through a postal ballot on 14 October 2021, had approved the alteration of the Main Object Clause of the Memorandum of Association of the Company

to carry out the activities as a Registered Core Investment Company and accessing public funds.

V. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

A. OPERATIONS OF THE COMPANY:

WINDMILLS:

The Company has seven Wind Energy Generators (WEGs) in Maharashtra with a total installed capacity of 5.6 Megawatt (MW). The WEGs are located at Tirade Village, Tal. Akole, Dist. Ahmednagar.

The WEGs have generated net wind energy of around

0.82 Crores units of electricity in the period under review as against 0.68 Crores units of electricity in the previous year showing an increase of 20% over the previous year. During the previous year, the generation of units from windmills had gone down due to lower wind speed and motor winding issues related to one of the seven WEGs in operation. The management had taken corrective steps for improving the monitoring system of operation and maintenance of WEGs with the help of operation and maintenance service provider resulting in higher unit generation in the current year. During the year under review and till the date of this Report, all WEGs were operational at full capacity.

The Company has obtained Open Access Permission from Maharashtra State Electric Distribution Company Limited (MSEDCL) and is selling the wind power units generated to a leading electric power distribution company which has ensured the regular monthly revenue realisation. All windmills are registered with the National Load Despatch Centre (NLDC) and are eligible for the Renewable Energy Certificates (RECs).

During the year, the Company has also sold 8,778 RECs, which has resulted in revenue of H 0.88 Crores (previous year H 0.03 Crores). The Company is holding 7,676 unsold RECs as on 31 March 2022. The REC Trading Exchange was not in operation in quarters 1 and 2 and hence no sale transaction could be done during these quarters.

REAL ESTATE ACTIVITIES:

The Company transferred its ‘Real Estate Business Undertaking at Kothrud’ on a going concern basis by way of a ‘Slump Sale’ to the Company, for a lump sum consideration of H 75 Crores, by executing the Business Transfer Agreement (BTA) by and between the Company and Wellness Space Developers Private Limited (now known as Avante Spaces Limited (Avante)) dated 19 December 2020. The said purchase consideration was required to be paid by Avante, on or before 30 June 2021, or such other date as mutually agreed.

In terms of BTA, Avante allotted 6,00,00,000 Unsecured Optionally Convertible Debentures of H 10 each to the Company, for a consideration other than cash amounting to H 60 Crores. The balance consideration of H 15 Crores out of the total payable of H 75 Crores, was paid in cash by Avante on 24 June 2021.

Accordingly, the entire purchase consideration payable to the Company under the BTA was settled by Avante before 30 June 2021.

OTHERS:

The Company owns lands and buildings thereon and apartments and offices in Pune, New Delhi and Jaipur. The Company has given most of these lands and buildings and offices on leave and license basis to group and other companies which generated revenue of H 27.08 Crores (H 25.41 Crores as on 31 March 2021).

The Company is an ‘Unregistered CIC’ that continues to invest surplus funds in fixed deposits and liquid funds. These investments stood at H 11.83 Crores (previous year H 81.60 Crores) as at 31 March 2022.

During the year under review, the Company has liquidated mutual funds and used the proceeds to give loans to Avante Spaces Limited (Avante), a Wholly-Owned Subsidiary of the Company, for the development of its real estate activities.

During the year under review, your Company made investments of H 15 Crores in the equity shares of Avante.

The Company also purchased one preference share of Kirloskar Proprietary Limited at the rate of H 100.

B. COMPANY PERFORMANCE:

During the period under review, your Company earned a total income of H 102.67 Crores (previous year H 58.11 Crores).

During the period under review, the Company received a final dividend of H 45.78 Crores (previous year H 9.41 Crores) declared by the investee companies for the Financial Year 2020-2021.

The Company also received an interim dividend of H 19.92 Crores (previous year H 15.36 Crores) declared by some of the investee companies during the year 20212022. Consequently, the total dividend inflow during the fiscal year under review was H 65.70 Crores (previous year H 24.77 Crores).

The Profit Before Tax (PBT) is at H 80.10 Crores (previous year H 32.45 Crores). The substantial increase in the PBT is mainly due to the receipt of the dividend on its investments at a higher rate.

C. HUMAN RESOURCES:

As on 31 March 2022, the Company had 13 employees (previous year 14 employees) on its roll, including the Managing Director and the Executive Director.

D. KIRLOSKAR INDUSTRIES LIMITED - EMPLOYEES STOCK APPRECIATION RIGHTS PLAN 2019:

The ‘Kirloskar Industries Limited - Employees Stock Appreciation Rights Plan 2019’ (KIL ESARP 2019) was introduced in accordance with the SEBI guidelines for the employees of the Company and its subsidiaries. The Company obtained in-principle approval for the KIL ESARP 2019 from BSE Limited and National Stock Exchange of India Limited on 3 December 2020 and 19 January 2021, respectively. KIL ESARP 2019 is administered by the Nomination and Remuneration Committee of the Board of Directors of the Company.

KIL ESARP 2019 is in compliance with the applicable provisions of the Companies Act, 2013, and its Rules, SEBI (Share Based Employees Benefits Regulations, 2014), read with SEBI (Share Based Employees Benefits and Sweat Equity Regulations, 2021) (Employee Benefits Regulations) and other applicable Regulations. A certificate from Mr. Mahesh J. Risbud, Practicing Company Secretary, (FCS 810 CP 185), Pune, Secretarial Auditors of the Company, confirming that the KIL ESARP 2019, has been implemented in accordance with Employees Benefits Regulations and in accordance with the Special Resolution passed by the Company through Postal Ballot on 29 December 2019, and further amended by the Board of Directors in its meeting held on 3 February 2022. A copy of the same will also be available for inspection at the Company’s Registered Office.

Pursuant to the KIL ESARP 2019, the Company had granted an aggregate of 4,70,898 Equity Settled Stock Appreciation Rights (ESARs) at an exercise price of H 500 per ESAR to eligible employees of the Company on 30 January 2020.

Consequent to the Business Transfer Agreement (BTA) dated 19 December 2020, executed by and between the Company and Avante Spaces Limited (Avante), a Wholly-Owned Subsidiary of the Company, certain employees of the Company were transferred to Avante with effect from 1 January 2021.

Pursuant to KIL ESARP 2019, ESARs granted shall vest after a minimum period of 1 year but not later than a maximum period of 4 years from the grant date of such ESARs.

During the year under review, the Company had vested 1,14,160 ESARs, in the employees of the Company; employees of Avante who were transferred from the Company under the BTA; and in the Non-Executive Director of the Company, who is the Managing Director of Avante to whom ESARs were granted under the KIL ESARP 2019.

Details of KIL ESARP 2019, as required under Rule 12 (9) of the Companies (Share Capital and Debentures) Rules, 2014, read with Regulation 14 of Employees Benefits Regulations, as on 31 March 2022, are set out in ‘Annexure I’ to this Report and are available on the Company’s website at www.kirloskarindustries.com.

E. CONCERNS AND THREATS:

The Board of Directors has constituted a Risk Management Committee (the Committee) to identify the risks, mitigate the same and monitor the development and deployment of risk mitigation action plans for the businesses of the Company.

The Company has deployed a risk management process that includes risk identification, assessment and its treatment, mitigation, monitoring, and reviewing actions. The Company prioritises and manages the risks identified through its Risk Registers.

The Committee regularly presents the risk assessment and mitigation procedures adopted to assess the reliability of the risk management structure and efficiency of the process before the Audit Committee and the Board of Directors of the Company at their respective meetings.

The Committee meets every quarter, discusses all the mapped risks, evaluates future risks and reviews the mitigation plan for the identified risks for all business segments.

F. PROSPECTS:

Wind energy generation is largely dependent on natural factors such as the velocity of wind, continuity of the flow, etc., and is unpredictable and beyond control. The business is also largely impacted adversely by changes made by the Regulatory Authorities in the open access policies.

The market for Renewable Energy Certificates (RECs) continues to be sluggish, this trend is expected to continue in the current Financial Year.

G. INTERNAL CONTROLS SYSTEM AND THEIR ADEQUACY:

The Company has in place an adequate internal controls system to ensure operational efficiency, accuracy, and promptness in financial reporting and compliance with various laws and regulations.

The internal controls system is supported by the internal audit process. An Internal Auditor has been appointed for this purpose. The Audit Committee of the Board reviews the Internal Audit Report and the adequacy and effectiveness of internal controls periodically.

H. CAUTIONARY STATEMENT:

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

I. SEBI REGULATIONS AND LISTING FEES:

The annual listing fees for the year under review have been paid to the BSE Limited and the National Stock Exchange of India Limited, where your Company’s shares are listed.

J. DETAILS OF MATERIAL SUBSIDIARY:

In terms of the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, Kirloskar Ferrous Industries Limited (KFIL) is a material subsidiary of the Company, in which, the Company holds 50.93% of its total shareholding.

During the period under review, KFIL has not sold / disposed off and leased assets more than 20% of its assets.

K. SUBSIDIARY COMPANY AND CONSOLIDATED FINANCIAL STATEMENTS:

Kirloskar Ferrous Industries Limited (KFIL), a listed material subsidiary of the Company, has acquired a controlling interest and holds 51.25% of the issued, subscribed, and paid-up equity share capital of ISMT Limited (ISMT) and ISMT has, therefore, become a subsidiary of KFIL with effect from 10 March 2022, pursuant to the provisions of Section 2 (87) (ii) of the Companies Act, 2013, (the Act).

Consequently, pursuant to the provisions of Section 2(87)(ii) of the Act, ISMT has become a subsidiary of the Company with effect from 10 March 2022.

Accordingly, the Company has the following subsidiaries as on 31 March 2022:

1. Avante Spaces Limited, a Wholly-owned Subsidiary Company;

2. Kirloskar Ferrous Industries Limited (KFIL], Subsidiary Company; and

3. ISMT Limited, a subsidiary of the Subsidiary Company (a subsidiary of KFIL].

The Consolidated Financial Statements of the Company and its subsidiaries, prepared in accordance with IND AS 110, issued by the Ministry of Corporate Affairs, form part of this Annual Report. A statement containing the salient features of the Financial Statement of the subsidiary companies is attached to the Financial Statements of the Company in Form AOC-1.

Pursuant to the provisions of Section 136 of the Act, and its Rules thereof including amendments thereunder, the Financial Statements along with relevant documents of the Company and its subsidiaries, are available on the Company’s website, viz., www.kirloskarindustries.com.

The Financial Statements of the subsidiaries and related detailed information will be kept for inspection by any member at the Company’s Registered Office and will also be made available to the members on demand, at any point of time.

BRIEF HIGHLIGHTS OF BUSINESSES OF SUBSIDIARY COMPANIES:

AVANTE SPACES LIMITED:

During the year under review, the name of ‘Wellness Space Developers Limited’, a Wholly-Owned Subsidiary of the Company has been changed to ‘Avante Spaces Limited’ (Avante] with effect from 29 June 2021.

The Board of Directors of Avante in its meeting held on 23 July 2021, had approved a revised plan in respect of mixed-use development on land parcels bearing Survey Numbers 13/A, 13/B/C/D, 156A, 156B, 156C/2, 12/2, and 12/5 at Kothrud, Pune, of approximately 1.8 million sq. ft. leasable area, as per the revised Concept Design Drawings and strategies presented before the Board. This has been done pursuant to the Unified Development Control Regulation notified on 2 December 2020, which has had a positive impact on the project development for Floor Space Index (FSI] and leasable area.

In furtherance of the same, Avante has taken various measures for the development of the land parcels at Kothrud.

The works continued on design, project execution and statutory fronts as per the project plan in spite of COVID-19 waves during the year. Commodity prices also increased substantially impacting the project cost. Avante mitigated the impacts by taking various measures and it is under control within the overall Project Plan.

During the year, Avante has spent ? 119.71 Crores on real estate activities.

KIRLOSKAR FERROUS INDUSTRIES LIMITED:

Kirloskar Ferrous Industries Limited (KFIL] is in the business of manufacture of pig iron and castings and has its manufacturing facilities located at Bevinahalli village and Hiriyur in Karnataka and Solapur in Maharashtra.

The Board of Directors of KFIL declared an interim dividend of ? 2.50 (50%] per equity share on 24 January 2022 and paid on 18 February 2022.

The Board of Directors of KFIL in its meeting held on 17 May 2022, has also recommended a final dividend of ? 3 (60%] per equity share for the Financial Year ended 31 March 2022. Accordingly, the total dividend (inclusive of interim dividend declared and paid] for the Financial Year 2021-2022 is 110%.

KFIL achieved Net Sales of ? 3,614.97 Crores as compared to ? 2,038.08 Crores in the previous year. The Profit Before Tax for the year under review stood at ? 542.69 Crores as compared to ? 363.19 Crores of the previous year after providing for depreciation and amortisation.

During the year under review, KFIL maintained the leadership position in the castings business, which recorded a growth of 23.60% over previous year, with substantial capacity utilisation improvement in Foundry Line II at Koppal Plant. The operations of the Pig Iron Plant of KFIL at Hiriyur was stabilised and the Sinter project was completed as per the timeline. The plant was operational throughout the year and contributed both in volume growth and value growth of KFIL.

KFIL sold 4,95,555 MT of Pig Iron (includes 1,50,431 MT from Hiriyur Plant] valued at ? 2,201.77 Crores as compared to 3,13,690 MT of Pig Iron valued at ? 1,067.32 Crores in the previous year.

The demand for all the grades of pig iron was good across the sectors throughout the year under review. The average realisation of Pig Iron which was at around ? 34,000 per MT in the previous year went upto around ? 44,400 per MT during the year under review.

KFIL sold 1,14,342 MT of castings aggregating to ? 1,289.63 Crores during the financial year 2021-2022 as compared to 92,507 MT castings aggregating to ? 874.40 Crores in the previous financial year.

The demand for the casting was strong led by the tractor industry in the first two quarters of the year and later led by the commercial vehicle industry and auto sector.

During the year under review, KFIL was successful in increasing sale prices of pig iron with the increase in the input material costs.

During the year under review, iron ore prices increased from around H 6,500 per MT in April 2021 to around H 8,000 per MT by June 2021 and prices remained range bound till October 2021. However, prices started reducing from November 2021 and touched around H 6,000 per MT by March 2022. The fluctuation in iron ore prices is mainly attributed to variation in steel production in China.

During the year under review, prime coking coal prices which was around USD 135 per MT in the first quarter moved upto USD 430 per MT by January 2022 due to inclement weather and pandemic restrictions resulting in reduced production of coal in Australia. Further, the Russia Ukraine war contributed to increased prices for prime coking coal from USD 430 per MT to around USD 625 per MT by the end of March 2022.

KFIL mitigated the risk of variation in the coking coal prices by strategic sourcing of coking coal when the prices of coking coal were economical. Further during the year, the agreement for conversion of coal to coke helped in mitigating the coke price fluctuations. Both these strategies Contributed in substantial reduction in coke costs and helped in increasing the profitability of KFIL.

The Coke Oven Plant and the Power Plant were operated throughout the year at rated capacity, which helped KFIL to achieve substantial improvement in cost reduction and thereby contributing to the profitability of KFIL.

KFIL continuously worked on improving the casting sales volume growth and quality at both locations of Koppal and Solapur, which has resulted increase in the casting sales growth of 23.60% over the previous year and achieved the total rejection of 5.20%.

During the year under review, the major raw material, alloys and chemicals prices have gone up substantially. KFIL was successful in passing the increase in the input cost to the customers through established price adjustment mechanism.

KFIL continues to focus on increasing the revenue from supply of castings in machined condition and around 12% of casting were sold in machined condition.

KFIL worked on optimisation of interest rates by availing credit facilities at competitive rates and effectively managed the working capital thereby reducing the interest expenses.

KFIL hedged import transactions of input materials by taking forward covers to minimize the impact of fluctuations in the forex currencies.

KFIL worked on the optimisation of interest rates by availing credit facilities at competitive rates and effectively managed the working capital thereby reducing the interest expenses.

KFIL hedged import transactions of input materials by taking forward covers to minimize the impact of fluctuations in the forex currencies.

During the year under review, KFIL was successful in adding two new customers and increase in share of business and adding new products from the current customers and also increased the supply of machined castings.

KFIL has completed the following projects during the year under review:

• The Sinter Plant at Hiriyur was commissioned in November 2021 and was stabilised by January 2022. This has helped in reducing the coke consumption and dependency on iron ore lumps by replacing with iron ore fines thereby reducing the manufacturing costs and increasing the profitability.

• The Company has undertaken various projects for debottlenecking and improving the capacity utilisation and also undertook up-gradation on technology / infrastructure in foundry and machine shop both at Koppal and Solapur units, to meet the increasing demand for castings from the customers.

KFIL has undertaken the following projects during the year under review:

• Setting up of new moulding line at Solapur with contemporary technology with a capacity of 40,000 MT per annum.

• Establishment of Coke Oven Phase II to enhance the coke capacity from 2 lakhs MT per annum to 4 lakhs MT per annum and Power Plant (using waste gas generated from Coke Oven plant).

• Upgradation of Mini Blast Furnace II with Bell-less top equipment.

• Installation of Pulvarised Coal Injection into Mini Blast Furnaces with Oxygen enrichment facility.

• Expanding machining capacity to add more value.

ISMT Limited (ISMT)

During the year under review, KFIL has acquired sole control over ISMT on 10 March 2022, by acquiring 154,000,000 equity shares of H 5 each of ISMT (i.e., 51.25%) through preferential allotment pursuant to terms of the Share Subscription Agreement dated 25 November 2021, executed between KFIL, ISMT and certain promoters forming the promoter group of ISMT. Consequent to the aforesaid allotment of equity shares, ISMT has become a subsidiary of KFIL with effect from 10 March 2022, pursuant to the provisions of Section 2 (87) (ii) of the Companies Act, 2013, (the Act).

Consequently, pursuant to the provisions of Section 2 (87] (ii] of the Act, ISMT has become a subsidiary of the Company with effect from 10 March 2022.

ISMT (earlier known as The Indian Seamless Metal Tubes Limited] has been incorporated as a public limited company in the year 1977 and commenced production of seamless tubes in the year 1980. It has steel production facility at Jejuri in Maharashtra and seamless tube and pipes manufacturing units at Ahmednagar and Baramati in Maharashtra. It also has a captive power plant (presently not in operation] located at Chandrapur in Maharashtra.

The acquistion of ISMT has facilitated KFILto enter a business segment of steel manufacturing and seamless tubes.

VI. PARTICULARS OF INFORMATION FORMING PART OF THE BOARD’S REPORT PURSUANT TO SECTION 134 OF THE COMPANIES ACT, 2013, RULE 8 OF THE COMPANIES (ACCOUNTS) RULES, 2014 AND RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014:

1. EXTRACT OF ANNUAL RETURN:

In terms of the provisions of Section 92 (3) read with the provision of Section 134 (3) (a) of the Companies Act, 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014, including amendments thereunder, the Annual Return filed with the Ministry of Corporate Affairs (MCA), for the Financial Year 2020-2021, is available on the website of the Company, viz., www. kirloskarindustries.com and the Annual Return for the Financial Year 2021-2022, will be made available on the website of the Company once it is filed with the MCA.

2. NUMBER OF MEETINGS OF THE BOARD:

During the period under review, 7 Board Meetings were convened and held, the details of which form part of the Report on Corporate Governance. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

3. DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to the requirements under Section 134 (5) of the Companies Act, 2013, in respect of Directors’ Responsibility Statement, your Directors state that:

a) in the preparation of the Annual Financial Statements for the year ended 31 March 2022, the applicable accounting standards had been followed and there were no material departures;

b) accounting policies as mentioned in Note No. 2 of the Notes forming part of the Financial Statements have been selected and applied consistently. Further, judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31 March 2022 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 Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) the Annual Financial Statements have been prepared on a going concern basis;

e) proper internal financial controls were in place and that the internal financial controls were adequate and were operating effectively; and

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

4. A STATEMENT ON DECLARATION BY INDEPENDENT DIRECTORS:

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149 (7) of the Companies Act, 2013, and Rules thereunder including amendments thereto and Regulation 16 (1) (b) and 25 (8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, including amendments thereto and also confirmed that they have complied with the Code for Independent Directors prescribed in Schedule IV to the Act.

Further, pursuant to Sub-rule (1) and (2) of Rule 6 of the Companies (Appointment and Qualifications of Directors) Rules, 2014 and amendments thereto, all Independent Directors confirmed that they have enrolled their name in the data bank with the Indian Institute of Corporate Affairs, New Delhi, India, within prescribed time period.

In the opinion of the Board, each of the Independent Director appointed / re-appointed during the period under review possess requisite integrity, expertise, and experience for acting as an Independent Director of the Company.

The Company has laid down a Code for the Board of Directors and Senior Management of the Company (Code of Conduct). The Code of Conduct is available on the Company’s website, viz., www.kirloskarindustries.com.

All the Board Members and Senior Management Personnel of the Company have affirmed compliance with the Code of Conduct.

5. COMPANY’S POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION:

The Board has on the recommendation of the Nomination and Remuneration Committee adopted a policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management Personnel and their remuneration.

The Nomination and Remuneration Policy is available on the website of the Company, viz., www.kirloskarindustries.com.

6. AUDITORS:

a. Statutory Auditors:

Kirtane and Pandit LLP, Chartered Accountants, (Firm Registration Number 105215W), Pune, were appointed as the Statutory Auditors of the Company under Section 139 of the Companies Act, 2013, (the Act), to hold office for a term of five years from the conclusion of the Annual General Meeting (AGM) held on 10 August 2021, till the conclusion of the AGM of the Company, to be held in the year 2026.

The Company has received a certificate from the Statutory Auditors to the effect that they are fulfilling requirements prescribed under the provisions of Section 141 of the Act.

b. Cost Auditors:

Pursuant to the Companies (Cost Records and Audit) Rules, 2014, dated 31 December 2014, the Company was not required to audit cost records relating to Electricity Industry (Windmills) for the Financial Year 2021-2022.

c. Secretarial Auditors:

Pursuant to the provisions of Section 204 of the Companies Act, 2013, and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company had appointed Mr. Mahesh J. Risbud, Practicing Company Secretary, (FCS 810 CP 185), Pune, to undertake the Secretarial Audit of the Company.

The Report of the Secretarial Audit is annexed as ‘Annexure II’ to this Report.

Mr. Mahesh J. Risbud, Practising Company Secretary, Pune, has submitted Secretarial Compliance Report as laid down in SEBI Circular CIR/CFD/CMD1/27/2019 dated 8 February 2019 and has also confirmed that the Company has complied with all applicable SEBI Regulations and circulars / guidelines issued thereunder, for the Financial Year 2021-2022.

7. MAINTENANCE OF COST RECORDS:

Pursuant to the Companies (Cost Records and Audit) Rules, 2014, dated 31 December 2014, the Company was not required to maintain cost records relating to Electricity Industry (Windmill) in Form CRA - 1 for the Financial Year 2021-2022.

8. EXPLANATION OR COMMENTS OF STATUTORY AUDITORS AND SECRETARIAL AUDITORS:

There are no qualifications, reservations or adverse remarks or disclaimer made by the Statutory Auditor in their Audit Report or by the Practicing Company Secretary in the Secretarial Audit Report for the year ended 31 March 2022.

The notes to the Accounts referred to in the Auditors Reports are self-explanatory and therefore no further clarifications are required.

9. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT, 2013:

During the period under review, your Company has given a loan of H 139.65 Crores to Avante Spaces Limited (Avante), a Wholly Owned Subsidiary Company. Your Company has not granted any guarantee.

During the period under review, the Company has invested of H 15 Crores in equity capital of Avante. The Company also purchased one preference share of Kirloskar Proprietary Limited at the rate of H 100. The details are given in the Financial Statements.

10. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SUB-SECTION (1) OF SECTION 188 OF THE COMPANIES ACT, 2013:

Pursuant to the provisions of Section 134 of the Companies Act, 2013, read with Rule 8 (2) of the Companies (Accounts) Rules, 2014, the particulars of all contracts or arrangements entered into by the Company with related parties have been done at arm’s length and are in the ordinary course of business. Hence, no particulars are being provided in Form AOC - 2. Related party disclosures as per the Indian Accounting Standard 24 (IND AS 24) have been provided in Note No. 45 to the Financial Statements.

None of the related party transactions entered into by the Company, were materially significant, warranting members’ approval under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, including amendments thereunder.

11. STATE OF COMPANY’S AFFAIRS:

Discussion on state of Company’s affairs has been covered in the Management Discussion and Analysis Report.

12. AMOUNTS PROPOSED TO BE CARRIED TO RESERVES:

The particulars of the amounts proposed to be carried to reserves have been covered as part of the financial performance of the Company.

13. 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 the Financial Year of the Company to which the Financial Statements relate and the date of this Report.

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

A. Conservation of Energy and Technology Absorption:

The Company has no particulars to report regarding conservation of energy and technology absorption as required under Section 134 (3) (m) of the Companies Act, 2013, read with Rules thereof including amendments thereunder.

B. Foreign exchange earnings and outgo:

(H in Crores)

Particulars Amount

Foreign exchange earnings Nil

Foreign exchange Outgo Nil

15. RISK MANAGEMENT POLICY:

The Company has in place a mechanism to identify, assess, monitor, and mitigate various risks to key business objectives. Major risks identified are systematically addressed through risk-mitigating actions on a continuing basis. These are discussed at the meetings of the Risk Management Committee, the Audit Committee, and the Board of Directors of the Company from time to time.

During the year under review, the Risk Management

Policy developed by the Company guides the risk management processes which are in line with the nature of the Company’s operations.

The risk management process works at various levels across the organisation. It is an ongoing process and forms an integral part of management focus.

16. CORPORATE SOCIAL RESPONSIBILITY:

The Company has been carrying out Corporate Social Responsibility (CSR) activities. These activities are carried out in terms of Section 135 read with Schedule VII of the Companies Act, 2013 and the Companies (CSR Policy) Rules, 2014.

Annual Report on CSR activities includes details about the CSR policy developed and implemented by the Company CSR initiatives taken during the year are annexed as ‘Annexure III’ to this Report.

17. BOARD EVALUATION:

Pursuant to the provisions of the Companies Act, 2013, and Regulation 17 (10) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out a performance evaluation of its own performance and that of its committees and individual Directors. Performance evaluation has been carried out as per the criteria prescribed by the Nomination and Remuneration Committee.

Mr. Atul Kirloskar and Mr. Vinesh Kumar Jairath retired by rotation and were re-appointed in the Annual General Meeting held on 10 August 2021.

Key Managerial Personnel appointed during the year:

During the period under review, the Company has not appointed any Key Managerial Personnel.

Directors and Key Managerial Personnel resigned during the year 2021-2022:

During the year under review, Mr. Sunil Shah Singh, ceased to be an Independent Director of the Company, with effect from 19 October 2021, on completion of his tenure as an Independent Director. Mr. Nihal Kulkarni, resigned as a Director of the Company, with effect from 9 February 2022.

During the year under review, Mr. Umesh Shastry resigned as a Chief Financial Officer of the Company, with effect from 1 February 2022.

21. DIRECTORS PROPOSED TO BE APPOINTED / REAPPOINTED AT THE ENSUING ANNUAL GENERAL MEETING:

Mr. Anil Alawani who retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

The Company has received the requisite disclosure / declaration from Mr. Anil Alawani.

On the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company in its meeting held on 26 May 2022, has re-appointed Mr. Mahesh Chhabria as the Managing Director of the Company, for a term of 5 years with effect from 4 July 2022.

A proposal for his re-appointment as the Managing Director of the Company with effect from 4 July 2022, for a term of 5 years and remuneration payable to him for the period effective from 4 July 2022 to 3 July 2025, is being placed before the members for their approval at the ensuing Annual General Meeting.

On the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company in its meeting held on 30 October 2021, has reappointed Ms. Aditi Chirmule as the Executive Director of the Company, for a further period of 5 consecutive years with effect from 25 January 2022.

A proposal for her re-appointment as the Executive Director of the Company with effect from 25 January 2022, for a term of 5 years and remuneration payable to her for the period effective from 25 January 2022 to 24 January 2025, is being placed before the members for their approval at the ensuing Annual General Meeting.

On the recommendation of the Nomination and Remuneration Committee, in accordance with the provisions of Section 161 of the Companies Act, 2013, (the Act), read with the Articles of Association of the Company, the Board of Directors of the Company coopted Mr. Vijaydipak Varma and Ms. Purvi Sheth as Additional Independent Directors with effect from 15 October 2021 and 26 May 2022, respectively.

Mr. Vijaydipak Varma and Ms. Purvi Sheth hold office up to the date of the ensuing Annual General Meeting of the Company. The Company has received a requisite notice under Section 160 of the Act, in writing from a member signifying intention to propose the appointment of Mr. Vijaydipak Varma and Ms. Purvi Sheth as candidates for the office of Directors at the ensuing Annual General Meeting. Mr. Vijaydipak Varma and Ms. Purvi Sheth are eligible for appointment.

In the opinion of the Board of Directors, Mr. Vijaydipak Varma and Ms. Purvi Sheth fulfill the conditions specified in the Act, and Rules thereunder and also possess high integrity, repute, requisite expertise and experience (including the proficiency) so as to enable the Board to discharge its functions and duties effectively and they are independent of the management.

Mr. Vijaydipak Varma is exempted from passing the online proficiency test pursuant to the provisions of Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

Ms. Purvi Sheth has passed online proficiency test pursuant to the provisions of Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

The Company has also received requisite disclosures / declarations from Mr. Vijaydipak Varma and Ms. Purvi Sheth under Section 149 of the Act, and other applicable provisions of the Act and SEBI (Listing Obligations and Disclosure Requirements), 2015, (the Regulations) and its amendments thereunder.

Upon the recommendation of the Nomination and Remuneration Committee, the Board of Directors has sought the approval of the members for the reappointment of Mr. D. Sivanandhan and Mr. Ashit Parekh, as Independent Directors to hold office for a second term up to 2 February 2026, and 3 July 2027, respectively.

In the opinion of the Board of Directors, Mr. D. Sivanandhan and Mr. Ashit Parekh fulfill the conditions specified in the Act and Rules thereunder and also possess high integrity, repute, requisite expertise and experience (including the proficiency) so as to enable the Board to discharge its functions and duties effectively and they are independent of the management.

Mr. D. Sivanandhan is exempted from passing the online proficiency test and Mr. Ashit Parekh has passed the online proficiency test.

The Company has also received requisite disclosures / declarations from Mr. D. Sivanandhan and Mr. Ashit Parekh under Section 149 of the Act, and other applicable provisions of the Act and the Regulations and its amendments thereunder.

The brief resumes and other details relating to Directors who are proposed to be appointed / re-appointed as required to be disclosed under Regulation 36 (3) of the Regulations, form part of the Statement settling out material facts annexed to the Notice of the Annual General Meeting.

The resolutions seeking approval of the members for the appointment / re-appointment of these Directors have been incorporated in the Notice of the forthcoming Annual General Meeting of the Company.

22. NAMES OF THE COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR:

Kirloskar Ferrous Industries Limited (KFIL), a subsidiary company of the Company has acquired a controlling interest and holds 51.25% of the issued, subscribed and paid-up equity share capital of ISMT Limited (ISMT) and that ISMT has, therefore, become a subsidiary of KFIL with effect from 10 March 2022, pursuant to the provisions of Section 2 (87) (ii) of the Companies Act , 2013, (the Act).

Consequently, pursuant to the provisions of Section 2 (87) (ii) of the Act, ISMT has become a subsidiary of the Company with effect from 10 March 2022.

23. DETAILS RELATING TO DEPOSITS, COVERED UNDER CHAPTER V OF THE COMPANIES ACT, 2013:

None

24. DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY’S OPERATIONS IN FUTURE:

To the best of our knowledge, the Company has not received any such order from the Regulators, Courts or Tribunals during the year, which may impact the going concern status or the Company’s operation in future.

25. DETAILS IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH REFERENCE TO THE FINANCIAL STATEMENTS:

The Company has developed a strong two-tier internal control framework comprising entity level controls and process level controls. The entity level controls of the Company include elements such as defined Code of Conduct, Whistle Blower Policy / Vigil Mechanism, rigorous management review and Management Information System (MIS) and strong internal audit mechanism. The process level controls have been ensured by implementing

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

During the period under review, the Company has complied with the provisions relating to the constitution of the Internal Committee (the Committee) under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

The Committee comprises four members including one external member.

During the period under review, four meetings of the Committee were held on 29 April 2021, 29 July 2021, 20 October 2021, and 5 January 2022.

The Company has in place a Policy for Prevention of Sexual Harassment at the workplace. This would, inter alia, provide a mechanism for the resolution, settlements, or prosecution of acts or instances of sexual harassment at the workplace and to ensure that all employees are treated with respect and dignity.

The details of complaints filed, disposed off, and pending during the Financial Year pertaining to sexual harassment is provided in the Business Responsibility Report of this Report.

X. CASH FLOW:

A Cash Flow Statement for the year ended 31 March 2022, is attached to the Balance Sheet as a part of the Financial Statements.

XI. COMPLIANCES WITH RESPECT TO APPLICABLE SECRETARIAL STANDARDS:

During the period under review, the Company has complied with all the applicable secretarial standards.

XII. CORPORATE GOVERNANCE:

In terms of Regulation 34 (3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Report on the Corporate Governance along with a Compliance Certificate issued by the Statutory Auditors of the Company is attached and forms part of the Annual Report.

XIV. BUSINESS RESPONSIBILITY REPORT:

The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, (the Regulations), mandate the inclusion of the Business Responsibility Report (BRR) as part of the Annual Report for top 1000 listed entities based on market capitalisation. In compliance with the Regulations, the Company has integrated BRR disclosures into the Annual Report.

ACKNOWLEDGEMENTS:

Your Directors would like to place on record their appreciation of the contribution made and support provided to the Company by the members, employees and bankers, during the year under Report.

For and on behalf of the Board of Directors

Sd/-

ATUL KIRLOSKAR

CHAIRMAN

Pune: 26 May 2022 DIN 00007387