Dear Members,

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

(Amount in ' In Lakhs)

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

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

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

L30204TN1998PLC041571.

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

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

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

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

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

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

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

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

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

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

Apart from as stated above, the Company has not: i) issued any shares, warrants, debentures, bonds, or any other convertible or non-convertible securities. ii) issued equity shares with differential rights as to dividend, voting or otherwise iii) issued any sweat equity shares to its directors or employees iv) made any change in voting rights v) reduced its share capital or bought back shares vi) changed the capital structure resulting from restructuring vii) made any corporate action except in respect of it's IPO process.

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

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

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

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

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

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

There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of this report, which forms part of this report.

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

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

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

In terms of Section 134(3)(c) & 134 (5) of the Companies Act, 2013, with respect to Directors' Responsibility Statement it is hereby confirmed that: a) in the preparation of the annual accounts for the financial year ended 31st March, 2026, the applicable accounting standards have been followed and there are no material departures from the same; b) the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2026 and of the profit of the Company for the year ended on that date; c) the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) the Directors have prepared the annual accounts for the financial year ended 31st March, 2026 on a going concern basis; e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and f) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

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

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

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

Reference may also be made Related Party transactions in Note 16 of Notes to Accounts of the Financial Statements for more details. (stand alone financial statements) All transactions with related parties are in accordance with the RPT Policy. The policy on materiality of related party transactions and dealing with related party transactions ("RPT Policy") formulated by the Board can be accessed at https://www.airflow.co.in/pdf/Policies-21.08.2025/8.%20 Policy%20for%20Materiality%20of%20Related%20Party%20 Transaction.pdf

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

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

The Board of Directors of the Company comprises the following individuals who bring the right mix of knowledge, skills and expertise and help the Company in implementing the best Corporate Governance practices: Mr. Dakshinamoorthy Venkatesan (DIN:00232210) - Chairman-Cum- Managing Director Mr. Dakshna Moorthy Manikandan (DIN: 00232275) - Joint Managing Director Mr. Venkatesan Sathishkumar (DIN: 08561438) - Whole-time Director Ms. Manikandan Nanthini (DIN: 08561378) - Non-Executive Non-Independent Director Mr. Sudhanshu Mani (DIN: 10124439) - Independent Director Mr. Tilak Raj Seth (DIN: 07027068) - Independent Director The composition of the Board consists of a combination of Executive and Non-Executive Directors and not less than 1/3rd of the Board comprising of Independent Directors.

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

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

During the year under review, there was no any change in the constitution of board of Directors and key managerial personnel of the Company, except the following: Mr. Thygarajan Sivakumar (Membership Number: A8192) has resigned as Company Secretary of the Company w.e.f. 13/11/2025, The Board of Directors took note of resignation of Mr.Thygarajan Sivakumar (Membership Number: A8192) as Company Secretary of the Company and expressed their sincere appreciation for the valuable services rendered by him during his tenure as Company Secretary of the Company.

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

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

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

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

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

During the Financial Year 2025-2026 a total no. of 17 (Seventeen) Board meetings were held, the details of attendance of Directors are provided below. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013:

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

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

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

The Auditors have confirmed that they are not disqualified from continuing as the Statutory Auditors of the Company and satisfy the prescribed eligibility criteria. M/s. Varadarajan & Co, Chartered Accountants, have submitted their Report on the Financial Statements of the Company for the FY 2025-26, which forms part of the Annual Report 2025-26.

For the financial year 2025-26, M/s SVM & Associates, Cost Accountants, Chennai, Firm Registration No: 000536, have conducted the audit of the cost records of the Company. In compliance with the provisions of Section 148 of the Act, the members of the company have ratiRs.ed the remuneration paid/payable to the Cost Auditor for the financial years 2025-26 at the Annual General Meeting of the Company held on September 15, 2025. The audit is in progress and the report will be filed with the Ministry of Corporate Affairs within the prescribed period.

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

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

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

The Secretarial Audit report received from M/s. SKD & Associates for the financial year 2025-26 in the prescribed form MR3 pursuant to the provisions of Section 204 of the Act is provided in Annexure III forming part of this report. The said Report does not contain any qualification, reservation or adverse remark, except for observations relating to delay/non-Rs.ling of certain statutory forms and returns, delay in disclosure of Related Party Transactions for the half-year ended 30th September 2025 to BSE Limited, and certain website disclosures required under the applicable provisions. The management response in respect of the observations Secretarial Auditor and Statutory Auditor form part of this Report.

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

The adjudication orders referred to in the Auditors' Report relate to non-compliance with the provisions of Sections 135(5) and 135(6) of the Companies Act, 2013 for the financial years 2019-20 to 2022-23. Being aggrieved by the adjudication orders passed by the Registrar of Companies (RoC), Chennai on the suo-motto adjudication application of the company before the RoC, the Company preferred appeals under Section 454(5) of the Companies Act, 2013 before the Regional Director, Southern Region, Ministry of Corporate Affairs. The appeals were pending for consideration and disposal as at March 31, 2026. Accordingly, the aforesaid adjudication orders are under challenge before the competent appellate authority and have not attained finality. The Company is pursuing the appeals on their merits and shall take appropriate action based on the final outcome of the appellate proceedings. The Secretarial Audit contain observations relating to delay/non-Rs.ling of certain statutory forms and returns, delay in disclosure of Related Party Transactions for the half-year ended 30th September 2025 to BSE Limited, and certain website disclosures required under the applicable provisions.

In this regard, the Directors wish to clarify that the statutory forms and returns referred to in the Secretarial Audit Report have since been duly filed with the Registrar of Companies along with the applicable additional fees, wherever required, and necessary steps are being taken to complete the pending filings at the earliest. The delay in submission of the Related Party Transactions disclosure was for one day and the applicable Rs.ne levied by BSE Limited has been duly paid. The Company has also taken necessary steps to update the requisite disclosures on its website and strengthen its compliance monitoring mechanism.

The Company has also strengthened its internal compliance monitoring and review mechanism to ensure timely filings, disclosures and adherence to applicable statutory and regulatory requirements going forward. The Board continues to monitor statutory compliances and has advised the management to maintain appropriate systems and controls for timely compliance with applicable statutory requirements.

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

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

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

The internal control system is supplemented by internal audits, regular reviews by the management, and guidelines that ensure the reliability of financial and all other records. The management periodically reviews the framework, eRs.cacy, and operating effectiveness of the Internal Financial Controls of the Company The Company has, in material respects, adequate internal financial control over financial reporting, and such controls are operating effectively. Internal Audits are carried out to review the adequacy of the internal control systems and compliance with policies and procedures. Internal Audit areas are planned based on inherent risk assessment, risk score, and other factors such as probability, impact, significance, and strength of the control environment. Its adequacy was assessed, and the operating effectiveness was also tested.

The Company has zero tolerance for sexual harassment at workplace and has a mechanism in place for prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules made thereunder. The Company is committed to provide equal opportunities without regard to their race, caste, sex, religion, color, nationality, disability, etc.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The Company had filed a suo motu application for adjudication in respect of non-compliance with the provisions of Sections 135(5) and 135(6) of the Companies Act, 2013 for the financial year 2022-23. The Registrar of Companies, Chennai, vide order dated 7th January 2026, imposed a penalty of Rs.19,64,272 on the Company and Rs.1,96,427 on each of the two Directors concerned. The Company has preferred appeals against the adjudication orders passed by the Registrar of Companies, Chennai, in respect of the matters referred to at Item Nos. 3 to 6 above, before the Regional Director, Southern Region, Ministry of Corporate Affairs, on 6th March 2026. The said appeals are pending for disposal. Pending the outcome of the appeals, in the event the penalties imposed are not waived or reduced by the Appellate Authority, the Company may be required to bear the penalties to the extent sustained, which may have a consequential impact on the profitability of the Company.

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

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

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

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

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

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

The information pertaining to conservation of energy, technology absorption, Foreign exchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act, 2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are provided in Annexure-V to this Report.

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

As on 31st March 2026, the company has one subsidiary i.e., Sree Dakssnaa Aerospace and Defence India Private Limited bearing CIN: U30305TN2024PTC170955, incorporated on 11/06/2024, and having its registered office at No.127, Mettupalayam Road, Opp. to Samsung, Panruti, Kanchipuram, Sriperumbudur, 631604, Tamil Nadu, India, is engaged in the business of "Aerospace and Defense". The Company has not yet started commercial operation. Your company is holding 79.20 % of the Paid-up Equity Share Capital as on date of signing this report. There has been no material change in the nature of the business of the subsidiary.

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

Pursuant to the provisions of Section 136 of the Act, the Company's financial statements, consolidated financial statements along with relevant documents, and separate audited financial statements of its subsidiaries are posted and available on the Company's website at https://www.airflow. co.in/pdf/Financial%20Statement%20of%20Subsidiary%20 Company.pdf The Board of Directors at their meeting held on November 21, 2025 approved formation of a Joint Venture under the name and style M/s. Airbang Solutions Private Limited in collaboration with M/s. Big Bang Boom Solutions Private Limited. The Company is in the process of forming the said Joint Venture. Hence, details of the same are not required to be disclosed in Form No. AOC-1.

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

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

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

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

Details are as under:

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

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

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

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

The Board has constituted following committees in accordance with the requirements of the Companies Act and SEBI Listing Regulations: a) Audit Committee; b) Stakeholders' Relationship Committee; c) Nomination and Remuneration Committee; d) Risk Management Committee; and e) Corporate Social Responsibility Committee.

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

The Audit Committee was constituted at the Board meeting held on December 12, 2024 pursuant to Section 177 of the Companies Act, 2013. During the Financial Year 2025-26, the Company held Seven (07) Audit Committee meeting on April 20, 2025, June 10, 2025, August 21, 2025, November 13, 2025, November 21, 2025, February 5, 2026, and February 14, 2026. The composition of the Committee as on March 31, 2026 and the details of meetings attended by its members during the financial year 2025-26 are given below:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Independent Directors of the Company met separately on 30th March, 2026 without the presence of Non-Independent Directors and members of Management. In accordance with the provisions under Section 149 and Schedule-IV of the Act, following matters were, inter alia, reviewed and discussed in the meeting: i) Performance of Non-Independent Directors and the Board of Directors as a whole; ii) Performance of the Chairman of the Company taking into consideration the views of Executive and Non-Executive Directors; iii) Assessment of the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

All the Independent Directors were present at the meeting.

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

The Non-Executive Directors are paid remuneration by way of sitting fees for attending meetings of the Board and Committees thereof and reimbursement of expenses incurred for participation in such meetings, within the limits approved by the shareholders and permitted under applicable laws. The payment of remuneration to Non-Executive Directors is in accordance with the Nomination and Remuneration Policy of the Company and within the limits prescribed under the Companies Act, 2013 and SEBI regulations.

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

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

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

In a separate meeting of independent directors, performance of Non-Independent Directors and the Board as a whole was evaluated. Additionally, they also evaluated the performance of Chairman of the Board, taking into account the views of Executive and Non-Executive Directors in the aforesaid Meeting. The Board also assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties. The above evaluations were then discussed in the Board Meeting and performance evaluation of Independent directors was done by the entire Board, excluding the Independent Director being evaluated.

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

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

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

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

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

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

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

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

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

Address:

301, The Centrium, 3rd Floor, 57, Lal Bahadur Shastri Road, Nav Pada, Kurla (West), Kurla, Mumbai, Mumbai, Maharashtra, India, 400070 Toll-free No.: 1800 309 4001 Website: www.kfintech.com Investor Grievance Email: einward.ris@kfintech.com Contact Person: Mr. M Murali Krishna SEBI Registration Number: INR000000221 CIN: L72400MH2017PLC444072

The Company has entered into tripartite agreements for dematerialization of equity shares with the KFIN Technologies Limited, National Securities Depository Limited and Central Depository Services (India) Limited. As on 31st March, 2026, the shares of the Company held in demat form represents 100% of the total issued and paid-up capital of the Company. The ISIN for the Equity shares of the Company is INE0XBS01012.

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

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

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

Pursuant to Regulation 76 of Securities and Exchange Board of India (Depositories Participants) Regulations, 2018 a Company Secretary in Practice carries out audit of Reconciliation of Share Capital on quarterly basis to reconcile the total admitted equity share capital with the National Securities Depository Limited (NSDL) and the Central Depository Services (India) Limited (CDSL) and the total issued and listed equity share capital. The audit report confirms that the total issued/paid-up capital is in agreement with the total number of shares in physical form and the total number of dematerialized shares held with NSDL and CDSL. The said report, duly signed by practicing company secretary is submitted to stock exchanges where the securities of the company are listed within 30 days of the end of each quarter and this Report is also placed before the Board of Directors of the company.

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

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

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

The details of the proposed utilization of IPO Proceeds are as follows:

*Total issue size is '9,109.80 lakhs, Including Issue Related Expenses of '225.00 lakhs

The details of the Utilisation / Variation of IPO proceeds as on 31st March 2026 is as follows:

The Company has not made any application or no proceeding is pending under the Insolvency and Bankruptcy Code, 2016 during the Financial Year.

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

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

During the period since listing of shares of the company to the date of this report, there were no complaints received from the investors. The designated email id for Investor complaint is cs@airflow.co.in.

Company Secretary & Compliance Officer Registered office: No. 9, Chelliamman Koil Street, Keelkttalai, Chennai-600117, Tamil Nadu, India. Contact No. +91 9600615940; E-mail: cs@airflow.co.in

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

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

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