To the Members,

Hindustan Composites Limited

Your directors are pleased to present the 62nd (Sixty-Second) Annual Report together with the Standalone and Consolidated Audited Financial Statements of the Company for the financial year ended 31st March, 2026.

1. FINANCIAL HIGHLIGHTS

The Company's financial performance for the financial year ended 31st March, 2026 is summarized below:

(Rs in Lakh)

2. OPERATIONAL PERFORMANCE AND OUTLOOK

On a standalone basis, the Company achieved a higher total revenue of Rs 37,501.46 Lakh during the financial year under review compared to Rs 32,508.01 Lakh in the previous financial year registering a growth of 15.36%. The net manufacturing revenue was also higher by 10.84% from Rs 28,356.45 Lakh to Rs 31,431.65 Lakh.

The Investment Income during the financial year remained almost same at Rs 3,962.50 Lakh as compared to Rs 4,081.16 Lakh in the previous financial year. Considering volatile market conditions & falling interest rate regime and taking into the account the other Comprehensive income, overall performance was good and was achieved with judicious deployment of funds in various asset classes.

The gross profit of the Company was lower at Rs 5,586.59 Lakh as against Rs 6,786.61 Lakh in the previous financial year. After considering the interest of Rs 27.95 Lakh, depreciation of Rs 1,198.27 Lakh and increase in provision for employee benefits of the Company arising out of past service cost amounting to Rs 291 lakhs, Profit before tax was at Rs 4,069.06 Lakh (previous year Rs 4,470.50 Lakh). With a tax provision of Rs 958.23 Lakh (previous year Rs 970.77 Lakh) Profit after tax stood at Rs 3,110.83 Lakh as against Rs 3,499.73 Lakh in the previous financial year. Other comprehensive income, net of tax during the financial year was Rs 3,264.56 Lakh (previous financial year Rs 6,582.11 Lakh) and the total comprehensive income was Rs 6,375.39 Lakh (previous financial year Rs 10,081.84 Lakh).

During the financial year under review, the Company continued its growth trajectory and posted excellent results with highest ever revenue and improved profitability in its Composite products segment. It aligned with the overall success of auto/rail industry. The growth was mainly led by strong traction in rail friction business.

The Indian automobile industry recorded one of its strongest performances in FY 2025-26, achieving the highest ever sales across all vehicle categories. Similarly Indian railway continued to be the largest rail networks in the world and remains a key driver of India's infrastructure development.

Amid the dynamic landscape of the automotive and rail sector, our Company continued its growth trajectory and posted excellent results. Our Company is deeply aware of customer expectations and has taken proactive measures to align itself toward the development of high-performance products. The Company continues to emphasize on improvement in operational efficiencies, higher productivity, and prudent cost control measures.

The Company has taken several steps towards sustainability including installation of 1.80 MWp on-sight Solar plant at Paithan unit and 0.40 MWp Solar plant at Bhandara, putting up recycling plant to use waste materials, putting up plantation around the plant and several other initiatives.

During the financial year under review, the Company has been awarded the prestigious IRIS Certification for its rail product division from DNV, a globally recognized standards of excellence in the railway industry.

The investment segment faced some challenges related to fluctuations in interest rates, volatile stock market, currency depreciation and global uncertainties. However, performance of investment operations remains stable with a conservative approach towards deployment of funds, keeping capital protection in focus.

The working of Company's Joint venture viz. Compo Advics (India) Private Limited, has slightly improved with several step taken towards change in product mix and cost reduction program.

The Company has started a new business line of ‘trading in metals and commodities' w.e.f. 1st April, 2025, to have new revenue stream, which will increase its overall profitability.

Looking ahead, the Company remains agile, tracking geopolitical development and their evolving macro environment. In parallel, the Company is actively assessing the risk landscape and has put in place appropriate mitigation measures to strengthen resilience.

3. SLUMP SALE OF FRICTION BUSINESS UNDERTAKING

The Board of your Company, at its meeting held on 30th June 2026, approved the slump sale of Friction Business Undertaking of your Company to Rane (Madras) Limited, (herein after referred to as the "RML"), as a going concern, for a lump sum cash consideration of Rs 370.00 Crores (Rupees Three Hundred Seventy Crores only), subject to members' approval, which is sought by passing of special resolution through Postal Ballot process.

The transfer of Company's friction business comprising of development, manufacturing and marketing of friction material related to automobile, railway and industrial applications ("Friction Business") to RML is a strategic move and aligns with the Company's stated priorities of enhancing shareholders' value. The divestiture unlocks embedded value that was not fully reflected in the Company's market capitalization, with the consideration reflecting the strategic premium a scaled industry leader such as RML is positioned to realize. RML's Friction Business offers a natural fit for the transfer of Company's Friction Business. The transaction is expected to streamline Company's portfolio by reducing complexity and simplifying operations, enabling management attention and resources to be directed to the segments that are core to our long term strategy.

4. THE CHANGE IN THE NATURE OF BUSINESS

There was no change in the nature of business of the Company during the financial year 2025-26, except commencement of trading in metals and commodities.

5. MATERIAL CHANGES AND COMMITMENTS AFFECTING FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF THE REPORT

The Board of your Company, at its meeting held on 30th June 2026, approved the slump sale of Friction Business Undertaking of your Company to Rane (Madras) Limited, as a going concern, for a lumpsum cash consideration of Rs 370.00 Crores (Rupees Three Hundred Seventy Crores only), subject to members' approval, which is being sought through Postal Ballot process.

Except above, there were no material changes and commitments affecting the financial position of the Company between the end of the financial year to which the financial statements relate and the date of this annual report.

6. SHARE CAPITAL OF THE COMPANY

During the financial year under review, there was no change in the share capital of the Company. The Paid-Up Equity Share Capital of your Company as on 31st March, 2026 was Rs 7,38,45,000/- (Rupees Seven Crore Thirty-Eight Lakh Forty-Five Thousand only) divided into 1,47,69,000 (One Crore Forty-Seven Lakh Sixty-Nine Thousand only) Equity Shares of Rs 5/- (Rupees Five only) each fully paid up.

During the financial year under review, the Company has not issued shares with differential voting rights nor granted stock options nor sweat equity.

7. DIVIDEND & DIVIDEND POLICY

Your directors have recommended a dividend of Rs 2/- per share (previous financial year Rs 2/- per share) of Rs 5/- each, being 40% (previous financial year 40%) on equity share capital for the financial year ended 31st March, 2026. This will absorb a total cash outflow of Rs 295.38 Lakh. The dividend, if approved, will be paid to those eligible members whose names shall appear in the Register of Members / List of Beneficial Owners as on 22nd September, 2026.

Pursuant to the provisions of Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the Company has formulated the Dividend Distribution Policy. The policy can be accessed on the Company's website at: https://www.hindcompo.com/UploadDocument/DownloadAzure?name=investor-relations/dividend-distribution-policy-16E3B268-56B6-4904-81BB-871D8347C45D.pdf&str=91135.

8. RESERVES

During the financial year under review, a sum of Rs. 5,000 Lakhs (previous year Rs 10,000 Lakhs) was transferred to the General Reserve.

9. SUBSIDIARIES, JOINT VENTURES AND ASSOCIATE COMPANIES

Your Company has a Joint Venture Company namely "Compo Advics (India) Private Limited". The Company had no subsidiary or associate company during the financial year under review.

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013 ("the Act"), a statement containing salient features of financial statements of the Joint Venture Company in Form AOC-1 is attached to the financial statements of the Company forming part of this Annual Report.

No subsidiary, joint venture or associate Company was formed, acquired or ceased during the financial year under review.

10. CONSOLIDATED AUDITED FINANCIAL STATEMENTS

Pursuant to the provisions of Sections 129 and 133 of the Act read with the Companies (Accounts) Rules, 2014 and as required under Regulation 34 of the Listing Regulations, the Company has prepared Consolidated Audited Financial Statements consolidating financial statements of its Joint Venture Company namely "Compo Advics (India) Private Limited" with its financial statements in accordance with the applicable provisions of Indian Accounting Standards ("Ind-AS"), and the Consolidated Audited Financial Statements along with the Independent Auditors' Report thereon are annexed and form part of this Annual Report.

The summarized consolidated financial position is provided in point no. 1 above.

11. RISK MANAGEMENT AND AREAS OF CONCERN

The Company has laid down a well-defined Risk Management Policy covering risk mapping, trend analysis, risk exposure, potential impact and risk mitigation process. A detailed exercise is being carried out from time to time to identify, evaluate, manage and monitoring of both business and non-business risks. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework.

Pursuant to the provisions of Regulation 21 of the Listing Regulations, the Company has constituted Risk Management Committee. As on 31st March, 2026, Risk Management Committee comprised of Mr. Lalit Kumar Bararia and Mrs. Preeti Vimal Agrawal, Independent Directors as its members and Mr. P. K. Choudhary, Managing Director as its Chairman. The Company Secretary and Compliance Officer of the Company acts as Secretary of the Committee.

The Committee assists the Board in fulfilling its oversight responsibilities with regard to enterprise risk management. The Committee reviews the risk management practices and actions deployed by the management with respect to identification, impact assessment, monitoring, mitigation and reporting of key risks while at the same time trying to achieve its business objectives.

This Committee's responsibilities include achieving the objective of developing a risk mitigated culture that supports decision making and helps improving the Company's performance as stated in the Risk Management Policy of the Company. The role and terms of reference of the Risk Management Committee are in conformity with the requirements of the Act and Regulation 21 of the Listing Regulations.

12. ANNUAL RETURN

Annual Return of the Company as on 31st March, 2026 in accordance with the provision of Section 92(3) read with the Section 134(3)(a) of the Act will be placed on the website of the Company and can be accessed at the link working.: https://www.hindcompo.com/investor-relations/annual-reports

13. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

a) Composition

As on 31st March, 2026, the Board comprised of 6 (six) Directors including one Independent Woman Director. The Board has an appropriate mix of Executive Director, Non-Executive Directors and Independent Directors, which is in compliance with the requirements of the Act and the Listing Regulations, and is also aligned with the best practices of Corporate Governance.

b) Retirement by rotation

In accordance with the provisions of Section 152(6) of the Act read with the Companies (Management and Administration) Rules, 2014 and the Articles of Association of the Company, Mr. P. K. Choudhary (DIN: 00535670), Director of the Company, retires by rotation at the ensuing Annual General Meeting and being eligible, has offered himself for re-appointment. The Board of Directors, on the recommendation of Nomination and Remuneration Committee, recommends his re-appointment as such to the members of the Company.

c) Appointment and Re-appointment

Details of the appointments and re-appointments of Directors made during the financial year under review are as follows:

Upon the recommendation of Nomination and Remuneration Committee and the Board of Directors of the Company, at the 61st Annual General Meeting ("AGM") held on 25th September, 2025, members of the Company re-appointed Mr. Vinay Sarin (DIN: 00090757) as Director of the Company, who retired by rotation at 61st AGM in terms of provisions of Section 152(6) of the Act. Apart from this, no other Director was appointed/re-appointed during the financial year 2025-26.

Changes in Key Managerial Personnel of the Company:

There were no changes in the Key Managerial Personnel of the Company, during the year under review.

d) Cessation

Mr. Deepak Sethi (DIN: 07165462) ceased to be Independent Director of the Company w.e.f. close of business hours of 22nd April, 2025 upon completion of his two consecutive terms as Independent Director of the Company. The Board of Directors of the Company places on record its appreciation for the invaluable contribution and guidance provided by him during his stint with the Company. Apart from above, no other Director or KMP retired or resigned during the financial year 2025-26.

e) Declaration from Independent Directors

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Act read with Regulation 16(1)(b) and Regulation 25 of the Listing Regulations and declaring that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence. The Independent Directors have also confirmed that they have complied with the provisions of Schedule IV of the Act and the Company's Code of Conduct.

Further, the Independent Directors have also submitted their declarations in compliance with the provisions of Rule 6(3) of the Companies (Appointment and Qualification of Directors) Rules, 2014, which mandates the inclusion of their names in the data bank of Indian Institute of Corporate Affairs ("IICA") till they continue to hold the office of an independent director.

None of the directors of your Company are disqualified under the provisions of Section 164(2) of the Act. Your directors have made necessary disclosures as required under various provisions of the Act and the Listing Regulations.

In the opinion of the Board, all the independent directors of the Company are persons of integrity and possess relevant expertise and experience and are independent of the management.

f) Annual Performance and Board Evaluation

The Board has devised a policy pursuant to the provisions of the Act and the Listing Regulations for performance evaluation of the chairman, board, individual directors (including independent directors) and committees which includes criteria for performance evaluation of non-executive directors and executive directors.

The Nomination and Remuneration Committee of the Company has specified the manner of effective evaluation of the performance of the Board, its committees and individual directors of the Company and has authorized the Board to carry out the evaluation. Based on the manner specified by the Committee, the Board has devised a questionnaire to evaluate its performance and that of its committees and individual directors. Such questions are prepared considering the business of the Company and the expectations that the Board has from each of the directors. The performance of each committee was evaluated by the Board. The reports on performance evaluation of the individual directors were reviewed by the Board.

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

i. Attendance at Board and Committee meetings;

ii. Quality of contribution to Board deliberations;

iii. Strategic perspective or inputs regarding future growth of the Company and its performance; and

iv. Providing perspective and feedback going beyond information provided by the management.

The details of the programmes for familiarization of Independent Directors with the Company, their roles, rights, responsibilities in the Company, nature of the industry in which the Company operates, business model of the Company and related matters are put up on the website of the Company at the link: https://www.hindcompo.com/UploadDocument/DownloadAzure?name=investor-relations/familiarisation-programme-for-independent-directors-BD1C29A0-6A8A-4D86-AAF2-3992BB60A1D5.pdf&str=131329

g) Key Managerial Personnel (KMP)

The details of Key Managerial Personnel of the Company are as follows:

14. PARTICULARS OF EMPLOYEES AND MANAGERIAL PERSONNEL

A. DETAILS PURSUANT TO THE PROVISIONS OF SECTION 197 OF THE ACT READ WITH RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014

Disclosure pertaining to remuneration and other details as required under Section 197 of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are provided in "Annexure –A", which forms part of this Report.

The statement containing particulars of employees as required under Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is provided in a separate annexure forming part of this Report. However, in terms of Section 136 of the Act, the reports and financial statements are being sent to the members excluding the aforesaid annexure. The said annexure is available for inspection at the registered office of the Company during the working hours and any member interested in obtaining copy of the same may write to the Company Secretary and Compliance Officer of the Company and the same will be furnished on request.

B. MATERNITY BENEFIT ACT, 1961.

During the financial year under review, the Company has complied with and adhered to provisions relating to the Maternity Benefit Act, 1961, as part of inclusive HR practices. The Company remains dedicated to supporting the health, dignity and work-life balance of all women employees and reaffirms its commitment to upholding the rights and welfare of women employees by ensuring strict compliance with the provisions of the said Act.

The Company believes in and practices no discrimination or no termination of employment on the grounds of maternity, promoting gender equity and facilitating a safe and supportive working environment, facilitating safe and hygienic working conditions in all office locations including plants, thus supporting the holistic well-being of all employees including women employees.

C. INFORMATION UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has complied with the provisions relating to the constitution of the Internal Committee(s) as required under Section 4 of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. During the financial year under review, no complaint was filed before the said Committee(s) and details as required under Section 134(3) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, are as follows:

(a) number of complaints of sexual harassment received in the year : Nil

(b) number of complaints disposed of during the year : Nil

(c) number of cases pending for more than ninety days : Nil

D. NUMBER OF EMPLOYEES AS ON THE CLOSURE OF FINANCIAL YEAR ENDED 31ST MARCH, 2026:

Female : 9

Male : 519

Transgender : Nil

15. REMUNERATION POLICY

Pursuant to the provisions of Section 178 of the Act and Regulation 19 of the Listing Regulations and on the recommendation of the Nomination and Remuneration Committee, the Board of Directors of the Company has adopted a policy for selection and appointment of Directors, Key Managerial Personnel (KMP), Senior Management Personnel (SMP), other employees and their remuneration including criteria for determining qualifications, positive attributes, independence of a director and other related matters.

The Remuneration Policy is placed on the website of the Company viz. www.hindcompo.com.

16. MEETINGS OF THE BOARD

The Board met 5 (five) times during the financial year under review, the details of which are given in the Corporate Governance Report, forming part of this Annual Report and are also given herein below:

The intervening gap between the two consecutive meetings was within the period prescribed under the Act and Listing Regulations.

17. COMMITTEES OF THE BOARD

In accordance with the applicable provisions of the Act and the Listing Regulations, the Company has constituted 5 (five) committees of the Board, namely: 1. Audit Committee 2. Stakeholders' Relationship Committee 3. Nomination and Remuneration Committee 4. Risk Management Committee, and 5. Corporate Social Responsibility (CSR) Committee.

Details of the Committees constituted by the Board under the Act and Listing Regulations, along with their composition and changes thereof, if any, terms of reference and meetings during the financial year under review are provided in the Corporate Governance Report, which forms part of this Annual Report. The number and dates of meetings of various Committees held during the financial year under review and attendance thereto are also provided herein below:

18. AUDIT COMMITTEE AND ITS COMPOSITION

The Audit Committee is duly constituted as per the provisions of Section 177 of the Act and Regulation 18 of Listing Regulations. As on 31st March, 2026, the Audit Committee comprised of Mr. Lalit Kumar Bararia, Mrs. Preeti Agrawal, Mr. Rajan Dalal and Mr. P. K. Choudhary. Mr. Lalit Kumar Bararia is Chairman of the Audit Committee. The Company Secretary and Compliance Officer of the Company acts as Secretary of the Audit Committee. All the recommendations made by the Audit Committee were accepted by the Board of Directors of the Company. Other details with respect to Audit Committee are given in Corporate Governance Report, which forms part of this Annual Report.

Mr. Deepak Sethi, Independent Director, ceased to be Director of the Company w.e.f. close of business hours of 22nd April, 2025 upon completion of his two consecutive terms as Independent Director. Accordingly, he ceased to be member of the Audit Committee with effect from that date.

The Audit Committee reviews the reports to be submitted to the Board of Directors with respect to auditing and accounting matters, etc. It also supervises the Company's internal control, financial reporting process and vigil mechanism.

19. DIRECTORS' RESPONSIBILITY STATEMENT

Your Directors, to the best of their knowledge and belief and according to the information and explanations obtained by them and as required under Section 134(3) (c) read with Section 134(5) of the Act, state that:

(a) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(b) the directors have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

(c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this 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 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 were operating effectively; and

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

20. PUBLIC DEPOSITS

During the financial year under review, the Company has not accepted or renewed any public deposit within the meaning of Sections 73 to 76 of the Act read with the Companies (Acceptance of Deposits) Rules, 2014. As on 31st March 2026, there were no deposits which remained unclaimed / unpaid and due for repayment nor payment of interest thereon.

21. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188(1) OF THE ACT

All contracts / arrangements / transactions entered by the Company during the financial year under review with related parties were in ordinary course of business and on arm's length basis, details of which are given under notes to accounts on financial statements forming part of this Annual Report and are entered into based on considerations of various business exigencies, such as synergy in operations, their specializations etc. and to further the Company's interests.

During the financial year under review, the Company had no material transactions with related parties falling under the scope of Section 188(1) of the Act. Hence, the Company is not required to furnish disclosure of material related party transactions as required under Section 134(3)(h) of the Act in Form AOC-2 for the financial year under review.

In accordance with the provisions of Regulation 23 of the Listing Regulations, the Company has adopted the policy on related party transactions and the same is available on the Company's website at https://www.hindcompo.com/UploadDocument/DownloadAzure?name=investor-relations/related-party-transaction-policy-A9552EA6-FEDC-4D85-8897-B52AE8AE23E8.pdf&str=14753

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

The details of loans, guarantees or investments made by the Company as required under Section 186 of the Act are given under notes to accounts on financial statements forming part of this Annual Report.

23. CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

Pursuant to the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility) Rules, 2014, the Company has formed Corporate Social Responsibility Committee and the Corporate Social Responsibility (‘CSR') Policy. The CSR Policy has been placed on the website of the Company viz. www.hindcompo.com.

As part of CSR initiatives, the Company towards it's CSR obligations for the financial year under review, contributed a sum of Rs 47,75,412/- (Rupees Forty Seven Lakh Seventy Five Thousand Four Hundred and twelve only) to the Project Kaamyaab by Vipla Foundation (registered as Save The Children India) to support the Vipala Foundation, an intervention for Women Empowerment and to strengthen women's skills for employability and at the same time providing access to quality and safe after care services. Further, the Company contributed a sum of Rs 75,00,000/- (Rupees Seventy Five Lakh only) to Nirmal Society for Education (formerly known as Nirmal Society for Education Promotion) a registered charitable society with the main objective of promotion and development of Education in India, to partner the Society in achieving its objectives. Apart from above, the Company also contributed a sum of Rs 5,00,000/- (Rupees Five Lakh only) to Prime Minister's National Relief Fund (PMNRF) to support and assist the Central Government to render immediate relief to families of those killed in natural calamities like floods, cyclones and earthquakes, etc.

As required under the provisions of Rule 8 of the Companies (Corporate Social Responsibility) Rules, 2014, a brief outline/salient features of the Company's CSR Policy and the Annual Report on CSR activities undertaken by the Company during the financial year under review are given in "Annexure - B", which forms part of this Report.

24. WHISTLE BLOWER / VIGIL MECHANISM POLICY

The Company has a Vigil Mechanism / Whistle Blower Policy to deal with instances of fraud and mismanagement, if any. The mechanism also provides for adequate safeguards against victimization of directors and employees who avail of the mechanism and also provide for direct access to the Chairman of the Audit Committee in appropriate and exceptional cases. The details of the Vigil Mechanism Policy are explained in the Corporate Governance Report and the policy has been placed on the website of the Company viz. www.hindcompo.com.

We affirm that during the financial year under review, no employee or director was denied access to the Chairman of the Audit Committee.

25. STATUTORY AUDITORS

As per provisions of Section 139 of the Act read with the Companies (Audit and Auditors) Rules, 2014, the members of the Company in their 58th Annual General Meeting held on 29th September, 2022 appointed M/s. Lodha & Co. LLP (formerly Lodha & Company), Chartered Accountants, Mumbai (Firm Registration No. 301051E / E300284), as Statutory Auditors of the Company for a term of consecutive 5 (five) years i.e. to hold office from the conclusion of 58th Annual General Meeting till the conclusion of 63rd Annual General Meeting of the Company to be held for the financial year ending 31st March, 2027.

M/s. Lodha & Co. LLP has furnished written confirmation to the effect that they are not disqualified from acting as the Statutory Auditors of the Company in terms of the provisions of Sections 139 and 141 of the Act and the Companies (Audit and Auditors) Rules 2014.

26. SECRETARIAL AUDITORS

Pursuant to the provisions of Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, Members of the Company appointed M/s. MR & Associates, Company Secretaries, Kolkata as Secretarial Auditors of the Company, to hold office as such for a term of 5 (five) consecutive years with effect from financial year 2025-26 till financial year 2029-30, at the 61st AGM held on 25th September, 2025. The Secretarial Auditors have issued Secretarial Compliance Report and Secretarial Audit Report for the financial year ended 31st March, 2026.

The Secretarial Audit Report is annexed as "Annexure – C" and forms part of this Report.

M/s. MR & Associates, Company Secretaries, Kolkata, have resigned as Secretarial Auditors of the Company with effect from 10th July 2026, due to the considerable distance between their office at Kolkata and the Company's Registered Office at Mumbai, accordingly the Company is required to appoint new Secretarial Auditors.

Pursuant to the provisions of Regulation 24A of the Listing Regulations read with Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and the Board, at its meeting held on 23rd July, 2026, based on the recommendation of the Audit Committee, has recommended the appointment of M/s. R M Mimani & Associates LLP (Firm Registration No. - L2015MH008300), Company Secretaries in Practice as Secretarial Auditors of the Company for a term of 5 (five) consecutive years with effect from financial year 2026-27 till financial year 2030-31, on payment of such fees, basis the recommendation of the Audit Committee, as may be mutually agreed by the Board and the Secretarial Auditors from time to time, to the members of the Company at the ensuing AGM. Your directors seek members' approval for appointment of M/s. R M Mimani & Associates LLP as Secretarial Auditors of the Company.

M/s. R M Mimani & Associates LLP have confirmed they are not disqualified from being appointed as Secretarial Auditors of the Company and satisfy the prescribed eligibility criteria.

27. INTERNAL AUDITORS

Pursuant to the provisions of Section 138 of the Act read with the Companies (Accounts) Rules, 2014, the Board, on recommendation of the Audit Committee, re-appointed M/s. S M M P & Associates, Chartered Accountants, Mumbai, as Company's Internal Auditors for the financial year 2026-27.

The Internal Auditors monitor and evaluate the efficacy and adequacy of internal control systems in the Company, its compliances with operating systems, accounting procedures and policies at all locations of the Company and reports are presented to the Audit Committee periodically.

28. COST RECORDS AND COST AUDITORS

As required under Section 148(1) of the Act, the Company has prepared and maintained cost accounts and cost records in the prescribed manner for its products viz. Railway Brake Block manufactured at Chhatrapati Sambhajinagar unit.

In terms of the provisions of Section 148(2) and (3) of the Act, read with the Companies (Cost Records and Audit) Rules, 2014 and the Companies (Audit and Auditors) Rules, 2014, the Board of Directors of your Company in its meeting held on 23rd April, 2026, on the recommendation of the Audit Committee appointed M/s. Suresh Pimple & Associates, Cost Accountants, Chhatrapati Sambhajinagar (Firm Registration No. 100780) as Cost Auditors of the Company to conduct audit of cost records as prescribed under the Companies (Cost Records and Audit) Rules, 2014 for the financial year 2026-27. A resolution seeking ratification of remuneration payable to the Cost Auditors by the members of the Company for the financial year 2026-27 is included in the Notice of the ensuing 62nd AGM of the Company.

29. COMMENTS ON QUALIFICATION BY STATUTORY AUDITORS, SECRETARIAL AUDITORS AND COST AUDITORS

There are no qualifications, observations, adverse remarks or disclaimers by the Statutory Auditors, Secretarial Auditors and Cost Auditors in their respective reports.

Further, none of the Auditors of the Company have reported any fraud as specified under Section 143(12) of the Act, and therefore disclosure of details under Section 134(3)(ca) of the Act is not applicable.

30. MANAGEMENT DISCUSSION AND ANALYSIS AND CORPORATE GOVERNANCE REPORT

Pursuant to the provisions of Regulations 34(2) & (3) and Schedule V of the Listing Regulations, the following have been made part of the Annual Report and are attached to this Annual Report:

- Management Discussion and Analysis Report,

- Corporate Governance Report,

- Declaration on compliance with Code of Conduct,

- Certificate from Practicing Company Secretary that none of the directors on the Board of the Company has been debarred or disqualified from being appointed or continuing as director of company, and

- Auditors' Certificate regarding compliance of conditions of Corporate Governance.

31. 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

There was no significant or material order passed by any regulator or court or tribunal, which may impact the going concern status of the Company or will have a bearing on Company's operations in future.

32. INTERNAL FINANCIAL CONTROL WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has in place proper and adequate internal control systems commensurate with the nature of its business, size and complexity of its business operations. Internal control systems comprising of policies and procedures are designed to ensure reliability of financial reporting, compliance with policies, procedures, applicable laws and regulations and that all assets and resources are acquired economically, used efficiently and adequately protected.

33. TRANSFER OF UNCLAIMED SHARES TO UNCLAIMED SUSPENSE ACCOUNT OF THE COMPANY AND (DEMAT) SUSPENSE ESCROW ACCOUNT

During the financial year under review, the Company was not required to transfer any shares to the unclaimed suspense account as specified in Schedule VI of the Listing Regulations. The details of the shares transferred from the unclaimed suspense account to the respective shareholders and details of shares transferred to / released from (Demat) Suspense Escrow Account during the financial year under review are provided in the Corporate Governance Report, which forms part of this Annual Report.

34. INVESTOR EDUCATION AND PROTECTION FUND ("IEPF")

Pursuant to the provisions of Section 124(5) of the Act read with the IEPF Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the Rules"), all unpaid or unclaimed dividends are required to be transferred by the Company to the IEPF Authority established by the Government of India after the completion of seven years. Further, according to provisions of Section 124(6) of the Act read with the said Rules, the shares on which dividend remains unpaid or unclaimed by the shareholders for 7 (seven) consecutive years or more shall also be transferred to the demat account of the IEPF Authority. Accordingly, during the financial year under review, the Company transferred 20,314 equity shares to the demat account of the IEPF Authority on which the dividend remained unclaimed / unpaid for the financial years upto 2017-18.

In terms of the provisions of Sections 124(5) and 125 of the Act and said Rules, during the financial year under review, an amount of Rs 2,09,494.50, being remaining unpaid / unclaimed dividend for the financial year 2017-18, was transferred to the IEPF Authority.

Further, the unpaid and unclaimed dividend amount lying with the Company for financial year 2018 - 19 is due for transfer to the IEPF in the month of October, 2026. The details of the same are available on the Company's website viz. www.hindcompo.com.

Mr. P. K. Choudhary, Managing Director has been appointed as Nodal Officer and Mr. Arvind Purohit, Company Secretary and Compliance Officer as Deputy Nodal Officer to ensure compliance with the IEPF Rules.

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

Pursuant to the provisions of Section 134(3)(m) of the Act read with Rule 8 of the Companies (Accounts) Rules, 2014, details regarding Conservation of Energy, Technology Absorption, Foreign Exchange earnings and outgo are given in "Annexure - D", which forms part of this Report.

36. CREDIT RATINGS:

On 25th September, 2025, the Acuite Ratings & Research Limited re-affirmed the following credit ratings for the Company's long term and short-term instruments:

37. COMPLIANCE WITH SECRETARIAL STANDARD

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and your directors confirm compliance of the same during the financial year under review.

38. DETAILS OF PROCEEDINGS UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016

During the financial year under review, no application was made or proceedings initiated against the Company under the Insolvency and Bankruptcy Code, 2016 nor any such proceeding was pending at the end of the financial year under review.

39. VALUATION OF ASSETS

During the financial year under review, there was no instance of one-time settlement of loans / financial assistance taken from Banks or Financial Institutions, hence, the Company was not required to carry out valuation of its assets for the said purpose.

40. APPRECIATION

Your directors would like to place on record their sincere appreciation for the continued co-operation, guidance, support and assistance extended during the financial year under review by our bankers, customers, suppliers, shareholders, distributors, retailers, other business partners, Government and Regulatory Authorities and stock exchanges. The Board also wishes to express its appreciation for the valuable contribution made by the employees at all levels during the financial year under review.