DIRECTORS' REPORT

The Board of Directors (“Board”) Is pleased to present the Twenty-Sixth Directors' Report of Aequs Limited, formerly known as
Aequs Private Limited (“Company”), together with the audited financial statements and auditors' report for the financial year ended
March 31, 2026 (“Financial Year”).

This Directors' Report should be read together with the Corporate Governance Report, Management Discussion and Analysis Report,
Business Responsibility and Sustainability Report, Secretarial Audit Report, and the relevant statutory annexures forming part of
the Annual Report.

Summary of Financial Results

The Company's financial performance for the Financial Year is summarized below.

All amounts given in this report are in H Millions, unless expressly mentioned otherwise.

Performance Review and State of the Company's
affairs:

On standalone basis, during the Financial Year, the Company has
generated total income of approx. H 1,784 (Indian Rupees One
Billion Seven Hundred Eighty-Four Million only) as compared
to H 1,118/- (Indian Rupees One Billion One Hundred Eighteen
Million only) for the financial year ended on March 31, 2025
(“Previous Year”) and posted a net profit of H 498 (Indian Rupees
Four Hundred Ninety-Eight Million only) as compared to net
loss of H 741/- (Indian Rupees Seven Hundred Forty-One Million
only) for the Previous Year.

On consolidated basis, the Company has incurred net loss of
approx. H 1,133 (Indian Rupees One Billion One Hundred Thirty-
Three Million only) as against the net loss of H 1,024 (Indian Rupees
One Billion Twenty-Four Million only) for the Previous Year.

During the Financial Year, the Company was converted into a
public limited company w.e.f. May 07, 2025.

Initial Public Offering & Listing of Equity Shares of
the Company

During the year under review, your Company completed an
Initial Public Offering (IPO) comprising a Fresh Issue of Equity
Shares aggregating up to H 6,700.5 million and an Offer for
Sale of aggregating up to H 2,517.6 million by certain existing
shareholders (collectively referred to as the “Offer”).

The issue opened on December 03, 2025 and closed on
December 05, 2025. The issue was led by Book Running Lead
Managers, viz., JM Financial Limited, IIFL Capital Services Limited
(formerly known as IIFL Securities Limited), and Kotak Mahindra
Capital Company Limited.

Pursuant to the IPO, the equity shares of the Company are listed
on the National Stock Exchange of India Limited and BSE Limited
effective December 10, 2025.

Your Directors thank the Merchant Bankers, Legal Counsels,
regulators and other stakeholders for their support in the
successful completion of the IPO and listing process.

Your Directors further extend their sincere appreciation to the
shareholders for investing in the IPO and continued confidence
in the Company and its management.

Performance of Subsidiaries, Associates & Joint
Ventures

As per the provisions of sub section 3 of Section 129 of the
Companies Act, 2013 (hereinafter referred as “the Act”), the
statement containing salient features of the Financial Statements
of the Company's subsidiaries, associates and Joint ventures is
provided in Form AOC - 1 which is attached as Annexure 1
to this report.

The consolidated financial statements of the Company for the
Financial Year 2025-26 are prepared in compliance with the
applicable provisions of the Act including Indian Accounting
Standards specified under Section 133 of the Act.

Audited financial statements of each of the subsidiary companies
are available on the website of the Company and can be accessed
at https://www.aequs.com/investor/.

Apart from the financial aspects, the following is a brief
description of highlights on the performance and financial
position of the Company's subsidiaries, associates and
Joint ventures:

Subsidiaries

Aerospace Manufacturing Holdings Private Limited, India

Aerospace Manufacturing Holdings Private Limited
('AMHPL') registered under the Companies Act, 1956, bearing
CIN: U65191KA2012PTC065904 and having its registered office
at Aequs Tower, No. 55, Whitefield Main Road, Mahadevapura
Post, Bengaluru - 560048 Karnataka. AMHPL was incorporated to
carry on the business of investments in aerospace subsidiaries,
associates and Joint venture companies and also to provide
auxiliary services to group companies.

During the Financial Year, AMHPL has earned net profit of
approx. H4 (Indian Rupees Four Million only).

Aerostructures Assemblies India Private Limited, India

Aerostructures Assemblies India Private Limited ('AAIPL') is

a company registered under the Companies Act, 1956, bearing
CIN: U29253KA2013PTC067804, and having its registered
office at Aequs SEZ, No. 437/A, Hattargi village, Hukkeri Taluk,
Belagavi. AAIPL is in the business of assembly of aerostructure
parts and operates from its Unit located at Aequs SEZ, Hattargi,
Belagavi 591243.

During the Financial Year, AAIPL generated total income of
approx. H 919 (Indian Rupees Nine Hundred Nineteen Million
only) and earned net profit of approx. H 53 (Indian Rupees Fifty-
Three Million only).

AeroStructures Manufacturing India Private Limited,
India

AeroStructures Manufacturing India Private Limited

('ASMIPL') registered under the Companies Act, 1956, bearing
CIN: U29253KA2013PTC067763, and having its registered office
at Aequs Tower, No. 55, Whitefield Main Road, Mahadevapura
Post, Bengaluru - 560048 Karnataka and Corporate Office at
Aequs Special Economic Zone, No.437/A, Hattargi Village,
Hukkeri Taluk, Belagavi - 591243, Karnataka India. ASMIPL is in
the business of machining of parts for the aerospace sector.

ASMIPL has three (3) operating Units located at Aequs SEZ,
Hattargi, Belagavi - 591243, Karnataka, India.

During the Financial Year, ASMIPL generated total income of
approx. H 6,847 (Indian Rupees Six Billion Eight Hundred Forty-
Seven Million only) and earned net profit of approx. H 607 (Indian
Rupees Six Hundred Seven Million only).

The Board of Directors of ASMIPL, vide its board resolutions
dated April 23, 2026, and May 26, 2026, has approved the
scheme of Amalgamation ('Scheme') between AeroStructures
Manufacturing India Private Limited, Aequs Engineered Plastics
Private Limited and Aequs Force Consumer Products Private
Limited with Aequs Limited. As of the date of this Board's report,
necessary approvals on the Scheme are pending. Upon receipt
of the requisite approvals and completion of all formalities
associated with the amalgamation, ASMIPL will be merged with
the Company and will cease to exist as a separate legal entity.

Aequs Aerospace LLC, USA

Aequs Aerospace LLC ('AALLC') is a limited liability company
incorporated and operating under the Laws of Delaware, USA,
bearing registration no. 5673441 and having its registered office
at 108 West 13^th Street, Wilmington, Delaware 19801. AALLC is in
the business of investments in the aerospace sector particularly
in North America.

During the Financial Year, AALLC has generated total income
of approx. H 32 (Indian Rupees Thirty-Two Million only) and
incurred a net loss of approx. H 508 (Indian Rupees Five Hundred
and Eight Million only).

Aequs Aero Machine Inc., USA

Aequs Aero Machine Inc. ('AAM') is a limited liability company
incorporated and operating under the Laws of Texas, USA,
bearing registration no. 25317400 and having its registered
office at 2220 Park Street, Paris, Texas, 75460. AAM is engaged
in the machining of parts for aerospace sector.

During the Financial Year, AAM has generated a total income
of approx. H1,706 (Indian Rupees One Billion Seven Hundred
Six Million only) and incurred a net loss of approx. H199 (Indian
Rupees One Hundred Ninety-Nine Million only)*

Aequs Aerospace B V, Netherlands

Aequs Aerospace B V ('AABV') is a limited liability company
incorporated and operating under the Laws of Netherlands,
bearing registration no. 61294225 and having its registered
office at Joop Geesinkweg 701, Rembrandt room, 1114AB
Amsterdam-Duivendrecht Netherlands. AABV is in the business
of investments in the aerospace sector particularly in Europe.

During the Financial Year, AABV has generated a total income
of approx. H 682 (Indian Rupees Six Hundred Eighty-Two Million
only) and earned net profit of approx. H 608 Million (Indian
Rupees Six Hundred Eight Million only)*

Aequs Holdings France SAS, France

Aequs Holdings France SAS, France ('AHF') is a limited liability
company incorporated and operating under the Laws of France,
bearing registration no. 817 785 405 and having its registered

office at Zl de I'Appentiere 49280 MAZIERES-EN- MAUGES. AHF
Is in the business of investments in aerospace sector for entities
operating in France.

During the Financial Year, AHF has booked net profit of approx.
H 1 Million (Indian Rupees One Million only).

Aequs Aerospace France SAS, France

Aequs Aerospace France SAS ('AAF') is a limited liability
company incorporated and operating under the Laws of France,
bearing registration no. 490 362 241 and having its registered
office at Zl de I' Appentiere 49280 Mazieres-en-Mauges.

During the Financial Year, AAF generated total income of approx.
H1,307 (Indian Rupees One Billion Three Hundred Seven Million
only) and booked net loss of approx. H 50 (Indian Rupees
Fifty Million only).

Aequs Oil & Gas LLC, USA

Aequs Oil & Gas LLC ('AOGLLC') is a I imited liability company
incorporated in Delaware and operating under the Laws of Texas,
USA, bearing registration no. 801498629 and having its office
at 9595 Six Pines Drive, The Woodlands, Tx 77380. AOGLLC was
in the business of supply of products for both D&E (Drilling &
Evaluation) and C&P (Completion & Production) for the major
Oil & Gas Service and Aerospace Companies.

Operations of AOGLLC have been closed. During the Financial
year AOGLLC has booked net loss of approx. H 6 (Indian Rupees
Six Million only).

Aequs Engineered Plastics Private Limited, India

Aequs Engineered Plastics Private Limited ('AEPPL') is a

company registered under the Companies Act, 2013, bearing
CIN: U22209KA2015PTC078777 and having its registered office
at Aequs Tower, No. 55 Whitefield Main Road, Mahadevapura
Post, Bengaluru Karnataka, 560 048, India. The AEPPL is
formed to carry on the business of manufacturing of all sorts
of plastic products, light and heavy automobile parts and toys.
The Company has its manufacturing facility at Aequs Special
Economic Zone, Hattargi, Belagavi, Karnataka.

During the Financial Year, AEPPL generated total income of
approx. H 1,330 (Indian Rupees One Billion Three Hundred Thirty
Million only) and booked net loss of approx. H 173 (Indian Rupees
One Hundred Seventy-Three Million only).

The Board of Directors of AEPPL, vide its board resolutions
dated April 23, 2026, and May 26, 2026, has approved the
scheme of Amalgamation ('Scheme') between AeroStructures
Manufacturing India Private Limited, Aequs Engineered Plastics
Private Limited and Aequs Force Consumer Products Private
Limited with Aequs Limited. As of the date of this Board's report,
necessary approvals on the Scheme are pending. Upon receiving
the requisite approvals and completing all formalities associated
with the amalgamation, the AEPPL will be merged with the
Company and will cease to exist as separate legal entity.

Aequs Toys HongKong Private Limited , Hong Kong

Aequs Toys HongKong Private Limited ('ATHKPL') is a

company incorporated and operating under the Laws of Hong

Kong and has its office at Units 17/F, Beautiful Group Tower, 77
Connaught Road Central, Hong Kong and the ATHKPL is into
the business of providing marketing, business development and
technical services.

Operations of ATHKPL have been closed and ATHKPL has
made an application for closure by way of Member's Voluntary
Liquidation ('MVL') and the liquidation is under process.

Aequs Force Consumer Products Private Limited, India

Aequs Force Consumer Products Private Limited ('AFCPPL')

is a company registered under the Companies Act, 2013, bearing
CIN: U28191KA2018PTC114901 and having its registered office at
Aequs SEZ, No. 437/A, Hattargi Village, Hukkeri Taluk, Belagavi -
591243, Karnataka. AFCPPL is into the business of manufacturing
of all sorts of consumer products and toys.

During the Financial Year, AFCPPL generated total income of
approx. H14 (Indian Rupees Fourteen Million only) and booked
net loss of approx. H235 (Indian Rupees Two Hundred Thirty-
Five Million only).

The Board of Directors of AFCPPL, vide its board resolutions
dated April 23, 2026, and May 26, 2026, has approved the
scheme of Amalgamation ('Scheme') between AeroStructures
Manufacturing India Private Limited, Aequs Engineered Plastics
Private Limited and Aequs Force Consumer Products Private
Limited with Aequs Limited. As of the date of this Board's
report, necessary approvals on the Scheme are pending. Upon
receiving the requisite approvals and completing all formalities
associated with the amalgamation, AFCPPL will be merged with
the Company and will cease to exist as separate legal entity.

Aequs Consumer Products Private Limited, India

Aequs Consumer Products Private Limited ('ACPPL') is a

company registered under the Companies Act 2013, bearing
CIN: U28995KA2019PTC129087, and having its registered office
at Ground floor, Aequs Towers, No. 55, Whitefield Main Road,
Mahadevapura Post, Bengaluru - 560048 Karnataka. It is formed
to carry on the business of manufacturing of consumer products
and all types and varieties of parts, components, elements, units,
fittings, constituents, assemblies, and accessories to be used in
electronic, electrical, digital devices, apparatus, and appliances.

During the Financial Year, ACPPL generated total income of
approx. H 572 (Indian Rupees Five Hundred Seventy-Two Million
only) and booked net loss of approx. H1,458 (Indian Rupees One
Thousand Four Hundred Fifty-Eight Million only).

Aequs Home Appliances Private Limited, India

Aequs Home Appliances Private Limited ('AHAPL') is a

company registered under the Companies Act, 2013, bearing
CIN: U31904KA2021PTC150511 and having its registered office
at Aequs Tower, No. 55 Whitefield Main Road, Mahadevapura
Post, Bengaluru Karnataka, 560 048, India. AHAPL is engaged in
the business of manufacturing and sale of all kinds of kitchenware
and consumer durable goods. AHAPL has sold its business as
a going concern on a slump sale basis to Aequs Consumer
Products Private Limited, holding company of AHAPL with effect
from December 07, 2022.

During the Financial Year, on April 23, 2025, the application
was made to Registrar of Companies for strike off of AHAPL
and subsequently AHAPL has been struck off w.e.f. June 27,
2025, from the Register of Companies and is dissolved under
provisions of Section 248 of the Act.

Aequs Toys Private Limited, India

Aequs Toys Private Limited ('ATPL') is a company
registered under the Companies Act 2013, bearing CIN:
U26400KA2021PTC150503, and having its registered office at
Aequs Tower, No. 55, Whitefield Main Road, Mahadevapura Post,
Bengaluru - 560048 Karnataka. ATPL is incorporated to carry on
the business of manufacturing and sale of all sorts of toys and
related products.

During the Financial Year, ATPL generated total income of
approx. H 26 (Indian Rupees Twenty-Six Million only) and booked
net loss of approx. H 243 (Indian Rupees Two Hundred Forty-
Three Million only).

Koppal Toys Molding COE Private Limited, India

Koppal Toys Molding COE Private Limited ('KTM') is a

company registered under the Companies Act 2013, bearing
CIN: U36999KA2021PTC150753, and having its registered office
at Aequs Tower, No. 55, Whitefield Main Road, Mahadevapura
Post, Bengaluru - 560048 Karnataka. KTM is incorporated to
carry on the business of manufacturing and molding of all kinds
of toys and toy products.

During the Financial Year, KTM generated total income of
approx. H127 (Indian Rupees One Hundred Twenty-Seven
Million only) and booked net loss of approx. H94 (Indian Rupees
Ninety-Four Million).

Aequs Rajas Extrusion Private Limited, India

Aequs Rajas Extrusion Private Limited ('AREPL') is a company
registered under the Companies Act, 2013, bearing CIN:
U25200KA2021PTC148763, and having its registered office at
Aequs Tower, No. 55, Whitefield Main Road, Mahadevapura Post,
Bengaluru- 560048, Karnataka, India. AREPL is incorporated
to carry on the business of manufacture and sale of all sorts
of products manufactured by plastic extrusion process and to
produce, prepare, assemble, alter, build, brand, mould, and
otherwise to deal in all sorts of extruded products in toys and
consumer goods sector etc.

During the Financial Year, AREPL booked net loss of approx. H 2
(Indian Rupees Two Million only).

Joint Venture Companies

Aerospace Processing India Private Limited, India

Aerospace Processing India Private Limited ('API') is a

company registered under the Companies Act, 1956, bearing
CIN: U35303KA2007PTC043311, and having its registered
office at Aequs SEZ, No. 437/A, Hattargi Village, Hukkeri Taluk,
Belagavi. API is a Joint venture between Aequs Limited and
Magellan Aerospace of Canada and is located in Aequs SEZ,

Belagavi. API provides aerospace surface treatments that were
not readily available in India. The fully integrated, scalable facility
has been operational since 2009. This is the First and only Third-
party Company whose facility is approved by Airbus and Boeing
in India. The Company holds 50% of equity capital in API.

During the Financial Year, API generated total income of approx.
H833 (Indian Rupees Eight Hundred Thirty-Three Million only)
and earned net profit of approx. H158 (Indian Rupees One
Hundred Fifty-Eight Million only).

SQuAD Forging India Private Limited, India

SQuAD Forging India Private Limited ('SQuAD') is a company
registered under the Companies Act, 1956, bearing CIN:
U28910KA2011PTC056681, and having its registered office at
Aequs SEZ, No. 437/A, Hattargi village, Hukkeri Taluk, Belagavi.
SQuAD is a Joint venture between Aequs Limited and Aubert &
Duval SAS, France. It is located in Aequs SEZ, Belagavi. SQuAD
specializes in forging of aerostructural parts, landing gear and
braking system components in aluminum, steel, titanium or
nickel base alloys. SQuAD also manufactures critical parts for
automotive, power generation, and oil & gas markets. The
Company holds 50% of equity capital in SQuAD.

During the Financial Year, SQuAD generated total income of
approx. H1,160 (Indian Rupees One Billion One Hundred Sixty
Million only) and earned net profit of approx. H 289 (Indian
Rupees Two Hundred Eighty-Nine Million only).

Aequs Cookware Private Limited, India

Aequs Cookware Private Limited ('ACPL') is a company
registered under the Companies Act, 2013, bearing CIN:
U27504KA2024PTC189903, and having its registered office at
HDGC, Sy No 11, Hissa No., 12, Ittigatti Village, Kanavihonnapur,
Dharwad, Karnataka, India, 580114. ACPL is a Joint venture
between Aequs Limited and Tramontina Internacional S.A.
of Brazil. This Joint venture is established with an obJect to
manufacture and sell all sorts of domestic, household, including
commercial use cookware appliances and kitchenware appliances
and any parts/accessories thereof. The Company holds 50% of
equity capital in ACPL.

During the Financial Year, ACPL generated total income of
approx. H403 (Indian Rupees Four Hundred Three Million only)
and incurred a net loss of approx. H199 (Indian Rupees One
Hundred Ninety-Nine Million only).

Ajna Aerospace & Defence Private Limited

Ajna Aerospace & Defence Private Limited ('AADPL') is a

company registered under the Companies Act, 2013, bearing
CIN U30400KA2025PTC209996, and having its registered
office at No.55, Whitefield Main Road, Mahadevapura Post,
Bengaluru - 560048, Karnataka, India. AADPL is a Joint venture
between Aequs Limited, Accel India VIII (Mauritius) Limited of
Mauritius and Vagus Defence Tech & Aerospace Fund I. AADPL
Joint venture is a newly incorporated company and the said
company has been incorporated to carry out the business of
(i) sourcing, acquiring, licensing intellectual property rights for

unmanned aerial vehicles from overseas licensors and owners;
(II) developing own IP; and (iii) manufacturing, assembling,
testing, marketing and selling unmanned aerial vehicles ("UAVs”)
and related products in India and internationally in accordance
with applicable laws.

As AADPL was incorporated on October 22, 2025, it is currently
in the process of commencing its commercial operations.

Associate Companies

Aequs Foundation, India

The Company had co-established Aequs Foundation (AF) as part
of its Corporate Social Responsibility initiative. AF is engaged
in inspiring and educating children in Health & Hygiene,
Education (including STEM-Science, Technology, Engineering
and Mathematics) and Safety through various community
and regional initiatives that bring measurable and sustainable
changes to society and improve quality of life. The formative
years of 5 to 10 are crucial for every child as they have a direct
impact on how the child develops learning skills as well as
social and emotional abilities. Accordingly, AF has designed its
program and project portfolio with these focused objectives and
structure in mind.

Previously the Company had transferred its 50% shareholding
in AF to Aequs SEZ Private Limited. Further during the Financial
Year, the Company has again acquired 50% Stake in AF from
Hubballi Durable Goods Cluster Private Limited.

The names of companies which have become or ceased to
be its subsidiaries, joint ventures or associate companies
during the year

Details of companies which have become the subsidiaries, joint
ventures or associate during the Financial Year are as follows:

Details of companies which ceased to be the subsidiaries, joint
ventures or associate during the Financial Year are as follows:

The Company does not have any other subsidiaries, joint ventures
or associate companies which were incorporated/ceased to exist
during the Financial Year.

Material Subsidiaries

The Board of Directors of the Company has adopted a Policy
for determining material subsidiaries in line with the SEBI
(Listing Obligations and Disclosure Requirements) Regulations,
2015 ('SEBI Listing Regulations'). The Policy is available on the
Company's website athttps://www.aequs.com/wp-content/
uploads/2025/09/Policy-on-Material-Subsidiary.pdf

On the basis of audited financial statements of the Company for
the year ended March 31, 2025, AeroStructures Manufacturing
India Private Limited (ASMIPL), Aequs Aerospace France SAS,
Aequs Aerospace BV (AABV), Aequs Consumer Products Private
Limited (ACPPL), Aequs Engineered Plastics Private Limited
(AEPPL), Aequs Aero Machine Inc, (AAM) and Aequs Oil & Gas
LLC (AOGLLC) are categorized as material subsidiary(s) of the
Company for the Financial Year 2025-26, as per the thresholds
laid down under the SEBI Listing Regulations.

Dividend

The Board has not recommended any dividend for the
Financial Year.

In terms of Regulation 43A of the SEBI Listing Regulations,
the Dividend Distribution Policy is available on the Company's
website and can be accessed athttps://www.aequs.com/wp-
content/uploads/2025/09/Dividend-Distribution-Policy.pdf.

Transfer to reserves

The total profit earned by the Company during the Financial
Year, i.e. H 497.99/- (Indian Rupees Four Hundred Ninety-Seven
Point Ninety-Nine Millions only) is transferred to the reserves
of the Company.

Share Capital

Authorised Share Capital

The Authorised Share Capital of the Company as on
March 31, 2026 is H 10,146,299,340/- (Indian Rupees Ten Billion
One Hundred Forty-Six Million Two Hundred Ninety-Nine
Thousand Three Hundred Forty only) divided into 1,014,629,934
(One Billion Fourteen Million Six Hundred Twenty-Nine Thousand
Nine Hundred Thirty-Four) equity shares of H 10/- (Indian Rupees
Ten only) each.

Issued, Subscribed and paid-up Share Capital

The issued, subscribed and paid-up share capital of the Company
is H 6,706,656,350/- (Indian Rupees Six Billion Seven Hundred Six
Million Six Hundred Fifty Six Thousand Three Hundred and Fifty
only), divided into 670,665,635 (Six Hundred Seventy Million Six
Hundred Sixty Five Thousand Six Hundred and Thirty-Five only)
equity shares of face value of H 10/- (Indian Rupees Ten only) each.

Changes during the year

Details of change in the share capital of the company during the year are as below:

The change in the nature of business, if any

During the Financial Year, there has been no change in the nature of business of the Company.

Particulars of loans, guarantees or investments under section 186 of the Act

The particulars of loans, guarantees and investments as per Section 186 of the Act, are disclosed in the Standalone Financial Statement.
(Please refer to Note Nos. 6, 7 & 31).

Particulars of Employees Stock Option Scheme

The Aequs Employee Stock Option Plan 2025 (“ESOP 2025” / “Plan”) was adopted by the Board of Directors at its meeting held on May 10, 2025
and members by passing the special resolution at its extraordinary general meeting held on May 13, 2025 by consolidating all the existing
Employee Stock Option Plans namely Aequs Employee Stock Option Plan, 2013, Aequs Employee Stock Option Plan, 2016, Aequs Employee
Stock Option Plan, 2020 and Aequs Employee Stock Option Plan, 2022 (“Prior ESOP Plans”) into “Aequs Employee Stock Option Plan 2025”
(“ESOP 2025”) in line with the provisions of the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity)
Regulations, 2021 ("SEBI SBEB Regulations”). Subsequently, the Plan was ratified and amended by the shareholders by passing a
special resolution through Postal Ballot on March 27, 2026.

The Aequs Stock Option Plan Trust administers the ESOP 2025 in accordance with the Act, SEBI SBEB Regulations and SEBI
Listing Regulations.

The brief details on the Employees' Stock Option Scheme as of the year ended as required to be provided under the provisions of rule
12(9) of the Companies (Share Capital and Debentures) Rules, 2014 are mentioned below:

Directors and Key Managerial Personnel ("KMP")

The composition of the Board of Directors is in due compliance with the Act and SEBI Listing Regulations.
The details of Directors and KMP appointed or resigned during the Financial Year:

*Mr. Dinesh Iyer ceased to hold office as Chief Financial Officer w.e.f. June 30, 2026

During the year under review, the Non-Executive/ Independent Directors of the Company had no pecuniary relationship or transactions
with the Company, other than sitting fees, commission and reimbursement of expenses, if any.

None of the Directors of the Company are disqualified under Section 164(1) or Section 164(2) of the Act.

Retirement by Rotation & Re-appointment

In accordance with the provisions of the Act and the Articles of Association of the Company, Mr. Rajeev Kaul (DIN: 01468590), is liable
to retire by rotation at this Annual General Meeting ("AGM”) and being eligible offers himself for re-appointment.

The Board of Directors of the Company, based on the recommendation of the Nomination and Remuneration Committee, have
recommended his re-appointment. The necessary resolution and disclosures pertaining to Director being re-appointed as required
under the SEBI Listing Regulations and Secretarial Standard on General Meetings issued by the Institute of Company Secretaries of
India, is provided and forms part of this Notice convening the AGM for reference of the Shareholders.

Board Meetings

During the Financial Year under review, 18 (Eighteen) Board Meetings were held. The maximum time gap between any two consecutive
meetings was not more than one hundred and twenty days.

Following are the details of meetings along with attendance of each of the Director at the Board Meetings held during the
period under review:

The Committees of the Board

The Board of Directors of the Company have constituted the
following committees and the details of meetings of these
Committees held during the financial year 2025-26 along with
information relating to attendance of each director/committee
member is provided in the Corporate Governance Report, which
forms part of this Annual Report.

• Audit Committee

• Nomination and Remuneration Committee

• Corporate Social Responsibility Committee

• Stakeholders Relationship Committee

• Risk Management Committee

• Independent Director Committee

• IPO Committee

• Administrative Committee

Implementation of risk management policy

The Company has risk management mechanism in place that
enables sustainable business growth with stability and to
promote a pro-active approach in reporting, evaluating and
resolving risks associated with the business. In line with the
SEBI Listing Regulations, the Company has constituted a Risk
Management Committee ('RMC') comprising members of the
Board of Directors. Terms of reference of the Committee and
composition thereof including details of meetings held during
the financial year 2025-2026 forms part of the Corporate
Governance Report, which forms part of this Annual Report.

The Company recognizes that the objective of risk management
is not to eliminate risk totally, rather to provide a structural means
to identify, prioritize and manage risks involved in the Company's
activities. It requires a balance between the cost of managing and
mitigating risks and anticipated benefits derived therefrom.

Risk Management Policy of the Company can be accessed at
https://www.aequs.com/wp-content/uploads/2025/11/Risk-
Management-Policy-Charter.pdf

Auditors

Statutory Auditors

M/s. B S R & Co. LLP., Chartered Accountants, Bangalore (FRN:
101248W/W-100022) are appointed as Statutory Auditors of
the Company at the Annual General Meeting of the Company
held on October 25, 2024 for further period of 5 (Five) years to
hold office from the conclusion of Twenty Forth (24^th) Annual
General Meeting held in FY 2024-25 till the conclusion of Twenty
Ninth (29^th) Annual General Meeting of the Company to be
held in FY 2029-30.

The Auditors' Report provided by M/s. B S R & Co. LLP., Chartered
Accountants, for the Financial Year, is enclosed with the financial
statements in the Annual Report. The Auditors' Report does not
contain any qualifications, observations or adverse remarks.

Internal Auditors

M/s. Guru & Jana LLP, Chartered Accountants, has been appointed
by the Audit Committee of the Board as Internal Auditors
in accordance with the provisions of Section 138 of the Act.
M/s. Guru & Jana LLP, Chartered Accountants, has assigned
to provide independent and objective assurance services to
create and preserve value by continuous improvement to the
Company's systems, processes and internal controls. They are
supported in the discharge of duties by the in-house team and
external service providers leveraged on a need basis, providing
comprehensive assurance on governance, risk and controls.

Secretarial Auditors

M/s. BMP & Co., LLP, a peer reviewed firm of Practicing Company
Secretaries has conducted the Secretarial Audit of the Company
for the financial year 2025-26. The Secretarial Audit Report is
appended as Annexure 2 to this report.

The resolution for appointment of M/s. BMP and Co. LLP as the
Secretarial Auditor for a term of five years, commencing from
the conclusion of the 26^th Annual General Meeting and until the
conclusion of the 31^st Annual General Meeting of the Company,
to be held in FY 2031-32 is being taken up at the ensuing Annual
General Meeting.

Further as per the requirements of Regulation 24A (1) (a) of the
SEBI Listing Regulations, M/s. Prathibha Priya & Associates, a peer
reviewed firm of Practicing Company Secretaries, the Secretarial
Auditors of the unlisted material subsidiaries incorporated
in India have undertaken Secretarial Audit of for financial year
ended March 31, 2026 and issued the Secretarial Audit Reports in
Form MR-3 which is appended as Annexure 3. The reports does
not contain any qualification, reservation or adverse remark.

Cost Auditors

Pursuant to Rule 4(3)(ii) of the Companies (Cost Records and Audit)
Rules, 2014, the provisions relating to Cost Audit are not applicable
to the Company, as the Company operates from a Special
Economic Zone (SEZ). Accordingly, the Company is not required
to appoint a Cost Auditors for the financial year under review.

Cost Records

The Company has maintained the cost records as specified
by the Central Government under sub section (1) of Section
148 of the Act.

Particulars of employees

Disclosures pertaining to remuneration and other details as
required under Section 197(12) of the Act read with Rule 5(1) of
the Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 are provided in the prescribed format and
appended as Annexure 4 to this Report.

Details of amount received from the Director or a
relative of the Director

During the year under review, the Company has not received
any amount from any Director or relative of the Director
pursuant to Rule 2 (1)(c) (viiii) of the Companies (Acceptance of
Deposits) Rules, 2014.

Disclosure on Managing Director and Key Managerial
Personnels receiving remuneration and commission
from holding company or subsidiary company:

Except Mr. Aravind S Melligeri, Executive Chairman & Chief
Executive Officer, none of the other Key Managerial Personnels
(KMPs) of the Company have received remuneration and
commission from any of the subsidiary companies or holding
company of the Company. The details of remuneration of
Mr. Aravind S Melligeri, Executive Chairman & Chief Executive
Officer, has been provided in the Corporate Governance Report,
which forms part of this Annual Report.

Conservation of energy, technology absorption,
foreign exchange earnings and outgo

The particulars relating to conservation of energy, technology
absorption, foreign exchange earnings and outgo, as required
to be disclosed under the Act, are provided in Annexure 5
to this Report.

Status on cases filed under Sexual Harassment of
Women at workplace (Prevention, Prohibition &
Redressal) Act, 2013

The Company has complied with provisions relating to the
constitution of Internal Complaints Committee under the Sexual
Harassment of Women at Workplace (Prevention, Prohibition
and Redressal) Act, 2013.

The Company has zero tolerance towards harassment of
employees that may fall under the sphere of sexual harassment
at workplace and is fully committed to uphold and maintain the
dignity of employees across the organization. Your Company
has established a Policy on prevention, prohibition and redressal
of sexual harassment at workplace that provides for protection
against sexual harassment of employees at workplace and for
prevention and redressal of such complaints. To build awareness
in this area, the Company has been conducting necessary
training in the organization on an ongoing basis.

Details of complaints during the Financial Year under review:

Compliance with the Maternity Benefit Act, 1961

The Company has complied with the provisions of the Maternity
Benefit Act, 1961, including all applicable amendments and rules
framed thereunder. The Company is committed to ensuring a
safe, inclusive, and supportive workplace for women employees.
All eligible women employees are provided with maternity
benefits as prescribed under the Maternity Benefit Act, 1961.

Number of employees as on the closure of Financial
Year

The gender wise composition of the Company's workforce as on
the March 31, 2026:

Whistle Blower Policy/ Vigil Mechanism Policy

The Company has a Whistle Blower Policy (Vigil Mechanism Policy)
in place which provides a platform to the employees and Directors
for raising genuine concerns in relation to misuse or abuse of
authority, fraud or suspected fraud, violation of Company's rules
and policies, manipulations, negligence causing danger to public
health and safety, misappropriation of monies, and other matters
or activity on account of which the interest of the Company is
affected and to report the same in accordance with the Policy.

During the Financial Year under review, the Company has received
one Complaint and the same has been concluded as per the
Whistle Blower Policy (Vigil Mechanism Policy) of the Company.

During the Financial Year under review, the subsidiaries
and Joint Venture companies of the Company have not
received any complaint under the Whistle Blower Policy (Vigil
Mechanism Policy).

Whistle Blower Policy/ Vigil Mechanism Policy is available at the
website of the Company athttps://www.aequs.com/wp-content/
uploads/2025/09/Whistle-Blower-Policy.pdf

Related Party Transactions

In line with the provisions of the Act and the SEBI Listing
Regulations, the Board has approved a policy on related party
transactions. The policy on related party transactions has been
placed on the Company's website athttps://www.aequs.com/
wp-content/uploads/2026/03/Policy-on-RPT.pdf.

Prior omnibus approval of the Audit Committee is obtained for the
transactions which are foreseeable and of a repetitive nature. All
related party transactions are placed on a quarterly basis before
the Audit Committee for its review. All contracts, arrangements and
transactions entered by the Company with related parties during
financial year 2025-26 were in the ordinary course of business and
on an arm's length basis. Further, shareholder's approval for material
related party transactions for the financial year 2026-27 with Aequs
SEZ Private Limited has been obtained on March 27, 2026.

Further, the disclosure of transactions with related parties during
the financial year, as per Indian Accounting Standard (Ind AS) 24
on Related Party Disclosures, is provided under Note no. 31 to
the Annual Audited Standalone Financial Statements.

The particulars of contracts or arrangements with related parties
referred to in Sub-Section (1) of Section 188 of the Act in the
Form AOC-2 is attached with this report as Annexure 6.

Corporate Social Responsibility ("CSR")

The provisions of Corporate Social Responsibility as prescribed
under Section 135 of the Act and the rules prescribed thereunder
were applicable to the Company for the Financial Year. In view
thereof the Board has formulated and adopted the CSR Policy
of the Company.

As the Company had an average loss for the last three financial
years, there was no CSR obligation for the Company for the
Financial Year.

The detailed Annual Report on CSR activities of the Company is
enclosed as Annexure 7.

Annual Performance Evaluation of the Board of
Directors of the Company

The Company has a policy for performance evaluation of the Board,
Committees and other individual Directors (including Independent
Directors) which includes criteria for performance evaluation of
Non-Executive Directors and Executive Directors. The policy on

evaluation of the performance of the board of directors is available
on the website of the Company athttps://www.aequs.com/wp-
content/uploads/2025/11/Policy-on-evaluation-of-performance.pdf.

In a separate meeting of Independent Directors held on March
18, 2026, performance of non-independent directors, the Board
as a whole and Chairman of the Company was evaluated, taking
into consideration the views of the Executive Directors and Non¬
Executive Directors.

Further, Nomination and Remuneration Committee at its meeting
held on May 26, 2026, reviewed the performance of the Board
and identified certain areas of improvement and recommended
appropriate actions for implementation.

Thereafter, at its meeting held on July 29, 2026, the Board of
Directors carried out the annual performance evaluation of the
Board, its Committees and Individual Directors in accordance
with the manner specified under the Policy on Evaluation of the
Performance of the Board of Directors.

The evaluation was undertaken after considering the inputs
received from the Independent Directors and the Nomination
and Remuneration Committee, and was based on various criteria
including the Board's composition and structure, effectiveness of
Board processes, quality, adequacy and timeliness of information
provided to the Board, and overall functioning of the Board and
its Committees.

The performance evaluation of each Independent Directors were
carried out by the rest of the Board.

Familiarization Program for Board Members

The familiarization program aims at making the Independent
Directors familiar with the businesses, operations and
amendments in roles and responsibilities of directors through
various structured familiarization programs. The Company
organizes such a program for directors as and when required.
The said familiarization programs are available on the website
of the Company at:https://www.aequs.com/wp-content/
uploads/2026/03/Details-of-Familiarisation-programme-
imparted-to-Independent-Directors-for-FY-2025-26.pdf

Policy on Directors' Appointment and Remuneration

Pursuant to Section 178(3) of the Act and Regulation 19 &
Schedule II Part D of the SEBI Listing Regulations, the Company
has adopted the Nomination and Remuneration Committee
Policy which provides the criteria and process for appointment
of Directors, Independent Directors, Key Managerial Personnel
and Senior Management Personnel.

The Nomination and Remuneration Committee Policy is available
on the website of the Company athttps://www.aequs.com/wp-
content/uploads/2025/09/NRC-Policy-and-Charter.pdf

The Policy on Remuneration of Directors, Key Managerial
Personnel and Other Employees is available on the website
of the Company athttps://www.aequs.com/wp-content/
uploads/2025/09/NRC-Policy-on-Remuneration-on-Dir-KMP-
Other-Employees.pdf

Corporate Governance Report

Your Company provides utmost importance to the best
Governance practices and is designed to act in the best interest
of its stakeholders. The Corporate Governance Report along with
the Auditor's Certificate for the year under review, as stipulated
under SEBI Listing Regulations forms part of the Annual Report
and the same is appended as Annexure 8.

Management Discussion and Analysis Report

The Management's Discussion and Analysis Report for the
year under review, as stipulated under the SEBI Listing
Regulations forms part of the Annual Report and is appended.

Business Responsibility and Sustainability Report

The Business Responsibility and Sustainability Report for the
year under review, as stipulated under the SEBI Listing
Regulations forms part of the Annual Report and is appended.

Annual Return

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act,
the Annual Return of the Company in Form MGT-7 is available
on the website of the Company at https://www.aequs.com/
investor/.

Details in respect of fraud reported by auditors under
sub-section (12) of section 143 other than
those which are reportable to the Central
Government

The Auditors of the Company have not reported any fraud
under Section 143(12) of the Act. Accordingly, the disclosures of
details prescribed thereunder are not applicable.

Explanation or comments on qualification,
reservation or adverse remark in the audit report

The Statutory Auditors Report for the Financial Year does not
contain any qualification, reservation or adverse remark.

Remarks from the Secretarial Auditor for the
Financial Year:

Consequent to the aforesaid investment, the Company was
required to file Form DI with the Authorised Dealer Bank
within the timeline prescribed under the applicable provisions of
the Foreign Exchange Management (Mode of Payment and
Reporting of Non-Debt Instruments) Regulations, 2019.
However, the Company is yet to re-file Form DI, pursuant to
the clarifications sought by the Authorised Dealer Bank,
resulting in delay with the prescribed reporting requirements.

Management Reply

The Company had filed the Form DI with the Authorised
Dealer Bank within the timeline prescribed under the
applicable provisions of the Foreign Exchange Management
(Mode of Payment and Reporting of Non-Debt Instruments)
Regulations, 2019. However, the filed Form DI is rejected
seeking more clarifications and documents. Company is

yet to re-file the Form DI, as company is working closely with
Authorised Dealer Banker before we initiate actions for
providing the clarifications. However as any subsequent re¬
filing of Form DI will be considered as fresh filing and hence
would be considered as delayed filing.

Declaration by Independent Directors

Pursuant to the provisions of Section 149(7) of the Act, the
Independent Directors have submitted declarations that each of
them meets the criteria of independence as provided in Section
149(6) of the Act along with Rules framed thereunder and Regulation
16(1)(b) of the SEBI Listing Regulations. The Board has taken on
record the said declarations. The independent directors have
affirmed compliance with the Code of Conduct. The Independent
Directors also affirmed compliance under Section 150 of the Act
including any amendments/ notifications issued from time to time.

Pursuant to the provisions of Rule 8(5)(iiia) of the Companies
(Accounts) Rules, 2014, our Company's Board is of the opinion
that all Independent Directors possess requisite qualifications,
experience and expertise and hold highest standards of integrity.

Further, all Independent Directors have confirmed that they
have registered with the data bank of Independent Directors
maintained by and are either exempt or have completed the
online proficiency self-assessment test conducted by the Indian
Institute of Corporate Affairs in accordance with the provisions
of Section 150 of the Act.

Secretarial Standards of Institute of Company
Secretaries of India (ICSI)

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

Details of application made or any proceeding
pending under the Insolvency and Bankruptcy
Code, 2016 (31 of 2016) during the year along
with their status as at the end of the Financial Year

There are no proceedings pending under the Insolvency and
Bankruptcy Code, 2016.

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

There was no instance of onetime settlement with any Bank or
Financial Institution.

Downstream Investment Compliance

The Company has obtained a certificate from the Statutory
Auditors of the Company as required under Rule 23(6) of Foreign
Exchange Management (Non-debt Instruments) Rules, 2019.

Utilization of Proceeds of Initial Public Offer

The proceeds of the funds raised by the Company through IPO
are in line with the details mentioned in the Prospectus and there
were no instances of deviation(s) or variation(s) in the utilization
of proceeds of the IPO, as mentioned in the objects of Offer in
the Prospectus dated December 05, 2025, in relation to the IPO
of the Company. Accordingly, disclosure of the Statement of
Deviation(s) or Variation(s) as required under Regulation 32(4) of
the SEBI Listing Regulations, is not applicable to the Company.

The report of the monitoring agency disclosed to stock
exchanges on a quarterly basis are available on our website at
https://www.aequs.com/investor/.

Details of utilization of funds raised through
preferential allotment or qualified institutional
placement as specified under Regulation 32(4) and
32(7A) of the SEBI Listing Regulations

During the period under review and prior to the listing of the
Company's equity shares on the Stock Exchanges, the Company
raised funds through a Pre-IPO Placement undertaken in
accordance with the provisions of Sections 42 and 62 of the Act
and the rules made thereunder.

The aforesaid fundraising was neither a preferential issue nor a
qualified institutions placement (QIP) as contemplated under the
SEBI (Issue of Capital and Disclosure Requirements) Regulations,
2018. Accordingly, the disclosure requirements prescribed under
Regulation 32(7A) are not applicable to the Company.

Disclosure with respect to Demat Suspense/
Unclaimed Suspense Account pursuant to Schedule
V(F) of the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015

The provisions relating to the disclosure requirements under
Schedule V(F) of the SEBI Listing Regulations are not applicable to
the Company during the financial year under review, as no shares
were required to be transferred to or held in any Demat Suspense
Account or Unclaimed Suspense Account. Accordingly, no such
account was required to be opened or maintained by the Company.

Disclosure under rule 4 (4) of the Companies (Share
Capital and Debentures) Rules, 2014

The Company has not issued any shares carrying differential
rights as referred to under Section 43(a)(ii) of the Act during
the year under review. Accordingly, the disclosure requirements
prescribed under the provisions of Rule 4 (4) of the Companies

(Share Capital and Debentures) Rules, 2014 are not applicable
to the Company.

Disclosure under rule 8(13) the Companies (Share
Capital and Debentures) Rules, 2014

The Company has not issued any sweat equity shares as referred
to under Section 54 of the Act during the year under review.
Accordingly, the disclosure requirements prescribed under the
provisions of Rule 8(13) of the Companies (Share Capital and
Debentures) Rules, 2014 are not applicable to the Company.

Details of Penalties/Punishment/ Commitments affecting the
financial position of the Company between the end of the
Financial Year and the date of the Directors' Report

There were no penalties/punishment/commitments affecting
the financial position of the Company between the end of the
financial year and the date of this report.

Directors' Responsibility Statement

In accordance with the provision of Section 134 (3) (c) and
134 (5) of the Act, the Board of Directors, to the best of its
knowledge and ability, affirms that:

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

b) Such accounting policies have been selected and applied
consistently and judgments and estimates that have been
made are reasonable and prudent so as to give a true
and fair view of the state of affairs of the Company as at
March 31, 2026 and of profit of the Company for the year
ended on that date.

c) Proper and sufficient care has been taken for the
maintenance of adequate accounting records in accordance
with the provision of the Companies Act, 2013 for
safeguarding the assets of the Company and for preventing
and detecting fraud and other irregularities.

d) The accounts for the year ended March 31, 2026 have been
prepared on a going concern basis.

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

f) Systems to ensure compliance with the provisions of
all applicable laws were in place and such systems were
adequate and operating effectively.

Appreciation/ Acknowledgements

The Board of Directors take this opportunity to place on record their deep sense of appreciation for the co-operation, commitment
and dedicated services of Aequals (employees of Aequs) at all levels for successful operational performance of the Company as well
as the support extended by the shareholders, customers, vendors, bankers and all concerned. Without this it would be impossible to
achieve an overall growth of the Company.

Your Directors also thank the Government of India, particularly the Ministry of Corporate Affairs, Department of Electronics, Customs
and Excise departments, Cochin Special Economic Zone, Ministry of Commerce, and Reserve Bank of India, the State Government,
and other Government and semi government agencies and delegated authorities for their support during the Financial Year and look
forward to their continued support in the future.

For Aequs Limited

Mr. Aravind S Melligeri Mr. Rajeev Kaul

Executive Chairman & CEO Co-Founder & Managing Director

(DIN: 00787735) (DIN: 01468590)

Address: Aequs SEZ, No. 437/A, Hattargi Address: Aequs SEZ, No. 437/A, Hattargi

Village, Hukkeri Taluk, Belagavi - 591243, Village, Hukkeri Taluk, Belagavi - 591243,

Karnataka, India Karnataka, India

Place: Belagavi Place: Belagavi

Date: August 07, 2026 Date: July 29, 2026