DIRECTORS' REPORT

Your directors are pleased to present the 64^th Annual Report of Balkrishna Industries Limited (the "Company”) along with the audited Financial Statements for the financial year ended 31^st March, 2026. The consolidated performance of the Company and its subsidiaries for the year ended 31^st March, 2026 has been referred to wherever required.

2. OPERATIONS AND STATE OF AFFAIRS

Standalone: During the year under consideration on Standalone basis, your Company achieved Revenue from Operations of H 10,819.95 Crores as against H 10,412.88 Crores during the previous financial year. EBITDA decreased to H 2,511.49 Crores from H 2,955.03 Crores during previous financial year and Net profit has decreased to H 1,221.85 Crores from H 1,628.37 Crores during previous financial year. The revenue from exports is over 65%.

Consolidated: During the year under consideration on Consolidated basis, your Company achieved Revenue from operations H 10,823.08 Crores as against H 10,446.95 Crores during the previous financial year. EBITDA has decreased to H 2,552.26 Crores from H 2,996.39 Crores during previous financial year and Net profit has decreased to H 1,243.10 Crores from H 1,654.96 Crores during previous financial year.

3. EXPORT HOUSE AND AUTHORISED ECONOMIC OPERATOR STATUS

In accordance with the provisions of the Foreign Trade Policy, your company has continued to hold the prestigious 'Five Star Export House' status since September 2021. Additionally, the company is recognised as an Authorised Economic Operator (AEO) Tier III, which facilitates faster cargo processing and clearance, deferred duty payments, direct port delivery and entry, along with various other operational benefits.

4. DIVIDEND

Your Company has maintained a strong track record of consistent dividend payments over the past three decades. In continuation of this trend, the Board of Directors is pleased to recommend a final dividend of H 4 (200%) per equity share for the FY 2025-26. This is in addition to three interim dividends of H 4 (200%) per equity share each, aggregating to H 12 (600%) per equity share. Accordingly, the total dividend for the year amounts to H 16 (800%) per equity share.

The final dividend is subject to the approval of the Shareholders at the forthcoming Annual General Meeting scheduled to be held on 29^th July 2026. Upon approval, the dividend will be disbursed within the stipulated timeframe, after deduction of applicable taxes at source. The Record Date for determining the eligibility of shareholders for payment of the final dividend has been fixed as 17^th July 2026.

Pursuant to Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations, 2015”), the Dividend Distribution Policy can be accessed at the Company's website at: https://www. bkt-tires.com/ww/us/investors-desk.

5. SHARE CAPITAL

The paid-up Share Capital of the Company as on 31^st March, 2026 remains unchanged at H 38.66 Crores. The Company has neither issued shares with differential voting rights, nor granted stock options,

nor sweat equity and none of the Directors of the Company hold any shares with differential voting rights or convertible instruments.

6. RESERVES

The Company proposes to transfer H 500 Crores to General Reserves.

7. MATERIAL CHANGES AND COMMITMENTS

I n terms of Section 134(3)(l) of the Companies Act, 2013, there are no material changes and commitments affecting the financial position of your Company which have occurred between the close of the financial year of the Company on 31^st March, 2026 to which the Financial Statements relate and up to the date of this report.

8. SIGNIFICANT CHANGES IN KEY FINANCIAL RATIOS AND RETURN ON NET WORTH

As per Schedule V read with Regulation 34(3) of Listing Regulations, details of significate changes (i.e change of 25% or more as compared to the immediate previous financial year) in Key Financial Ratios and any changes in Return on Net Worth of the Company including explanations thereof are provided in Note No. 52 of Standalone and Note No. 54 of Consolidated financial statement respectively forming part of the Annual report.

9. OUTLOOK

We maintain a positive-yet-cautious outlook as the global economy stays largely stable. We are fully prepared to face emerging market headwinds, including shifting trade regulations and raw material price volatility. Global demand for our tyres remains resilient, anchored by macro drivers such as farm mechanisation for food security, public infrastructure expansion, and mining for the global energy transition. To capture this momentum, we are deepening our ties with global OEMs, aligning our engineering with the high-performance durability standards required to secure long-term contracts.

As our industrial customers increasingly evaluate purchases based on the total cost of ownership (TCO), we will continue to invest in application-specific designs and lifecycle efficiency to differentiate our brand. To insulate our margins from natural rubber supply shocks, we will leverage our deep vertical integration, headlined by our in-house carbon black production, to maintain manufacturing continuity and cost-competitiveness. This supply chain autonomy is a core pillar of our longterm growth guidance, which includes our planned 40% capacity expansion for BKT Carbon over the next five years to capture Asia's premium rubber and specialty carbon markets.

10. ECONOMIC OVERVIEW

Global economy: Fragile growth amid geopolitical volatility

The global economy showed signs of stability in 2025 even in the face of volatile geopolitical conditions, escalating trade disputes, and rapid technological changes, with a projected expansion of 3.4%.

The headwinds, however, have led to a surge in commodity prices, set the cost of energy soaring and disrupted supply chains, pushing the IMF to lower its GDP growth estimate to 3.1% for 2026. Inflation is also projected to scale 4.4% in 2026, taking a major toll on emerging markets. The situation may worsen if the West Asia conflict continues for longer and tariff disputes are not resolved. There could be wider fiscal deficits and deeper dents in the market.

Sector wise, agriculture continues to be scorched by simmering input costs, climate variations and uneven profitability. Mining, however, remains structurally strong, supported by rising global investments in critical minerals and energy transition supply chains. Industrial and manufacturing see gradual recovery amid supply-chain realignment and technology-led capital investments, while infrastructure and construction continue to benefit from sustained public capex, transport modernisation and urban development programmes across key economies.

Digital transformation and technological advancement continue to create long-term opportunities for productivity enhancement, operational efficiency and investment growth across industries. The pace of technology adoption, though is creating nearterm adjustment challenges for businesses, stoking implementation costs, calling for skill upgrades and organisational transformation, while labour markets face increasing pressure from workforce displacement and rapid reskilling needs.

As protectionist trade practices, fiscal pressures, regulatory issues and commodity price rise create broader economic and operating uncertainties across global markets, there is an increasing need for adaptability, stronger cooperation, and large-scale structural reforms to ensure resilience.

The US economy showed remarkable resilience, with output projected to expand 2.3% in 2026, supported by technology investments, adoption of artificial intelligence (AI), and steady consumer spending. But higher tariffs, policy uncertainties, and sticky domestic inflation threaten to derail this growth, forcing the Federal Reserve to maintain a cautious monetary stance. A strong equity market and steady domestic consumption are likely to insulate the economy from global slowdown and structural instability.

The Eurozone is passing through a complex, low-growth landscape with output slowing down to a projected 1.1% in 2026, characterised by a sharp divergence between weak industrial manufacturing giants and more resilient, service-driven economies. The region faces significant pressure from West Asian maritime disruptions and hike in defence spending, while real consumer consumption remains sluggish.

Most major economies show uneven growth because of trading trends, commodity price fluctuations, structural challenges, and geopolitical tensions. The Canadian economy is expected to grow 1.5%, supported by strong exports of critical minerals and energy and close trade links with the US. Trade policy uncertainty, high household debt, and a sensitive housing market continue to limit stronger growth.

Latin America and the Caribbean are projected to grow by 2.3%, aided by favourable export conditions for food and minerals and gradual interest rate cuts.

Emerging market and developing economies are expected to grow 3.9% in 2026 despite geopolitical tensions and commodity price shocks. While India remains resilient on strong domestic demand and policy stability, its peer economies continue to grapple with higher energy costs, weaker currencies, rising debtservicing burdens, and employment pressures.

Indian economy: Resilience confronts external headwinds

The Indian economy remained the fastest-growing major economy with a real GDP growth of 7.7% in 202526. Revival in domestic demand, positive consumer sentiment, sustained public infrastructure investment, and policy continuity helped it weather the external headwinds through the year under review.

India's robust macroeconomic fundamentals, controlled inflation, policy modernisation and rising disposable incomes helped the domestic growth engines on track despite disruptive tariffs and external pressures. Lending and investment activities are expected to drive this growth in future with the RBI lowering the cumulative repo rate by 125 basis points.

Despite its strong economic framework, the country stares at some imminent risks. India's heavy reliance on imports, especially crude oil that makes up over 85% of consumption, has sharply increased the dollar

demand. The situation escalated since Iran blocked the Strait of Hormuz through which a fifth of global crude shipments move. Widening trade deficits and a steady flight of foreign investors from Indian securities sent the rupee down about 10% against the dollar in 2025-26.

While core investment and services continue to be buoyed by public spending and financial stability, persistent structural constraints remain, including skill gaps, infrastructure bottlenecks, and limited global value chain integration. Sustaining balanced, long-term growth will rely on rise in productivity, trade facilitation, and deeper structural reforms in infrastructure, skill development, and business regulation.

A growing market for mobility solutions

India's long-term growth trajectory remains closely linked to rising energy consumption and expanding mobility demand. Primary energy demand is projected to nearly double by 2050, with oil increasing its share in the energy mix. Road transport is expected to account for the largest share of incremental oil demand, reinforcing the dominance of road-based mobility.

This trend is expected to drive significant growth in the vehicle parc, with passenger vehicles projected to increase from 56 Million to 246 Million and commercial vehicles from 25 Million to 99 Million by 2050, supported by rising incomes, urbanisation, infrastructure development and expanding logistics networks.

Higher vehicle ownership, utilisation and freight movement are expected to drive tyre demand across segments. Industry demand is projected to expand nearly fourfold, with total tyre consumption rising from approximately 2.6 Million tonnes to 10.7 Million tonnes by 2050. As the vehicle base expands, the replacement market is expected to emerge as the primary growth driver, providing recurring demand and greater revenue visibility, particularly in commercial vehicle and logistics-linked segments.

These structural trends align well with BKT's growth strategy. Continued investments in infrastructure, mining and mechanisation are expected to support demand for off-highway tyres. The projected growth across passenger and commercial vehicle segments validates BKT's calibrated on-highway expansion. Rising tyre demand also strengthens the strategic value of the Company's carbon black integration by supporting cost efficiency, supply security and margin resilience.

The tyre industry is shifting from the legacy of 'justin-time' logistics to a highly adaptive, risk-balanced model. To insulate operations from price volatility and regional concentration risks, manufacturers are expanding raw material inventory to 60-90-days and diversifying sourcing beyond Southeast Asia into emerging African markets.

Companies are scaling sustainable, low-rolling-resistance designs to 20% of new formulations to comply with circular economy regulations. This also helps meet the demand from the EV market. Higher demand from agriculture, mining, industrial, construction and ports is being supported by farm mechanisation and precision agriculture, rising investments in critical mineral extraction and mining automation, adoption of smart manufacturing and warehouse automation is driving demand for off-highway tyres.

The industry is penetrating underserved Tier-II and Tier-III markets through deep local partnerships. This geographical push is reinforced by Industry 4.0 digital capabilities, including IoT tracking, blockchain traceability, and digital twins, which have reduced supply chain disruptions by over 30%. Through this blend of supply diversification, green engineering, and targeted regional expansion, the tyre industry continues to sustain long-term productivity despite an uncertain macroeconomic climate.

11. INDUSTRY OVERVIEW Global tyre industry

The global tyre market is projected to grow 3.7% from USD 202.83 Billion in 2025 to USD 210.33 Billion in 2026, with long-term valuations expected to reach USD 249.51 Billion by 2030 at a CAGR of 4.4%.

The industry is likely to pull off this growth despite uneven demand and supply chain volatility. The industry sees a growing replacement demand, structurally propelled by an expanding global vehicle parc, aging vehicles, and rapid EV adoption, where high vehicle weight and torque inherently accelerate the tyre replacement intervals. Cyclical stabilisation in off-highway and premium agricultural tyres provides strong foundational volumes for diversified players.

A distinct divergence between a muted Original Equipment Manufacturer (OEM) segment and a highly resilient aftermarket replacement channel is, however, a cause for concern. The industry faces severe cost-push inflation, with raw materials commanding 60-70% of total manufacturing costs. Climate-driven supply

shocks in Southeast Asia spiked natural rubber prices, while West Asian maritime disruptions inflated crude derivatives like synthetic rubber and carbon black. To insulate their margins, manufacturers abandoned rigid annual pricing. They successfully executed calibrated, consecutive price hikes, averaging 6% to 8% in domestic replacement markets and 2% to 4% internationally, while optimising product recipes through internal value engineering.

Protectionist tariffs and anti-dumping duties across North America and Europe forced global trade routes to shift to agile hubs with vertical raw material integration. Consequently, manufacturers realigned capex, concentrating up to 85% of expansion outlays within secure domestic footprints. Major corporations reallocated capital towards structural efficiency and premiumisation, specifically large-rim radial tyres for the booming SUV market. Backed by digital Industry 4.0 capabilities and expanded dealer networks in underserved regional markets, the sector secured steady replacement volumes to cushion against broader economic shocks.

Indian tyre industry

Despite raw material barriers and macroeconomic shifts, the India tyre market shows strong structural resilience, growing from USD 14.45 Billion in 2025 at a 7.49% CAGR. Driven by a 60% expansion of the national highway network, the replacement segment commands 58% of total demand, serving as the market's primary engine over a subdued OEM channel.

This momentum is anchored by post-monsoon rural recoveries, infrastructure outlays, and the pass-through benefits of the RBI's repo rate cuts to 5.25%. This boosted commercial fleet utilisation. During the year, demand was supported by government measures to stimulate consumption, including GST reforms and the recent free trade agreements (FTAs) with several countries.

A sharp premiumisation wave drives the product mix, with passenger cars leading at 32%share and medium-

sized tyres dominating at 50%. Off-Highway Tyres (OHT), agricultural, and construction lines provide a high-margin cyclical buffer. Consumer demand has pushed radial technology to corner over 60% market share and tubeless fitments to over 70%.

In India's tyre landscape, domestic production commands a 70% majority, protected by production-linked incentives, BIS certifications, and trade barriers for select imports. The industry is innovating the value proposition with offerings such as 'Tyre-as-a-Service', integrating smart TPMS sensors, and developing EV-specific low-rolling-resistance tyres (projected at a rapid 12.5% CAGR) engineered for heavier battery packs with high torques.

The Off-highway tyre market

The global off-highway tyre market has reached a phase of cyclical stabilisation, navigating a multi-speed demand environment. According to Smithers, the total market volume is expected to increase in sync from 52.5 Million units in 2026 to 57 Million units by 2029. Lower farm net incomes and high dealer inventories across Europe and North America have created minor agricultural headwinds.

These are being effectively counterbalanced by robust global mining and public infrastructure outlays, sustaining strong, structural demand for large-rim ultralarge radial and earthmover tyres. Tyre retreading is also emerging as a focus, driven by increasing emphasis on lifecycle extension, cost-efficiency and sustainable fleet management across commercial and off-highway mobility segments.

The market's growth trajectory is expected to remain differentiated across end-use segments through 2030. The mining, construction and ports segment is expected to remain the largest and fastest-growing category, supported by sustained infrastructure investments and increased mining activity linked to energy transition. The agriculture segment is expected to continue growing on ongoing mechanisation, the adoption of precision farming practices and rising global food demand, although it may lose its market share marginally. The industrial segment, meanwhile, is expected to benefit from the steady expansion of manufacturing, warehousing and material-handling activities.

These trends are expected to support the continued expansion of global OHT market's expansion and reinforce a stable long-term growth outlook for the industry.

Domestically, a USD 1.22 Billion off-highway tyre market is zooming at 5.52% to reach USD 1.69 Billion by 2031. Led by an unprecedented public capital expenditure push into national highway networks, multi-modal freight corridors, and major mining operations, the construction equipment segment commands over 40% of the market. This localised traction is reinforced by a shift to advanced radialisation and pneumatic compounds fit for rough terrains.

The On-highway tyre market

The global on-highway automotive tyre segment is rapidly shifting towards specialised safety configurations, with all-season variants commanding a 61.78% market share. The winter variant grows 4.12% under widening European safety mandates.

Run-flat and specialised segments are expanding 7.8% annually, backed by a demand from luxury OEMs. Driven by rigorous safety frameworks in the US and EU, the connected and smart tyre market is pacing towards USD35.2 Billion at 35.7% a year. This has converted TPMS-integrated sensors into a massive, connected platform, utilising real-time Tyre-to-Infrastructure (T2I) data to optimise fleet scheduling, vehicle-to-everything (V2X) cloud telemetry, and acoustic cabin comfort through sound-insulated foam inserts.

India's on-highway tyre industry is in the middle of rapid structural changes. Manufacturers are advocating for supportive Union Budget measures, including lower duties on key raw materials and stronger export incentives, to reduce import dependence and improve competitiveness. At the same time, demand continues to shift towards premium passenger car tyres that offer better wet grip, improved braking performance and lower rolling resistance for urban driving conditions.

Major industrial players are expanding aggressively into the consumer and commercial mobility segments. To improve pricing discipline and reduce channel conflicts, companies are increasingly drifting away from fragmented dealer structures to exclusive regional distribution models. This approach enables better market control, protects dealer territories and strengthens partnerships with re-treaders. This helps fleet operators reduce total cost of ownership (TCO) across logistics networks.

Carbon Black market

The global carbon black market is navigating a steady phase of structural expansion — from USD 21.1-21.5 Billion to USD 23.8-24.5 Billion by 2030 at a stable CAGR of 2.5-3%. On a volume basis, the global carbon black demand is estimated to increase from 15.2 Million tonnes to nearly 17 Million tonnes by the same year, averaging a growth rate of 2.3-2.4%. While the automotive tyre sector dictates the largest slice of the market, accounting for 74-75% of total volume consumption, the industry is actively diversifying into high-margin speciality carbons.

Speciality carbon black is emerging as a strategic growth segment within the broader carbon black industry. An increasing adoption of carbon black by advanced applications beyond traditional tyre reinforcement is driving the demand. It is supported by growth across electric mobility, electronics, digital infrastructure, energy storage, and high-performance industrial applications. As a result, the speciality carbon black segment is expected to outperform the broader market, expanding 4-5% over the medium term.

Demand is rising for highly conductive formulations used in lithium-ion battery electrodes and speciality carbon solutions for plastics masterbatch, power distribution cables and industrial coatings. To protect operational margins against volatile feedstock baselines and strict carbon-emission mandates, manufacturers are scaling circular technologies, specifically commercialising sustainable reinforcing variants that utilise Tyre Pyrolysis Oil (TPO) as an eco-friendly feedstock.

The Indian carbon black market is accelerating rapidly, setting the market value on a 4-5% expansion to reach USD 2.3-2.5 Billion by 2030 from an estimated USD 1.8-1.9 Billion. This growth is propelled by massive public infrastructure outlays, a thriving domestic tyre manufacturing ecosystem — dominating application shares at 72.12% — and a 7.65% volume expansion in the plastics compounding sector for heavy-duty pipe extrusion and utility cable lines. The furnace black process commands an overwhelming 80.78% share of local production due to its supreme cost-efficiency, while specialised carbons grew fastest at 8.12%. Major domestic producers are commissioning capacities across the country, pairing advanced capacity expansions with waste-heat recovery, to satisfy tightening corporate ESG benchmarks.

12. BUSINESS REVIEW

The off-highway tyre (OHT) segment showed deep structural resilience with an annual sales volume of 3,17,356 tonne. Driven by an aftermarket replacement demand, the full-year standalone operational revenue reached H 10,819.95 Crore, despite geopolitical challenges.

To accelerate our Vision 2030, since August 2024, we have cumulatively announced a capex outlay of H 6,800 Crore, to be deployed through FY 2028-29. These investments are directed towards capacity expansion and infrastructure development across OHT and on-highway tyre categories, expansion of carbon black capabilities, Al-enabled automation in the on-highway business, and sustainability initiatives.

This roadmap includes ongoing manufacturing expansion of 35,000 MTPA, supported by continuous debottlenecking, to enhance OHT tyre capacity to 4,25,000 MTPA and support an 8% global market share. In parallel, we are ramping up our captive carbon black capacity to 3,60,000 MTPA by Q1 FY 2026-27, strengthening our integrated manufacturing advantage.

These investments also position us to scale the on-highway tyre business, with a targeted contribution of 20% to overall revenues by FY 2029-30.

Off-Highway Tyre - SCOT analysis

Strengths

• Technology leadership: BKT is the only Indian company developing and scaling advanced allsteel radial technology up to 57 inches for heavy earthmoving and mining applications.

• Quality and innovation excellence: Adherence to global quality standards, supported by advanced in-house robust R&D Centre and testing capabilities, strengthens the Company's ability to develop high-performance off-highway tyre solutions for diverse agricultural, industrial & mining applications.

• Vertical integration and margin cushioning:

Full backward integration with the in-house carbon black plant ensures absolute control over the main raw material quality, protecting production from supply chain shocks.

• Capacity scaling: Total achievable tyre production capacity to reach 4,25,000 MTPA, positioned to capture larger global market share, as part of announced growth capex and debottlenecking.

• Operational and product intelligence: High capability to deploy advanced data analytics, technology, and premium product positioning to optimise real-world tyre performance, operational efficiency, and global customer retention.

• Integrated manufacturing and global presence: Advanced manufacturing facilities in India supported by overseas subsidiaries and distribution networks.

• Global OEM partnerships: Long-term

relationships with leading global OEMs.

Opportunities

• Large, untapped end market: Growing

investments in infrastructure and rising mechanisation in industrial and agricultural sectors across globe and in India, have enhanced demand across material handling, industrial OHT

• Premiumisation and smart-tyre tech: Shifting market preferences towards smart tyres, featuring embedded real-time pressure monitoring systems (TPMS) and advanced heat-resistant compounds, allow for premium pricing headroom.

• Macroeconomic and trade tailwinds and GST 2.0: Tax rationalisation and lower GST brackets on select tyre classes are providing a distinct domestic consumption boost.

• Sustainability and eco-compliance:

Heightened global regulatory focus on low-emission equipment presents a major runway for BKT's specialised low-rolling-resistance and energy-efficient configurations.

• Replacement market growth: Higher

equipment utilisation across construction, agriculture, mining and infrastructure sectors is expected to drive tyre replacement demand, while continued investments in roads, ports, smart cities and other infrastructure projects support longterm growth in the replacement segment.

Constraints and threats

• Geopolitical and tariff vulnerabilities:

Escalating global trade friction and the risk of reciprocal import tariffs from primary Western trading partners create headwinds for stable export growth

• High capital and labour intensive: The offroad tyre (OTR) model is structurally asset-heavy, requiring massive upfront product development budgets, complex SKU inventory management, and labour intensive

• Cyclical industry exposure: Demand remains closely tied to highly volatile, cyclical core sectors like mining, construction, and public infrastructure

• Raw material volatility: Profitability and margin baselines are continuously exposed to sharp price swings in global natural rubber markets and crude-linked chemical feedstocks

• Lengthy institutional ramps: Strict, multi-tiered qualification protocols and long product approval timelines with global automotive/heavy equipment OEMs can delay real-time volume scale-ups in new product segments

The On-Highway venture

Building on nearly four decades of expertise, we have taken an important step forward by entering India's on-highway tyre market as part of our calibrated expansion strategy. Our On-Highway Tyre segment is being progressively shaped to address the domestic opportunity across two-wheelers, passenger car radial (PCR), and commercial vehicle radial (CVR) segments, marking a key milestone in BKT's growth journey.

During the year, we began building momentum by scaling our presence across high-volume segments, supported by the launch of specialised two-wheeler lines under our sub-brands, BKT Zenova and BKT Thyros, along with the rollout of our Commercial Vehicle Radial range, including BKT m.Loadxpert and BKT Milexpert RG. Developed and manufactured in India, these products are being engineered to deliver safety, reliability, and consistent performance across diverse terrains.

While the opportunity is still evolving, the principles guiding our journey remain unchanged - engineering excellence, product reliability, and a long-term commitment to customer value.

SCOT analysis

Strengths

• Engineering pedigree and dealers' trust: Over 40 years of technical leadership in the OHT sector has cemented the confidence of our dealers, especially in the commercial vehicles space, focused on comfort, mileage, and durability.

• Advanced R&D and compliance: Certified under strict IATF 16949 and BIS compliance standards, equipped with premier testing infrastructure like NATRAX access to engineer advanced, low-rolling-resistance EV compounds.

• Multi-segment expansion portfolio:

Product pipelines are strategically scaled across targeted sub-brands — for two-wheelers, BKT Zenova and BKT Thyros, for medium and heavy commercial vehicles (M&HCV), BKT Loadxpert and BKT Milexpert.

• Capital-efficient distribution: Operating a highly disciplined, distributor-led commercial framework backed by more than 70 regional distributors, allowing a controlled scale-up into underpenetrated Tier II and III retail corridors.

Constraints

• Lower consumer brand salience: BKT operates in lower consumer-facing awareness, compared to traditional, decades-old incumbents. The historical market association with industrial and OHT applications creates a brand perception barrier.

• High influence of point-of-sale advocacy:

Lacks direct consumer pull, purchase decisions depend heavily on the recommendations of retail dealers and influencers.

• Scale and pricing vulnerability: Smaller initial volume scale compared to market leaders restricts the ability to offer aggressive bulk discounting schemes.

• Cost and regulatory headwinds: Margins are highly sensitive to global natural rubber price volatility and regional regulatory anomalies, such as inverted duty structures.

Opportunities

• Market tailwinds: Driven by an expanding Indian automotive parc, rising vehicle replacement demand, and a structural shift towards premiumisation (high-volume 11.00R20 commercial radials and larger rim sizes)

• The EV and sustainability runway: High-growth, premium pricing headroom exists within the specialised EV-ready tyre segment, justifying continued R&D capital expenditure

• Increasing radialisation thresholds:

Commercial vehicle radialisation now exceeds 70%, creating a strong environment for players with a solid engineering narrative over cheap alternatives

• Calibrated phased rollout: A low-risk, phased strategy that builds brand equity in the twowheeler and commercial segments first before scaling up higher-value passenger car radials (PCR).

• Global network leverage: BKT's presence across the US and Europe provides a powerful, underutilised springboard to scale the B2C on-highway portfolio.

Threats

• Aggressive competitor discounting:

Industry peers are aggressively defending market share through price wars, promotions, and deep discounts.

• Retail shelf-space battles: Dealers consistently give preference to faster-moving or higher-margin competitor brands, impacting the physical push of BKT products at the retail counter.

• Commodity price volatility: Sharp pricing shocks in raw materials, particularly natural rubber, pose a constant threat to manufacturing cost structures.

The Carbon Black business

During the year, BKT Carbon expanded its diversified portfolio to cover reinforcing carbon products for tyres and mechanical rubber goods alongside premium

specialty carbon segments like plastics masterbatch, coatings, inks, and niche. From a backward integration initiative for in-house requirements, the Carbon Black business has expanded to serve third-party customers, including major tyre manufacturers in India.

Operating with an annual capacity of 3,60,000 MTPA by Q1 of FY 2026-27 to unlock massive economies of scale, the company is set to capture Asia's premium carbon black expansion. It plans to pivot to high-margin specialty and sustainable lines. Certified under stringent EU REACH and IATF 16949 standards, these advanced production assets channel product innovation directly into transformative global mobility, infrastructure, and energy transition.

Sustainability remains central to this framework. Our reinforcing carbons maximise durability in heavy-duty tyres, automotive belts, hoses, and seals. The Use of Tyre Pyrolysis Oil (TPO) underscores our commitment to circular solutions.

We are fortifying our high-purity carbon segment and unlocking value creation opportunities by leveraging our patented carbon black feedstock purification. Our specialised high-purity carbons for power distribution cables are enabling global grid upgrades and expanding power generation networks. At the same time, the rapid growth of data centres is fuelling demand for speciality carbons to ensure reliable, high-capacity energy infrastructure.

We are targeting an aggressive 40% capacity expansion over the next five years across our reinforcing and speciality carbon operations. This is heavily supported by highly favourable market dynamics, where reinforcing carbon black demand is climbing at a stable 2.2% and premium speciality segments are expanding at 4-5% annually, on infrastructure rollouts and organic volume growth in automotive, packaging, and energy distribution networks. BKT Carbon is uniquely positioned to lead Asia's premium market and shape a sustainable industrial future that delivers enduring value to all global stakeholders.

SCOT analysis

Strengths

• Integrated operations: Our fully integrated operations make carbon black products that strengthen BKT's demanding tyre compounds. Our innovations deliver differentiated solutions that address complex customer challenges.

• Capacity expansion: We plan to raise our annual capacity from 2,65,000 MTPA to 3,60,000 MTPA by Q1FY 2026-27, reaffirming supply security.

• Strong domestic market: India remains BKT Group's most resilient market, supported by favourable GST rates and strong demand in agriculture and infrastructure sectors.

• Sustainability credentials: Five-Star rating from the British Safety Council, reduced non-renewable electricity consumption, and community development initiatives enhance ESG positioning.

Constraints

• US tariffs: The sharp spike in import levies weigh on the finances.

• Volatile commodity prices: Carbon black feedstock costs fluctuate with crude oil prices, creating margin uncertainty.

• Geopolitical impact: supply chain disruption due to rising fuel prices.

Opportunities

• Carbon black sales: Carbon black is expected to contribute 10% of the group revenue by FY 2029-30 with strong focus on specialty blacks.

• On-highway tyre expansion: Entry into commercial vehicle radial and passenger car radial segments creates new internal demand for carbon black.

• Sustainability-driven demand: Growing preference for eco-friendly materials and processes align with BKT's ESG initiatives.

Threat

• Geopolitical risks: Trade disputes, tariffs, and regulatory changes like EU deforestation regulation can disrupt exports.

13. OPERATIONAL PERFORMANCE REVIEW

Manufacturing excellence and digital transformation

We are driving extensive factory-floor efficiencies and strategic cost-engineering across our industrial footprint in Waluj, Bhiwadi, Chopanki, and our flagship megaplant in Bhuj. We have accelerated the deployment of AI and comprehensive SAP upgrades across our manufacturing ecosystem to unlock complete spend visibility down to the minutest level, transitioning operations from standard manual tracking to real-time filtration and data-backed decision-making.

Cost-engineering on the plant floor has been heavily optimised through targeted energy and utility interventions. We replaced legacy direct-on-line starters with automated Variable Frequency Drives (VFDs), installed Venturi optimisation valves in our curing lines to drastically slash compressed air consumption, and deployed plate-type heat exchangers to achieve complete condensate steam recovery. These measures ensure that our production assets, certified by the EU REACH and IATF 16949 frameworks, operate at peak resource efficiency. Reflecting these world-class operational and safety standards, our flagship Bhuj facility secured a prestigious Five Star safety grading following a rigorous audit by the British Safety Council. Such digital and automated infrastructure is also being heavily leveraged to support our newly expanded, high-volume domestic B2C division.

Supply chain and logistics

We have transitioned our purchasing and logistics functions into agile, value-creation engines, driven by total cost-efficiency and structural automation. Over the past three years, our strategic logistics costs averaged an impressive 5.45% of sales revenue, sitting comfortably below the industry benchmark of 7.9% to 9%. We successfully reduced these costs to a highly competitive 4.40% in FY 2025-26. This lean architecture is reinforced by our direct-sales model, which ensures that less than 3% of our volume is routed through overseas warehouses, allowing us to dynamically fulfil just-in-time demands without carrying heavy localised overheads.

We systematically track our multi-segment SKU catalogue and enhance product visibility straight to the end consumer, under sub-brands like Zenova and Thyros, backed by an aggressive 4% SCM budget for our on-highway vertical for FY 2026-27.

To maintain a nimble financial footprint, our finished goods inventory is strictly maintained at 12 to 15 days of production and sales, achieving an annualised inventory turnover ratio exceeding 24 times. BKT is increasingly consolidating export sizes at our flagship Bhuj facility, located just 95 kilometres from Mundra Port. The Bhuj plant produces approximately 70% of our exports, with a clear roadmap to take it to 80% next year.

Environmental stewardship and physical automation are embedded directly into our everyday transport loops, highlighted by a 90% displacement of conventional warehouse diesel forklifts with electric alternatives. For near-field movements, the majority of our bulk carbon black transfers to the Bhuj tyre plant are executed utilising specialised, zero-packaging EV-SILO vehicles.

For long-distance interplant networks, we use an innovative dual-leg rail execution that carries carbon and compound from Bhuj to Bhiwadi. It returns export-ready tyres back to Mundra Port inside the exact same container, backed by a strict recycling loop that achieves six full operational rounds per jumbo packaging bag.

14. COMMITMENT TO SUSTAINABILITY

Sustainability and environmental stewardship

As stakeholders increasingly evaluate the off-highway tyre (OHT) industry on emissions, resource efficiency, and circularity along with raw performance, we are optimising resource use and ensuring safe and ethical workplaces.

To lower our carbon footprint, we have expanded the adoption of clean energy across our locations, led by our Waluj rooftop solar installation. This also includes transition to biofuels, and continued utilisation of wind energy at the Waluj plant. Targeted energy efficiency initiatives at the shop-floor level, including machinery upgrad es, complement these measures. Our Variabl e Frequency Drives (VFDs) on air systems, automatic idle modes on extruder ventilation systems, and intelligent mixer blowers dynamically adjust power.

Water stewardship and circularity are critical to this broader sustainability approach. Under a strict Zero Liquid Discharge (ZLD) mandate, our tyre, power, and carbon black units treat, clean, and recycle almost the entire volume of manufacturing wastewater, reintegrating it into plant utility operations through advanced biological treatment and reverse osmosis.

Dedicated industrial and domestic effluent treatment infrastructure, strengthened by enhanced ZLD systems, ensures maximum water recovery, while residual organic sludge is repurposed as green-space fertiliser and for use in other industrial applications. Our Chopanki and Bhiwadi plants use rooftop rainwater harvesting systems and treat wastewater sourced from nearby residential societies, significantly reducing dependence on groundwater resources.

On the logistics and compounding floors, circular initiatives are helping reduce operational costs and waste. Jumbo bags used for carbon black transportation are reused up to six times, minimising plastic waste generation. Battery-operated trucks with pneumatic silos are deployed for internal carbon black movement, reducing emissions. We follow a reverse logistics model, where trucks delivering carbon black to other plants carry finished tyres on their return trips, eliminating empty backhauls and optimising transportation efficiency.

15. CULTIVATING THE HUMAN CAPITAL

BKT's human capital strategy integrates workplace equity, specialised skill frameworks, and holistic employee care into its core manufacturing culture. We strictly enforce a gender-neutral compensation system with absolute pay parity, and a transparent, ski lls-based recruitment framework to ensure zero discrimination.

To build a competitive, future-ready workforce, we have expanded our capability-building infrastructure. Our human resource teams deployed targeted corporate leadership initiatives, technical competency frameworks, behavioural skill programmes and AI-enabled productivity tools. These programmes cultivate in them faster decision-making abilities, sharper strategic execution, and significantly greater leverage from existing talent capabilities. Newly recruited workmen undergo a structured 'Campus to Corporate' foundation framework to master safe workplace habits before stepping on to the operational floor. This continuous development cycle is reinforced by mandatory annual refreshers covering our corporate Code of Conduct, Prevention of Sexual Harassment (POSH) protocols, and workplace ethics. We also accelerated shop-floor motivation through our Employee Recognition Scheme and Kaizen culture initiatives.

The company has rolled out an advanced Occupational Health Centre (OHC) to provide immediate on-site healthcare, professional first-aid training, led by external medical faculties, and expert-led wellness programmes. To further support our workforce, we updated our core employee benefits, including the National Pension Scheme, cashless Mediclaim enhancements, and Term Life Insurance upgrades.

Our deep focus on workplace safety was validated by world-class safety certifications and global accolades. We halved our plant incident rate while sustaining our target of zero lost-time injuries. Our proactive plant-floor safety architecture relies heavily on robust physical engineering controls, automated hardware safeguards, and biometric restricted access systems for high-risk chemical storage environments. To eliminate unsafe acts, we complement these physical barriers with continuous competency development, supervisor-led briefings, and Behaviour-Based Safety (BBS) training systems across all manufacturing facilities.

Performance highlights

• Zero plant incident rate

• 1,200 people trained per day in shop-floor safety systems, up from 1,000 earlier

• 3.4 lakh training man-hours delivered across technical, behavioural, and compliance modules

• 5,020 active respondents participating in our comprehensive corporate Well-Being Survey

16. CORPORATE SOCIAL RESPONSIBILITY

The Company's social initiatives empower society at a large and provide a holistic growth platform. The Company believes that Corporate Social Responsibility (CSR) projects undertaken by it should be sustainable with the long-term purpose of improving the quality of livelihood of the less privileged. The funds on CSR projects / activities are spent very carefully to ensure that the desired objectives are achieved. CSR activities has been segregated as to have a reach in different areas such as promoting education, improving healthcare, sustainability, rural development.

The Board of Directors of the Company has approved a Corporate Social Responsibility (CSR) Policy based on the recommendation of the CSR Committee. The brief outline of the CSR policy of the Company and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure-II. The Board of Directors has formed a committee on CSR in accordance with the Companies Act, 2013. The terms of reference of the Corporate Social Responsibility Committee, number and dates of meetings held, composition and attendance of the Directors during the financial year ended 31^st March, 2026 are given separately in the Corporate Governance Report. During the year under review, the Company was required to spend H 42.73 Crores including unspent CSR amount of H 8.69 Crores for FY 2024-25. The Company has spent H 44.21 Crores during FY 2025-26, resulting in an excess spend of H 1.48 Crores over the mandated amount.

The CSR policy of the Company is available on the Company's website and can be accessed at: https:// www.bkt-tires.com/ww/us/investors-desk.

17. RISK MANAGEMENT AND MITIGATION FRAMEWORK

Risk management forms an integral part of the Company's governance and strategic decisionmaking processes. The Board of Directors has overall responsibility for oversight of the Company's risk

management framework and is supported by the Risk Management Committee constituted in accordance with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Company has defined a comprehensive Enterprise Risk Management Policy that defines governance structures, roles and responsibilities, and processes for risk identification, assessment, monitoring, and reporting. The Audit Committee oversees compliance with the Company's risk management policies, while periodic reviews of risk controls and internal financial controls are conducted, with observations and recommendations reported to the Audit Committee.

Based on the Enterprise Risk Management (ERM) framework adopted by the Company, ongoing risk awareness initiatives, periodic risk assessment processes and governance oversight by the Board and its committees, the Board is of the view that there are no material risks which, in its opinion, threaten the existence or continuity of the Company.

The Audit Committee oversees how management monitors compliance with the Company's risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. Internal Audit undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit Committee.

There are no risks which in the opinion of the Board threaten the existence of the Company.

Risks related to business

Balkrishna Industries Limited ("the Company”) operates in a global business environment influenced by geopolitical developments, commodity price fluctuations dynamic regulatory environment and sustainability linked expectations.

Given the global scale of operations and capital as well as labour intensive manufacturing processes, the Company is exposed to a range of strategic, operational, financial, technology and climate risks

The Company has established a structured Enterprise Risk Management ("ERM”) framework to proactively identify, assess, monitor, and mitigate risks ensuring long-term organisational resilience. As part of the ERM framework, identified risks, are periodically reviewed by the management and the Risk Management Committee, and appropriate mitigation measures are implemented.

18. INTERNAL CONTROL SYSTEM AND THEIR

ADEQUACY

Strengths in Internal Control and Governance:

a. Comprehensive Internal Control Framework:

• Your Company emphasises internal controls as a pillar of governance, providing a framework of checks and balances. This framework covers financial and operational functions, ensuring that transactions are properly authorised, recorded, and reported.

b. Adherence to Policies and Procedures:

• Your company has well-defined procedures, delegation of authority, and segregation of duties, which are essential for ensuring transparency and accountability in financial transactions.

c. Integration of IT Policies and Processes:

• IT policies and processes are robustly integrated to mitigate business risks. This includes implementing an ERP system supported by SAP software, ensuring credibility of data, compliance with regulations, and managing IT security risks.

d. Continuous Improvement and Audit:

• The company continuously improves its systems and processes through best practices, automation,

and adoption of latest IT tools. Regular audits and reviews reinforce the effectiveness of internal controls.

e. Cybersecurity and Data Privacy:

Recognising the importance of cybersecurity, the company has adopted a Cyber Security and Data Privacy Policy. This safeguards IT assets and ensures responsible handling of personal and sensitive data in accordance with applicable laws.

f. Assessment and Audit Committee Review:

• M/s. Deloitte Haskins & Sells LLP has been appointed to assess the effectiveness of internal financial controls. The Audit Committee reviews report from management and internal auditors, confirming the adequacy and effective operation of internal financial controls as of the assessment date.

Limitations and Future Considerations:

g. Inherent Limitations of Internal Controls:

• The company acknowledges that internal financial controls cannot provide absolute assurance due to inherent limitations. Changes in conditions or compliance may impact the effectiveness of controls over time.

h. Risk Management and Compliance:

• Managing risks associated with economic conditions, regulatory changes, and cybersecurity threats remains critical. Continuous adaptation and reinforcement of internal controls are necessary to mitigate these risks effectively.

i. Future Adaptation and Enhancement:

• As the business environment evolves, the company should remain proactive in adapting internal controls to new challenges and opportunities. This includes staying updated with regulatory requirements and technological advancements.

In conclusion, your company demonstrates a strong commitment to governance through its comprehensive internal control framework, IT integration, cybersecurity measures, and regular assessment processes. Moving forward, maintaining vigilance and agility in responding to emerging risks will be crucial for sustaining effective internal controls and ensuring long-term business resilience.

19. SUBSIDIARY COMPANIES

At the end of the year under review, the Company had five Overseas Wholly Owned Subsidiary Companies (WOS). The Overseas WOS are BKT EUROPE S.R.L., BKT USA INC, BKT TIRES (CANADA) INC., BKT TIRES INC, BKT NETHERLANDS B.V. The Company does not have any material subsidiary as per the thresholds laid down under the Listing Regulations, 2015 A policy on material subsidiaries has been formulated by the Company and posted on the website of the Company and can be accessed at: https://www.bkt-tires.com/ww/us/ investors-desk.

Pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing the salient features of the financial position of subsidiary companies in Form AOC-1 attached as Annexure - I.

20. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134 (3)(c) and 134(5) of the Companies Act, 2013, your Directors, to the best of their knowledge and belief, make the following statements that:

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

(ii) the Directors have selected such accounting policies and applied them consistently and made

judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31^st March, 2026 and the Statement of Profit and Loss of the Company for the FY ended 31^st March, 2026;

(iii) the Directors have taken proper and sufficient care for maintenance of adequate accounting records in accordance with provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

( iv) the Directors have prepared the annual accounts of the Company on a "Going Concern” basis;

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

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

21. CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All contracts /arrangements / transactions entered by the Company during the financial year with related parties were in ordinary course of business and on an arm's length basis. During the year, the Company has not entered into any contracts /arrangements / transactions with related parties which could be considered material in accordance with the policy of the Company on materiality of related party transactions.

Accordingly, the disclosure of related party transactions as required under Section 134(3)(h) of the Companies Act, 2013 in Form AOC - 2 is not applicable to your Company.

The Policy on materiality of related party transactions and dealing with related party transactions are approved by the Board and can be accessed on the Company's website at https://www.bkt-tires.com/ ww/us/investors-desk. The details of transactions / contracts/ arrangements entered by the Company with related parties during the financial year are set out in the notes to the Financial Statement.

The Board of Directors of the Company has approved the criteria for making the omnibus approval by the Audit Committee within the overall framework of the policy on related party transactions. Prior omnibus approval is obtained for related party transactions which are of repetitive nature and proposed to be entered in the ordinary course of business and at

arm's length during the financial year. All related party transactions are placed before the Audit Committee for review and approval.

22. DIRECTORS AND KEY MANAGERIAL PERSONNEL

Your Directors are pleased to inform that, based on the recommendations of the Nomination and Remuneration Committee and the Board of Directors, the Shareholders have approved the following appointments and re-appointments through Postal Ballot dated 19^th December 2025:

• By passing a Special Resolutions, approval was accorded for the re-appointment of Mr. Arvind Poddar as the Managing Director of the Company for a further period of five (5) years, with effect from 1^st August 2026 up to 31^st July 2031, upon the expiry of his present term of office and Mr. Natarajan Gnanaskandan Tanjore was appointed as an Independent Director of the Company for a term of five (5) years with effect from 1^st February 2026.

• By passing an Ordinary Resolution, Mr. Ashok Saraf was appointed as a Non-Executive, NonIndependent Director, liable to retire by rotation, with effect from 1^st February 2026.

During the year under review, Mrs. Vijaylaxmi Poddar (DIN: 00160484), Mr. Vipul Shah (DIN: 05199526), and Mr. Ashok Saraf (DIN: 01627873) retire by rotation and, being eligible, have offered themselves for re-appointment. A resolution seeking the approval of the Shareholders for their re-appointment, along with the requisite details, forms part of the Notice.

The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Company remains committed to maintaining the highest standards of Corporate Governance and adheres to the requirements prescribed by SEBI. The Company has complied with the Corporate Governance provisions as stipulated under the Listing Regulations, 2015. Accordingly, the Report on Corporate Governance forms an integral part of this Annual Report.

The requisite certificate from the Statutory Auditors of the Company confirming compliance with the conditions of Corporate Governance is annexed to the said Report.

23. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION

Your Company has established a Nomination and Remuneration Policy to guide the selection, appointment, and remuneration of Directors, Key Managerial Personnel (KMP), and other employees, including senior management. This policy is designed to ensure that individuals with the skills, leadership ability, and vision necessary to drive sustainable growth are appointed to key roles.

An extract of the Nomination and Remuneration Policy is included in the Corporate Governance Report, which forms an integral part of the Board's Report.

The Criteria for appointment and remuneration of Directors is as under:

( i) Criteria for Appointment of Managing Director /

Whole Time Director/ Director:

The Nomination and Remuneration Committee shall identify persons of integrity who possess relevant expertise and experience particularly in Tire Industry, leadership qualities required for the position and shall take into consideration recommendation, if any, received from any member of the Board.

(ii) Criteria for Appointment of Independent Director:

The Independent Director shall be of high integrity with relevant expertise and experience so as to have a diverse Board with Directors having expertise in the fields of manufacturing, marketing, finance, taxation, law, governance and general management.

24. PERFORMANCE EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and the applicable Regulations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board is required to undertake an annual evaluation of its own performance, as well as that of its committees and individual Directors. The Nomination and Remuneration Committee (NRC) also evaluates the performance of each Director.

Accordingly, during the year under review, the Board, the Independent Directors, and the NRC carried out the annual performance evaluation.

For the purpose of evaluating the performance of the Board as a whole, its committees, and individual Directors, including the Chairman, the Company has devised a structured questionnaire. Each Director is required to complete the questionnaire, providing ratings on various parameters relating to the performance of the Board, its committees, and other Directors, excluding self-evaluation.

Based on the responses received to the questionnaire, a matrix reflecting the ratings was prepared and presented before the Board for its formal annual evaluation of the performance of the Board as a whole, its committees, and individual Directors.

The Board reviewed the evaluation outcomes and expressed satisfaction with the overall performance. This evaluation process ensures adherence to regulatory requirements while promoting continuous improvement in leadership effectiveness, decision-making, and corporate governance practices.

The Directors bring a wealth of expertise and experience, contributing meaningfully to the strategic direction of the Company. The Independent Directors are highly valued for their objective judgement, deep understanding of the business, and their ability to express views freely and constructively during deliberations. The Non-Executive Directors provide balanced and diverse perspectives, while the Executive Directors demonstrate strong action orientation and effectiveness in executing the decisions of the Board.

The Chairman plays a pivotal role in guiding the Board, fostering an environment of open discussion, and encouraging active participation from all members, thereby strengthening a dynamic and robust governance framework.

The performance evaluation of the Independent Directors was carried out by the entire Board. As part of this process, a separate meeting of the Independent Directors for FY 2025-26, chaired by Mr. Pannkaj Ghadiali, was held on 28^th March 2026.

During the meeting, the Independent Directors reviewed the performance of the Non-Independent Directors, the Board as a whole, and the Chairman, based on defined parameters of effectiveness. They also assessed the quality, adequacy, and timeliness of the flow of information between the Management and the Board to ensure transparency and efficiency in governance practices.

The Directors expressed their satisfaction with the evaluation process, reaffirming the Company's commitment to maintaining high standards of corporate governance and continuously enhancing leadership effectiveness.

25. AUDITORS Statutory auditor

In accordance with Section 139 of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, M/s Jayantilal Thakkar & Co (Firm Registration Number 104133W), Chartered Accountants was appointed as the Statutory Auditors of the Company for a period of 5 years, from the conclusion of 60^th Annual General Meeting (AGM) until the conclusion of the 65^th AGM, at the AGM held on July 7, 2022.

M/s Jayantilal Thakkar & Co. has confirmed that they continue to meet eligibility criteria and are not disqualified from serving as Auditors of the Company.

The report given by M/s Jayantilal Thakkar & Co, Chartered Accountants, Statutory Auditors on financial statements of the Company for FY 2025-26 is part of the Annual Report. The comments on statement of accounts referred to in the report of the Auditors are self-explanatory. The Auditors' Report does not contain any qualification, reservation or adverse remark.

Joint auditor

The Board of Directors at their meeting held on 8^th May, 2026 has appointed M/s. Deloitte Haskins and Sells Chartered Accountants LLP, ICAI Firm Registration Number: 117364W/W100739 as the Joint Auditors in accordance with Section 139 of the Companies Act, 2013, read with the Companies (Audit and Auditors) Rules, 2014, for a term of five consecutive years i.e. from the conclusion of the 64^th AGM until the conclusion of the 69^th AGM, subject to approval of the Members.

Secretarial auditor

I n accordance with Regulation 24A of the SEBI Listing Regulations and Section 204 of the Companies Act, the members of the company, at the 63^rd AGM held on July 26, 2025, approved the appointment of Mr. G.B.B Babuji, Company Secretary in Whole Time Practice (Certificate of Practice No. 8131) as the Secretarial Auditor for a five-year term, covering FY 2025-26 to FY 2029-30.

Mr. G.B.B Babuji, Company Secretary in Whole Time Practice has confirmed that they continue to meet eligibility criteria and are not disqualified from serving as Auditors of the Company. Further, the Secretarial Auditor has confirmed that they have subjected themselves to Peer Review process by the Institute of Company Secretaries of India ("ICSI”) and hold valid certificate issued by the Peer Review Board of ICSI.

The company's assistance in facilitating the audit process ensures transparency and adherence to regulatory expectations.

Further, pursuant to SEBI Circular CIR/CFD/ CMD1/27/2019 dated 8^th February, 2019, Mr. G.B.B Babuji, has also conducted the Annual Secretarial Compliance. The Secretarial Audit Report for the financial year ended 31^st March, 2026 is annexed herewith marked as Annexure - III.

Cost auditor

Your Company is required to make and maintain cost records as specified by the Central Government under sub-section (1) of section 148 of the Act. Accordingly, your Company has been making and maintaining such cost records as per the requirements. The cost records are maintained in such manner which enable the Company to exercise, to the extent possible, control over the various operating costs to achieve optimum economies in utilisation of resources.

During the year under review, in accordance with Section 148(1) of the Act, the Company has maintained the accounts and cost records, as specified by the Central Government. Such cost accounts and records were subjected to audit by M/s. RA and Co., Cost Accountants (Registration No. 000242) of the Company for FY 2025-26.

The Board of Directors has re-appointed M/s. RA and Co., Cost Accountants (Registration No. 000242) as Cost Auditors of the Company and recommends ratification of the remuneration payable to the Cost Accountants for the year ending on 31^st March, 2027 by the Members at the ensuing AGM. In the opinion of the Directors, considering the limited scope of audit, the proposed remuneration payable to the Cost Auditors would be reasonable and fair and commensurate with the scope of work carried out by them.

Internal auditor

The Board of Directors has appointed M/s. RTD & Associates, Chartered Accountants as the Internal Auditors for a one-year term for the FY 2026-27, in accordance with Section 138 of the Companies Act, 2013.

The appointed auditors have successfully completed the Internal Audit in line with the scope defined by the Audit Committee, ensuring compliance with regulatory requirements and strengthening governance and financial oversight.

Auditor's qualification

There are no qualifications in the reports of the Statutory Auditors and Secretarial Auditor. There was no instance of fraud during the year under review, which is required to be reported by Statutory Auditors in their reports as mentioned under sub-section (12) of Section 143 of the Act.

The Cost Auditors' Report of FY 2024-25 did not contain any qualifications, reservations, adverse remarks or disclaimers and no frauds were reported by the Cost Auditors to the Company under sub-section (12) of Section 143 of the Act.

26. INDUSTRIAL RELATIONS

The industrial relations with staff and workers during the year under review continue to be cordial.

27. CHANGE IN THE NATURE OF BUSINESS, IF ANY:

There is no change in the nature of business of your Company during the year under review.

28. DISCLOSURES

i. Non-Convertible Debentures

During the FY 2025-26, your Company has issued and allotted 75,000 rated, listed, Unsecured Redeemable Non-Convertible Debentures of face value of H 1,00,000 each amounting to H 750 Crores on private placement on 23^rd March, 2026.

ii. Commercial Paper

During the FY 2025-26, your Company has issued Listed Commercial papers aggregating to H 200 Crores and redeemed the Commercial papers aggregating to H 200 Crores in compliance with applicable provisions.

iii. Vigil Mechanism /Whistle Blower Policy

The Company has established a Vigil Mechanism, which includes a Whistle Blower Policy in accordance with the provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, to address instances of fraud, misconduct, or mismanagement, if any.

Adequate safeguards are in place to protect individuals who avail of this mechanism against any form of victimisation or retaliation. The Vigil Mechanism and Whistle Blower Policy are available on the Company's website and can be accessed at: https://www.bkt-tires. com/ww/us/investors-desk.

iv. Audit Committee

All the recommendations made by the Audit Committee have been accepted by the Board. All the members have relevant experience in financial matters.

v. Number of Board Meetings

The Board of Directors of the Company met six times in the year, the details of which are provided in the Corporate Governance Report.

vi. Particulars of loans given, investment made, guarantees given and securities provided

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan or guarantee or security is proposed to be utilised by the recipient are provided in Note Nos. 5, 10, 14, 46 and 48 to the financial statement forming part of this Annual Report.

vii. Conservation of Energy, Technology Absorption and Foreign Exchange Earnings and outgo:

The particulars relating to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required to be disclosed 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 - IV and forms an integral part of this report.

viii. Annual Return:

Pursuant to Section 92(3) read with section 134(3)(a) of the Companies Act, 2013, copies of the Annual Returns of the Company prepared in accordance with Section 92(1) of the Act read with Rule 11 of the Companies (Management and Administration) Rules, 2014 may be accessed on the Company's website at: https://www. bkt-tires.com/ww/us/investors-desk.

ix. Particulars of Employees and related

disclosures:

The information required under Section 197(12) of the Companies Act, 2013 read with Rules 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure -V.

A statement comprising the names of top 10 employees in terms of remuneration drawn and every person employed throughout the year, who were in receipt of remuneration in terms of Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, are provided in the Report.

However, having regard to the provisions of the first proviso to Section 136 of the Act, the details are excluded in the report sent to members. Members who are interested in obtaining the particulars may write to the Company Secretary at registered/ corporate office of the Company. The aforesaid information is available for inspection 21 days before and up to the date of the ensuing AGM during the business hours on working days.

x. Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013

The Company has formulated and implemented a policy of prevention of sexual harassment at the workplace with mechanism of loading/redressal complaints. During the year under review, there were no complaints reported to the Board.

xi. Business Responsibility and Sustainability Committee Report

Your Company does business that delivers longterm shareholder value and benefits the society. Your Company continue to focus on its commitments which are aligned with national priorities and United Nations Sustainability Development Goals.

With regard to sustainability, various initiatives being taken under the ambit of Environment, Social and Governance ('ESG') are more particularly described under the relevant sections as reported in this Annual Report as well as the Business Responsibility and Sustainability Report.

I n terms of Regulation 34 of the Listing Regulations, 2015 read with relevant SEBI Circulars, new reporting requirements on ESG parameters were prescribed under "Business Responsibility and Sustainability Report” ('BRSR'). The BRSR seeks disclosure on the performance of the Company against nine principles of the p"National Guidelines on Responsible Business Conduct' ('NGRBCs'). Accordingly, for the FY ended 31^st March, 2026, your Company is publishing Business Responsibility Report. BRSR describes the initiatives taken by the Company from an environmental, social and governance prospective, in the prescribed form is annexed as Annexure - VI and forms an integral part of the Annual Report.

xii. Compliance with the Institute of Company Secretaries of India ("ICSI") Secretarial Standards

The relevant Secretarial Standards issued by the ICSI related to the Board Meetings and General Meeting have been complied with by the Company.

No disclosure or reporting is required in respect of the following items as there were no transaction on these items during the year under review:

a. Details relating to deposit and unclaimed deposits or interest thereon.

b. I ssue of equity shares with differential rights as to dividend or voting.

c. Issue of shares (including sweat equity shares) and Employee Stock Option Scheme of the Company under any scheme.

d. None of the managerial personnel i.e. Managing Director, Joint Managing Director and Wholetime Director of the Company are in receipt of remuneration / commission from Subsidiary Companies of the Company.

e. No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern and Company's operation in future.

xiii. IBC Code & One-time Settlement

The Board of Directors confirms that there are no proceedings pending against the Company under the Insolvency and Bankruptcy Code, 2016 (IBC Code). Furthermore, the Company has not engaged in any onetime settlement with any bank or financial institution during the financial year.

29. CAUTIONARY STATEMENT

Certain statements in the 'Director's Report & Management Discussion and Analysis' describing the Company's views about the Industry, expectations/ predictions, objectives etc., may be forward looking within the meaning of applicable laws and regulations. Actual results may differ materially from those expressed

in the Statement. Company's operations may inter-alia affect with the supply and demand stipulations, input prices and their availability, changes in Government regulations, taxes, exchange fluctuations and other factors such as Industrial relations and economic developments etc. Investors should bear the above in mind.

30. APPRECIATION

Your Company continues to operate efficiently, driven by a strong culture of professionalism, creativity, integrity, and continuous improvement across all functions and areas. This commitment, combined with the efficient utilisation of resources, has enabled sustainable and profitable growth, ensuring long-term value for stakeholders.

The Board of Directors expresses its sincere appreciation for the invaluable assistance and cooperation received from financial institutions, banks, government authorities, customers, vendors, and members during the year under review. Their support has been instrumental in the Company's continued growth and success.

The Board also wishes to place on record its deep sense of appreciation for the dedicated and committed services of the Company's executives, staff, and workers, whose efforts have been pivotal in driving operational excellence and achieving strategic objectives.

Last but not the least, your Directors wish to place on record their warm appreciation to you for your continuous support and encouragement.

For and on behalf of the Board of Directors

Arvind Poddar

Place: Mumbai Chairman & Managing Director

Dated: 8^th May, 2026 DIN: 00089984