Dynamatic Technologies Ltd

TO SHAREHOLDERS

Your directors are pleased to present herewith the 49^th (Forty Ninth) Annual Report of Dynamatic Technologies Limited (the 'Company') along with the Audited Financial Statements for the financial year ended 31^st March 2024.

FINANCIAL RESULTS:

The Financial Results of the Company for the year ended 31^st March 2024, were as follows:

COMPANY PERFORMANCE:

Despite global supply chain disruption and increasing inflationary pressure on commodity prices due to prevailing geopolitical conditions, Dynamatic Technologies has reported strong business performance in FY2024. Consolidated net sales for FY2024 were Rs. 1,42,933 lakhs, increased by 8.6% as compared to Rs. 1,31,577 lakhs in FY2023. The top line growth was driven by better product mix and inventory management. Consolidated EBITDA for FY2024 was reported as Rs. 15,941 lakhs down by 12.10% as compared to Rs. 18,126 lakhs during FY2023. The operating margins impacted due to subdued performance of Hydraulics segment during the year owing to unfavorable monsoon conditions in India and a production pause in the UK to implement a major product design modification. EBITDA margin for the year under review was 11.20% compared to 13.80% in FY2023. Increase in costs of material, labour and other expenses caused for decrease in margin year on year.

SEGMENT PERFORMANCE:

AEROSPACE & DEFENCE: The Aerospace & Defence segment recorded a revenue of Rs. 51,009 lakhs compared to Rs. 43,737 lakhs in FY2023. Segment EBITDA for the year was Rs. 13,094 lakhs, reported alongside Rs. 11,682 lakhs in FY2023.

The aerospace segment reported a growth of 16.6% y-o-y in FY2024 driven by resilient performance of Aerospace industry, strong commercial order book, supply chain improvements and ramp-up of production at its new site on receipt of requisite customer qualifications. However, margins significantly got impacted during the first half of the year owing to the delay in getting customers' qualifications for the relocation of Indian facility from rented to own facility.

Nevertheless, the company has successfully contracted to manufacture all variants of Airbus A220 doors, as well as aerostructures for the Falcon 6X of Dassault. Additionally, in March 2024, your company proudly announced a new partnership with Deutsche Aircraft, the German OEM based in Munich, Germany. The collaboration focuses on producing the Rear Fuselage for the 40-seater D328eco regional turboprop aircraft. This marks a significant milestone for the "Make in India" initiative and will bring work to the highly capable ecosystem here. All these large contracts are expected to transform our aerospace business substantially over the next two to three years.

A strong order book and continued revenues from large Global OEMs like Airbus A330, Airbus A220, Dassault new work FAI and Deutsche Aircraft alongside focus on increasing business on detailed parts at Dynamatic Manufacturing Limited (DML) is expected to ramp up the revenues in the coming years.

HYDRAULICS: During the year, the Hydraulics segment experienced a slowdown due to unfavourable monsoon conditions in India and a production pause in the UK to implement a major product design modification. This affected both revenue and margins in the UK and India. However, it is evident now that revenues recovered in the second half of the year following the successful completion of the required design modifications. The projection for FY2025 looks strong as we have good monsoon projection along with an increased demand on Construction and Industrial Segments.

Revenues for this segment decreased to Rs. 44,834 lakhs compared to Rs. 46,166 lakhs in the same period last year. EBITDA for FY2024 was Rs. 3,771 lakhs and Rs. 8,748 lakhs during last year.

METALLURGY: The Metallurgy segment remained under pressure due to a demand shortage as the German automotive industry stayed weak. The completion of corporate business restructuring during the year helped Eisenwerk Erla GmbH, Germany, minimize the impact of lower demand on its profitability. However, the strong technical capabilities of this subsidiary are enabling it to transition into the aerospace and defence business going forward. There are some large defence campaigns at advanced stages, and we expect to conclude them shortly.

Metallurgy segment has shown an y-o-y growth of 13%, primarily as result of successful negotiations with customers owing to protective shield process undertaken by the company. However, revenue of the segment was impacted in the second half of the year due to inflation and lower demand in auto sector

Revenue for this segment was Rs. 47,081 lakhs compared to same period last year Rs. 41,661 lakhs. Segment EBITDA was Rs. 2,467 lakhs compared to Rs. 1,714 lakhs in FY2023.

Going forward, the segment performance will be majorly driven by availability of raw material, input commodity prices and cost of financing to end customers. Focus on high margin product mix, rationalization of low margin products alongside development of aerospace castings and forgings in the future is expected to drive the business growth in the coming quarters.

SALE OF WIND FARM LAND:

During the year under review, the Company completed the sale of windfarm land (357.867 acres), including buildings, located at Varapatti Village, Sulur Taluk, Coimbatore, to the Tamil Nadu Industrial Development Corporation Limited (TIDCO) for the establishment of the Southern Defence Industrial Corridor. The Company received a compensation amount of INR 10,710.81 lakhs. It retained approximately 87 acres of land with greater strategic value for future development. Consequently, a gain from the sale of the windfarm land and buildings has been recognized during the current quarter and disclosed as an exceptional gain. The proceeds were primarily utilized for deleveraging by pre-paying long-term debt, leading to subsequent interest cost savings and improving credit metrics and potential rating upgrades. With this execution, the Company has demonstrated its commitment to being part of this significant initiative by the State Government of Tamil Nadu, which holds national importance.

STATE OF THE COMPANY'S AFFAIRS:

Over the years, Dynamatic Technologies has created its own brand image and has found its niche presence in the industry. Dynamatic Technologies supplies products to the world's renowned Original Equipment Manufacturers (OEM's) such as Airbus, Boeing, Bell Helicopters, Deutsche Aircraft, Dassault Aviation, Daimler, BMW, Macdon, JCB, John Deere and Mahindra & Mahindra.

The Company is focused on expanding the size of business with existing customers and expanding its customer base with addition of new customers. With a strong business foundation, technological excellence and industry recognition for products, we are confident of creating utmost value for all our stakeholders.

During the year under review, your company was honoured to be recognized by Boeing Defence & Space as their outstanding supplier of the year 2023. This recognition further validates your company's unwavering commitment to supporting Boeing's safety, quality, sustainability, and delivery goals worldwide.

DML, your company's wholly owned subsidiary signed a contract with Airbus for the manufacturing of detailed parts for Airbus commercial aircraft. This partnership is a significant milestone for both companies, as it combines the expertise and resources of DML and Airbus Aerostructures. With this collaboration, both companies aim to enhance their capabilities, improve efficiency, and deliver exceptional products to the aerospace industry.

Further, your company successfully completed the first delivery of Airbus A220 Escape Hatch Door assembly to Airbus Atlantic and signed a long-term contract for manufacturing and assembly of Flight Critical Aerostructure for Falcon 6X with Dassault Aviation. In addition, your company received business award from Airbus to manufacture A220 Doors, which are critical structures, incorporating advanced technologies to meet the stringent requirements for safety and overall efficiency.

Your company also entered a strategic partnership with Deutsche Aircraft to manufacture rear fuselage for the D328eco. This marks a significant moment for the "Make in India" initiative and will bring work to the highly capable ecosystem here.

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 Act, as applicable.

Further, the Board of Directors of the Company vide its meeting held on 28^th May 2024, 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 30^th August 2024 to 5^th September 2024 (both days inclusive) for ascertainment of shareholders eligible to receive dividend for the financial year ended March 31, 2024.

DIVIDEND DISTRIBUTION POLICY:

In terms of Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("the Listing Regulations"), the Dividend Distribution Policy duly approved by the Board is available on the website of the Company under the 'Investors' section at https://www.dynamatics. com. The Board has recommended dividend based on the parameters laid down in the Dividend Distribution Policy and dividend will be paid out of the profits for the year.

SHARE CAPITAL:

As of 31^st March 2024, 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 2024 was 679.14 lakhs, comprising 67,91,443 equity shares of Rs. 10/- each.

TRANSFER TO RESERVES

The Board of Directors have decided to retain the entire amount of profit for FY2024 in the Statement of Profit & Loss as of 31^st March 2024.

CAPITAL EXPENDITURE:

During the year under review, the Company incurred capital expenditure of Rs. 8,217 lakhs for physical infrastructure and Rs. 483 lakhs for procurement of intangible assets. Significant investments have been made in building infrastructure, data security, information systems, and design and development activities, for the future benefits of the Company.

CONSOLIDATED FINANCIAL STATEMENTS:

The Consolidated Financial Statements of the Company and its subsidiary 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 https://www. dynamatics.com

The Company has ten subsidiaries. There are no associate or joint venture companies within the meaning of Section 2(6) of the Companies Act, 2013 ("Act"). There has been no material change in the nature of the business of the subsidiaries. The structure of Dynamatic Technologies Limited and its subsidiaries as on 31^st March 2024, is appended hereunder:

*JKM Erla Holdings GmbH, has filed the requisite application for protective shield by self-administration before the Chemnitz Local Court and the same is pending court order. On receipt of the order, JKM Erla will cease to exist.

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.

INDIAN SUBSIDIARIES:

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 operates a unique facility for testing and analysing complete tractor aggregates and systems.

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

JKM Automotive Limited (JAL) is a wholly owned subsidiary of JEAL and is a non-operating company.

Dynamatic Manufacturing Limited, India (DML) is Wholly owned Subsidiary of the Company.

DML, a subsidiary of Dynamatic Technologies Limited (DTL) is a Centre of Excellence for detail parts, will be involved in engineering, manufacturing, and delivering components for different aircraft parts.

During the year under review, pursuant to a rights issue in DML, a total of 3,50,00,000 equity shares of Rs. 10/- each aggregating to Rs. 35 crores were subscribed by DTL. As on 31^st March 2024, DTL holds 100% shareholdings in DML (97.18 % shareholdings directly and the balance 2.82 % through its wholly owned subsidiary, JKM Erla Automotive Limited).

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.

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 its Hydraulics unit and Aerospace unit, Dynamatic-Oldland Aerospace? in Swindon.

Dynamatic Hydraulics?, a division of DLUK located in Swindon, UK, produces high performance engineered hydraulic products. The plant has over 50 years of experience in gear pump design and manufactures and caters to agriculture, construction, and off-highway vehicle manufacturers. Products include combined variable and fixed displacement pump packages, temperature-controlled fan drive systems and fixed displacement pumps in aluminium and cast iron with a range of additional integrated valve options.

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

JKM Erla Holdings GmbH, Germany (JKM Erla) it was engaged in the business of setting up automotive component processing manufacturing units. JEAL owned 100% share holdings in JKM Erla, which inturn held 100% share holdings in Eisenwerk Erla GmbH, Germany upto 31^st July 2023. As a result of corporate restructuring measures implemented by Eisenwerk Erla, the 100% shareholdings of Eisenwerk previously held by JKM Erla have been assigned to JEAL, effective August 1, 2023.

As an outcome of the corporate restructuring measures implemented by JKM Erla through the protective shield process by self-administration, it was determined that JKM Erla shall be dismantled with the aim of streamlining the group holding structure in Germany. In this context, JKM Erla has filed the requisite application before the Chemnitz Local Court and the same is pending court order. On receipt of the order, JKM Erla will cease to exist.

Eisenwerk Erla GmbH, Germany (Eisenwerk) it has been in business for over 630 years and is a preferred supplier to leading global OEMs including Audi, BMW and Volkswagen. The manufacturing capabilities of this subsidiary include high precision machining of complex metallurgical products for automotive engines and turbochargers.

Eisenwerk is currently in the process of transformation from automotive/foundry-focus to the aerospace business. Considering the various challenges viz., supply chain crisis at OEMs; current inflation in Europe; steep and unpredictable increase in the cost of gas and electricity being faced by corporations across Europe, Eisenwerk undertook corporate restructuring measures through 'protective shield process by self-administration under the applicable German Laws.

During the year, Eisenwerk submitted a financial resolution plan to the local court (Chemnitz, Germany). This led to a creditors' meeting convened by the Chemnitz court on June 28, 2023, where the resolution plan was approved. Subsequently, the court issued a final order on July 27, 2023, concluding the protective shield proceedings effective August 1,2023, by accepting the legally binding confirmation of Eisenwerk's financial resolution plan. As a result of these proceedings, the 100% shareholdings of Eisenwerk previously held by JKM Erla have been assigned to JEAL, effective August 1, 2023.

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.

There are no associate 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.

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 (https://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 2023-24.

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 2024, 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 2024, 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:

The shareholders approved:

(1) The appointment of Ms. Gaitri Issar Kumar (DIN: 10245539) as an Independent Director to hold office for a term of five years from 9^th August 2023, till 8^th August 2028.

(2) The re-appointment of Mr. Udayant Malhoutra (DIN: 00053714), CEO & MD, for a period of 3 years from 1^st October 2023, till 30^th September 2026.

(3) The re-appointment of Mr. P S Ramesh (DIN: 05205364), Executive Director & COO - Hydraulics, for a period of 1 year from 14^th November 2023, till 13^th November 2024.

(4) The appointment of Dr. Ajay Kumar (DIN: 01975789) as an Independent Director to hold office for a term of five years from 10^th November 2023, till 9^th November 2028.

(5) The re-appointment of Mr. Pierre de Bausset (DIN: 07178878) as an Independent Director to hold office for a second term of five consecutive years from 11^th February 2024, till 10^th February 2029. Mr. Pierre de Bausset was also designated as Chairman w.e.f 14^th August 2023.

(6) The re-appointment of Mr. Pradyumna Vyas (DIN: 02359563) as an Independent Director to hold office for a second term of five consecutive years from 11^th February 2024, till 10^th February 2029.

Mr. Govind Mirchandani (DIN: 00022583) and Ms. Malavika Jayaram (DIN: 02252302) retired as Independent Directors on 14^th August 2023, after completing their term of appointment. The Board places on record its appreciation for the contributions and guidance made by Mr. Govind Mirchandani and Ms. Malavika Jayaram, during their stint with the Company as Independent Directors.

The board took note of the resignation of Mr. Arvind Mishra (DIN: 07892275) as Executive Director and Global COO - Hydraulics and Head - Homeland Security, from the close of the business hours on 8^th August 2023.

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.

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

Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company as on 31^st March 2024, are:

• Mr. Udayant Malhoutra, CEO & Managing Director

• Mr. P S Ramesh, Executive Director & COO - Hydraulics

• Mr. Chalapathi P, Chief Financial Officer

• Mr. Shivaram V, Head - Legal, Compliance & Company Secretary

Declaration by Independent Directors:

All the Independent Directors of the Company have given declarations to the Company under Section 149(7) of the Act, that they meet the criteria of independence as provided under Section 149(6) of the Act and Regulation 16(1) (b) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ('the Listing Regulations'). In terms of Regulation 25(8) of the Listing Regulations, the Independent Directors have confirmed that they are not aware of any circumstances or situations which exist or may be reasonably anticipated that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence.

In the opinion of the Board, they fulfil the conditions of independence as specified in the Act as well as the Rules made thereunder and the Listing Regulations and are independent of the management.

BOARD MEETINGS:

Six meetings of the Board were held during the year under review. For details of meetings of the Board, please refer to the Corporate Governance Report, which is a part of this report.

COMMITTEES OF BOARD OF DIRECTORS:

The Board has eight committees:

1. Audit Committee,

2. Nomination and Remuneration Committee,

3. Stakeholders' Relationship Committee,

4. Risk Management Committee

5. Technology & Strategy Development Committee,

6. Finance Committee,

7. Corporate Social Responsibility Committee and

8. Independent Directors' Committee.

Details of all the Committees of Board of Directors as per the Secretarial Standard - 1, as issued by the Institute of Company Secretaries of India have been disclosed in the Corporate Governance Report. 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.

REMUNERATION POLICY:

The remuneration philosophy at Dynamatic Technologies 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.

Members can download the complete remuneration policy on the Company's website www.dynamatics.com in Investors Desk section.

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, race, 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 woman director.

FAMILIARIZATION 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 independent directors were familiarized with the metallurgy business operations of the company. A factory visit was organized at our Germany facility, Eisenwerk Erla, where the independent directors were introduced to the metallurgy process. This included a visit to the foundry, one-on-one discussions with the workers and supervisors, a tour of the plant, and a visit to the local metallurgy museum in Erla.

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

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

In terms of the provisions of Section 178(3) of the Companies Act, 2013 and Regulation 19 of the Listing Regulations, the Nomination and Remuneration Committee (NRC) has formulated the criteria for determining qualifications, positive attributes and independence of Directors, the key features of which are as follows:

a. Qualifications - A transparent Board nomination process is in place that encourages diversity of thought, experience, knowledge, perspective, age, and gender. This process ensures that the Board has an appropriate blend of functional and industry expertise. When recommending the appointment of a Director, the NRC considers how the individual's functional and domain expertise will contribute to the overall skill mix of the Board.

b. Positive Attributes - Apart from the duties of Directors as prescribed in the Companies Act, 2013, the Directors are expected to demonstrate high standards of ethical behavior, communication skills, and independent judgment. They are also expected to abide by the respective Code of Conduct applicable to them.

c. Independence - A Director will be considered independent if he / she meets the criteria laid down in Section 149(6) of the Companies Act, 2013 and Regulation 16(1)(b) of the Listing Regulations.

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

The Board of Directors has conducted an annual evaluation of its own performance, board committees, and individual directors in accordance with the provisions of the Act and SEBI Listing Regulations. This evaluation was guided by criteria and frameworks adopted by the Board. Input from all directors was considered, focusing on factors like board composition, processes, information and functioning, risk management and strategy, corporate social responsibility, organizational performance and structure, and effectiveness of board processes, among others.

The performance of committees was evaluated by the board with inputs from committee members, focusing on criteria such as committee composition and effectiveness of meetings. In a separate meeting of independent directors, the performance of non-independent directors, the Board as a whole, and the Chairman was evaluated, incorporating views from both executive and non-executive directors. The Nomination and Remuneration Committee, along with the Board, reviewed individual director performance, considering factors like preparedness, contribution to meetings, interpersonal skills, and strategic input. The subsequent board meeting further discussed the performance of the Board, committees, and individual directors. Evaluation of Independent Directors was conducted by the entire Board, excluding the director under evaluation.

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.

INTERNAL CONTROLS SYSTEMS AND THEIR ADEQUACY:

The Board has implemented policies and procedures to ensure the orderly and efficient conduct of its business, encompassing adherence to the Company's policies, safeguarding its assets, and preventing and detecting frauds and errors. Additionally, measures are in place to ensure the accuracy and completeness of accounting records and the timely preparation of reliable financial disclosures.

The Company has implemented adequate systems for internal control, tailored to its size and complexity. These systems ensure the safeguarding and protection of all assets, as well as the proper authorization, recording, and reporting of transactions. Furthermore, the Company has established checks and balances to verify the accuracy and reliability of accounting data. All related processes are thoroughly documented, and steps are taken to ensure compliance with internal control systems. Clear delineation of roles and responsibilities among stakeholders involved in the process further reinforces the effectiveness of these controls.

The Internal Auditors conduct independent evaluations of internal controls and concurrently audit a majority of transactions in terms of value. To ensure the independence of the audit and compliance functions, they report directly to the Audit Committee of the Board. 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, details of which are required to be mentioned in this Report.

QUALIFICATIONS IN AUDIT REPORTS:

Explanations or comments made by the Board on every qualification, reservation or adverse remark or disclaimer made:

a. by the Statutory Auditor in their report: There are no qualifications, reservations or adverse remarks reported by M/s. Deloitte Haskins & Sells., LLP, (ICAI Firm Registration No. 117366W/W-100018) statutory auditors in their report for the year under review.

b. by the Company Secretary in Practice in his Secretarial Audit Report: Mr. Ratish Tagde & Associates, Company Secretary in practice, has made no qualifications or reservations or adverse remarks in the secretarial audit report.

The auditors above mentioned have used appropriate disclaimers to limit the scope of their audit to the documents provided by the management and explanations/ representations made by the management.

TRANSFER TO INVESTOR EDUCATION AND PROTECTION FUND:

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

Particulars of Dividend remaining unclaimed in terms of Section 124(5) of the Act, amounts transferred to the Unpaid Dividend Account of the Company, which remain unpaid or unclaimed for a period of seven years from the date of such transfer, shall be transferred by the Company to the IEPF established by the Central Government along with the underlying shares.

The details pertaining to the transfers is forming part of the Corporate Governance Report which is annexed to this report.

b) Transfer of Shares to IEPF:

As required under Section 124(6) of the Act, Equity Shares in respect of which dividend has not been claimed by the members for seven consecutive years or more have already been transferred by the Company to the IEPF Authority. Details of shares transferred is available on the website of IEPF as well as the Company.

c) DEMAT Suspense Account Unclaimed Shares:

As on 31^st March 2024, there are 11 members, holding 851 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:

All Related Party Transactions during the FY2024 were conducted on an arm's length basis and within the ordinary course of business. These transactions were in full compliance with the relevant provisions of the Act and the Listing Regulations.

During the year, the Company did not engage in any materially significant Related Party Transactions that necessitated shareholder approval under the Listing Regulations. All such transactions are subject to approval by the Audit Committee. Moreover, prior omnibus approval from the Audit Committee is sought for transactions that are repetitive in nature or unforeseeable in advance. A statement detailing all Related Party Transactions, including their nature, value, and terms, is submitted to the Audit Committee for quarterly review.

The Related Party Transactions Policy adopted by the Company, as approved by the Board, is uploaded on the Company's website. Details of transactions with related parties are provided in the accompanying financial statements. Form AOC-2, annexed as Annexure - 2.

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

CORPORATE GOVERNANCE:

Your Company is in compliance with all the applicable provisions of Corporate Governance as stipulated under Chapter IV of the Listing Regulations. A detailed report on Corporate Governance as required under the Listing Regulations is provided in a separate section and forms part of the Annual Report. A Certificate from a Practicing Company Secretary regarding compliance with the conditions stipulated in the Listing Regulations forms part of the Corporate Governance Report.

Dynamatic Technologies has a longstanding commitment to upholding the highest standards of corporate governance practices. This commitment stems from the belief that effective governance lays a solid groundwork for a thriving enterprise. Integrity and transparency are consistently prioritized in all interactions, as they are vital for maintaining the trust of stakeholders. The core values underpinning the Company's Corporate Governance framework include independence, transparency, accountability, responsibility, compliance, ethics, values, and trust. It is believed that these practices not only facilitate efficient and ethical business operations but also contribute to sustainable enhancement of shareholders' wealth, benefiting all stakeholders in the process.

Dynamatic Technologies is dedicated to upholding the highest standards of Corporate Governance, often proactively adopting ethical and transparent practices ahead of legal mandates. Building trust with shareholders, employees, customers, suppliers, and other stakeholders is a paramount goal, grounded in principles such as transparency and integrity. The Company views strong leadership and best- in-class corporate governance practices as major strengths, essential for fostering long-term success and stakeholder confidence.

The Company is following all the applicable provisions of Corporate Governance as stipulated under Chapter IV of the Listing Regulations. A detailed report on Corporate Governance, pursuant to the requirements of the Listing Regulations, forms part of the Annual 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 of conditions of Corporate Governance as stipulated under 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 Obligations and Disclosure Requirements) Regulations, 2015 ('Listing Regulations'), the Management Discussion and Analysis Report is presented in a separate section forming part of this Annual Report.

BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT:

The Company is committed to meeting the needs of the communities in which it operates, aiming to generate maximum value for society while conducting its business in a manner that fosters positive impact and enhances stakeholder value. 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:

M/s. Deloitte Haskins & Sells., LLP, (ICAI Firm Registration No. 117366W/W-100018) were appointed as the Statutory Auditors of the Company at the 44^th AGM held on 9^th August 2019, for a period of five years till the conclusion of 49^th Annual General Meeting. Consequently, M/s. Deloitte Haskins & Sells., LLP, complete their first term of five consecutive years as statutory auditors of the company at the conclusion of the 49^th AGM of the Company. Pursuant to section 139(2) of the Act, the company can appoint an auditor's firm for a second term of five consecutive years. M/s. Deloitte Haskins & Sells., LLP, have consented to the said re-appointment, and confirmed that their re-appointment, if made, would be within the limits specified under Section 141(3)(g) of the Act. They have further confirmed that they are not disqualified to be reappointed as statutory auditor in terms of the provisions of the Act, and the provisions of the Companies (Audit and Auditors) Rules, 2014, as amended from time to time. The audit committee and the board of directors recommend, to the shareholders, the reappointment of M/s. Deloitte Haskins & Sells., LLP, chartered accountants, as statutory auditors of the company from the conclusion of 49^th AGM till the conclusion of 54^th AGM, to the members.

Cost Auditors:

As per Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, as amended from time to time, the Company is required to have its cost records audited by a Cost Accountant in practice. The Board of Directors, based on the recommendation of the Audit Committee, has appointed M/s. Rao, Murthy & Associates, Cost Accountants, as Cost Auditor of the Company for conducting the Cost Audit for the FY2025, to conduct cost audits pertaining to relevant products prescribed under the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time. The Members are hereby requested to ratify the remuneration payable to Cost Auditor's for the FY2025.

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 FY2025.

Secretarial Auditor:

The Company had appointed M/s. Ratish Tagde & Associates, Company Secretary in practice, to conduct its Secretarial Audit for the financial year ended 31^st March 2024. The Secretarial Auditors have submitted their report, confirming compliance by the Company of all the provisions of the applicable corporate laws. The report does not contain any qualification, reservation, or adverse remark. The Secretarial Audit Report is annexed as Annexure - 3 to this report.

As per regulation 24(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 2024 and accordingly Secretarial Audit Report of JEAL is annexed as Annexure - 3A

Tax Auditors:

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

RISK MANAGEMENT POLICY:

The Company has constituted a Risk Management Committee which has been entrusted with the responsibility to assist the Board in (a) approving the Company's risk management framework and (b) overseeing all the risk that the organisation faces such as strategic, operational, financial, liquidity, security, regulatory, legal, reputational, cyber security, ESG and other risks that have been identified and assessed to ensure that there is a sound risk management policy in place to address such concerns/ risks. The risk management process covers risk identification assessment analysis and mitigation incorporating sustainability in the process and helps to align potential exposures with the risk appetite and highlight risks associated with chosen strategies.

The audit committee has additional oversight in financial risks and controls major risks identified by the business and functions are systematically addressed through mitigating actions on a continuing basis.

The company has a robust Risk Management Policy in place which enables framing an appropriate action for the key risks identified to make sure that risks are adequately compensated or mitigated in the designated response time.

The main objectives of the said policy include:

i. To ensure that all the current and future material risk exposures of Dynamatic Technologies are identified, assessed, quantified, appropriately mitigated and managed.

ii. To establish a framework for Dynamatic Technologies' risk management process and to ensure company-wide implementation.

iii. To ensure systematic and uniform assessment of risks related with each of the units of Dynamatic Technologies.

iv. To enable compliance with appropriate regulations, wherever applicable, through the adoption of best practices; and

v. To assure business growth with financial stability.

The Risk Management Committee is chaired by an Independent Director and the Chairperson of the Audit Committee is also a member of the said Committee. Further, the Board is apprised of any procedure that may impact the long-term plans of the Company.

The major risks forming part of the Risk Management process are linked to the audit universe and are also covered as part of the annual risk-based audit plan.

The said policy has been uploaded on Company's website (www.dynamatics.com/investor.html).

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.

HUMAN RESOURCES & DEVELOPMENT:

Dynamatic Technologies emphasizes the pivotal role of Human Resources (HR) in fostering the organization's holistic advancement. Timely identification, nurturing, and empowerment of human capital, coupled with continual talent enhancement, stand as imperatives. The HR function assumes the responsibility of anticipating industry shifts, aligning employee competencies accordingly. In navigating the dynamic digital landscape and evolving labour laws, multiskilling becomes indispensable. Adaptability remains paramount for HR to confront adversities head-on. Dynamatic Technologies pledges unwavering commitment not only to fostering employee rapport but also to cultivating a fair, inclusive, and conducive workspace for personal and professional growth. With Dynamatic 2.0 at the helm, the journey continues towards excellence.

During this period, Dynamatic Technologies has implemented SAP's HR modules to streamline employee attendance tracking and digitize payroll processes entirely. This software comprehensively covers all HR aspects, from recruitment to separation, thereby minimizing human involvement and bias. Additionally, it incorporates a robust performance management system. The organizational structure and reporting mechanisms are meticulously captured, ensuring clarity and eliminating ambiguity. Employee personal data is securely stored and safeguarded in digital format, residing in the cloud. Utilizing this platform, all communications to both blue-collar and white-collar staff are centralized, enabling realtime and efficient interaction. Moreover, remote accessibility has enhanced communication efficacy significantly.

This year marks a significant milestone as the HR team at Dynamatic Technologies has effectively rolled out SAP HR modules at the organization-wide level in India. This transition ensures that HR processes and transactions are entirely digitalized and transparent. Standardized policies are enforced across all divisions through SAP workflow, fostering consistency and efficiency. Comprehensive training sessions have been conducted for both CTMs and end-users to facilitate seamless adoption. Real-time access to HR data and reports further enhances operational agility and decision-making capabilities.

The foundation for this digital platform was laid upon the launch of the comprehensible HR manual in January 2023. Serving as a dynamic document, it forms the cornerstone for HR operations, continually evolving through periodic reviews by the corporate team. This manual not only established clear guidelines but also facilitated the seamless transition to digital HR processes, ensuring alignment with organizational goals and values.

SAP plays a pivotal role in enabling the corporate team to access Management Information System (MIS) data in real-time, facilitating swift and informed decision-making. With SAP's robust capabilities, analysing manpower data becomes significantly more efficient and insightful. This enhanced data accessibility and analysis empower the corporate team to gain deeper insights into workforce dynamics, enabling them to optimize resource allocation and strategic planning effectively.

Dynamatic Technologies has maintained a steadfast commitment to cultivating and empowering top-tier talent, grooming them for leadership positions within the organization. Ongoing efforts are underway to augment employee skills through continuous training and learning endeavours. The HR team orchestrates sensitization programs and fosters open communication to foster an organizational culture characterized by fairness and safety for all employees. With an illustrious history of amicable industrial relations, the company boasts a flawless record, with not a single man-day lost due to labour unrest over the years.

As an integral component of our ongoing organizational development strategy, numerous initiatives are in the pipeline to systematically cultivate a dynamic and forward-thinking workforce. Through our sustained year-on-year endeavours, our employees have evolved into an engaged and outcome- driven collective. A multitude of ongoing activities have been meticulously planned and implemented to nurture and retain competencies within our talent pool. We actively promote a culture of holistic growth, encouraging employees to thrive and excel within the organization.

The HR team organizes sensitization programs and encourages communication to ensure an organizational culture that always provides for a fair and safe working environment for all the employees.

At Dynamatic Technologies, we prioritize health and safety as paramount elements of human resources management. Our commitment extends to ensuring the holistic well-being of our employees, encompassing both physical and mental health. To this end, the company periodically manages comprehensive health insurance coverage for employees and their families. Additionally, we provide access to well- equipped ambulances, healthcare teams, and pathological labs, ensuring prompt and efficient medical assistance whenever needed.

Recognizing the importance of mental wellness, we've taken proactive measures to address this aspect as well. A distinguished psychiatrist has been retained as a wellness expert, tasked with engaging and intervening to promote mental and emotional well-being among our workforces. By integrating physical and mental health initiatives, we strive to create a supportive and nurturing environment where every employee can thrive.

The Aerospace Skill Development Centre (ASDC) continues to flourish, playing a pivotal role in training aspiring young individuals from rural areas surrounding ITI Devanahalli and Bangalore. These students undergo rigorous training in aerospace structure assembly and related tasks, supplemented by bridge courses in CNC turning and machining, among others. The training curriculum encompasses both theoretical knowledge and practical skills.

Upon completion of their training, these talented individuals are placed in esteemed aerospace companies located around KIADB, Devanahalli. Remarkably, all graduates of ASDC have secured employment opportunities in renowned aerospace industries in and around Bangalore.

Efforts are underway to introduce a two-year aeronautical structure and equipment fitter trade program at ITI Devanahalli. Necessary approvals have been sought from relevant government authorities, and infrastructure and tools are being procured for the ITI. Once operational, this government ITI, chaired by DTL, will be the first in the country to offer such a specialized course. This initiative holds immense potential in nurturing and guiding young technicians in the aerospace manufacturing sector, thereby contributing significantly to the growth of the aerospace industry in India.

CORPORATE SOCIAL RESPONSIBILITY (CSR):

Your company has a documented policy on corporate social responsibility, which has been posted on the company's website at www.dynamatics.com. Pursuant to the provisions of Section 135 of The Companies Act 2013 and other applicable provisions of the Act, read with applicable rules, the company has undertaken various initiatives during FY2024, as follows:

Your company focuses its CSR activities on three thematic areas: promoting education, ensuring environmental sustainability, and promoting health care activities.

Dynamatic Technologies has forged a meaningful partnership with the Directorate of Employment and Training, Government of Karnataka, in a Public-Private Partnership (PPP) model to bolster the Industrial Training Institute (ITI) in Devanahalli as a hub for skill development and vocational training excellence. Since 2015, DTL has taken the helm in chairing this government ITI, underscoring its commitment to fostering socio-economic growth through skill enhancement.

As part of this collaboration, Dynamatic Technologies actively contributes to the ITI's advancement by providing equipment for laboratories, volunteering employees for training sessions, and developing tailored training modules. Additionally, the ITI prioritizes the enrolment of women students from rural communities and those from underprivileged backgrounds, fostering inclusivity and equal opportunities.

The Dynamatic team has played a pivotal role in designing the curriculum for CNC turning and milling training, with bridge courses offered to aspiring students from rural areas. Graduates from the Aerospace Skill Development Centre (ASDC) are extensively supported in securing employment opportunities through campus interviews conducted by various companies in and around Bangalore. Remarkably, a hundred percent placement rate has been achieved, reflecting the success of this collaborative endeavour in empowering youth and driving regional development.

Dynamatic Technologies has intensified its commitment to Corporate Social Responsibility (CSR) by spearheading a Skill Development Initiative aimed at enhancing the capabilities of trainees with backgrounds in ITI, Diploma, and Engineering degrees, as well as serving workers from the aerospace industry seeking to elevate their skill sets. Under the guidance of the Dynamatic Skill Initiative team, a comprehensive curriculum has been devised to systematically train ITI graduates in both theoretical subjects and practical aspects of aircraft structural assembly and related tasks, forming the cornerstone of the 3-month-long bridge course.

Throughout the year, Dynamatic Technologies has successfully concluded four batches of this training program, totalling sixteen batches to date by the Aerospace Skill Development Centre (ASDC). Notably, all graduated trainees have secured employment in various aerospace industries in and around Bangalore, underscoring the effectiveness of the curriculum in meeting industry demands.

The curriculum's success has garnered widespread acclaim, leading to its approval as a two-year trade program (aerospace fitters) in Government ITIs nationwide. ITI Devanahalli is poised to become the pioneering institute to formally introduce this course as a new trade in 2024. This curriculum addresses a spectrum of technical skills vital to aerospace operations, including sheet metal forming, material handling, drilling, riveting, painting, and Non-Destructive Testing (NDT), among others.

The Aerospace Skill Development Centre (ASDC), equipped with all essential infrastructure to impart aerospace- related training, operates under the Institute Management Committee. This year, ASDC has expanded its offerings by introducing two CNC program courses: one focusing on turning and the other on milling. Dynamatic Technologies has furnished the ITI facility with CNC machines, alongside providing necessary cutting tools and raw materials for practical training purposes.

Classes are currently underway for a fresh cohort of trainees in these trades, simultaneously, existing ITI students are undergoing training in technical and soft skills. Notably, the CNC Operator-Turning course, categorized as a Level 3 Course and registered under the Chief Minister's Kaushalya Karnataka Yojane (CMKKY) in the Department of Skill Development and Entrepreneurship and Livelihood, continues to be offered throughout the year. This initiative underscores Dynamatic Technologies' commitment to fostering skill development and empowering individuals to excel in the aerospace industry.

Dynamatic Technologies Limited (DTL) has been actively engaged in healthcare activities, extending support to frontline workers in the police department by providing them with necessary Personal Protective Equipment (PPE) on a periodic basis. Moreover, this year, DTL has extended financial assistance to two notable organizations in Bangalore, namely, Dr. Sandhya Health Foundation and Prerana Resource Centre, as part of its Corporate Social Responsibility (CSR) initiatives

Prerana Resource Centre is a charitable institution dedicated to serving destitute women, particularly blind and disabled teenage orphan girls. The center's primary objective revolves around providing counselling, medical assistance, training, and employment opportunities, ultimately facilitating their complete rehabilitation and integration into society.

Similarly, Dr Sandhya Health Foundation focuses on raising awareness about general health, with a specific focus on the girl child aged between 8 to 21 years in semi-urban and rural areas of Bengaluru, Karnataka. Through its initiatives, thefoundation aims to empower young girls with the knowledge and resources necessary to lead healthy lives. DTL's support to these organizations underscores its commitment to making a meaningful impact on healthcare and social welfare, particularly among vulnerable and marginalized communities.

The Annual Report on CSR activities in terms of the requirements of the Companies (Corporate Social Responsibility Policy) Rules, 2014 is annexed as Annexure 4, which forms part of this Report.

ANNUAL RETURN:

As per the requirements of Section 92(3) of the Act and Rules framed thereunder, the Annual Return for FY 2023-24 is uploaded on the website of the Company and the same is available at www.dynamatics.com

POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE:

Dynamatic Technologies upholds a strict zero-tolerance policy towards sexual harassment in the workplace. In alignment with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013, and its accompanying regulations, the company has adopted a robust Policy on Prevention, Prohibition, and Redressal of Sexual Harassment at the workplace.

The primary objective of this policy is to ensure the protection of all employees within the workplace and to prevent and address any instances of sexual harassment effectively. By fostering a safe and secure working environment, the company aims to promote employee well-being and organizational harmony.

To facilitate the implementation of this policy, Dynamatic Technologies has established Internal Complaints Committees (ICCs) across all its worksites and offices. These committees are dedicated to addressing and resolving complaints related to sexual harassment promptly and impartially, thereby fostering a culture of trust, respect, and accountability within the organization.

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.

POLICY FOR SAFETY AND WELL BEING OF WOMEN:

The company always strives to create a safe, friendly, and inclusive work environment for its employees. As a refresher training, all employees underwent Prevention of Sexual Harassment training conducted by an External Expert. During the financial year 2023-24, the company has not received any complaints of sexual harassment.

Women's Day was celebrated on 8^th March 2024. All women employees were honoured by a memento signed by the CTO, celebrating their uniqueness and strength. The theme was "Inspire inclusion".

The HR team has more women in the company than men, proving the point that the company has the mandate to increase the number of women employees in all its functions and constantly strive to improve the gender ratio.

All efforts are made to see that women are employed in all functions and processes. More women engineers are encouraged to join us.

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 (https://www.dynamatics.com/investor. html)

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 - 5, which forms part of this report.

ENVIRONMENTAL PROTECTION MEASURES:

Dynamatic Technologies remains steadfast in its commitment to minimizing its environmental impact while simultaneously enhancing livelihoods across its product value chain. In pursuit of this goal, the company has implemented various measures to improve environmental sustainability, safety, and health.

These measures include the implementation of standard operating procedures aimed at minimizing environmental impact, conserving resources, and enhancing workplace safety. Additionally, comprehensive training programs have been conducted for employees at all levels, focusing on resource conservation, environmental protection, and effective housekeeping practices.

Embracing sustainable living principles as an integral component of its long-term business strategy, Dynamatic Technologies continues to prioritize environmental stewardship and social responsibility across its operations, striving for a harmonious balance between economic prosperity and environmental conservation.

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 - 6.

OTHER DISCLOSURES:

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.

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 was no change in the nature of business during the year under review. State of the affairs of the Company and future plan of action and outlook is discussed in 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.

A Memorandum of Understanding (MOU) was inked with the Indian Institute of Technology (IIT) Kanpur, focusing on the design and development of unmanned solutions tailored for surveillance and reconnaissance applications. This collaboration harnesses the cutting-edge expertise of IIT Kanpur to drive innovation in unmanned systems, addressing critical defense and security needs.

In addition, an agreement was established with the Central Scientific Instruments Organisation (CSIO) to facilitate the design and development of advanced optical sensors and payloads. Leveraging CSIO's specialized capabilities, this partnership aims to bolster Dynamatic Technologies' capabilities in delivering state-of-the-art optical solutions for defense applications.

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 year FY2024 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.

Mr. Udayant Malhoutra is the promoter of the Company within the definition of 'Promoter' for the purpose of regulations 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 49^th Annual General Meeting (AGM) of the Company, along with the Annual Report for the fiscal year 2023-24. 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, 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.