Kirloskar Industries Limited (KIL) has disclosed a Deed of Family Settlement (DFS) dated September 11, 2009, following a legal clarification from the Securities and Exchange Board of India (SEBI). The disclosure comes in the wake of proceedings before the Bombay High Court, where KIL had challenged the constitutional validity of certain SEBI disclosure regulations.

Legal Proceedings and SEBI Clarification

KIL filed a writ petition (Writ Petition (OS) No. 702 of 2025) before the Bombay High Court, contesting the constitutional validity of Regulation 30A read with Clause 5A of Part A of Para A of Schedule III of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The company's primary contention was that mere disclosure of an agreement should not automatically bind a listed entity if it is not a party to such an agreement.

During the court proceedings, SEBI provided a crucial clarification, agreeing with KIL's stance. The regulatory body stated that the mere disclosure of any agreement by a listed entity does not imply that the entity admits to the agreement being binding or having an impact on its management, control, or liabilities. SEBI further allowed listed entities to include a disclaimer as part of their disclosure.

Disclosure of the Family Settlement

Relying on SEBI's clarifications, as contained in the Bombay High Court's order dated September 23, 2025, KIL has now disclosed the 2009 Deed of Family Settlement. The company has emphasized several key points in its disclosure:

1. KIL is not a party to the DFS and has never ratified or approved it.
2. The company does not admit that the DFS is binding on it or has any impact on its management or control.
3. KIL expressly states that the DFS does not impose any restrictions or create any liabilities for the company.

Details of the Family Settlement

The disclosed family settlement, entered into by individual members of the Kirloskar family, involved the distribution of shares across various Kirloskar Group companies. Key family members involved in the settlement include Atul Kirloskar, Sanjay Kirloskar, Vikram Kirloskar, Rahul Kirloskar, and Gautam Kulkarni.

While specific details of the share allocations and financial arrangements were not provided in the disclosure, the settlement is reported to involve transactions totaling hundreds of crores of rupees.

Implications and Future Outlook

The disclosure of this family settlement, while significant for transparency, does not directly impact Kirloskar Industries Limited's operations or management, according to the company's statement. KIL's decision to disclose the DFS, along with its clear disclaimers, aligns with SEBI's clarified regulations on disclosure requirements for listed entities.

This development highlights the ongoing efforts to balance regulatory compliance with the protection of companies' interests, especially in cases involving complex family settlements in large business groups. As the situation unfolds, stakeholders will be watching closely to see if this disclosure leads to any further developments within the Kirloskar Group or sets a precedent for similar cases in the future.

Kirloskar Industries Limited continues to maintain its stance that the family settlement does not affect its corporate governance or operational decisions, emphasizing its commitment to transparency while protecting its interests as a listed entity.

Kirloskar Industries Limited has reported that its subsidiary, Kirloskar Ferrous Industries Limited (KFIL), has taken a significant step in its employee incentive program by allotting 87,690 equity shares under its Employee Stock Option Schemes. This move, approved by KFIL's Stakeholders Relationship Committee, has resulted in an increase in the company's share capital.

Share Allotment Details

The Stakeholders Relationship Committee of KFIL convened on September 3 to approve the allotment of 87,690 equity shares. These shares, each with a face value of ₹5.00, were issued following the exercise of stock options by employees under the company's Employee Stock Option Schemes.

Impact on Share Capital

As a result of this allotment, KFIL's issued, subscribed, and paid-up share capital has seen a notable increase. The company's share capital now stands at ₹82,36,95,340.00, comprising 16,47,39,068 equity shares of ₹5.00 each.

Corporate Governance and Transparency

The allotment process was conducted in compliance with Regulation 30 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Kirloskar Industries Limited promptly informed the stock exchanges about this material update from its listed subsidiary, adhering to transparency norms in corporate communications.

Meeting Details

The Stakeholders Relationship Committee meeting, which approved this allotment, was held on September 3. The meeting commenced at 2:30 p.m. and concluded at 2:45 p.m., as disclosed in the company's filing.

This development in KFIL's share structure reflects the company's ongoing commitment to its employee incentive programs and its adherence to regulatory requirements in the Indian stock market.