The Directors are pleased to present the 78^th Annual Report, together with the audited financial statements for the financial year ended March 31,2026.

COMPANY OVERVIEW

Your Company offers one of India's widest range of room air conditioning and commercial refrigeration & air- conditioning products, as well as a comprehensive range of air purifiers, air coolers, storage water coolers, water purifiers, cold chain equipment and speciality products. It fulfils the cooling, refrigeration & air-conditioning requirements of a large number of corporate, commercial as well as residential customers.

Leveraging on its project execution capabilities, your Company offers turnkey solutions in MEP (Mechanical, Electrical, Plumbing

and Fire-fighting) contracting for Buildings, Factories, Data Centres, Infrastructure, Heavy Industry and Water Distribution projects.

Your Company's integrated business model of a Manufacturer, Contractor and After-sales service provider enables it to offer end-to-end solutions to its customers, a factor that has proved to be a significant differentiator in the marketplace.

FINANCIAL HIGHLIGHTS

The financial statements of the Company are prepared in accordance with the applicable provisions of the Companies Act, 2013 (the 'Act') including Accounting Standards as specified in Section 133 of the Act, read with the Companies (Accounts) Rules, 2014, and amendments thereof. The consolidated and standalone financial highlights of the Company for the financial year ended March 31,2026, are summarised as follows:

OPERATING RESULTS

FY26 was a challenging year with multiple external headwinds that impacted business performance across segments. While the Unitary Products segment was adversely affected by unfavourable weather conditions resulting in subdued consumer demand, the Company benefited from strong growth in its International Business and resilient performance in the Electro-Mechanical Projects and Commercial Air Conditioning business enabling it to deliver modest overall revenue growth.

Notwithstanding near-term market challenges, the Company remained focused on its long-term strategic priorities through sustained investments in manufacturing capacity, research and development, sales and distribution expansion, digital transformation, talent development, and capability enhancement. These investments reinforce the Company's commitment to

strengthen its market position, enhancing operational scalability, and driving sustainable long-term value creation.

On a consolidated basis, revenue from operations for the current financial year grew by 3.62% to ' 12,401.99 crores as compared to ' 11,967.65 crores in the previous financial year. Your Company's consolidated Total Income in the current financial year stands at ' 12,463.90 crores. Net profit before exceptional items and tax (including share of profit of Joint Venture) for the current financial year stood at ' 741.94 crores reflecting a decline of 3.95% as compared to ' 772.42 crores in the last financial year. During the current financial year, pursuant to the notification of Labour Codes and as required by the ICAI Guidance Note, the Company had, on an estimated basis, recognised the incremental impact of Gratuity and Leave Encashment amounting to ' 56.35 crores for the period ended on December 31, 2025, and was shown as an

Exceptional Item. Consequently, the net profit after exceptional items and tax declined by 10.81% to ' 527.33 crores as compared to ' 591.28 crores in the previous financial year.

On a standalone basis, revenue from operations grew by 4% to ' 11,779.23 crores as compared to ' 11,325.75 crores in the previous year. Your Company's standalone net profit before exceptional items and tax for the current financial year stood at ' 559.65 crores as compared to ' 649.93 crores in the previous financial year, while the net profit after exceptional items and tax declined to ' 385.10 crores as compared to ' 484.90 crores in the previous year.

The Group operates through three business segments: (i) ElectroMechanical Projects and Commercial Air Conditioning Systems; (ii) Unitary Products; and (iii) Professional Electronics and Industrial Systems. The performance of the segments during the year under review is summarized below:

I. Electro-Mechanical Projects and Commercial Air Conditioning Systems

a. Electro-Mechanical Projects Business

The Projects business witnessed healthy order inflows from the data center and factories sector, while the order inflow from buildings and infrastructure sectors remained subdued. The outlook for FY27 remains encouraging driven by sustained demand from data center investments and broad based manufacturing expansion cycle.

As part of its disciplined capital allocation strategy, the Company continues to adopt a selective approach towards order acquisition. Consequently, the carried-forward order book stood at ' 4,664 crores as of March 31, 2026, compared with ' 4,755 crores in the previous year.

b. Commercial Air Conditioning Systems

The Commercial Air Conditioning business recorded modest revenue growth during the year. However, the margins for the business were impacted due to input cost inflation . Your Company continues to maintain its leadership position in Ducted Air-conditioning Systems and a formidable position in VRFs and Screw Chillers.

With enhanced and strengthened product portfolio and focused market interventions, the Company remains well positioned to further expand its market presence and capture growth opportunities.

c. International Business

The International Business delivered a strong performance during the year, and played an important role in mitigating the impact of subdued demand due to unfavorable weather conditions and other

uncertainties across domestic businesses. Geopolitical uncertainty, including tariff-related uncertainties continue to pose challenge in the US market where the long-term prospects though encouraging, are expected to be influenced by the outcome of the proposed India-US trade deal.

The Company's strategic expansion into international markets continues to gain momentum. Your Company's supplies to Europe commenced during the Financial Year, and the Company remains optimistic about the growth opportunities across key global markets.

Revenue in this segment for the year grew by 12.75% to ' 6,762.80 crores as compared to ' 5,997.99 crores in the previous year. The segment result grew 2.25% to ' 501.91 crores as compared to ' 490.88 crores in the previous year.

II. Unitary Products

a. Cooling and Purification Products Business

In FY26, the Cooling and Purification Products business experienced a challenging year due to unfavourable weather conditions which adversely impacted consumer demand. In the last quarter of the financial year the business witnessed reasonable growth with channel partners across regions stocking up for the summers.

While the business remains inherently weather dependent, the Company is focused on driving growth through enhanced product portfolio, deeper market penetration and continued expansion of its distribution network.

b. Commercial Refrigeration Business

Demand across Deep Freezer and Modular Cold Room categories remained muted due to subdued activity in frozen food and quick service restaurant segments. However, the Storage Water Coolers witnessed double digit growth driven by strong demand from the government and corporate sectors.

The Company continued to maintain leadership position in Deep Freezers, Storage Water Coolers and Modular Cold Rooms.

Reflecting the impact of unfavourable weather conditions and muted demand for refrigeration products, the segment revenue declined to ' 5,332.36 crores in FY26 as compared to ' 5,621.11 crores in the previous year, a drop of 5%. Segment results declined by 7.73% to ' 434.82 crores, compared to ' 471.26 crores in FY25.

III. Professional Electronics and Industrial Systems (PE&IS)

The Med-Tech Solutions business continued to face uncertainty arising from evolving regulatory framework resulting in the business slowing down during the Financial Year. However, Industrial Solutions business recorded decent growth driven by demand from the automotive and steel sector, and the Data Security Solutions also maintained a steady performance.

The segment revenue for the year declined by 12% to ' 306.83 crores as against ' 348.55 crores in the previous year. However, the segment result grew by 17.4% to ' 34.89 crores as compared to ' 29.72 crores in the previous year primarily driven by focused cost optimization and operational efficiency initiatives.

DIVIDEND

The Board at its meeting held on May 6, 2026, has recommended a final dividend of '8.5 per Equity Share of face value of '2 each for the financial year ended March 31,2026. This dividend will be paid subject to the approval of the members at the Annual General Meeting to be held on August 6, 2026, to those members whose names appear in the list of Beneficial Owner/Register of Members as on the record date, i.e. July 17, 2026.

The Board has adopted the Dividend Distribution Policy for the Company. During the year, the Dividend Distribution Policy was amended to broaden the scope of permissible uses of retained earnings.

The Dividend Distribution Policy can be viewed on the website of the Company at: https://www.bluestarindia.com/media/104569/ dividend-distribution-policy.pdf

FINANCING

During this year, on a consolidated basis the finance cost increased to ' 72.14 crores as compared to ' 48.80 crores in the previous year primarily due to higher average borrowings levels utilized to support enhanced working capital requirements.

The Company's forex cost declined to ' 4.78 crores for the year as compared to ' 11.83 crores in the previous year. FY26 witnessed heightened currency volatility especially in the second half of the year, which increased the forex cost of imports. However, your Company benefitted from higher exports compared to previous year as it helped pare the forex cost.

Your Company continues to monitor foreign currency exposure and takes appropriate actions as guided by Foreign Exchange Risk Management Policy.

DEPOSITS

The Company has not accepted any deposits from the public, falling within the ambit of Section 73 of the Act, read with the Companies (Acceptance of Deposits) Rules, 2014.

CONSOLIDATED FINANCIAL STATEMENTS

As required under Regulation 34 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (the 'Listing Regulations'), and Section 129(3) of the Act, the consolidated financial statements prepared by the Company as per the Indian Accounting Standards (Ind AS), forms part of this Annual Report.

The Consolidated Financial Statements shall be laid at the ensuing Annual General Meeting of the Company for members approval.

SUBSIDIARIES AND JOINT VENTURE COMPANIES I. Subsidiary Companies:

a. Blue Star Engineering & Electronics Limited

Blue Star Engineering & Electronics Limited ('Blue Star E&E') is a wholly owned subsidiary of the Company. Blue Star E&E provides advanced technology products to the BFSI and Healthcare sectors as well as turnkey engineering solutions that cater to the Industrial sector. It is an exclusive distributor and system integrator in India for many globally renowned manufacturers of high-technology professional electronics equipment and solutions, as well as industrial products and systems.

Revenue from operations of Blue Star E&E for the year ended March 31, 2026, was ' 310.55 crores, as against its previous year's revenue of ' 353.66 crores. The subsidiary achieved a net profit of ' 37.61 crores for the year under review, as against previous year's net profit of ' 40.17 crores.

b. Blue Star Climatech Limited

Blue Star Climatech Limited is a wholly owned subsidiary of the Company. It was a material subsidiary under the Listing Regulations for financial year 202526. Blue Star Climatech is a manufacturer of all kinds of air conditioners, commercial refrigeration equipment, cooling appliances and other related products.

Blue Star Climatech's state-of-the-art manufacturing facility in Sri City, Andhra Pradesh, has an annual capacity of 10.50 lakh units of split air-conditioners. This automated, smart factory incorporates advanced automation techniques across its assembly lines and material handling systems, with extensive integration of IoT and digitalisation. Committed to sustainability, Blue Star Climatech has implemented several green initiatives, including an advanced effluent treatment plant, rainwater harvesting, and solar power installations.

Revenue from operations of Blue Star Climatech for the year ended March 31,2026, was '1,509.31 crores as compared to previous year's revenue of '1,484.24 crores. The subsidiary achieved a net profit of '67.01 crores for the year under review, as against previous year's net profit of '61.52 crores.

c. Blue Star International FZCO

Blue Star International FZCO is a wholly owned subsidiary of the Company, operating in the Dubai Airport Freezone, UAE. It is responsible for the development and growth of the Company's Global Products Sales business in Middle East and Africa (MEA) regions.

This company primarily promotes the export of Blue Star's air conditioning and commercial refrigeration products and systems.

The consolidated revenue from operations and net profit of this company for the year ended March 31, 2026, was '293.80 crores and '10.29 crores as compared to '331.48 crores and '5.89 crores in the previous financial year. On a standalone basis, revenue from operations and net profit of this company for the year ended March 31, 2026, was '161.73 crores and '6.63 crores as compared to '155.51 crores and '4.52 crores in the previous financial year.

d. Blue Star MEA Airconditioning LLC

Blue Star MEA Airconditioning LLC (Formerly 'Blue Star Systems and Solutions LLC') is a wholly owned subsidiary of Blue Star International FZCO and is engaged in the activities of directly selling central air conditioning equipment, executing mid-sized HVAC projects, and offers after-sales service in the mainland UAE.

Revenue from operations of this company for the year ended March 31, 2026, was '131.72 crores as compared to previous year's revenue from operations of '173.88 crores. This company has generated a net profit of '3.90 crores for the year ended March 31, 2026, as compared to a net profit of ' 2.70 crores in the previous year.

e. Blue Star Qatar W.L.L.

Blue Star Qatar W.L.L., a 49:51 joint venture between the Company and Al Malki Trading & Contracting Co., is principally engaged in the business of MEP contracting and maintenance in Qatar for residential, commercial and industrial purposes.

It is a subsidiary of the Company under Section 2(87)(i) of the Act, as the Company controls the management of Blue Star Qatar.

Revenue from operations of Blue Star Qatar for the year ended March 31,2026, was ' 64.47 crores as compared to ' 67.31 crores in the previous financial year. This company incurred Net Loss for the year ended March 31,2026, of ' 7.28 crores as compared to net profit of ' 0.80 crores in the previous year.

The Company's Board of Directors at its meeting held on May 6, 2026, granted its in-principle approval for acquisition of 51% of the shares held by Al Malki Trading & Contracting Co. in Blue Star Qatar W.L.L. The Board authorised Executive Management Committee of the Company to negotiate and finalise the contours of the acquisition at a face value, subject to the fair market valuation, and the total consideration for the acquisition not exceeding ' 50 lakhs.

f. BSL AC&R (Singapore) Pte. Ltd.

BSL AC&R (Singapore) Pte. Ltd., is a wholly owned subsidiary of Blue Star International FZCO to directly sell central air conditioning equipment, execute midsized HVAC projects and offer after-sales service. This company also owns a 49% stake in the joint venture, Blue Star M&E Engineering Sdn Bhd.

Revenue from operations of this subsidiary for the year ended March 31, 2026, was ' 0.36 crores as compared to previous year's revenue of ' 2.09 crores. This subsidiary incurred a net loss of ' 0.24 crores for the year ended March 31,2026, as compared to net loss of ' 0.09 crores in the previous financial year.

g. Blue Star North America Inc.

Blue Star North America Inc., incorporated in the State of Delaware, is a wholly owned subsidiary of the Company. It is currently engaged in the business of Custom Design & Manufacturing (CDM) of air conditioning, heating and refrigeration equipment for OEM brands in the United States, Canada, and Latin American markets.

Revenue from operations of this subsidiary for the year ended March 31, 2026, was ' 619.50 crores as compared to previous year's revenue of ' 333.10 crores. Net profit for the year ended March 31,2026, was ' 34.28 crores as compared to net profit of ' 15.34 crores in the previous financial year.

h. Blue Star Europe B.V.

Blue Star Europe B.V., incorporated in Netherlands, Europe, is a wholly owned subsidiary of the Company. It is currently engaged in the business of Custom Design & Manufacturing (CDM) of air conditioning, heating and refrigeration equipments for OEM brands in the European market.

Revenue from operations of this subsidiary for the year ended March 31,2026, was ' 57.28 crores as compared to previous year's revenue of ' 7.73 crores. Net profit for the year ended March 31,2026, was ' 0.20 crores as compared to net loss of ' 10.23 crores in the previous financial year.

i. Blue Star Innovation Japan LLC

Blue Star Innovation Japan LLC incorporated in Japan is a wholly owned subsidiary of the Company for the purpose of Research and Developments (R&D) of refrigeration cycles, control algorithms, and control boards for residential and commercial air conditioners and cold / hot water chillers.

Revenue from operations of this subsidiary for the year ended March 31,2026, was ' 9.25 crores as compared to ' 7.55 crores in the previous year. Net Loss for the year ended March 31, 2026, was ' 0.64 crores as compared to net profit of ' 0.27 crores in the previous financial year.

j. Blue Star Air Conditioning & Refrigeration (U) Limited

Blue Star Air Conditioning & Refrigeration (U) Limited is a wholly owned subsidiary of Blue Star International FZCO. This subsidiary is incorporated in Uganda for the purpose of carrying manufacture, sale and distribution of all kinds of air conditioning and commercial refrigeration products and systems and fabrication and repair of air conditioning system.

This subsidiary has generated nil revenue from operations for the financial year ended March 31,2026 and March 31,2025. It incurred a nil profit for the year ended March 31,2026, as compared to net loss ' 1.26 crores in the previous financial year.

II. Joint Venture Companies:

a) Blue Star M & E Engineering Sdn Bhd

Blue Star M & E Engineering Sdn Bhd, a 49:51 joint venture between BSL AC&R (Singapore) Pte. Ltd. and Amcorp Properties Bhd, Malaysia, has been principally engaged in the business of HVAC contracting and maintenance in Malaysia.

This company's total income for the year ended March 31,2026, was ' 23.5 crores as compared to ' 62 crores in the previous financial year. It made a net profit of ' 2.8 crores for the year ended March 31,2026, as compared to net loss of ' 4.4 crores in the previous year.

b) Blue Star Oman Electro-Mechanical Company LLC

Blue Star Oman Electro-Mechanical Company LLC is a joint venture between W J Towell & Co LLC and the

Company and it was formed to principally engage in the business of MEP contracting and maintenance in Oman.

Owing to certain disputes with the joint venture partners, the Board of Directors of the Company had approved a proposal to exit this Joint Venture in FY19 subject to regulatory and other compliances as may be applicable. The Company, in the year 2020, made an application to the Reserve Bank of India for its approval for a write-off of investment in this Joint Venture under the provisions of the Foreign Exchange Management Act. The approval from Reserve Bank of India is awaited.

W J Towell & Co LLC initiated arbitration proceeding with International Chamber of Commerce against the Company for the ongoing dispute. Initially, the claim was filed for OMR 103,18,000 (approx. ' 223.60 crores) which at the filing stage was subsequently revised to OMR 211,80,748 (approx. ' 461.74 crores).

The Company has filed its response contesting the claim raised by WJT and the arbitration proceedings were concluded in the later half of the financial year. The final award from the International Chamber of Commerce is awaited.

No company became or ceased to be a Subsidiary / Associate / Joint Venture company of the Company during the year under review.

As required under Section 136 of the Act, the audited annual accounts, including the consolidated financial statements of the Company and audited accounts of the subsidiary companies, are available on the website of the Company at www.bluestarindia.com.

A copy of these documents will be made available to the members, on their request in writing. The annual accounts will also be available for inspection by any member at the registered office of the Company during business hours up to the date of the Annual General Meeting.

A statement containing the salient features of the financial statements of the subsidiaries and joint venture companies in Form AOC-1, as required under Rule 5 of the Companies (Accounts) Rules, 2014, forms part of the Consolidated Financial Statements.

NEW INITIATIVES

As part of its commitment to delivering future-ready solutions, the Company advanced its product portfolio while investing in research and development capabilities. It commissioned state-of-the-art performance test laboratories at the Ashok M Advani Innovation Centre, Bhiwandi, for testing air-to-air and air-to-water heat pumps in line with Indian, European, and American standards.

During FY26, the Company introduced several new products and upgraded existing platforms across its businesses. In the room air-conditioner segment, it launched the premium ICONIA series, developed new indoor unit platforms as part of its localisation and import-substitution strategy, and expanded its air cooler portfolio. In commercial air conditioning, the Company introduced the VRF VI Plus series, new-generation 1-Way Cassette units, and energy-efficient inverter ducted systems featuring IoT-enabled connectivity and low-GWP refrigerants.

The Company also expanded its commercial refrigeration portfolio through energy-efficient deep freezers and enhanced cold room refrigeration solutions, while introducing a new range of brine chillers for process and pharmaceutical applications. Further, it commenced supplies of R290-based air-to-water heat pumps in Europe and completed the development of new heat pump solutions for residential applications.

Blue Star continued to invest in cutting-edge laboratories, specialised talent, digital engineering tools, and collaborative research initiatives. During the year, the Company filed 12 new patent applications, reinforcing its focus on innovation-led and sustainable growth. For more information on the products launched during the year, please refer to the Intellectual Capital section of the Integrated Report.

AWARDS AND RECOGNITIONS

During the year under review, the Company was felicitated with many prestigious awards for excellence in its areas of business. For detailed information on the same, please refer to the 'Awards and Recognitions' section of the Integrated Report.

DIRECTORS

Board

As on the date of this Report, the Board of the Company consists of twelve Directors comprising of six Independent Directors, three Non-Executive Non-Independent Directors and three Executive Directors. The Board comprised two women Directors, one Independent Director and one Non-Executive NonIndependent Director.

Retire by rotation

In accordance with the provisions of the Act, Rajiv R Lulla (DIN: 06384402), retires by rotation at the ensuing Annual General Meeting, and being eligible, offers himself for re-appointment. The Board recommends his re-appointment at the ensuing Annual General Meeting.

A brief profile of Rajiv R Lulla is annexed to the notice convening Annual General Meeting.

Appointment of Director:

During the year, based on the recommendations of the Nomination and Remuneration Committee, the following Directors were appointed by the Board:

A. Managing Director - B Thiagarajan's (DIN: 01790498) current term was set to conclude this fiscal year. Accordingly, he was re-appointed as the Managing Director of the Company for a further term commencing from April 1,2026 to May 24, 2027, not liable to retire by rotation, vide Ordinary Resolution passed by the Members through Postal Ballot on March 31, 2026.

B. Executive Director - Mohit Sud (DIN: 10034070), as an Executive Director - Unitary Cooling Products Group and Key Managerial Personnel of the Company, liable to retire by rotation, for a period commencing from April 1, 2026 to March 31, 2031, vide Ordinary Resolution passed by the Members through Postal Ballot on March 31,2026.

C. Independent Director - M S Unnikrishnan (DIN: 01460245) as an Independent Director of the Company for a term of five consecutive years commencing from January 29, 2026 to January 28, 2031, vide Special Resolution passed by the Members through Postal Ballot on March 31,2026.

Resignation/Cessation of Director:

A. Executive Director - Ponnada Venkata Rao (P V Rao) (DIN: 09177075) tendered his resignation as the Executive Director - Projects, Solutions & International of the Company with effect from February 28, 2026, owing to personal reasons.

B. I ndependent Director - Sam Balsara (DIN: 00076942) ceased to be an Independent Director of the Company with effect from January 31,2026, upon completion of his second term as an Independent Director.

C. Independent Director - Arvind K Singhal (DIN: 00092425) has submitted his resignation as an Independent Director of the Company on April 30, 2026, with effect from May 30, 2026, due to his pre-occupation with the current and some new professional commitments.

The Board has placed on record its deep appreciation of the invaluable services rendered by P V Rao, Sam Balsara and Arvind K Singhal during their tenure as Directors of the Company.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received the necessary declarations from each of the Independent Directors of the Company under Section 149(7) of the Act and Regulation 25 of the Listing Regulations, confirming that they meet with the criteria of independence as

laid down in Section 149(6) of the Act, along with Rules framed thereunder and Regulation 16 (1) (b) of the Listing Regulations. The declarations also confirm compliance with sub rule 3 of Rule 6 of the Companies (Appointment and Qualifications of Directors) Rules, 2014.

There has been no change in the circumstances affecting their status as Independent Directors of the Company.

Further, the Board, while considering the appointment of Independent Director mentioned above, based on the declarations/disclosures submitted, concluded that the Independent Director is a person of integrity and possess the relevant expertise and experience (including proficiency) to qualify as an Independent Director of the Company and is independent of the Management.

KEY MANAGERIAL PERSONNEL

As required under the provisions of Section 203 of the Act, the following personnel have been designated as the Key Managerial Personnel of the Company:

*Resigned as an Executive Director - Projects, Solutions & International with effect from February 28,2026.

** Appointed as an Executive Director - Unitary Cooling Products Group with effect from April 1,2026.

BLUE STAR EMPLOYEES STOCK OPTION SCHEME - 2024 ('ESOP 2024')

During the year under review, no changes were made to ESOP 2024, and the Scheme remains in compliance with the SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 ("SEBI SBEB Regulations") and the resolutions passed by the Members in this regard.

The certificate from the Secretarial Auditors certifying that the ESOP 2024 has been implemented in accordance with the SEBI SBEB Regulations and the resolution passed by the Members of the Company, has been uploaded on the website of the Company at: https://www.bluestarindia.com/investors/annual-report

The disclosures required under Regulation 14 read with Part F of Schedule I of the SEBI SBEB Regulations are available on the website of the Company at: https://www.bluestarindia.com/ investors/other-updates

DIRECTORS' RESPONSIBILITY STATEMENT

Under the provisions contained in Section 134(5) of the Act, the Directors, to the best of their knowledge and belief, confirm that:

• In the preparation of the annual accounts for the financial year ended March 31, 2026, the applicable accounting standards have been followed, along with proper explanation relating to material departures;

• They have selected such accounting policies and applied them consistently, and made judgments and estimates that are reasonable and prudent, to give a true and fair view of the state of affairs of the Company as at March 31,2026, and of the profit of the Company for the period April 1,2025 to March 31, 2026;

• They have taken proper and sufficient care of the maintenance of adequate accounting records, under the provisions of the Act for safeguarding the assets of the Company, and for preventing and detecting fraud and other irregularities;

• They have prepared the annual accounts for the year ended March 31, 2026, on a going concern basis;

• They have laid down internal financial controls to be followed by the Company, and such internal financial controls are adequate and are operating effectively; and

• They have devised proper systems to ensure compliance with the provisions of all applicable laws, and that such systems are adequate and operating effectively.

MEETINGS OF THE BOARD OF DIRECTORS

During the year under review, 5 (five) meetings of the Board of Directors were held. The intervening gap between these meetings was within the period prescribed under the Act and Listing Regulations. The details of the meetings and attendance of the Directors are provided in the Corporate Governance Report.

BOARD COMMITTEES

Your Company has in place all the Committees as mandated under the provisions of the Act and Listing Regulations as mentioned below:

• Audit Committee

• Nomination and Remuneration Committee

• Investor Grievance cum Stakeholders' Relationship Committee

• Risk Management Committee

• Corporate Social Responsibility and Environmental, Social & Governance Committee

Additionally, there are following Committees constituted for operational and administrative affairs:

• Share Transfer Committee

• Executive Management Committee

AUDIT COMMITTEE

As on March 31, 2026, the Audit Committee comprises three Independent Directors viz. Anil Harish (Chairman), Arvind K Singhal and G Murlidhar. B Thiagarajan ceased to be a member of the Committee with effect from January 29, 2026.

Pursuant to movement of Arvind K Singhal, Independent Director, M S Unnikrishnan, Independent Director and Rajiv R Lulla, NonExecutive Director were appointed as Members of the Committee with effect from May 6, 2026.

In accordance with the circular dated January 7, 2026 issued by the National Financial Reporting Authority, the Board, on the recommendation of the Audit Committee, and in consultation with the Statutory Auditors, approved the framework to ensure effective two-way communication between Those Charged with Governance and the Statutory Auditors.

The composition of the Committee is in compliance with the requirements of Section 177 of the Act and Regulation 18 of the Listing Regulations. The terms of reference of the Committee conform with the Act and the Listing Regulations as more particularly set out in the Corporate Governance Report, which forms part of this Annual Report. During the year under review, there was no instance wherein the Board had not accepted any recommendation of the Audit Committee.

NOMINATION AND REMUNERATION COMMITTEE

As on March 31, 2026, the Nomination and Remuneration Committee comprised two Independent Directors viz. Anita Ramachandran (Chairperson) and Vipin Sondhi and one NonExecutive Director, Dinesh N Vaswani.

Pursuant to movement of Sam Balsara, Independent Director and Chairperson of the Committee, Anita Ramachandran, Independent Director was elected as the Chairperson of the Committee in his place and Vipin Sondhi, Independent Director was appointed as a member of the Committee with effect from January 29, 2026.

The Committee is constituted in line with the requirements mandated by Section 178 of the Act and Regulation 19 of the Listing Regulations. The terms of reference of the Committee conform with the said requirements, as more particularly set out

in the Corporate Governance Report, which forms part of this Annual Report.

INVESTOR GRIEVANCE CUM STAKEHOLDERS' RELATIONSHIP COMMITTEE

As on March 31, 2026, the Committee comprised of Arvind K Singhal (Chairman) and two Non-Executive Directors viz. Rajiv R Lulla, and Sunaina Murthy.

Pursuant to movement of Arvind K Singhal, the Committee was re-constituted with Dinesh N Vaswani, Non-Executive Director appointed as the Chairman and Anil Harish, Independent Director was appointed as a member of the Committee with effect from May 6, 2026. Further, Rajiv R Lulla, Non-Executive Director ceased to be a member of the Committee with effect from May 6, 2026.

The Committee is constituted in line with the requirements mandated by Section 178 of the Act and Regulation 20 of the Listing Regulations. The terms of reference of the Committee conform with the said requirements, as more particularly set out in the Corporate Governance Report, which forms part of this Annual Report.

RISK MANAGEMENT COMMITTEE

As on March 31, 2026, the Risk Management Committee comprises of one Executive Director viz. Vir S Advani (Chairman), one Independent Director, Anil Harish and one Non-Executive Director, Rajiv R Lulla. B Thiagarajan ceased to be a member of the Committee with effect from January 29, 2026.

The Company has adopted a formal Risk Management Policy. The Committee identifies, evaluates and assesses the risks, understands the exposure of risks, and accordingly prepares and oversees execution of appropriate risk mitigation plans and identification of possible opportunities. The Committee and the Board have identified elements of risks, which, according to them, are crucial to the Company. It has identified Risk Management Units within the Company, the risk profiles of which are constantly monitored, and the severity of risk is tracked, based on a systematic risk rating methodology. Details of these elements of risks have been covered in the Management Discussion and Analysis, and Integrated Report, which forms part of this Annual Report and in the standalone financial statement in Note No. 43.

CORPORATE SOCIAL RESPONSIBILITY AND ENVIRONMENTAL, SOCIAL & GOVERNANCE (CSR & ESG) COMMITTEE

As on March 31, 2026, the CSR & ESG Committee comprises one Non-Executive Director, Sunaina Murthy (Chairperson) and two Independent Directors, Anita Ramachandran and M S Unnikrishnan.

B Thiagarajan ceased to be the Chairman and member of the Committee with effect from January 29, 2026 and in his place Sunaina Murthy, Non-Executive Director was elected as the Chairperson of the Committee and M S Unnikrishnan was appointed as a member of the Committee with effect from January 29, 2026.

During the year under review, the Company's total CSR obligation was ' 9.96 crores. As per the provisions of the Act, two percent of its average net profits made during the three immediately preceding financial years was ' 10.31 crores from which set-off for the excess CSR spent of ' 0.35 crores of FY25 was adjusted.

The Company has spent an amount of ' 10.21 crores towards various CSR initiatives. Based on the recommendation of CSR & ESG Committee, the Board of Directors have approved set-off of excess CSR spent of ' 0.24 crores towards CSR obligation of FY27. No amount has been transferred to the Unspent Corporate Social Responsibility Account in accordance with the provisions of Section 135(6) of the Act.

A brief outline of the CSR Policy and the initiatives undertaken by the Company on CSR activities during the year are set out in Annexure 2 of this report as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014, and amendments thereof. The CSR Policy is available on the website of the Company at: https://www.bluestarindia.com/media/343680/ csr-policy.pdf

Details of the other Committees of the Board including details of the meetings and attendance of all Committees are provided in the Corporate Governance Report, which forms part of this Annual Report.

EVALUATION OF PERFORMANCE OF THE BOARD, ITS COMMITTEES AND OF DIRECTORS

The Nomination and Remuneration Committee at its meeting held on January 15, 2026, and the Board at its meeting held on January 29, 2026, approved the criteria for evaluating the Chairman, Directors, the Board, and its Committees. Accordingly, the questionnaires were circulated seeking inputs of the Directors to evaluate on various parameters including structure and composition of the Board and Committees, quality of Board processes, Board culture and dynamics, effectiveness vis-a-vis stakeholders' expectations in terms of strategic direction, and guidance to the leadership team.

The inputs received from the Directors were deliberated upon and reviewed by the Independent Directors at a separate meeting held on March 27, 2026. At this meeting, they evaluated the performance of the Non-Independent Directors, the Board as well as that of the Chairman, taking into account the views of the Executive and Non-Executive Directors. The Board of Directors carried out an annual evaluation of the performance of the Board as a whole, the Chairman, the Directors individually, and the working of the Committees of the Board. The outcome of the evaluation was noted by the Nomination and Remuneration Committee at its meeting held on April 29, 2026, and by the Board of Directors at its meeting held on May 6, 2026. Broadly, the Directors have expressed their satisfaction with the evaluation process and the outcome. The Board also noted the key action points that emerged from the process for implementation. Additional details on the Board Evaluation is provided in the relevant section of the Corporate Governance Report, which forms part of this Annual Report.

NOMINATION AND REMUNERATION POLICY

The Nomination and Remuneration Policy has been adopted with the objective to provide a broad framework for the Board of Directors of the Company on appointment, removal, retirement, remuneration of the Directors, Key Managerial Personnel (KMP) and Senior Management Personnel (SMP); and Board diversity.

It is designed to foster a high-performance culture that enables the Company to attract, retain and motivate the Directors/KMPs/ SMPs to achieve results. As part of the Policy, the Nomination and Remuneration Committee has to ensure that the appointment of the candidate for the position of Directors/KMPs/SMPs possess the requisite skills, competencies, expertise, optimum talent mix, independence and their remuneration structure/ payouts is decided based on the adequacy of the level and composition of remuneration, well defined performance parameters, appropriate balance between fixed and variable incentives, share-based and other compensation plans, Company's performance against the annual budget, and individual performance against the key result areas, compensation and benefits survey based on industry benchmarks and current trends. The performance of the Directors/ KMPs/SMPs was evaluated and reviewed by the Nomination and Remuneration Committee.

The Nomination and Remuneration Policy is uploaded on the Company's website at: https://www.bluestarindia.com/ media/217800/blue-star-nrc-policy.pdf

MANAGERIAL REMUNERATION

Details of the ratio of the remuneration of each Director to the median employee's remuneration and other details in terms of Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and amendments thereof are provided below:

The Non-Executive Directors of the Company are paid sitting fees and commission as per the statutory provisions and within the limits approved by the members. The details of the remuneration of Non-Executive Directors are provided in the Corporate Governance Report, which forms part of this Annual Report.

CORPORATE GOVERNANCE

The Company is committed in maintaining the highest standards of corporate governance and continues to be compliant with the requirements of corporate governance as enshrined in the Listing Regulations.

The report on corporate governance together with a certificate from the Secretarial Auditors of the Company, confirming compliance with corporate governance norms as stipulated in the Listing Regulations, forms part of this Annual Report.

VIGIL MECHANISM

The Company is committed to conducting its business with the highest standards of ethics, integrity, and transparency across its operations, while ensuring full compliance with all the applicable laws and regulations. In line with a strong commitment to governance and compliance, the Company has instituted a robust and comprehensive Vigil Mechanism framework encompassing various elements and components in an integrated manner to enable effective oversight, reporting and resolution of concerns.

The Vigil Mechanism structure of the Company is based on the COSO 2017 ERM framework and COSO 2013 internal control-integrated framework governing risk, compliance, and controls. Embedded in the Vigil Mechanism structure are three lines of defence. The first line of defence comprises key management controls, viz., financial controls, governance policies, and internal control measures at the process owner level. The second line of defence is addressed by an assurance from risk management and compliance procedures. The third line of defence is provided through the work done by the Internal and the Statutory Auditors.

Governance policies, internal controls, stakeholders' engagement, enterprise risk management, compliance, and the internal and statutory audit, constitutes the core pillars of Blue Star's Vigil Mechanism. These elements are seamlessly integrated within the framework, enabling continuous interaction and reinforcement to uphold best practices, strengthen oversight and drive sustainable value creation for all stakeholders.

As a part of its governance policies, the Company has in place a whistle blower policy to enable the Stakeholders to report concerns of any unethical behaviour, unacceptable and improper practices, or suspected fraud. An Ethics Committee has been constituted, comprising the Group Chief Financial Officer, Group Chief Human Resources Officer, and Company Secretary & Compliance Officer (Ethics Officer) to administer this Policy. The Policy also provides a mechanism for stakeholders to approach the Chairman of Audit Committee or Compliance Officer. The

Company has also adopted a robust Governance, Risk and Compliance Framework that enables a seamless integration of processes and components around the Company's governance, risk and compliance objectives. The Audit Committee reviews on a quarterly basis, whistle blower and other Code of Conduct complaints and oversees the implementation of corrective actions wherever necessary.

The Whistle Blower Policy is uploaded on the Company's website at: https://www.bluestarindia.com/media/271525/whistle-blower-policy.pdf

The Company has also adopted a Code of Conduct which is available on the Company's website at: https://www.bluestarindia. com/media/271526/code-of-conduct.pdf

The Governance, Risk and Compliance Framework is uploaded on the Company's website at: https://www.bluestarindia.com/ media/335126/governance-risk-compliance-framework website. pdf

INTERNAL CONTROL SYSTEMS

The Company has established an internal control system commensurate with the size, scale, and complexity of its operations.

To enhance the standards of controls and governance, the Company has adopted the COSO 2013 framework to ensure that robust internal financial controls exist concerning operations, financial reporting, and compliance.

Significant features of the Company's internal control system are:

• A leading firm of Chartered Accountants manages the Internal Audit function in line with best-in-class governance practices. It reviews and reports to the Audit Committee about compliance with internal controls, the efficiency and effectiveness of operations as well as key process risks.

• The Audit Committee periodically reviews internal audit plans, significant audit findings, and adequacy of internal controls.

• Systematic self-certification of adherence to key internal controls, as part of control self-assurance by process owners, monitors, and reviewers.

• Adherence with a comprehensive information security policy and continuous upgrades of the Company's IT systems for strengthening automated controls.

• Appropriate segregation of duties and usage of technology for continuous controls monitoring and enhanced controls assurance.

• Continuous control review mechanism in place to check adequacy of the established internal controls.

During the year, the internal controls were tested and found effective, as a part of the Management's control testing initiative.

Accordingly, the Board, with the concurrence of the Audit Committee and the Auditors believe that the Company's Internal Financial Controls were adequate and operating effectively for the financial year ended March 31,2026.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has complied with the provisions of Secretarial Standards on Meetings of the Board of Directors (SS-1) and on General Meetings (SS-2).

LOANS, GUARANTEES AND INVESTMENTS

Details of loans, guarantees, investments and security provided as covered under the provisions of Section 186 of the Act, as may be applicable are given in the standalone financial statements as Note No. 9-11.

CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

The Company has in place a process for approval of Related Party transactions and dealing with related parties. All the related party transactions are approved by the Audit Committee. All related party transactions that were entered into during the financial year were on an arm's length basis and in the ordinary course of business.

There is no material transactions with any related party as defined under Section 2(76) of the Act and Regulation 2(zb) of the Listing Regulations and hence disclosure in Form AOC-2 has not been provided.

The details of transactions with the related parties as per Indian Accounting Standards are provided in the standalone financial statements in Note No. 39.

A policy governing the related party transactions has been uploaded on the Company's website at: https://www. bluestarindia.com/media/78799/policy-for-transaction-with-related-parties.pdf

HUMAN RESOURCES

The Company continued to strengthen its human capital capabilities during the year, recognising that talent remains a critical enabler of growth, innovation and long-term value creation. As on March 31, 2026, the Company had over 3,400 Managerial (M Staff) employees, supported by a multigenerational workforce with Gen Z employees constituting over 21% of the employee base.

Building a future-ready talent pipeline remained a strategic priority. During the year, the Company inducted over 150 campus trainees and continued to invest in leadership development, managerial capability building and critical talent readiness across functions. The Star Lead Programme for high-potential talent, along with other structured leadership initiatives, continued to strengthen the Company's leadership pipeline and succession readiness.

The Company further strengthened its leadership core through the onboarding of key senior leaders, including the Group Chief Technology Officer and Group President-Manufacturing, reinforcing capabilities across technology, innovation and operational excellence.

Capability development remained a key focus area during the year. Through the Academy of Leadership Development, employees completed over 34,000 hours of classroom and digital learning, supported by programmes delivered in collaboration with leading institutions and focused interventions across leadership, project management, solution selling, technical and functional domains.

The Company continued to advance its diversity, equity and inclusion agenda through focused initiatives aimed at enhancing representation and fostering an inclusive workplace culture. During the year, the number of women in managerial positions increased by 18%, reflecting the Company's commitment to creating equitable growth opportunities and strengthening leadership diversity.

Employee engagement and workforce experience remained central to the Company's people strategy. Continued focus on career development, internal mobility, workplace culture and employee connect initiatives contributed to stable workforce retention and a stronger employer brand. During the year, the Company's Glassdoor rating improved from 4.2 to 4.4, reflecting positive employee sentiment and positioning the Company favourably amongst industry peers.

The Company remains committed to building a skilled, agile and future-ready workforce and will continue to invest in leadership development, capability enhancement, digital enablement and talent transformation to support its long-term growth aspirations.

PARTICULARS OF EMPLOYEES

Details of employee remuneration as required under provisions of Section 197(12) of the Act read with Rule 5(2) & 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, will be made available during 21 days before the Annual General Meeting upon request in writing made by the shareholder to the Company Secretary of the Company.

DISCLOSURES UNDER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has zero-tolerance for sexual harassment at the workplace and has adopted a policy on prevention, prohibition, and redressal of the same, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, and the Rules thereunder.

All employees (permanent, contractual, temporary, and trainees) are covered under this Policy. The Company has duly constituted Internal Complaints Committees in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013, to redress complaints received regarding sexual harassment. The Company organises workshops and awareness programs at regular intervals for sensitising the employees with the provisions of the said Act.

The details and status on the sexual harassment complaints for the financial year 2025-26 are as follows:

• Number of complaints pending resolution as on March 31, 2025 - One

• Number of complaints received during the financial year under review - NIL

• Number of complaints disposed of during the financial year under review - One

• Number of complaints pending as on March 31,2026 - NIL

• Number of complaints pending for more than 90 days received during the financial year - NIL

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on Energy Conservation, Technology Absorption and Foreign Exchange Earnings and Outgo, as required under Section 134(3)(m) of the Act, read with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as Annexure 1.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis for the year under review, as stipulated under Regulation 34 of Listing Regulations, forms part of this Annual Report.

BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

In compliance with Regulation 34 of the Listing Regulations, the Business Responsibility and Sustainability Report describing sustainability initiatives undertaken by the Company during the year under review is provided in a separate section forming part of this Annual Report.

INTEGRATED REPORTING

Your Company has adopted Integrated Reporting describing initiatives undertaken by the Company for enhancing stakeholders' value in the long term. The report on Integrated Reporting is provided in a separate section forming part of this Annual Report.

STATUTORY AUDITORS

The Company's existing Statutory Auditors, M/s Deloitte Haskins & Sells LLP, Chartered Accountants, were re-appointed by the Members at the 75^th Annual General Meeting (AGM) of the Company held on August 3, 2023, for a period of 5 years, to hold office until the conclusion of the 80^th AGM to be held for FY 202728 at such remuneration as may be mutually agreed upon between the Board of Directors of the Company and the Auditors.

AUDITOR'S REPORT

The Audit Committee and the Board have duly reviewed the Statutory Auditor's Report on the financial statements. There is no qualification, reservation, or adverse remark given by the Auditors in their report.

COST AUDITORS

In terms of the provisions of Section 148 of the Act, read with the Companies (Cost Records and Audit) Rules, 2014, the Board of Directors had on the recommendation of the Audit Committee, appointed Narasimha Murthy & Co., Cost Accountants, Hyderabad, as the Cost Auditors, to conduct the cost audit for the financial year ended March 31, 2026.

As per the Act, the remuneration payable to the cost auditor is required to be placed before the members in a general meeting for their ratification. Accordingly, a resolution seeking members' ratification for the remuneration payable to Narasimha Murthy & Co., forms part of the Notice convening the Annual General Meeting.

COST RECORDS

As per Section 148 of the Act, read with the Companies (Cost Records and Audit) Rules, 2014, your Company is required to maintain cost records and accordingly, such accounts and records are maintained.

SECRETARIAL AUDITORS

MMJB & Associates LLP, Company Secretaries, were appointed as the Secretarial Auditor of the Company, by the Members at the 77^th Annual General Meeting held on August 6, 2025, for a first term of 5 (Five) consecutive financial years to conduct Secretarial Audit for the period from April 1,2025 till March 31,2030.

The Secretarial Audit Report given by MMJB & Associates LLP, Company Secretaries, has been provided in Annexure 3 to this Report.

As required under Regulation 24A of the Listing Regulations, the Secretarial Audit Report of Blue Star Climatech Limited, the material unlisted subsidiary, issued by Ashish Bhatt & Associates is also provided in Annexure 3A to this Report.

The Secretarial Audit Report of the Company and Blue Star Climatech Limited as mentioned above do not contain any qualification, reservation, or adverse remark.

INTERNAL AUDITORS

In terms of the provisions of Section 138 of the Act read with Companies (Account) Rules, 2014, the Company has appointed Grant Thornton Bharat LLP, Chartered Accountants, as the Internal Auditors.

REPORTING OF FRAUDS BY AUDITORS

During the year under review, none of the auditors, viz., statutory auditors, cost auditors, and secretarial auditors, have reported to the Audit Committee, under Section 143(12) of the Act, any instances of fraud committed against the Company by its officers or employees, the details of which would need to be mentioned in the Board's Report.

ANNUAL RETURN

The annual return of the Company has been uploaded on the Company's website at: https://www.bluestarindia.com/investors/ annual-returns

RESERVES

During the financial year, there was no amount proposed to be transferred to the reserves.

PROCEEDINGS UNDER INSOLVENCY AND BANKRUPTCY CODE, 2016

There are no proceedings, either filed by the Company or against the Company, pending under the Insolvency and Bankruptcy Code, 2016 as amended, before the National Company Law Tribunal or other Courts as on March 31,2026.

OTHER DISCLOSURES

• Except as provided in the Report, no material changes, and commitments affecting the financial position of the Company, have occurred between the end of the financial year under review and the date of this report.

• There were no significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status of your Company and its operations in the future.

• Your Company has not issued Equity Shares with differential rights as to dividend, voting or otherwise.

• Your Company has listed its Commercial Paper on National Stock Exchange of India Ltd.

• Your Company has not issued any sweat equity shares.

• There has been no change in the nature of business of your Company.

• The Company has not made any one-time settlement for loans taken from the Banks or Financial Institutions, and hence the details of difference between amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof is not applicable.

• In terms of Regulation 34(3) read with Para A of Schedule V of the Listing Regulations, the Company, during the financial year, has not entered into any transaction with person or entity belonging to the promoter/promoter group holding 10% or more shareholding in the Company.

• There was no revision of financial statements and Board's Report of the Company during the year under review.

• The Company has duly complied with the Maternity Benefit Act, 1961, and applicable State Rules.

• The Managing Directors did not receive any remuneration or commission from any of the subsidiaries of your Company.

• The Company does not have any scheme in respect of shares on which voting rights are not directly exercised by the employees.

ACKNOWLEDGEMENTS

The Directors place on record their sincere appreciation for the assistance, guidance, and co-operation provided by the Government of India and other regulatory authorities. The Directors thank the financial institutions and banks associated with the Company for their support as well. The employees are instrumental for the Company scaling new heights year after year, and their commitment and contribution are deeply acknowledged. Shareholders' involvement is greatly valued. The Directors look forward to your continuing support.