DIRECTORS' REPORT

Your directors are pleased to present herewith the 51^st (Fifty first) Annual Report of Dynamatic Technologies Limited (the 'Company')
along with the Audited Financial Statements for the financial year ended 31^st March 2026.

FINANCIAL RESULTS OF OUR OPERATIONS AND STATE OF AFFAIRS:

The Financial Results of the Company for the year ended 31^st March 2026, were as follows:

COMPANY PERFORMANCE:

The Consolidated net sales for FY2026 were Rs. 1,62,134
lakhs, increased by 15.5% as compared to Rs. 1,40,380 lakhs
in FY2025. Consolidated EBITDA for FY2026 was reported as
Rs. 18,268 lakhs as compared to Rs. 15,832 lakhs in FY2025.
EBITDA margin for the year under review was 11.27%
compared to 11.28% in FY2025.

The Aerospace continued to be the primary growth driver,
with revenue increasing by 27.6% for the full year, driven
by resilient performance and execution of commercial
order books. While revenue momentum remains robust,
profitability was broadly stable and grew moderately during
the year, indicating some margin normalization amid growth
investments and project mix.

The Hydraulics segment reported 6.4% year-on-year growth,
led by strong performance in India Hydraulics driven by robust
OEM and aftermarket demand. However, UK Hydraulics
revenue declined due to reduced OEM demand and planned
operational rationalization on transfer of technology and
product lines to improve profitability.

The Metallurgy segment recorded a year-over-year growth
of 6.9% in INR terms. However, the business continued to
operate under challenging market conditions and navigating a
complex transition amid structural shifts, high energy costs,
and fierce global competition in Germany.

SEGMENT PERFORMANCE:

AEROSPACE & DEFENCE: The Aerospace segment
represents increasingly the most important strategic area for
the Group; it remained the Company's largest contributor to
revenue and profitability in FY2026. It grew 27.6% y-o-y in
FY2026, recording Revenue of Rs. 77,561 lakhs compared to
Rs. 60,785 lakhs in FY2025. Segment EBITDA for the year
was Rs. 17,755 lakhs, against Rs. 15,783 lakhs in FY2025.
While revenue momentum remains robust, profitability was
broadly stable and grew moderately during the year, indicating
some margin normalization amid growth investments and
project mix.

The segment remains well positioned for strong growth,
supported by strong demand across commercial and defence
aerospace programs, increasing India's growing role in the
global aerospace supply chain. Ongoing customer programs
and new strategic partnerships are expected to support long¬
term business visibility and growth.

Favourable global context: Global Aerospace and Defence
demand remains robust, supporting sustained segment
growth and long-term program visibility. As OEMs diversify
and deepen global supply chains, India is becoming an
increasingly important aerospace manufacturing and
localisation hub, placing our Group at the forefront of the
beneficiaries from this movement.

Engineering capabilities and manufacturing excellence:

The Group is strengthening its position through advanced
manufacturing, precision engineering and execution of
complex aerostructure programs. The readiness of the first
complete shipset of all eight Airbus A220 doors from Bangalore
ahead-of-schedule demonstrated our strong execution
capability and growing manufacturing sophistication. The
Group invests in next-generation aerospace, progress along
the value chain, supply chain integration, and exacting quality
standards. It views disciplined programme ramp-up and
long-term execution excellence as the keys to enhancing
competitiveness, margins and return on capital employed.

Besides, the Group is well advanced in the development of
Dynauton, the UAV internal startup it has recently incorporated,
and its purely indigenous technological capabilities, product
line and industrial capacity.

Solid customers, diversified programmes: Growth is
underpinned by long-term programmes with major OEMs
including Airbus, Boeing, Bell Textron, Dassault Aviation and
Deutsche Aircraft. Key platforms include the Airbus A220,
Airbus A330, Dassault Falcon 6X and D328eco, with a strong
order book expected to support continued revenue growth in
the coming years.

Our focus remains on scaling complex aerostructure programs,
deepening relationships with global OEMs and strengthening
advanced manufacturing and engineering capabilities. We
continue to invest in next-generation commercial and security
applications to enhance long-term competitiveness, margins
and execution capabilities.

HYDRAULICS: The Hydraulics segment grew 6.4% y-o-y,
recording a revenue of Rs. 48,738 lakhs compared to Rs.
45,804 lakhs in FY2025. Segment EBITDA for the year was
Rs. 3,587 lakhs, against Rs. 2,415 lakhs in FY2025. The
Indian Hydraulics business grew by 22.5%, while the UK
business declined 25.5% due to product rationalisation and
ongoing restructuring initiatives. However, UK Hydraulics
revenue declined due to reduced OEM demand and planned
operational rationalization on transfer of technology and
product lines to improve profitability.

Segment is expected to witness gradual improvement in
margins supported by stable domestic demand, increasing
farm mechanization and infrastructure activity in India. UK
restructuring initiatives are expected to aid margin recovery
over the medium term.

Macro Trends: The Hydraulics business is benefiting from
structural growth drivers in India, including rising farm
mechanisation, infrastructure-led economic development
and supportive government policies for agricultural and
construction equipment. Domestic demand remains resilient
across OEM, industrial and aftermarket channels.

Business Positioning & Capabilities: The company
continues to position itself as a global leader in gear pump
manufacturing. Management is focused on improving
long-term profitability through supply chain integration,
manufacturing efficiency, cost optimisation and restructuring
initiatives. The returns from coordination and integrated
operations between the Indian and UK operations having
substantially diminished, the Group completed the transfer
of relevant manufacturing activities and capacity and
reorganisation of manufacturing to Bangalore. This and the
reprioritising inside the product line is intended to create a
leaner and more competitive operating model, enhancing
throughput, delivery responsiveness and operational agility,
while rationalising capital employment.

Customers, End Markets & Outlook: Performance
was supported by steady demand from domestic OEMs,
industrial customers and aftermarket channels, particularly
in agriculture and construction equipment. Improving
mechanisation trends and infrastructure activity in India
are expected to support gradual growth, while expansion
of the aftermarket and industrial businesses are meant to
improve resilience, margin profile and capital efficiency over
time. The Company continues to prioritize cost optimization,
manufacturing efficiency and expansion of its aftermarket
and industrial presence to improve long-term profitability and
competitiveness.

METALLURGY: The Metallurgy segment grew 6.9% in
INR terms y-o-y, recording a revenue of Rs. 35,810 lakhs
compared to same period last year Rs. 33,483 lakhs. Segment
EBITDA was Rs. 283 lakhs compared to Rs. 1,004 lakhs in
FY2025. However, the business continued to operate under
challenging market conditions and navigating a complex
transition amid structural shifts, high energy costs, and fierce
global competition in Germany.

The segment continues to face a cautious demand
environment in Europe, particularly across automotive-linked
industrial markets. However, gradual demand stabilisation,
easing inflationary pressures and increasing opportunities
in specialised engineering and defence applications are
expected to support the business over medium to long term.

Macro Trends: The Metallurgy segment continues to operate
in a difficult European environment, impacted by weakness
in the German automotive sector, elevated energy costs
and broader geopolitical uncertainty. Commercial demand is
driven by caution, although easing inflation has provided a
glimmer of light. A growing German defence budget and new
security priorities offer new opportunities and may provide
a support to pivot towards promising product diversification
and regional industrial stability.

Business Positioning & Capabilities: The company is
responding through very strict cost discipline, operational
efficiency measures and a strategic shift toward higher-value
applications. Management is actively seeking new markets
where its capabilities are relevant, particularly in defence.
Longer term, it may consider capabilities in aerospace
castings, forgings and specialised engineering to create long¬
term resilience and enhance margins, but with a strong focus
on capital employment.

Customers, End Markets & Outlook: Near-term performance
will remain influenced by raw material availability, commodity
input costs, and financing conditions for end customers. Over
time, increased exposure to defence is necessary to reduce
dependence on the weaker automotive industry and support
future profitable growth.

However, our focus remains on cost discipline, operational
efficiency and improving the product mix toward higher-value
added. The Company continues to advance diversification into
aerospace, defence and specialised engineering segments
to strengthen margins, reduce dependence on traditional
automotive demand cycles and improve long-term business
resilience.

For more information on Performance and state of affairs
for the Company and its subsidiaries, please refer to the
Management Discussion and Analysis Report.

CAPITAL ALLOCATION AND DEBT MANAGEMENT:

The Company continued to invest in strategic growth
initiatives and operational capabilities during the year. Over
the last decade, the Group has undertaken a series of portfolio
rationalisation, refinancing and non-core asset divestment
initiatives, including the monetisation of selected real estate
and infrastructure assets, with the objective of strengthening
the balance sheet while continuing to invest in long-term
Aerospace and Advanced Engineering capabilities. The Board
and management remain focused on disciplined capital
allocation and prudent leverage management in support of
sustainable long-term industrial development and optimal
capital efficiency.

DIVIDEND:

The interim dividend declared by the Board of Directors of
Rs. 5/- per share was paid by the Company during the year
in accordance with Section 123 of the Companies Act, 2013
("Act") as applicable.

Further, the Board of Directors of the Company vide its
meeting held on 19^th May 2026, has proposed final dividend of
Rs. 5/- per share for the year which is subject to the approval
of the members at the ensuing Annual General Meeting.

The total dividend outgo amounts to Rs. 6,79,14,430/- out of
which Rs 3,39,57,215/- was paid as interim dividend.

The Register of Members and Share Transfer Books of the
Company will remain closed from 9^th September 2026 to 15^th
September 2026 (both days inclusive) for ascertainment of
shareholders eligible to receive dividend for the financial year
ended 31^st March 2026.

Pursuant to Regulation 43A of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015, the
Company has adopted a Dividend Distribution Policy, which
outlines the parameters and guiding principles that the Board
considers while determining dividend declarations or deciding
to retain profits for future growth initiatives. The said policy is
hosted on the website of the Company under the 'Investors'
section at www.dynamatics.com.

SHARE CAPITAL:

As of 31^st March 2026, the Company had an authorized share
capital of Rs. 2,500 lakhs, divided into 2,00,00,000 equity
shares of Rs. 10/- each and Rs. 500 lakhs divided into 5,00,000
redeemable cumulative preference shares of Rs. 100/- each.

The Issued, subscribed and paid-up Equity Share Capital of
the Company as of 31^st March 2026 was Rs. 679.14 lakhs,
comprising 67,91,443 equity shares of Rs. 10/- each.

TRANSFER TO RESERVES AND SURPLUS/RETAINED
EARNINGS:

The movements in reserves and surplus/retained earnings are
available in the Statement of Changes in Equity, which forms
part of the financial statements.

CAPITAL EXPENDITURE:

During the year under review, the Group incurred capital
expenditure of Rs. 5,998 lakhs for physical infrastructure
and Rs. 2,464 lakhs for procurement and development of
intangible assets. Significant investments have been made
in plant and machinery, building, data security, information
systems, design and development activities, for the future
benefits of the Group.

CONSOLIDATED FINANCIAL STATEMENTS:

The Consolidated Financial Statements of the Company
and its subsidiaries are prepared in accordance with Indian
Accounting Standards notified under the Companies (Indian
Accounting Standards) Rules, 2015 ('Ind AS'). The Audited
Consolidated Financial Statements together with the Auditor's
Report thereon form part of this Integrated Annual Report.

The Company has adopted a Policy for determining Material
Subsidiaries in terms of Regulation 16(1)(c) of the SEBI Listing
Regulations. The Policy, as approved by the Board is uploaded
on the Company's website at www.dynamatics.com.

SUBSIDIARIES:

As on 31^st March 2026, the Company has eight subsidiaries.
There are no associate companies or joint venture companies
within the meaning of Section 2(6) of the Act. There has
been no material change in the nature of the business of
the subsidiaries. The structure of Dynamatic Technologies
Limited (DTL) and its subsidiaries is appended hereunder:

INDIAN SUBSIDIARIES:

Dynamatic Manufacturing Limited, India (DML) is a wholly
owned subsidiary of the Company. DML serves as a Centre of
Excellence for detail parts and is engaged in the engineering,
manufacturing, and delivery of components for various aircraft
parts. Its capabilities include fabrication, precision machining,
sheet metal work, forming technology, stretch forming,
rubber press operations, Amada CNC bending, AWS-certified
welding (American Welding Society), special processes,
heat treatment, and aerospace fabrication. During the year,
DML started its operations into the Hydraulics business
and commenced the manufacturing and supply of hydraulic
pumps.

JKM Erla Automotive Limited, India (JEAL) continues to
be a wholly owned subsidiary of the Company and is a non
operating company.

JKM Research Farm Limited, India (JRFL) is a wholly
owned subsidiary of the Company. It continues to be the
Research & Development facilitator to the Company. It
supports the Hydraulics & Dynauton Division of Dynamatic
Technologies Limited (DTL) in the areas of design concept,
functional prototype testing, and technical information.

JKM Automotive Limited (JAL), a wholly owned subsidiary
of JKM Erla Automotive Limited (JEAL) and a step-down
subsidiary of DTL, was struck off by the Ministry of Corporate
Affairs (MCA), effective 27^th June 2025, pursuant to an
application for strike-off filed with the MCA on 11^th April 2025,
as it had not commenced operations or generated any revenue
since incorporation and remained a dormant company.

Dynauton Limited (DL), a wholly owned subsidiary of
the Company, was incorporated on 10^th April 2026 with
the objective of designing and manufacturing advanced
Unmanned Aerial Vehicles (UAVs) and critical subsystems,
including gimbals, autopilots, radars, propulsion units,
avionics, and software solutions.

OVERSEAS WHOLLY OWNED SUBSIDIARIES:

JKM Global Pte. Limited, Singapore continues to be an
investment hub for overseas businesses.

Dynamatic Limited, Swindon, UK, (DLUK) is a wholly
owned subsidiary and held through JKM Global Pte. Limited,
Singapore.

Dynamatic-Oldland Aerospace®, a division of Dynamatic
Limited UK, is located in Swindon, and is a leader in Aeronautical
Precision Engineering and is currently manufacturing and
supplying high precision and complex machined components
for most of the Airbus family of aircraft.

Dynamatic Hydraulics®, a DLUK division in Swindon, UK,
manufactures high-performance hydraulic products with
over 50 years of gear pump expertise, serving agriculture,
construction, and off-highway sectors with pump packages,
fan drive systems, and integrated valve solutions.

Yew Tree Investments Limited, Bristol, UK is a wholly
owned subsidiary of Dynamatic Limited, UK. Originally Yew
Tree Investments Limited and Dynamatic Limited were the

subsidiaries of JKM Global Pte. Limited. Post-merger, DLUK
has both its Hydraulics and Aerospace units in Swindon.

Dynamatic LLC, US is a subsidiary of Dynamatic Limited,
UK.

Eisenwerk Erla GmbH, Germany, a wholly owned subsidiary
held through JEAL, India, has been in business for over 630
years and is a preferred supplier to leading global OEMs,
including Audi, BMW, and Volkswagen. Its manufacturing
capabilities include high-precision machining of complex
metallurgical components for automotive engines and
turbochargers. Eisenwerk is currently transitioning from an
automotive and foundry focus to the aerospace and defence
sector.

PERFORMANCE OF SUBSIDIARIES:

Pursuant to the provisions of Section 129(3) of the Act,
a statement containing the salient features of financial
statements of the Company's subsidiaries in Form
No. AOC -1 is attached to the financial statements of the
Company as Annexure-1.

Further, pursuant to the provisions of Section 136 of the
Act, the financial statements of the Company, consolidated
financial statements along with relevant documents
and separate audited financial statements in respect of
subsidiaries, are available on the website of the Company at
www.dynamatics.com.

DIRECTORS' RESPONSIBILITY STATEMENT:

Based on the framework of Internal Financial Controls and
compliance systems established and maintained by the
Company, the work performed by the internal, statutory, cost
and secretarial auditors and external agencies, including audit
of internal controls over financial reporting by the Statutory
Auditors and the reviews performed by Management and the
relevant Board Committees, including the Audit Committee,
the Board is of the opinion that the Company's internal
financial controls were adequate and effective during Financial
Year 2025-26.

Accordingly, pursuant to Sections 134(5) of the Act, the
Board of Directors, to the best of their knowledge and ability,
confirm that:

i. in the preparation of the annual accounts, for the Financial
Year ended 31^st March 2026, the applicable accounting
standards have been followed and there are no material
departures;

ii. they have selected such accounting policies and have
applied them consistently and made judgments and
estimates that are reasonable and prudent so as to give a
true and fair view of the state of affairs of the Company
at the end of the financial year and of the profit of the
Company for that period;

iii. they have taken proper and sufficient care for the
maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding
the assets of the Company and for preventing and
detecting fraud and other irregularities;

iv. they have prepared the annual accounts for the Financial
Year ended 31^st March 2026, on a going concern basis;

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

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

DISCLOSURE ON COMPLIANCE WITH SECRETARIAL
STANDARDS:

Your directors have devised proper systems and processes
for complying with the requirements of applicable Secretarial
Standards issued by the Institute of Company Secretaries of
India and that such systems were adequate and operating
effectively.

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP):Inductions, Re-appointments, Retirements &
Resignations:

During the year, the shareholders approved the appointment
of Air Chief Marshal V.R. Chaudhari (Retd.) (DIN: 08444323)
and Ms. Shyamala Venkatachalam (DIN: 07691824) as
Independent Directors of the Company to hold office for a
term of five consecutive years i.e., from 23^rd December 2025
up to 22^nd December 2030.

Mr. Dietmar Hahn (DIN: 06414463) resigned as a Non¬
Executive and Non-Independent Director on 19^th May 2026,
owing to his retirement from Eisenwerk Erla, Germany, a
foreign subsidiary of the Company.

Pursuant to the provision of Section 152 of the Companies
Act, 2013, Mr. James Tucker (DIN: 07093258), Non-Executive
Non-Independent Director of the Company retires by rotation
at the ensuing Annual General Meeting and being eligible,
offers himself for re-appointment. The Board recommends his
re-appointment. A resolution seeking shareholders' approval
for his re-appointment forms part of the Notice.

Brief profile and details of Mr. James Tucker (DIN: 07093258),
Non-Executive Non-Independent Director of the Company,
proposed to be re-appointed as required under the SEBI
Listing Regulations are contained in the Notice convening the
ensuing 51^st Annual General Meeting of the Company.

Based on the recommendations of the Nomination and
Remuneration Committee, the Board of Directors, at its
meeting held on 19^th May 2026, have re-appointed Dr. Udayant
Malhoutra (DIN:00053714), CEO & MD, for a period of 5
years, with effect from 1^st October 2026 to 30^th September
2031, which is subject to the approval of the members by
way of a Special Resolution.

Apart from aforesaid changes there are no changes in
Directors and Key Managerial Personnel of the Company.

Pursuant to the provisions of Section 203 of the Act, the Key
Managerial Personnel of the Company as on 31^st March 2026,
are:

• Dr. Udayant Malhoutra, CEO & Managing Director

• Mr. Chalapathi P, Executive Director & Chief Financial
Officer

• Mr. Shivaram V, Chief Legal Officer & Company Secretary

None of the Directors of the Company are disqualified from
being appointed as Directors as specified under Section 164
of the Companies Act, 2013.

During the year under review, the company did not have
any pecuniary relationship or transactions with any of its
directors, other than payment of remuneration/incentive to
the Executive Directors and sitting fees to Non-Executive
Directors and reimbursement of expenses incurred by
them for the purpose of attending meetings of the Board/
Committees of the Company.

INDEPENDENT DIRECTORS:

All the Independent Directors of the Company have submitted
the requisite declarations stating that they meet the criteria of
independence as prescribed under Section 149(6) of the Act
and Regulation 16(1)(b) of the SEBI Listing Regulations. The
Board reviewed and assessed the veracity of the aforesaid
declarations, as required under Regulation 25(9) of the
SEBI Listing Regulations. In the opinion of the Board, all the
Independent Directors fulfil the said conditions as mentioned
in Section 149(6) of the Act and the SEBI Listing Regulations
and are independent of the Management. All the Independent
Directors of the Company have complied with the provisions
of sub rule (1) and (2) of Rule 6 of the Companies (Appointment
and Qualification of Directors) Rules, 2014 with respect to
registration with the Indian Institute of Corporate Affairs for
the Independent Directors' Database.

There has been no change in the circumstances affecting
their status as Independent Directors of the Company. In
the opinion of the Board, the Independent Directors possess
the requisite integrity, experience, expertise and proficiency
required to fulfil their duties as Independent Directors.

FAMILIARISATION PROGRAMME FOR THE
INDEPENDENT DIRECTORS:

Dynamatic Technologies ensures high corporate governance
through appropriate induction and ongoing training for all
directors. Each new independent director participates in an
induction program designed to provide a comprehensive
understanding of the company's businesses, markets,
and regulatory environment. This program also familiarizes
directors with management and operations, helping them
understand their roles and responsibilities to contribute
significantly to the company's growth. Directors have full
opportunities to interact with senior management and receive
all necessary documents to enhance their understanding
and effectiveness. Dynamatic Technologies firmly believes
that a well-informed and familiarized Board can significantly
contribute to effectively discharging its role of trusteeship,
thereby fulfilling stakeholders' expectations. To achieve this,
directors are continuously updated on corporate and industry
developments, including regulatory and economic changes,
enabling them to make well-informed and timely decisions.

During the year, the Company has facilitated factory visits
for the newly inducted independent directors, providing
them with firsthand experience and brief overview of the
Company's operations at Aerotropolis campus alongside
Hangar visits, wherein the independent directors had an
immersive review of the deep tech eco system developed for
autonomous systems.

The details of the familiarisation programme are uploaded
under the Investors Desk section on the Company's corporate
website www.dynamatics.com.

BOARD MEETINGS AND ANNUAL GENERAL MEETING:

The Board meetings are convened regularly to review and
determine the Company's business policies and strategies,
alongside other key governance matters. It maintains robust
operational oversight with quarterly meetings featuring
comprehensive presentations. Board and Committee
meetings are scheduled in advance, and a tentative annual
calendar is shared with Directors well ahead of time, enabling
them to plan their schedules effectively and participate
meaningfully in discussions. Only in case of special and urgent
business matters, if the need arises, Board's or Committee's
approval is taken by passing resolutions through circulation or
by calling the Board / Committee meetings at a shorter notice,
in accordance with the applicable law.

The agenda for the Board and Committee meetings includes
detailed notes on the items to be discussed to enable the
Directors to make an informed decision.

During the year under review, 6 (Six) meetings of the Board of
Directors were held, and details thereof have been provided
in the Corporate Governance Report. The intervening gap
between meetings were not more than 120 days as required
under the Act and SEBI Listing Regulations.

The Board has accepted the recommendations made by
the Committees of Board of Directors during the year under
review, with no instances where recommendations of the
Audit Committee were not accepted by the Board.

The 50^th Annual General Meeting (AGM) of the Company was
held on 30^th September 2025.

REMUNERATION POLICY:

The Company has adopted a Remuneration Policy for the
Directors, KMP and other employees, pursuant to the
provisions of the Act and the SEBI Listing Regulations.

The remuneration philosophy at the Company centers on
fostering a culture of leadership built on trust. The company
aims to offer opportunities that reinforce its performance-
driven culture. Adhering to globally accepted governance
practices, the remuneration policy is designed to attract,
motivate, and retain talent while enhancing productivity. This
policy creates a supportive work environment, encourages
personal growth and teamwork, and provides competitive
remuneration packages. Additionally, the policy is market-
responsive, tailored to attract and retain quality talent, and
leverage performance across different business sectors.

The copy of Nomination and Remuneration policy can
be accessed at the Company's website at https://www.
dynamatics.com/shareholders.

DIVERSITY IN THE BOARD:

In line with the core strategy, the Company understands
the importance of maintaining board diversity. Ensuring
optimal mix of varied perspectives, skills, expertise, industry
experience, age, gender, ethnicity, and cultural background
is critical to foster innovation and helps us to retain our
competitive advantage. The Board has adopted the policy on
appointment, continuation and cessation of Directors which
sets out the approach to diversity in the composition of the
Board. The Company has an optimum mix of executive and
non-executive independent directors and women directors.

CRITERIA FOR DETERMINING QUALIFICATIONS,
POSITIVE ATTRIBUTES, AND INDEPENDENCE OF A
DIRECTOR:

The NRC has formulated the criteria for determining
qualifications, positive attributes and independence of
Directors in terms of provisions of Section 178(3) of the Act
and Regulation 19 read with Part D of Schedule II to the SEBI
Listing Regulations.

a. Qualifications - A transparent Board nomination
process is in place that encourages diversity of thought,
experience, knowledge, perspective, age and gender. It
is also ensured that the Board has an appropriate blend of
functional and industry expertise. While recommending
the appointment of a Director, the NRC considers the
manner in which the function and domain expertise of
the individual will contribute to the overall skill-domain
mix of the Board.

b. Positive Attributes - In addition to the duties as
prescribed under the Act, the Directors on the Board
of the Company are also expected to demonstrate high
standards of ethical behaviour, strong interpersonal and
communication skills and soundness of judgement.
Independent Directors are also expected to abide by the
'Code for Independent Directors' as outlined in Schedule
IV to the Act.

c. Independence - In accordance with the above criteria, a
Director will be considered as an 'Independent Director' if
he/she meets the criteria for Independence as laid down
in the Act and Rules framed thereunder, as amended and
Regulation 16(1)(b) of the SEBI Listing Regulations.

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

In compliance with the requirements of the Companies
Act, 2013 and the SEBI Listing Regulations, the Company
undertook the annual performance evaluation of the Board
for the financial year 2025-26. The evaluation framework was
designed in line with the provisions of the Companies Act,
2013, the SEBI Listing Regulations, and the Guidance Note on
Board Evaluation issued by SEBI in January 2019.

The evaluation process was conducted through a structured
questionnaire covering qualitative and quantitative parameters,
along with feedback based on a rating mechanism. The
evaluation covered:

(i) the performance of the Board as a whole;

(ii) the performance of each Director on an individual basis;

(iii) the performance of the Chairperson of the Board; and

(iv) the performance of all Board committees.

The Board evaluation focused on parameters such as
the composition and role of the Board, the quality and
effectiveness of communication and relationships, the
functioning of Board committees, review of performance and
compensation of Executive Directors, succession planning,
strategic guidance, Board culture, governance standards, and
the discharge of specific duties and obligations.

The evaluation of individual Directors was based on parameters
including participation and contribution at Board and
committee meetings, representation of shareholder interests
and enhancement of shareholder value, the ability to provide
strategic guidance and governance oversight, understanding of
the Company's strategy and risk environment, independence
of judgment, and safeguarding the interests of the Company
and its minority shareholders. Separate evaluations were
carried out for the Chairperson, Executive Directors, Non¬
Executive Directors, and Independent Directors.

The evaluation of committees considered factors such as
the adequacy of their independence, the frequency and
effectiveness of meetings, the quality of discussions, and the
effectiveness of their recommendations and advice to the
Board.

Throughout the year, the Board and its committees had
multiple opportunities for interaction, both collectively and in
smaller groups, including dedicated meetings of Independent
Directors and one-on-one discussions with the Chairperson.
These deliberations provided valuable insights, enhancing the
quality of governance and collective decision-making.

Discussions during the evaluation process also focused on
identifying ways to further strengthen the effectiveness of
the Board and its committees, particularly in the context of
the evolving business environment and regulatory landscape.
The Board reviewed the structure, composition, functioning,
and interaction with management, and identified actionable
areas for continuous improvement.

The Nomination and Remuneration Committee, through
its chairman, led the evaluation process and presented the
findings to the Board. The overall assessment concluded
that the Board, its committees, and individual Directors
function cohesively and effectively, with periodic reporting
by committees to the Board ensuring transparency and
alignment.

The Annual Performance Evaluation is conducted in a
paperless manner, with documents securely uploaded and
accessed electronically. This approach has led to significant
benefits, including paper conservation, reduced cycle time
for the evaluation process, and enhanced confidentiality of
information.

The Board acknowledged and appreciated the significant
contributions of the Chairperson, Executive Directors, Non¬
Executive Directors, and Independent Directors towards the
Company's growth and governance practices.

INTERNAL CONTROLS SYSTEMS AND THEIR
ADEQUACY:

The Company has established robust internal control systems
by instituting adequate policies and procedures covering all
financial and operating functions. These controls have been
developed and designed in a manner consistent with the
maintenance of accounting records for ensuring the reliability
of financial information, monitoring of operations, protecting
assets from unauthorised use or losses and compliance
with regulatory requirements. The Company has digitised
key process controls through the ERP systems to maximise
automation, enable expeditious management reporting and
reduce the risk of fraudulent transactions. The internal audit
team reviews these controls through a risk-based audit plan.

The Company has an audit charter which defines the internal
audit plan and methodology for executing the reviews.
The scope of audits comprises reviews and reporting on
key process risks, adherence to operating guidelines and
statutory compliances. The progress of the audit plan and the
findings and recommendations are placed before the Audit
Committee which monitors the adequacy and reliability of
financial reporting, internal controls and risk management
processes.

Additionally, a CEO & CFO Certificate, included in the
Corporate Governance Report, confirms the existence and
effectiveness of internal controls and underscores their
responsibility to report deficiencies to the Audit Committee
and rectify them. Throughout the year, these controls were
thoroughly tested, and no material weaknesses in design or
operation were reported.

REPORTING OF FRAUDS:

During the year under review, the Statutory Auditors, Cost
Auditors and Secretarial Auditors have not reported any
instances of frauds committed in the Company by its officers
or employees, to the Audit Committee under Section 143(12)
of the Act.

TRANSFER TO INVESTOR EDUCATION AND
PROTECTION FUND:

a) Transfer of Unclaimed Dividend and corresponding
Shares to Investor Education and Protection Fund
(IEPF):

Pursuant to Sections 124 and 125 of the Act read with
the Investor Education and Protection Fund Authority
(Accounting, Audit, Transfer and Refund) Rules, 2016
('IEPF Rules'), dividends, if not claimed for a consecutive
period of seven (7) years from the date of transfer to
Unpaid Dividend Account of the Company, is liable to be
transferred to the Investor Education and Protection Fund
('IEPF').

Further, all the shares in respect of which dividend has
remained unclaimed for seven (7) consecutive years
or more from the date of transfer to unpaid dividend
account, shall also be transferred to IEPF Authority. The
said requirement does not apply to shares in respect
of which there is a specific order of Court, Tribunal or
Statutory Authority, restraining any transfer of shares.
In the interest of the shareholders, the Company sends
periodical reminders to the shareholders to claim their
dividends in order to avoid transfer of dividends / shares
to IEPF Authority. Notices in this regard are also published
in newspapers and details of unclaimed dividends and
shareholders whose shares are liable to be transferred
to the IEPF Authority, are uploaded on the Company's
website at www.dynamatics.com.

The details regarding remittance of Unclaimed Dividend
to Investors' Education & Protection Fund (IEPF) for
financial year 2018-19 and thereafter in terms of Section
125 of the Act and are provided in the Corporate
Governance Report forming part of the Annual Report.

b) DEMAT Suspense Account for Unclaimed Shares:

As on 31^st March 2026, there are 10 members, holding
835 Equity Shares of Rs.10/- each, lying in the escrow

account due to non-availability of their correct particulars.
A detailed note in this regard is provided in the Corporate
Governance Section under "Suspense Account for the
unclaimed shares". The voting rights on these shares
shall remain frozen till the rightful owner of such shares
claims the shares.

RELATED PARTY TRANSACTIONS:

The Company has formulated a Policy on Related Party
Transactions in accordance with the Act and the SEBI
Listing Regulations including any amendments thereto for
identifying, reviewing, approving and monitoring of Related
Party Transactions ('RPTs'). The said Policy is available on the
Company's website at www.dynamatics.com

All RPTs are placed before the Audit Committee for review
and approval. Prior omnibus approval of the Audit Committee
is obtained on periodic basis for the transactions which are
planned/repetitive in nature. A statement giving details of all
RPTs entered pursuant to omnibus approval so granted is
placed before the Audit Committee on a quarterly basis for its
review. All the RPTs under Ind AS-24 have been disclosed in
Note no. 47 to the Standalone Financial Statements forming
part of this Integrated Annual Report.

The RPTs entered into during the year under review were
on arm's length basis, in the ordinary course of business
and were in compliance with the applicable provisions of
the Act read with the rules framed thereunder and the SEBI
Listing Regulations. Further, the Company did not enter into
any contracts or arrangements with related parties in terms
of Section 188(1) of the Act and no material related party
transactions were entered into during the year under review.
Accordingly, the disclosure of RPTs as required under Section
134(3)(h) of the Act in Form No. AOC-2 is not applicable to the
Company for FY 2025-26 and hence does not form part of this
Integrated Annual Report.

In terms of Regulation 23 of the SEBI Listing Regulations,
the Company submits details of RPTs as per the prescribed
format to the stock exchanges on a half-yearly basis.

CORPORATE GOVERNANCE AND CERTIFICATE:

In terms of Regulation 34(3) of the SEBI Listing Regulations,
the Corporate Governance Report, Management Discussion
& Analysis Report, and the Auditors' Certificate regarding
Compliance with the Corporate Governance requirements
form part of this report. M/s. Ratish Tagde & Associates,
Company Secretary in Practice, had conducted the Corporate
Governance audit for the year under review. A certificate from
M/s. Ratish Tagde & Associates, regarding compliance with
the conditions of Corporate Governance as stipulated under
SEBI Listing Regulations is presented in a separate section
forming part of this Annual Report.

MANAGEMENT DISCUSSION & ANALYSIS REPORT:

Pursuant to Regulation 34 of the SEBI Listing Regulations, the
Management Discussion and Analysis Report is presented in
a separate section forming part of this Annual Report.

BUSINESS RESPONSIBILITY & SUSTAINABILITY
REPORT:

In accordance with Regulation 34(2)(f) of the SEBI Listing
Regulations, the Business Responsibility & Sustainability

Report (BRSR) is presented in a separate section and is an
integral part of this Integrated Annual Report.

AUDITORS:Statutory Auditors:

Pursuant to provisions of Section 139 of the Act read with
the Companies (Audit and Auditors) Rules, 2014, M/s.
Deloitte Haskins & Sells LLP, (ICAI Firm Registration No.
117366W/W-100018), were appointed as Statutory Auditors
of the Company for a term of 5 years, to hold office from the
conclusion of 49^th Annual General Meeting held on September
5, 2024 until the conclusion of 54^th Annual General Meeting to
be held in 2029.

The Auditor's Report for the FY 2025-26 does not contain any
qualification, reservation or adverse remark. The Auditor's
Report is enclosed with the Financial Statements in this
Annual Report.

Cost Auditors:

During the year under review, in accordance with Section
148(1) of the Act, the Company has maintained the accounts
and cost records, as specified by the Central Government.

The Board of Directors, on the recommendation of the Audit
Committee, has appointed M/s. Rao, Murthy & Associates,
Cost Accountants (Firm Registration No. 000065) as Cost
Auditors to audit the cost accounts of the Company for the
FY 2026-27 under section 148 of the Act. M/s. Rao, Murthy
& Associates have confirmed that their appointment is
within the limits of section 141 (3)(g) of the Act and have
also certified that they are free from any disqualifications
specified under section 141(3) and proviso to section 148(3)
read with section 141(4) of the Act. The Audit Committee has
also received a Certificate from the Cost Auditors certifying
their independence and arm's length relationship with the
Company. As per the provisions of the Companies Act, 2013,
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 M/s. Rao, Murthy &
Associates, Cost Auditors is included in the Notice convening
the Annual General Meeting.

Internal Auditors:

The Internal Audit function is responsible for assisting the
Audit Committee & Risk Management Committee on an
independent basis with a full status of the risk assessments
and management. M/s. KPMG Assurance & Consulting
Services LLP was appointed as Internal Auditors of the
Company to undertake Internal Audit for the FY 2026-27.

Secretarial Auditor:

Pursuant to the provisions of section 204 of the Act, and the
Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014 and Regulation 24A of SEBI Listing
Regulations, the Company had appointed M/s. Ratish Tagde
& Associates, Company Secretary in practice (CP No. 22018)
to undertake the Secretarial Audit of the Company for (five)
years from Financial Year 1^st April 2025 to 31^st March 2030.
The Secretarial Audit Report for the financial year ended 31^st
March 2026, as required under Section 204 of the Act and
Regulation 24A of the SEBI Listing Regulations, is appended
as Annexure 2 to this Report. The Secretarial Audit Report
does not contain any qualification, reservation or adverse
remark.

As per regulation 24A(1) of SEBI Listing Regulations, the
Company is required to annex the Secretarial Audit report of
its material unlisted subsidiary to its Annual Report. JKM Erla
Automotive Limited (JEAL) has been identified as Material
Unlisted Subsidiary of the Company for FY 2025-26 and
accordingly Secretarial Audit Report of JEAL is annexed as
Annexure - 2A.

Annual Secretarial Compliance Report: The Company
has undertaken an audit for the Financial Year ended 31^st
March 2026 for all applicable compliances as per SEBI Listing
Regulations and Circulars/ Guidelines issued thereunder. The
Annual Secretarial Compliance Report duly signed by M/s.
Ratish Tagde & Associates, Company Secretary in Practice,
has been submitted to the Stock Exchanges.

Tax Auditors:

M/s. BVS & Associates, Chartered Accountants Firm, are the
Tax Auditors of the Company.

RISK MANAGEMENT POLICY:

The growth and evolving business mix of the Group, including
the increasing contribution of Aerospace and Defence
activities, requires continued focus on program execution,
customer requirements, operational scalability, supply-chain
resilience and capital efficiency. The growth of the Group
also requires monitoring the efficacy of corporate support
functions, as well as areas such as cybersecurity.

The Board and management have established a Risk
Management Policy, including recuring processes to identify
and categorise various risks, implement mitigation measures
and capture opportunities for these risks. These entail periodic
reviews of enterprise risks, capital allocation mechanisms,
and operations as part of the Group's governance framework.

Further details on the Risk Management Framework
is provided in the Corporate Governance Report and
Management's Discussion and Analysis Report, forming part
of the Annual Report.

The said policy has been uploaded on Company's website at
https://www.dynamatics.com/shareholders

PARTICULARS OF LOANS, GUARANTEES OR
INVESTMENTS:

Loans, guarantees and investments covered under Section
186 of the Companies Act, 2013 forms part of the notes to
the financial statements provided in this Annual Report.

DEPOSITS:

During the year under review, the Company has neither
accepted nor renewed any deposits from the public and, as
such, no amount of principal or interest was outstanding as
on the Balance Sheet date within the meaning of Section 73
of the Companies Act, 2013 and the Companies (Acceptance
of Deposits) Rules, 2014.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

In line with Section 135 of the Companies Act, 2013 read
with applicable rules made thereunder, Corporate Social

Responsibility (CSR) Committee has been constituted for
the purposes of recommending and monitoring the CSR
initiatives of the Company.

The Board, based on the recommendation of the CSR
Committee, has formulated and adopted a CSR Policy, in line
with Section 135 of the Companies Act, 2013 read with the
applicable rules made thereunder, which is available on the
website of the Company at https://www.dynamatics.com/
shareholders.

The CSR objectives are designed to serve societal, local and
national goals in the locations we operate, create a significant
and sustained impact on local communities and provide
opportunities for our employees to contribute to these efforts
through volunteering.

The Annual Report on the CSR initiatives undertaken by
the Company as per the Companies (Corporate Social
Responsibilities Policy) Rules, 2014 (as amended) including
the reasons for not utilising the complete amount for CSR as
approved by the CSR Committee, is annexed as Annexure - 3.
The details relating to the composition of the CSR Committee
is provided in the Corporate Governance Report, forming part
of the Annual Report.

ANNUAL RETURN:

As per the requirements of Section 92(3) of the Act and
Rules framed thereunder, the Annual Return for FY 2025-26
is uploaded on the website of the Company and the same is
available at https://www.dynamatics.com/annual-reports.

DISCLOSURE AS PER THE SEXUAL HARASSMENT OF
WOMEN AT WORKPLACE (PREVENTION, PROHIBITION
AND REDRESSAL) ACT, 2013:

Your Company has zero tolerance towards sexual harassment
at the workplace and has adopted a policy on prevention,
prohibition and redressal of sexual harassment at workplace in
line with the provisions of the Sexual Harassment of Women
at Workplace (Prevention, Prohibition and Redressal) Act,
2013 and the Rules thereunder. As required under law, the
Company has constituted an Internal Complaints Committee
for conducting inquiry into the sexual harassment complaints
at the workplace and for taking such actions as stipulated
under the said act.

Any complaint pertaining to sexual harassment is diligently
reviewed, investigated and treated with great sensitivity.
The Internal Complaints Committee members have been
trained in handling and resolving complaints and have also
designed an online POSH e-learning awareness module, for
its employees.

As a proactive step towards promoting awareness and
understanding of the Sexual Harassment of Women at
Workplace (Prevention, Prohibition, and Redressal) Act,
Dynamatic Technologies organizes training sessions
conducted by legal experts specifically tailored for women
employees. These sessions aim to educate employees about
their rights and the procedures for reporting and addressing
instances of sexual harassment.

During the FY 2025-26, there were no complaints received on
sexual harassment.

COMPLIANCE WITH THE MATERNITY BENEFIT ACT:

During the year under review, the Company has complied
with the provisions of the Maternity Benefit Act, 1961.

WHISTLE BLOWER POLICY AND VIGIL MECHANISM:

The Company has adopted a Vigil Mechanism Policy through
which all stakeholders including Directors and employees may
report unethical behaviour, malpractices, actual or suspected
fraud, wrongful conduct, and violation of the Company's code
of conduct without fear of reprisal. Details of complaints
received, and the action taken are reviewed by the Audit
Committee.

During the year under review, the Company / Committee has
not received any such complaint. The functioning of the vigil
mechanism is reviewed by the Audit Committee from time
to time.

This Policy provides for adequate safeguards against
victimization of employees who avail of this mechanism. The
Policy also provides for direct access to the Chairman of the
Audit Committee to best manage such events and to enable
integrity of information. It is affirmed that no personnel of the
Company will be denied access to the Audit Committee. The
policy on vigil mechanism may be accessed on the Company's
website at https://www.dynamatics.com/shareholders.

PARTICULARS OF REMUNERATION OF DIRECTORS,
KMP AND EMPLOYEES:

In terms of the provisions of Section 197(12) of the Companies
Act, 2013 read with Rules 5(2) and 5(3) of the Companies
(Appointment and Remuneration of Managerial Personnel)
Rules, 2014, a statement showing the names and other
particulars of the employees drawing remuneration in excess
of the limits set out in the said rules is attached which forms
part of this report. 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 is
attached as Annexure - 4, which forms part of this report.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION
AND FOREIGN EXCHANGE EARNINGS & OUTGO:

The information relating to conservation of energy, technology
absorption, Research & Development and Foreign Currency is
appended as Annexure - 5.

PROCEEDINGS UNDER THE INSOLVENCY AND
BANKRUPTCY CODE, 2016:

During the Financial Year under review, neither any application
nor any proceeding is initiated against the Company under the
Insolvency and Bankruptcy Code, 2016.

OTHER DISCLOSURES:

a. Events Subsequent to the Date of the Financial
Statements:

There have been no material changes / commitments
affecting the financial performance of the Company
which occurred between the end of the Financial Year of

the Company to which the Financial Statements relate
and the date of this Report.

b. There was no instance of one-time settlement with any
bank or financial institution.

c. There were no significant and material orders passed by
the regulators or courts or tribunals impacting the going
concern status and the Company's operations in future.

Change in the Nature of Business, if any:

The Company continues to focus on its key business segments
and looks for selective growth / expansion opportunities.
There has been no change in the nature of business of the
Company as on the date of this Report.

Significant & Material Orders Passed by the Regulators:

During the year under review, no significant / material orders
were passed by the regulators or the Courts or the Tribunals
impacting the going concern status and the Company's
operations in future.

Partnerships and Collaborations:

Dynamatic Technologies has forged significant partnerships
with esteemed academic and defense research institutions
to advance indigenous product development for India's
defense and paramilitary sectors, aligning with the vision of
Atmanirbhar Bharat, as advocated by our Prime Minister.

The consortium of Larsen & Toubro and Bharat Electronics
Limited, pursuing India's AMCA (Advanced Medium Combat
Aircraft) program, has onboarded Dynamatic Technologies
Ltd (DTL) as an exclusive partner. DTL brings global expertise
in complex aerostructures and sub-systems manufacturing,
complementing L&T's engineering strength and BEL's
advanced electronics. The collaboration enhances indigenous
capabilities and strengthens India's push toward self-reliance
in 5^th-generation fighter aircraft development.

Further, Aerodata AG, an established German provider of
specialised solutions for aviation, and Dynauton Systems^®,
a division of Dynamatic Technologies Limited focusing on
the development and manufacture of unmanned systems,
announce the signing of a Memorandum of Understanding
(MoU). The agreement establishes the framework for a
strategic collaboration to develop a new unmanned, airborne
surveillance and reconnaissance solution for the Indian region.

Hutchinson and Dynamatic Technologies Limited have
signed a Memorandum of Agreement (MoA) to address
the fast-growing aerospace market in India. This strategic
collaboration combines Hutchinson's advanced composite
and multi-material systems expertise with Dynamatic's
strong industrial capabilities in metallic aero-structures and
assemblies , positioning both companies as leading partners
for global OEMs operating in the region.

Through these strategic partnerships, Dynamatic Technologies
is at the forefront of fostering indigenous innovation and
technology development, contributing to the nation's self¬
reliance aspirations in defense and security domains.

Credit Rating:

During the year under review, the Company's debt facilities
were rated by India Ratings and Research. The instrument
wise ratings are as below:

Listing with Stock Exchanges:

The Company confirms that it has paid the Annual Listing
Fees for the FY2025-26 to NSE (DYNAMATECH) and BSE
(505242) where the Company's Shares are listed.

Promoters:

The list of the promoters is disclosed for the purpose of
the SEBI (Substantial Acquisition of Shares and Takeovers)
Regulations, 2011.

Dr. Udayant Malhoutra is the promoter of the Company within
the definition of 'Promoter' for the purpose of regulation
2(1 )(s) of the SEBI (Substantial Acquisition of Shares and
Takeovers) Regulations, 2011.

Details of the promoter group are appended as under:
No. Name of the entity / person:

1. JKM Holdings Private Limited

2. Udayant Malhoutra and Company Private Limited

3. JKM Offshore India Private Limited

4. Christine Hoden (India) Private Limited

5. Greenearth Biotechnologies Limited

6. Mrs. Barota Malhoutra

7. Primella Sanitary Products Private Limited

8. Vita Private Limited

9. Wavell Investments Private Limited
GREEN INITIATIVES:

In alignment with its commitment to green initiatives and
sustainable practices, Dynamatic Technologies has taken
a proactive step by opting for electronic distribution of the
Notice of the 51^st Annual General Meeting (AGM) of the
Company, along with the Annual Report for the fiscal year
2025-26. This initiative involves sending electronic copies of
these documents to all members whose email addresses are
registered with the Company or Depository Participants.

By transitioning to electronic communication for AGM
notices and annual reports, Dynamatic Technologies aims
to minimize paper usage and reduce its environmental
footprint. This eco-friendly approach not only supports the
company's sustainability goals but also reflects its dedication
to responsible corporate citizenship.

APPRECIATION:

The Board of Directors extends its heartfelt gratitude to
the employees, customers, vendors, investors, lenders
and communities associated with Dynamatic Technologies
for their unwavering cooperation and invaluable support
throughout the year. Their dedication and partnership have
been instrumental in the company's achievements and
successes.

Furthermore, the Board expresses gratitude to the
Government of India, Government of Karnataka, and various
State governments, as well as government departments and
agencies, for their collaboration and support.

The contributions of every member of the Dynamatic family
are deeply appreciated and valued, reflecting the collective
effort and commitment towards the company's mission and
goals.

Finally, the Board acknowledges and thanks all the company's
customers for their continued trust and patronage. Their
support has been pivotal in shaping Dynamatic' s journey and
success.

For and on behalf of the Board of Directors

UDAYANT MALHOUTRA CHALAPATHI P

Chief Executive Officer & Executive Director &

Managing Director Chief Financial Officer

DIN : 00053714 DIN : 08087615

Place: Bangalore
Date: 19^th May 2026