Airfloa Rail Technology Ltd. ನಿರ್ದೇಶಕರ ವರದಿ

The Board of Directors have pleasure in presenting the 27^th Board''s Report of the Company together with the Audited financial
statements (Standalone and Consolidated) for the financial year ended 31st March, 2026.

FINANCIAL RESULTS AND STATE OF COMPANY AFFAIRS

(Amount in '' In Lakhs)

COMPANY PERFORMANCE OVERVIEW:

During the financial year 2025-26, revenue from operations on a standalone basis stood at ?31,959.76/- lakhs as against ?19,238.70/-
lakhs in the previous year 2024-25 registering a growth of 66.12%. The total expenditure of the company was ?26,739.51/- Lakhs
(on Standalone basis) as against ?15,768.58/- lakhs in the previous year 2024-25, an increase of 69.57%. Profit before exceptional
items and tax for the current year is ?5,267.69/- lakhs as against ?3,497.68/- lakhs in the previous year 2024-25 a growth of 50.61%.
Profit after tax for the current year is ?3,915.22/- Lakhs as against ?2,578.27/- lakhs in the previous year 2024-25 registering a
growth of 51.85%.

During the financial year 2025-26, revenue from operations
on a consolidated basis was ?31,959.76/- Lakhs as against
?19,238.70/- Lakhs in the previous year 2024-25 registering
a growth of 66.12%. The total expenditure of the company
was ?26,740.03/- lakhs (on Consolidation basis) as against
?15,769.90/- lakhs in the previous year 2024-25, showing an
increase of 69.57%. Profit before exceptional items and tax
for the current year is ?5,267.17/- lakhs as against ?3,496.36/-
lakhs in the previous year 2024-25 a growth of 50.64%. Profit
after tax for the current year is ?3,914.81/- Lakhs as against
?2,577.22/- Lakhs in the previous year 2024-25 showing a
growth of 51.90%.

During the year under review, the Company has achieved an
important milestone in its history wherein the equity shares
of the Company were listed on the SME Platform of BSE viz.,
"BSE SME" on September 18, 2025. Upon listing, the Corporate
Identification Number (CIN) of the Company is changed to
L30204TN1998PLC041571.

The financial year of the Company remains unchanged. The
Company continues to follow the financial year commencing
on 1st April and ending on 31st March, in accordance with the
provisions of the Companies Act, 2013.

No acquisition, merger, expansion, modernization, or
diversification activities were undertaken during the year
under review. The operations of the Company continued
in the normal course of business without any structural or
strategic changes. The Company has not acquired, assigned, or
developed any material Intellectual Property Rights during the
year under review.

BUSINESS OUTLOOK

The Company Airfloa Rail Technology Limited (formerly
known as Airflow Equipments (India) Private Limited) is
mainly engaged in the business of manufacturing, processing,
assembling, developing, designing all type of railway rolling
stocks, passenger rail coaches and their discrete components,
Rail wagons and their discrete components, locomotives and
their discrete components.

Considering the continued focus on the part of Indian
Government towards advanced Railway project developments
along with the positive trajectory of the overall economy,
the Company anticipates a significant expansion in its order
book. This anticipated growth is expected to strengthen
the Company''s business position and will be reflected in
higher revenues as well as improved profitability in the
forthcoming periods.

A more detailed explanation of the business and the
performance of the Company has been provided in the
Management Discussion and Analysis Report, which is forming
part of the Annual Report.

CHANGE IN THE NATURE BUSINESS OF
COMPANY

During the year under review, there was no change in the
nature of the Company''s business.

LISTING OF THE COMPANY

The Shares of your Company are listed on SME Platform of BSE
Limited. The annual Listing Fees for the Year 2026-27 has been
paid to the exchange within due date.

SHARE CAPITAL

As on 31st March, 2026 the Company has authorized share
capital of ?25,00,00,000/- consisting of 2,50,00,000 Equity
Shares of ?10/- each.

The Company has Issued 65,07,000 equity shares of ?10/- each
at an Issue price of ?140/- per share (including a securities
premium of ?130 per equity share) ("issue price") aggregating
a total amount of ?9,109.80 Lakhs of which 3,26,000 equity
shares aggregating to ?456.40 lakhs was reserved for
subscription by market maker ("market maker reservation
portion"). The issue less the market maker reservation portion
i.e. issue of upto 61,81,000 equity shares of face value of ?10/-
each at an issue price of ?140/- per equity share aggregating
to an amount of ?8,653.40 lakhs was offered to the public as
part of the Initial Public Offer (IPO). The total issue constitute
27.15% out of which 25.79% constitute the IPO size.

As on 31st March, 2026 the issued, subscribed and paid-up
capital of the Company stood at ?23,96,99,540/- comprising of
2,39,69,954 Equity shares of face value ?10/- each.

Apart from as stated above, the Company has not:

i) i ssued any shares, warrants, debentures, bonds, or any
other convertible or non-convertible securities.

ii) issued equity shares with differential rights as to dividend,
voting or otherwise

iii) issued any sweat equity shares to its directors or
employees

iv) made any change in voting rights

v) reduced its share capital or bought back shares

vi) changed the capital structure resulting from restructuring

vii) made any corporate action except in respect of it''s IPO
process.

The Company''s securities were not suspended for trading
during the year since its listing.

DIVIDEND

The Board considering the need to conserve capital to fund
the expansion activities as well as to augment working capital
requirements do not recommend any dividend for the financial
year ended 31st March, 2026.

To bring transparency in the matter of declaration of dividend
and protect the interests of investors, the company had
adopted a Dividend Distribution Policy since listing of its shares.
The policy has been displayed on the Company''s website at
link https://www.airfiow.co.in/pdf/Policies-21.08.2025/18.%20
dividend-distribution-policy.pdf

UNCLAIMED DIVIDEND

In the absence of any declaration of dividend in the past, the
Company does not have any unpaid/unclaimed dividend
coming under the purview of Section 124(5) of the Act to be
transferred to Investors Education and Protection Fund ("IEPF")
of the Central Government.

TRANSFER TO RESERVES

The Board has decided to retain the entire amount of profit for
FY-26 in the distributable retained earnings. Accordingly no
amount is proposed to transferred to Reserves.

QUALITY ASSURANCE

Your Company has obtained certification fromInternational
Railway Industry Standard(IRIS) in the areas of Design and
Development of products and services & Production and
service provision & Control of externally provided processes,
products and services & Project management & Requirements
for products and services. Your Company has also obtained
ISO 9001:2015 certification in the area of Design, Manufacture,
Services and Supply of Railway Rolling Stocks and other
allied products besides AS 9100:2016 certificate in the area
of manufacture of sheet metal components, fiber reinforced
polymer (FRP) claddings and assemblies for aerospace and
defence applications. Right from manufacturing to distribution,
we have consistently delivered competitive edge in the form
of robust, foresighted, and quality products confirming to the
Indian Railway''s quality Standards.

MATERIAL CHANGES AND COMMITMENT IF
ANY AFFECTING THE FINANCIAL POSITION
OF THE COMPANY OCCURRED BETWEEN THE
END OF THE FINANCIAL YEAR TO WHICH THIS
FINANCIAL STATEMENTS RELATE AND THE DATE
OF THE 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, which forms part of this report.

DEPOSITS

The Company has not accepted any deposits from public
falling within the ambit of section 73 and Section 76 of the Act,
read with the Companies (Acceptance of Deposits) Rules, 2014.
Hence, no disclosure is required under Rule 8(5)(v) and (vi) of
the Companies (Accounts) Rules, 2014.

BORROWINGS

As on 31st March, 2026, an amount of ?6830.98/- Lakhs was
outstanding towards borrowings, which comprises of both
secured and unsecured loans. The company has not defaulted
in payment of interest and/or repayment of loan to any of
the financial institutions and/or bank. The Details of the
Borrowings can be referred in the specified schedules (Long
term Borrowings & Short Term Borrowings) of the notes to
stand alone financial statements.

COMPLIANCE OF SECRETARIAL STANDARDS

During the financial year under review, the Company has
complied with the applicable provisions of the Secretarial
Standard-1 and Secretarial Standard-2 relating to ''Meetings
of the Board of Directors'' and ''General Meetings'', respectively
issued by the Institute of Company Secretaries of India (''ICSI'')
and approved by the Central Government under Section 118
(10) of the Act.

DIRECTORS'' RESPONSIBILITY STATEMENT

In terms of Section 134(3)(c) & 134 (5) of the Companies Act,
2013, with respect to Directors'' Responsibility Statement it is
hereby confirmed that:

a) in the preparation of the annual accounts for the financial
year ended 31st March, 2026, the applicable accounting
standards have been followed and there are no material
departures from the same;

b) the Directors have selected such accounting policies and
applied them consistently and made judgements and
estimates that are reasonable and prudent so as to give a
true and fair view of the state of affairs of the Company as
at 31st March, 2026 and of the profit of the Company for
the year ended on that date;

c) the Directors have taken proper and sufficient care 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 Directors have prepared the annual accounts for the
financial year ended 31st March, 2026 on a going concern
basis;

e) the Directors have laid down internal financial controls
to be followed by the Company and that such internal
financial controls are adequate and are operating
effectively; and

f) the Directors have devised proper systems to ensure
compliance with the provisions of all applicable laws and
that such systems are adequate and operating effectively.

PARTICULARS OF LOANS GIVEN, INVESTMENTS
MADE, GUARANTEES GIVEN AND SECURITIES
PROVIDED UNDER SECTION 186 OF THE ACT

The Company has not given any Loans, made any Investments,
given any Guarantees and provided any Securities during the
Financial Year coming under the purview of Section 186 of the
Companies Act, 2013 during the year under review.

However during the year under report the Company has
subscribed of 20 nos. of Compulsorily Convertible Debentures
(CCD) of face value of ?25.00 Lakhs each of Big Bang Boom
Solutions Private Limited as part of its strategic collaboration
with further investment in a phased manner.

CONTRACTS OR ARRANGEMENTS MADE WITH
RELATED PARTIES UNDER SECTION 188(1) OF
THE ACT:

All the transactions with related parties were in the ordinary
course of the business and on the arm''s length basis and are
reported in the Notes to Financial Statements. The related
party transactions entered into by the company during the
year under review have been approved by the Board and
Audit Committee. The details of materially significant related
party transactions entered into by the Company are disclosed
in Form AOC- 2 pursuant to Section 134(3) of the Act and
enclosed as Annexure-I to this report.

Reference may also be made Related Party transactions in Note
16 of Notes to Accounts of the Financial Statements for more
details. (stand alone financial statements)

All transactions with related parties are in accordance with
the RPT Policy. The policy on materiality of related party
transactions and dealing with related party transactions
("RPT Policy") formulated by the Board can be accessed at
https://www.airflow.co.in/pdf/Policies-21.08.2025/8.%20
Policv%20for%20Materialitv%20of%20Related%20Partv%20
Transaction.pdf

ANNUAL RETURN

Pursuant to the provisions of Section 92(3) and Section 134(3)
(a) of the Act read with Rule 12 of the Companies (Management
and Administration) Rules, 2014 as amended from time to time,
the Annual Return of the Company pertaining to the financial
year ended on 31st March, 2026 is available on the Company''s
website and can be accessed athttps://www.airfiow.co.in/
financial/

DIRECTORS OR KEY MANAGERIAL PERSONNEL

A. COMPOSITION OF THE BOARD OF DIRECTORS:

As on 31st March 2026, the Board of Directors of the
Company consists of total six directors, including a
Chairman and Managing Director, Joint Managing
Director, Whole-Time Director, Women Director and two
Independent Directors.

The Board of Directors of the Company comprises
the following individuals who bring the right mix of
knowledge, skills and expertise and help the Company in
implementing the best Corporate Governance practices:

Mr. Dakshinamoorthy Venkatesan (DIN:00232210) -
Chairman-Cum- Managing Director

Mr. Dakshna Moorthy Manikandan (DIN: 00232275)
- Joint Managing Director

Mr. Venkatesan Sathishkumar (DIN: 08561438) -
Whole-time Director

Ms. Manikandan Nanthini (DIN: 08561378) - Non¬
Executive Non-Independent Director

Mr. Sudhanshu Mani (DIN: 10124439) - Independent
Director

Mr. Tilak Raj Seth (DIN: 07027068) - Independent
Director

The composition of the Board consists of a combination
of Executive and Non-Executive Directors and not less
than 1 /3rd of the Board comprising of Independent
Directors.

The Board of Directors of the company are of the opinion
that all the Independent Directors of the company
appointed / re-appointed had possess impeccable
integrity, relevant expertise and experience required to
best serve the interests of the company.

B. KEY MANAGERIAL PERSONNEL:

As on March 31,2026, the Key Managerial Personnel (KMP)
of the Company, in terms of Sections 2(51) and 203 of the
Companies Act, 2013, and the Companies (Appointment
and Remuneration of Managerial Personnel) Rules,
2014, comprise of Mr. Dakshinamoorthy Venkatesan
(DIN:00232210), Chairman & Managing Director; Mr.
Dakshna Moorthy Manikandan (DIN: 00232275), Joint¬
Managing Director; Mr. Venkatesan Sathishkumar (DIN:
08561438), Whole-time Director; Mr. P S Karunakaran
(PAN:AZWPK0854H), Chief Financial Officer; and Mr.
Haraprasad Rout (Mem.No:A18749), Company Secretary
and Compliance Officer.

C. CHANGES IN DIRECTORS AND KEY MANAGERIAL
PERSONNEL:

During the year under review, there was no any change in
the constitution of board of Directors and key managerial
personnel of the Company, except the following:

Mr. Thygarajan Sivakumar (Membership Number: A8192)
has resigned as Company Secretary of the Company
w.e.f. 13/11/2025, The Board of Directors took note of
resignation of Mr.Thygarajan Sivakumar (Membership
Number: A8192) as Company Secretary of the Company
and expressed their sincere appreciation for the valuable
services rendered by him during his tenure as Company
Secretary of the Company.

Subsequent to the resignation of Mr. Thygarajan
Sivakumar (Membership Number: A8192) as Company
Secretary of the Company, Mr.Haraprasad Rout
(Membership Number: A18749) was appointed as the
Company Secretary and Compliance officer of the
Company w.e.f. 14/11/2025.

D. RETIREMENT BY ROTATION:

I n accordance with the provisions of Section 152 of the
Companies Act, 2013, and the Articles of Association of the

Company, Mr. Venkatesan Sathishkumar (DIN: 08561438),
Director of the Company, is liable to retire by rotation at the
ensuing Annual General Meeting. The Board of Directors, on
the recommendation of the Nomination and Remuneration
Committee, has recommended his re-appointment.
Details of the Directors retiring by rotation and seeking re¬
appointment have been furnished in the annexure to the
notice of the ensuing Annual General Meeting.

E. REMUNERATION OF DIRECTORS:

Remuneration of the executive directors consists of
the salary and other benefits. The Nomination and
Remuneration Committee makes annual appraisal of
the performance of the Executive Directors based on a
detailed performance evaluation, and recommends the
compensation payable to them, within the parameters
approved by the shareholders, to the Board for their
approval.

The Non-Executive Directors including Independent
Directors are entitled for sitting fees for attending
meetings of the board/ committees thereof. The
Company pays sitting fees of ?50,000/- per meeting to its
Independent and Non-executive Directors for attending
the meetings of Board and Committees.

Detailed agenda with explanatory notes and all other
related information is circulated to the members of the
Board in advance of each meeting. Detailed presentations
are made to the Board covering all major functions and
activities. The requisite strategic and material information
is made available to the Board to ensure transparent
decision making by the Board.

Adequate notice is given to all directors for the meetings
of the Board. Except where consent of directors was
received for scheduling meeting at a shorter notice,
agenda and detailed notes on agenda were sent at least
seven days in advance, and a system exists for seeking
and obtaining further information and clarifications on
the agenda items before the meeting and for meaningful
participation at the meeting by the directors.

AUDITORS AND AUDITORS'' REPORT:

A. STATUTORY AUDITORS AND THEIR REPORT:

Pursuant to the provisions of Section 139 of the
Companies Act, 2013 and the Companies (Audit and
Auditors) Rules, 2014 and in accordance with the
resolution passed by the members at the AGM held on
30/09/2024, M/s. Varadarajan & Co, (Firm Registration No:
004515S) Chartered Accountants, having office at Srivatsa
Basement, Door No.49, Kamaraj Avenue, 1st Street Adyar,
Chennai, 600020, Tamil Nadu, India were appointed as
the Statutory Auditors of the Company to hold office for
a period of 5 years from the conclusion of 25th Annual
General meeting, (for the financial year 31.03.2024), till
the conclusion of 30th Annual General Meeting (for the
financial year 31.03.2029) of the Company and the Board
of Directors were authorized to fix the remuneration of
the Auditors in consultation with the Auditors.

The Auditors have confirmed that they are not
disqualified from continuing as the Statutory Auditors of
the Company and satisfy the prescribed eligibility criteria.

M/s. Varadarajan & Co, Chartered Accountants, have
submitted their Report on the Financial Statements of
the Company for the FY 2025-26, which forms part of the
Annual Report 2025-26.

B. COST AUDITORS, COST RECORDS AND COST
AUDIT / COMPLIANCE:

For the financial year 2025-26, M/s SVM & Associates, Cost
Accountants, Chennai, Firm Registration No: 000536, have
conducted the audit of the cost records of the Company.
In compliance with the provisions of Section 148 of
the Act, the members of the company have ratified the
remuneration paid/payable to the Cost Auditor for the
financial years 2025-26 at the Annual General Meeting of
the Company held on September 15, 2025. The audit is in

progress and the report will be filed with the Ministry of
Corporate Affairs within the prescribed period.

The Company has maintained cost accounts and records
as specified by the Central Government under Section
148(1) of the Companies Act, 2013. Pursuant to the
recommendation of the Audit Committee, the Board of
Directors, at its meeting held on 30th May 2026, approved
the re-appointment of M/s. SVM & Associates, Cost
Accountants, Chennai (Firm Registration No. 000536) as
the Cost Auditors of the Company to conduct the audit
of the Company''s Cost Records for the financial year
2026-27, at a remuneration to be finalised by the Board
in consultation with the Cost Auditors. In accordance
with the provisions of Section 148(3) of the Companies
Act, 2013 read with Rule 14 of the Companies (Audit and
Auditors) Rules, 2014, the remuneration payable to the
Cost Auditors is subject to ratification by the Members of
the Company.

The remuneration of the Cost Auditors for the FY 2026¬
27 is being placed before the Members for ratification /
approval at the ensuing Annual General Meeting.

C. SECRETARIAL AUDITOR AND SECRETARIAL
AUDITORS'' REPORT:

The Board of Directors of the Company, based on the
recommendation made by the Audit Committee, and
subject to the approval of the shareholders of the
Company at the ensuing AGM, have approved the
appointment of M/s. SKD & Associates, as the Secretarial
Auditors of the Company to conduct the secretarial audit
for a period of five consecutive years from the financial
year 2025-26 to the financial year 2029-30, in terms of
provisions of Regulation 24A of the Listing Regulations
and provisions of Section 204(1) of the Companies
Act, 2013. M/s. SKD & Associates has given consent
and confirmed that he is not disqualified from being
appointed as the Secretarial Auditor of the Company and
satisfies the eligibility criteria. The profile of the Secretarial
Auditor is provided as part of the explanatory statement
to the AGM Notice.

The Secretarial Audit report received from M/s. SKD &
Associates for the financial year 2025-26 in the prescribed
form MR3 pursuant to the provisions of Section 204 of the
Act is provided in Annexure III forming part of this report.

The said Report does not contain any qualification,
reservation or adverse remark, except for observations
relating to delay/non-filing of certain statutory forms and
returns, delay in disclosure of Related Party Transactions
for the half-year ended 30th September 2025 to BSE
Limited, and certain website disclosures required under
the applicable provisions. The management response

in respect of the observations Secretarial Auditor and
Statutory Auditor form part of this Report.

Management Reply on observation in the
Auditors Report

With reference to the observations of the Statutory
Auditors in their Report the Board provides the following
explanation:

The GST demands referred to in the Auditors'' Report
pertain to earlier financial years and were outstanding
as they are under dispute as at March 31, 2026. The
Company has contested the said demands and has filed
appeals/replies, as applicable, before the appropriate
authorities. The respective proceedings are pending
adjudication/disposal. The Company is pursuing the
matters in accordance with law and shall take such action
as may be necessary based on the final outcome of the
proceedings.

The adjudication orders referred to in the Auditors''
Report relate to non-compliance with the provisions of
Sections 135(5) and 135(6) of the Companies Act, 2013 for
the financial years 2019-20 to 2022-23. Being aggrieved
by the adjudication orders passed by the Registrar of
Companies (RoC), Chennai on the suo-motto adjudication
application of the company before the RoC, the Company
preferred appeals under Section 454(5) of the Companies
Act, 2013 before the Regional Director, Southern Region,
Ministry of Corporate Affairs. The appeals were pending
for consideration and disposal as at March 31, 2026.
Accordingly, the aforesaid adjudication orders are under
challenge before the competent appellate authority and
have not attained finality. The Company is pursuing the
appeals on their merits and shall take appropriate action
based on the final outcome of the appellate proceedings.

The Secretarial Audit contain observations relating to
delay/non-filing of certain statutory forms and returns,
delay in disclosure of Related Party Transactions for the
half-year ended 30th September 2025 to BSE Limited, and
certain website disclosures required under the applicable
provisions.

In this regard, the Directors wish to clarify that the
statutory forms and returns referred to in the Secretarial
Audit Report have since been duly filed with the Registrar
of Companies along with the applicable additional fees,
wherever required, and necessary steps are being taken
to complete the pending filings at the earliest. The delay

in submission of the Related Party Transactions disclosure
was for one day and the applicable fine levied by BSE
Limited has been duly paid. The Company has also taken
necessary steps to update the requisite disclosures on
its website and strengthen its compliance monitoring
mechanism.

The Company has also strengthened its internal
compliance monitoring and review mechanism to ensure
timely filings, disclosures and adherence to applicable
statutory and regulatory requirements going forward.

The Board continues to monitor statutory compliances
and has advised the management to maintain
appropriate systems and controls for timely compliance
with applicable statutory requirements.

D. INTERNAL AUDITOR:

As per section 138 of The Companies Act 2013 read with
Rule 13 of Companies (Accounts) Rules, 2014, the Board
of Directors at their meeting held on 21/08/2025, on the
recommendation of Audit Committee, has Appointed
Mr. C. Subramanian, Chartered Accountants, Chennai
(Membership. No.027959), as Internal Auditor to conduct
Internal Audit for the Financial Years 2025-26 & 2026-27.
The Internal Audit reports are periodically reviewed by
the Audit Committee.

DETAILS IN RESPECT OF FRAUDS REPORTED
BY AUDITORS OTHER THAN THOSE WHICH ARE
REPORTABLE TO THE CENTRAL GOVERNMENT

In terms of the provisions of section 143(12) of the Act read
with rule 13 of the Companies (Audit and Auditors) Rules,
2014, during the year under review, none of the auditors have
reported any frauds to the Audit Committee or to the Board
and therefore, no details pursuant to the provisions of section
134(3) of the Act are required to be disclosed.

INTERNAL FINANCIAL CONTROL SYSTEM

The Company has put in place an effective internal control
system to synchronize its business processes, operations,
financial reporting, fraud control, and compliance with
extant regulatory guidelines and compliance parameters.
The Company ensures that a standard and effective internal
control framework operates throughout the organization,
providing assurance about the safekeeping of the assets
and the execution of transactions as per the authorization in
compliance with the internal control policies of the Company.

The internal control system is supplemented by internal
audits, regular reviews by the management, and guidelines
that ensure the reliability of financial and all other records. The
management periodically reviews the framework, efficacy, and
operating effectiveness of the Internal Financial Controls of the
Company

The Company has, in material respects, adequate internal
financial control over financial reporting, and such controls are
operating effectively. Internal Audits are carried out to review
the adequacy of the internal control systems and compliance
with policies and procedures. Internal Audit areas are planned
based on inherent risk assessment, risk score, and other factors
such as probability, impact, significance, and strength of the
control environment. Its adequacy was assessed, and the
operating effectiveness was also tested.

COMPLIANCE WITH THE SEXUAL HARASSMENT
OF WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION, AND REDRESSAL) ACT, 2013
READ WITH THE SEXUAL HARASSMENT OF
WOMEN AT WORKPLACE (PREVENTION,
PROHIBITION, AND REDRESSAL) RULES, 2013
The Company has zero tolerance for sexual harassment at
workplace and has a mechanism in place for prevention,
prohibition and redressal of sexual harassment at workplace
in line with the provisions of the Sexual Harassment of Women
at Workplace (Prevention, Prohibition and Redressal) Act, 2013
and the Rules made thereunder. The Company is committed to
provide equal opportunities without regard to their race, caste,
sex, religion, color, nationality, disability, etc.

All employees are treated with dignity with a view to maintain a
work environment free of sexual harassment whether physical,
verbal or psychological.

The Company has in place an Anti-Sexual Harassment Policy in
line with the requirements of the Sexual Harassment of Women
at the Workplace (Prevention, Prohibition & Redressal) Act,
2013. An Internal Complaints Committee (ICC) has been set up
to redress complaints received regarding sexual harassment at
workplace. All employees (permanent, contractual, temporary,
trainees) are covered under the Anti-Sexual Harassment Policy.
Details Policy in this regard is available in https://www.airflow.
co.in/pdf/Policies-21.08.2025/10.%20Prevention%20of%20
Sexual%20Harrassment%20Policy%20(1).pdf

The following is a summary of sexual harassment complaints
received and disposed off during the year 2025-2026.

DISCLOSURE WITH RESPECT TO THE
COMPLIANCE OF THE PROVISIONS RELATING TO
THE MATERNITY BENEFIT ACT, 1961

The Company has complied with the applicable provisions
of the Maternity Benefit Act, 1961, including the grant of
maternity leave, work-from-home options where applicable,
and provision of creche facilities as required. The Company
remains committed to ensuring a safe and supportive work
environment for its women employees.

SIGNIFICANT AND MATERIAL ORDERS
PASSED BY THE REGULATORS OR COURTS OR
TRIBUNALS IMPACTING THE GOING CONCERNS
STATUS AND COMPANY''S OPERATIONS IN
FUTURE

During the year under review, the Company has not any
significant or material orders passed by any regulatory
authority, court or tribunal which shall impact the going
concern status and Company''s operations in future, except
as separately disclosed under Compounding/Adjudication
Proceedings, none of which, in the Board''s assessment, affects
the going concern status.

COMPOUNDING / ADJUDICATION PROCEEDINGS

During the year, the following compounding and adjudication
proceedings, arising out of suo motu applications made by the
Company in respect of certain past non-compliances under
the Companies Act, 2013, were concluded:

1. Compounding under Section 96(1) of the Act in
respect of Annual General Meeting pertaining
to Financial Year 2022-23

The Company had filed a suo motu application for
compounding in respect of non-compliance with the
provisions of Section 96(1) of the Companies Act, 2013
for the financial year 2022-23. The Regional Director,
Southern Region, Ministry of Corporate Affairs, Chennai,
vide order dated 29th August 2025, compounded the
offence and imposed a compounding fee of ?1,50,000
on the Company and ?1,00,000 on each of the Directors
concerned. The compounding fees so imposed have
been duly paid and default is compounded.

2. Compounding under Section 148(3) of the Act in
respect of Financial Years 2018-19 to 2022-23

The Company had filed a suo motu application for
compounding in respect of non-compliance with the
provisions of Section 148(3) of the Companies Act, 2013
for the financial years 2018-19 to 2022-23. The Regional
Director, Southern Region, Ministry of Corporate
Affairs, Chennai, vide order dated 29th August 2025,
compounded the offence and imposed a compounding
fee of ?3,50,000 on the Company and ?12,00,000 on each
of the Directors concerned. The compounding fees so
imposed have been duly paid and default is compounded.

3. Adjudication under Sections 135(5) and 135(6) -
Financial Year 2019-20

The Company had filed a suo motu application for
adjudication in respect of non-compliance with the
provisions of Sections 135(5) and 135(6) of the Companies
Act, 2013 for the financial year 2019-20. The Registrar of
Companies, Chennai, vide order dated 20th January
2026, imposed a penalty of ?17,27,343 on the Company
and ?1,72,734 on each of the two Directors concerned.

4. Adjudication under Sections 135(5) and 135(6) -
Financial Year 2020-21

The Company had filed a suo motu application for
adjudication in respect of non-compliance with the
provisions of Sections 135(5) and 135(6) of the Companies
Act, 2013 for the financial year 2020-21. The Registrar of
Companies, Chennai, vide order dated 7th January 2026,
imposed a penalty of ?25,99,631 on the Company and
?2,00,000 on each of the two Directors concerned.

5. Adjudication under Sections 135(5) and 135(6) -
Financial Year 2021-22

The Company had filed a suo motu application for
adjudication in respect of non-compliance with the
provisions of Sections 135(5) and 135(6) of the Companies
Act, 2013 for the financial year 2021-22. The Registrar of
Companies, Chennai, vide order dated 7th January 2026,
imposed a penalty of ?27,12,722 on the Company and
?2,00,000 on each of the two Directors concerned.

6. Adjudication under Sections 135(5) and 135(6) -
Financial Year 2022-23

The Company had filed a suo motu application for
adjudication in respect of non-compliance with the
provisions of Sections 135(5) and 135(6) of the Companies
Act, 2013 for the financial year 2022-23. The Registrar of
Companies, Chennai, vide order dated 7th January 2026,
imposed a penalty of ?19,64,272 on the Company and
?1,96,427 on each of the two Directors concerned.

The Company has preferred appeals against the
adjudication orders passed by the Registrar of
Companies, Chennai, in respect of the matters referred to
at Item Nos. 3 to 6 above, before the Regional Director,
Southern Region, Ministry of Corporate Affairs, on 6th
March 2026. The said appeals are pending for disposal.
Pending the outcome of the appeals, in the event the
penalties imposed are not waived or reduced by the
Appellate Authority, the Company may be required to
bear the penalties to the extent sustained, which may
have a consequential impact on the profitability of the
Company.

The Company has taken necessary corrective measures
in respect of the aforesaid matters and has strengthened
its internal compliance monitoring framework with a
view to ensuring timely compliance with the applicable
provisions of the Companies Act, 2013.

MANAGEMENT DISCUSSION AND ANALYSIS
REPORT

Management Discussion and Analysis Report for the year under
review, as stipulated under the Securities and Exchange Board
of India (Listing Obligations and Disclosure Requirements)
Regulations, 2015 ("Listing Regulations"), is presented in a
separate section, forming part of the Annual Report.

CORPORATE SOCIAL RESPONSIBILITY (CSR)

In compliance with Section 135 of the Companies Act, 2013
read with the Rules made thereunder, the Company has
formed Corporate Social Responsibility ("CSR") Committee on
June 19, 2025. The Company has framed a Corporate Social

Responsibility (CSR) Policy as required under Section 135 of
the Companies Act, 2013 read with Rule 8 of the Companies
(Corporate Social Responsibility Policy) Rules, 2014, to oversee
the CSR activities initiated by the Company. The CSR Committee
has adopted a CSR Policy in accordance with the provisions
of Section 135 of the Companies Act, 2013 and rules made
thereunder. The details of the CSR initiatives undertaken by the
Company during the FY 2025-26 in the prescribed format are
annexed as Annexure-IV.

RISK MANAGEMENT

Pursuant to provisions of Section 134(3)(n) of the Companies
Act, 2013 and Regulation 17(9) & 21 of SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, the Company
has constituted the Risk Management Committee and laid
down a framework to inform the Board about the particulars of
Risks Identification, Assessment and Minimization Procedures.
In the opinion of the Board, there is no such risk, which may
threaten the existence of the Company. During the year, such
controls were tested and no material discrepancy or weakness
in the Company''s internal controls over financial reporting was
observed.

Proper Risk Management Practices have been followed for
the purpose of risk identification, analysis, and mitigation
planning, monitoring, and reporting. Although, all risks cannot
be eliminated, but mitigation and contingency plans are
developed to lessen their impact if they occur.

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

The information pertaining to conservation of energy,
technology absorption, Foreign exchange Earnings and outgo
as required under Section 134 (3)(m) of the Companies Act,

2013 read with Rule 8(3) of the Companies (Accounts) Rules,

2014 are provided in Annexure-V to this Report.

POLICY ON DIRECTORS'' APPOINTMENT AND
REMUNERATION:

The Board, based on the recommendation of the Nomination
and Remuneration Committee, has framed a policy for
the selection and appointment of Directors and Senior
Management Personnel and their remuneration. The
Company''s policy relating to the Directors appointment,
payment of remuneration and discharge of their duties is
available on the website of the Company at https://www.
airflow.co.in/pdf/Policies-21.08.2025/9.%20Qrderlv%20
Succession%20Policv%20for%20Appt%20of%20Directors%20
%26%20Sr%20MGT.%20(1).pdf

PARTICULARS OF HOLDING, SUBSIDIARIES,
JOINT VENTURES AND ASSOCIATE

As on 31st March 2026, the company has one subsidiary

i.e., Sree Dakssnaa Aerospace and Defence India Private
Limited bearing CIN: U30305TN2024PTC170955, incorporated
on 11/06/2024, and having its registered office at No.127,
Mettupalayam Road, Qpp. to Samsung, Panruti, Kanchipuram,
Sriperumbudur, 631604, Tamil Nadu, India, is engaged in the
business of "Aerospace and Defense". The Company has not yet
started commercial operation. Your company is holding 79.20
% of the Paid-up Equity Share Capital as on date of signing this
report. There has been no material change in the nature of the
business of the subsidiary.

The consolidated financial statement has been prepared in
accordance with the relevant accounting standards and a
separate statement containing the salient features of the
financial statement of its subsidiary pursuant to provision
of Section 129(3) of the Companies Act, 2013 read with rule
5 of the Companies (Accounts) Rules 2014 in form AQC- 1 is
attached along with the financial statement of the company
as Annexure-II.

Pursuant to the provisions of Section 136 of the Act, the
Company''s financial statements, consolidated financial
statements along with relevant documents, and separate
audited financial statements of its subsidiaries are posted and
available on the Company''s website at https://www.airflow.
co.in/pdf/Financial%20Statement%20of%20Subsidiary%20
Company.pdf

The Board of Directors at their meeting held on November
21, 2025 approved formation of a Joint Venture under the
name and style M/s. Airbang Solutions Private Limited in
collaboration with M/s. Big Bang Boom Solutions Private
Limited. The Company is in the process of forming the said
Joint Venture. Hence, details of the same are not required to be
disclosed in Form No. AOC-1.

Further, the company does not have any holding, joint venture
or associate company as on 31/03/2026.

PARTICULARS OF EMPLOYEES

Employee relations continued to be cordial during the year
under review. The Company continued its thrust on Human
Resources Development.

No employees of the Company are drawing remuneration in
excess of the limit specified under Rule 5(2) of the Companies
(Appointment and Remuneration of Managerial Personnel) Rules,
2014 read with Companies (Appointment and Remuneration of
Managerial Personnel) Amendment Rules, 2016.

As on the end of the Financial Year, the Company has 329
employees (including the employees on contract basis).

Details are as under:

A statement containing the particulars of the top ten
employees in terms of remuneration drawn and disclosures
containing, inter-alia, the ratio of remuneration of Directors
to median remuneration of employees, percentage increase
in the median remuneration as prescribed under Section
197(12) of the Act, read with Rule 5(1), Rules 5(2) and (3) of the
Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, as amended, are annexed to this Report
as ANNEXURE-VI.

RECEIPT OF REMUNERATION OR COMMISSION
BY THE MANAGING / WHOLE TIME DIRECTOR
FROM ITS HOLDING OR SUBSIDIARY COMPANY

During the year under review, the company has no holding
company and no remuneration / commission has been
received by the Managing Director or the Whole-Time Director
of the Company from its subsidiary company in terms of
Section 197(14) of the Companies Act, 2013.

BUSINESS RESPONSIBILITY AND
SUSTAINABILITY REPORT (BRSR)

The Business Responsibility and Sustainability Report pursuant
to Regulation 34(2)(f) of SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 is not applicable to the
Company for the financial year ended on 31st March, 2026.

CORPORATE GOVERNANCE

The Equity Shares of the Company are listed on the SME platform
BSE Limited. Pursuant to Regulation 15(2) SEBI (Listing Obligation
and Disclosure Requirements) Regulation, 2015 the compliance
with the Corporate Governance provision as specified in
Regulation 17 to 27 and clause (b) to (i) of sub regulations (2) of
regulation 46 and par as C, D and E of Schedule V of SEBI (Listing
Obligation and Disclosure Requirements) Regulation, 2015 is not
applicable to the Company. The Company voluntarily adopted
various practices of governance confirming to highest ethical
and responsible standards of business and is committed to focus
on long term value creation for its shareholders. The Corporate
Governance practices followed by the Company is included and
forms part of this Report.

COMMITTEES OF THE BOARD

The Board has constituted following committees in accordance
with the requirements of the Companies Act and SEBI Listing
Regulations:

a) Audit Committee;

b) Stakeholders'' Relationship Committee;

c) Nomination and Remuneration Committee;

d) Risk Management Committee; and

e) Corporate Social Responsibility Committee.

Details on the role and composition of these committees,
including the number of meetings held during the financial
year and the related attendance are provided below.

AUDIT COMMITTEE

The Audit Committee was constituted at the Board meeting held on December 12, 2024 pursuant to Section 177 of the Companies
Act, 2013. During the Financial Year 2025-26, the Company held Seven (07) Audit Committee meeting on April 20, 2025, June 10,
2025, August 21,2025, November 13, 2025, November 21,2025, February 5, 2026, and February 14, 2026.

The composition of the Committee as on March 31,2026 and the details of meetings attended by its members during the financial
year 2025-26 are given below:

All recommendations of Audit Committee during the year under review were accepted by the Board of Directors. Company
Secretary acted as the secretary of the Committee. The role and terms of reference of the Committee are in consonance with the
requirements mandated under Section 177 of the Companies Act, 2013 and available on the website of the Company at https://
www.airflow.co.in/pdf/Policies

STAKEHOLDERS'' RELATIONSHIP COMMITTEE

The Stakeholders Relationship Committee has been formed by the Board of Directors, at the meeting held on December 12, 2024.
During the Financial Year 2025-26, the Company held four (4) nos of Stakeholder''s Relationship Committee meeting on September
26, 2025, November 13, 2025, December 10, 2025 & February 14, 2026.

The Company Secretary acted as the secretary of the Committee. The role and terms of reference of the Committee are in
consonance with the requirements mandated under Section 178 of the Companies Act, 2013 is available on the website of the
Company athttps://www.airflow.co.in/.

NOMINATION AND REMUNERATION COMMITTEE:

The Nomination and Remuneration Committee was constituted at a meeting of the Board of Directors held on December 12, 2024.
During the Financial Year 2025-26, the Company held one (02) Nomination and Remuneration Committee meeting on August 21,
2025 and November 13, 2025.

The composition of the Committee and the details of meetings attended by its members are given below:

The Company Secretary acted as the secretary of the Committee. The role and terms of reference of the Committee are in consonance
with the requirements mandated under Section 178 of the Companies Act, 2013 and Listing Regulations and is available on the
website of the Company athttps://www.airflow.co.in/.

In pursuant to the provisions of section 178 (4) of the Companies Act, 2013, the Nomination and Remuneration Policy recommended
by the Nomination and Remuneration committee is duly approved by the Board of Directors of the Company. Policy is disclosed on
the website of the Company viz.https://www.airflow.co.in/.

RISK MANAGEMENT COMMITTEE:

The Risk Management Committee was constituted at a meeting of the Board of Directors held on December 12, 2024. During the
Financial Year 2025-26, the Company held One (1) Risk Management Committee on February 14, 2026.

The composition of the Committee and the details of meetings attended by its members are given below:

The Company Secretary acted as the secretary of the Committee. The role and terms of reference of the Committee are in consonance
with the requirements mandated under Section 178 of the Companies Act, 2013 and Listing Regulations and is available on the
website of the Company at https://www.airflow.co.in/pdf/Policies.

CORPORATE SOCIAL RESPONSIBILITY COMMITTEE

The Corporate Social Responsibility Committee has been formed by the Board of Directors, at the meeting held on June 19, 2025 in
terms of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 and
Rule 9 of the Companies (Accounts) Rules 2014. During the Financial Year 2025-26, the Company held 01 (One) Corporate Social
Responsibility Committee meeting on 21st August, 2025.The composition of the Committee and the details of meeting attended
by its members are given below:

The Company Secretary acted as the secretary of the Committee. The Corporate Social Responsibility Policy of the Company is
available on the website of the Company at https://www.airflow.co.in/pdf/Policies.

DECLARATION OF INDEPENDENT DIRECTORS:

The Company has received necessary declarations from all
Independent Directors of the Company in accordance with
the provisions of Section 149(7) of the Companies Act, 2013
confirming that they meet the criteria of independence as
prescribed under Section 149(6) of the Companies Act, 2013.

FAMILIARIZATION PROGRAM FOR
INDEPENDENT DIRECTORS:

The Independent Directors have been updated with their roles,
rights and responsibilities in the Company by specifying them
in their appointment letter along with necessary documents,
reports and internal policies to enable them to familiarize
with the Company''s procedures and practices. The Company
endeavors, through presentations at regular intervals to
familiarize the Independent Directors with the strategy,
operations and functioning of the Company.

The details of such familiarization programmes for
Independent Directors are posted on the website of the
Company and can be accessed at https://www.airfiow.co.in/
pdf/Policies-21.08.2025/4.%20Familiarisation-Programme-of-
IDs%20(1).pdf.

TERMS AND CONDITIONS OF APPOINTMENT OF
INDEPENDENT DIRECTORS:

The terms and conditions of appointment of Independent
Directors have been disclosed on the website of the Company
https://www.airflow.co.in/pdf/Policies.

SEPARATE MEETING OF INDEPENDENT
DIRECTORS:

Independent Directors of the Company met separately on
30th March, 2026 without the presence of Non-Independent
Directors and members of Management. In accordance with
the provisions under Section 149 and Schedule-IV of the Act,
following matters were, inter alia, reviewed and discussed in
the meeting:

i) Performance of Non-Independent Directors and the
Board of Directors as a whole;

ii) Performance of the Chairman of the Company taking into
consideration the views of Executive and Non-Executive
Directors;

iii) Assessment of the quality, quantity and timeliness of flow
of information between the Company Management and
the Board that is necessary for the Board to effectively
and reasonably perform their duties.

All the Independent Directors were present at the meeting.

CRITERIA FOR PAYMENT TO NON-EXECUTIVE
DIRECTORS

The Company has adopted a policy on remuneration of
Directors, Key Managerial Personnel and Senior Management
Personnel based on the recommendations of the Nomination
and Remuneration Committee, in terms of the provisions
of Section 178 of the Companies Act, 2013 and applicable
provisions of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015.

The Non-Executive Directors are paid remuneration by
way of sitting fees for attending meetings of the Board and
Committees thereof and reimbursement of expenses incurred
for participation in such meetings, within the limits approved
by the shareholders and permitted under applicable laws.

The payment of remuneration to Non-Executive Directors is
in accordance with the Nomination and Remuneration Policy
of the Company and within the limits prescribed under the
Companies Act, 2013 and SEBI regulations.

PERFORMANCE EVALUATION OF THE BOARD,

ITS COMMITTEES AND INDIVIDUAL DIRECTORS
INCLUDING INDEPENDENT DIRECTORS

The annual evaluation process of the Board, Individual
Directors and Committees was conducted in accordance with
the provision of the Act and the SEBI Listing Regulations. The
Board evaluated its performance after seeking inputs from
all the Directors on the basis of criteria such as the Board
composition and structure, effectiveness of Board processes,
information and functioning, etc.

The performance of the Committees was evaluated by the
Board after seeking inputs from the committee members on
the basis of criteria such as the composition of Committees,
effectiveness of Committee meetings, etc. The above criteria
are broadly based on the Guidance Note on Board Evaluation
issued by the SEBI.

The Board and the NRC reviewed the performance of individual
Directors on the basis of criteria such as the contribution of the
individual Director to the Board and Committee Meetings like
preparedness on the issues to be discussed, meaningful and
constructive contribution and inputs in meetings, etc.

In a separate meeting of independent directors, performance
of Non-Independent Directors and the Board as a whole was
evaluated. Additionally, they also evaluated the performance
of Chairman of the Board, taking into account the views
of Executive and Non-Executive Directors in the aforesaid
Meeting. The Board also assessed the quality, quantity and

timeliness of flow of information between the Company
Management and the Board that is necessary for the Board
to effectively and reasonably perform their duties. The above
evaluations were then discussed in the Board Meeting and
performance evaluation of Independent directors was done
by the entire Board, excluding the Independent Director being
evaluated.

VIGIL MECHANISM AND WHISTLE-BLOWER
POLICY

The Company has established a vigil mechanism and
accordingly framed a Whistle Blower Policy in accordance with
the provisions of Regulation 22 of SEBI (Listing Obligations and
Disclosure Requirements) Regulations, 2015 and Rule 7 of the
Companies (Meeting of the Board and its Power) Rules 2014. The
policy enables directors, employees and business associates
to report unethical behaviour, malpractices, wrongful
conduct, fraud, violation of Company''s code of conduct, leak
or suspected leak of unpublished price sensitive information
without fear of reprisal for appropriate action. Under the vigil
mechanism, all directors, employees, business associates have
direct access to the Chairman of the Audit committee. The
whistle blower policy can be accessed at https://www.airflow.
co.in/pdf/Policies-21.08.2025/11.%20Vigil%20Mechanism%20
Whistle%20Blower%20Policy.pdf.

CODE FOR PREVENTION OF INSIDER-TRADING:

Post listing of Equity Shares of the company, in accordance
with SEBI (Prohibition of Insider Trading) Regulations, 2015, the
Company has in place the following: -

1. Code of Conduct for Prevention of Insider Trading and
Code of Practices and Procedures for Fair Disclosure of
Unpublished Price Sensitive Information (UPSI).

2. Policy for determination of "legitimate purposes" forms
part of this Code.

3. Policy and procedures for inquiry in case of leak of UPSI/
suspected leak of UPSI

All compliances relating to Code of Conduct for Prevention
of Insider Trading which includes maintenance of structural
digital data base (SDD) are being managed through a
software installed by the Company in-house including
maintenance structural digital data base (SDD). This code
lays down guidelines advising the designated employees and
other connected persons, on procedures to be followed and
disclosures to be made by them while dealing with the shares
of the company, and while handling any unpublished price
sensitive information.

CODE OF CONDUCT

Commitment to ethical professional conduct is a must
for every employee including Board members and senior
management personnel of the company. The duties of
Directors including duties as an Independent Director as laid
down in the Act also forms part of the Code of Conduct. The
Code of Conduct is available on the website of the Company
https://www.airflow.co.in/pdf/Code%20of%20Conduct%20
for%20Independent%20Directors.pdf. All Board members and
senior management personnel affirm compliance with the
Code of Conduct annually.

POLICIES OF THE COMPANY

The Company is committed to a good corporate governance
and has consistently maintained its organizational culture as
a remarkable confluence of high standards of professionalism
and building shareholder equity with principles of fairness,
integrity and ethics. The Board of Directors of the Company
have from time to time framed and approved various Policies
as required by the Companies Act, 2013 read with the Rules
issued thereunder and the Listing Regulations. These Policies
and Codes are reviewed by the Board and are updated, if
required. The aforesaid policies can be accessed at https://
www.airflow.co.in/pdf/Policies.

REGISTRAR AND TRANSFER AGENT (RTA)

The Company appointed KFIN Technologies Limited as its RTA.
Details of the RTA are given below.

KFIN TECHNOLOGIES LIMITED

Address:

301, The Centrium, 3rd Floor, 57, Lal Bahadur Shastri Road,

Nav Pada, Kurla (West), Kurla, Mumbai, Mumbai,

Maharashtra, India, 400070

Toll-free No.: 1800 309 4001

Website: www.kflntech.com

Investor Grievance Email: [email protected]

Contact Person: Mr. M Murali Krishna

SEBI Registration Number: INR000000221

CIN: L72400MH2017PLC444072

DEMATERIALISATION OF SHARES

The Company has entered into tripartite agreements for
dematerialization of equity shares with the KFIN Technologies
Limited, National Securities Depository Limited and Central
Depository Services (India) Limited. As on 31st March, 2026,
the shares of the Company held in demat form represents
100% of the total issued and paid-up capital of the Company.

The ISIN for the Equity shares of the Company is INE0XBS01012.

POSTAL BALLOT

During the year under review, no resolution was passed
through postal ballot.

PENALTIES

During the year under review, there were no penalties, strictures
imposed on the company by stock exchange(s) or SEBI or any
statutory authority, on any matter related to capital markets,
except, the fine of ?5,000/- levied by the Stock Exchange for
the delay in disclosure of the related party transaction details
for the half year ended 30th September 2025 as required
under Regulation 23(9) of SEBI (LODR) Regulations, 2015
and the penalties imposed by the Registrar of Companies,
Chennai (RoC) on various suo motto adjudication applications
preferred by the company before the RoC the details of which
are provided in this Report.

SCORES

SEBI processes investor complaints in a centralized web-
based complaints redressal system i.e. SCORES. Through this
system a shareholder can lodge complaint against a company
for his grievance. The company uploads the action taken on
the complaint which can be viewed by the shareholder. The
company and shareholder can seek and provide clarifications
online through SEBI.

RECONCILIATION OF SHARE CAPITAL AUDIT

Pursuant to Regulation 76 of Securities and Exchange Board of
India (Depositories Participants) Regulations, 2018 a Company
Secretary in Practice carries out audit of Reconciliation of Share
Capital on quarterly basis to reconcile the total admitted equity
share capital with the National Securities Depository Limited
(NSDL) and the Central Depository Services (India) Limited
(CDSL) and the total issued and listed equity share capital. The
audit report confirms that the total issued/paid-up capital is
in agreement with the total number of shares in physical form

and the total number of dematerialized shares held with NSDL
and CDSL. The said report, duly signed by practicing company
secretary is submitted to stock exchanges where the securities
of the company are listed within 30 days of the end of each
quarter and this Report is also placed before the Board of
Directors of the company.

CREDIT RATING

In the absence of issue of any debt securities, the Company
has not obtained any credit rating with respect to any debt
securities. Further, CRISIL has assigned a long-term rating of
BBB-/ Stable and short-term rating of CRISIL A3 for the credit
facilities availed by the Company from Banks.

APPOINTMENT OF MONITORING AGENCY

Pursuant to Regulation 262 (2) of SEBI (lssue of Capital and
Disclosure Requirements) Regulations, 2018 ("SEBI ICDR
Regulations") and Monitoring Agency Agreement dated
August 06, 2025, Crisil Ratings Limited (CRISIL), has been
appointed as Monitoring Agency, as per Schedule XI of the SEBI
ICDR Regulations to monitor and submit its report towards
utilization of proceeds of IPO on quarterly basis. The quarterly
report submitted by CRISILis regularly placed before the Board
for its noting and approval.

UTILIZATION OF ISSUE PROCEEDS / DEVIATIONS

During the year under review, Pursuant to the Company''s Initial
Public Offer ("IPO" / "Issue"), the Company raised an aggregate
amount of ?9,109.80 Lakhs through a fresh issue of 65,07,000
equity shares. After deducting issue-related expenses, the net
proceeds received by the Company amounted to ?8,884.80
Lakhs ("IPO Proceeds"). The IPO Proceeds were proposed
to be utilized towards the objects of the Issue as detailed in
the Prospectus dated 16th September, 2025, in accordance
with the proposed schedule and manner of utilization stated
therein.

DETAILS OF APPLICATION MADE OR
ANY PROCEEDING PENDING UNDER THE
INSOLVENCY AND BANKRUPTCY CODE, 2016 (31
OF 2016) DURING THE YEAR ALONGWITH THEIR
STATUS AS AT THE END OF THE FINANCIAL YEAR
The Company has not made any application or no proceeding
is pending under the Insolvency and Bankruptcy Code, 2016
during the Financial Year.

DETAILS OF DIFFERENCE BETWEEN AMOUNT
OF THE VALUATION DONE AT THE TIME OF ONE
TIME SETTLEMENT AND THE VALUATION DONE
WHILE TAKING LOAN FROM THE BANKS OR
FINANCIAL INSTITUTIONS ALONG WITH THE
REASONS THEREOF

During the Financial Year under review, there has been no
incident of one-time settlement for loan taken from the banks
of financial institutions.

DISCLOSURE OF CERTAIN TYPES OF
AGREEMENTS BINDING LISTED ENTITIES

As per the information available with the Company, there are
no agreements entered into by the shareholders, Promoters,
Promoters Group entities, Related Parties, Directors, Key
Managerial Personnel, Employees of the Company, its
subsidiaries and associates companies which are binding the
Company in terms of clause 5A of Para A of Part A of Schedule
III of the Listing Regulations.

INVESTOR GRIEVANCE REDRESSAL

During the period since listing of shares of the company to the
date of this report, there were no complaints received from
the investors. The designated email id for Investor complaint is
[email protected].

COMPLIANCE OFFICER DETAILS AND ADDRESS
FOR CORRESPONDENCE

Mr. Haraprasad Rout,

Company Secretary & Compliance Officer
Registered office: No. 9, Chelliamman Koil Street,

Keelkttalai, Chennai-600117, Tamil Nadu, India.

Contact No. 91 9600615940;

E-mail: [email protected]

DESIGNATED PERSON RESPONSIBLE FOR
FURNISHING INFORMATION ON THE BENEFICIAL
INTERESTS IN SHARES OF THE COMPANY

Mr. Haraprasad Rout (Mem.No:A18749), who was appointed
as Company Secretary with effect from 14/11/2025, has also
been designated as the responsible person for furnishing
information on beneficial interests in the Company''s shares.

BUSINESS LOCATIONS

As on March 31,2026, the company has its place of business in
the following location;

ACKNOWLEDGEMENT

The Board of Directors would like to express their sincere
appreciation for the assistance and co-operation received from
the government and regulatory authorities, stock exchange,
financial institutions, banks, business associates, customers,
vendors, members, for their co-operation and support and
looks forward to their continued support in future. The
Board of Directors wish to place on record its deep sense of
appreciation for the committed services by all the employees
of the Company.

For and on behalf of the Board of Directors of
AIRFLOA RAIL TECHNOLOGY LIMITED

Sd/- Sd/-

Dakshinamoorthy Venkatesan Dakshna Moorthy Manikandan

Place: Chennai Managing Director Joint Managing Director

Date: 30.05.2026 DIN:00232210 DIN: 00232275