Directors Report of Dynamatic Technologies Ltd.

Mar 31, 2025

Your directors are pleased to present herewith the 50^th (Fiftieth) Annual Report of Dynamatic Technologies Limited (the ''Company'')
along with the Audited Financial Statements for the financial year ended 31^st March 2025.

FINANCIAL RESULTS:

The Financial Results of the Company for the year ended 31^st March 2025, were as follows:

Particulars	Consolidated		Standalone
	Year Ended 31 March 2025	Year Ended 31 March 2024	Year Ended 31 March 2025	Year Ended 31 March 2024
Revenue from Operations	1,40,380	1,42,933	63,918	58,186
Less: Cost of material and changes in inventories	65,359	66,815	31,811	27,785
Less: Employee benefit expenses	31,997	30,167	10,346	8,492
Less: Other Expenses	27,192	30,010	11,173	10,805
EBITDA	15,832	15,941	10,588	11,104
EBITDA Margin	11.28%	11.15%	16.56%	19.08%
Add: Other Income	2,280	4,282	1,661	1,830
Less: Finance Charges	5,672	6,255	4,269	5,026
Less: Depreciation and Amortisation Expenses	6,929	6,636	2,549	2,410
Profit before tax & Exceptional items	5,511	7,332	5,431	5,498
Profit before tax margin	3.93%	5.13%	8.50%	9.45%
Add: Exceptional items	-	6,231	-	5,132
Less: Tax expenses	1,207	1,382	365	1,181
Profit after tax	4,304	12,181	5,066	9,449
Profit after tax margin	3.07%	8.52%	7.93%	16.24%
Add: Other Comprehensive Income/(Losses)	1,147	1211	(271)	427
Total comprehensive income, carried to Balance Sheet	5,451	13,392	4,795	9,876

COMPANY PERFORMANCE:

The Consolidated net sales for FY2025 were Rs. 1,40,380
lakhs, decreased by 1.8% as compared to Rs. 1,42,933 lakhs
in FY2024. Consolidated EBITDA for FY2025 was reported as
Rs. 15,832 lakhs as compared to Rs. 15,941 lakhs in FY2024.
EBITDA margin for the year under review was 11.28%
compared to 11.15% in FY2024.

The Aerospace segment reported a growth of 19.2% y-o-y in
FY2025 driven by execution of commercial order book. This
segment is positioned for continued momentum, supported
by steady progress on key programs and new projects
industrialization as per the schedule. Recent budgetary
support for domestic defence procurement further positions
us to capitalize on emerging opportunities in aerospace and
defence modernization across the globe. However, supply
chain constraints may persist to continue due to global
geopolitical uncertainties.

The Hydraulics segment witnessed a year-over-year growth
of 2.2%. However, performance in H2 was impacted by
reduced construction activity and softer demand across key
geographies, along with a less favorable sales mix. Margins
were adversely affected due to negative margins in UK
operations, primarily driven by partial charge-offs related to

redundancies as part of the ongoing rationalization of product
lines between the Swindon and Bangalore facilities. While
the segment faced challenges due to muted construction
demand, strong agricultural demand supported by a favorable
monsoon and the government''s continued infrastructure
push are expected to drive revenue growth in India. Margin
improvement is also anticipated in the coming quarters, upon
completion of the product line rationalization between India
and the UK.

The Metallurgy segment has shown an y-o-y decline of 28.9%
in FY2025 as the German economy remained in recession
mainly due to a negative contribution from net trade and
a slowdown in household consumption leading to lower
demand. Factors contributing to the downturn included high
energy costs, global competition coupled with geopolitical
uncertainties, and declining industrial output.

SEGMENT PERFORMANCE:

AEROSPACE & DEFENCE: The Aerospace & Defence
segment recorded a revenue of Rs. 60,785 lakhs compared
to Rs. 51,009 lakhs in FY2024. Segment EBITDA for the year
was Rs. 15,783 lakhs, reported alongside Rs. 13,094 lakhs in
FY2024.

In FY2025, our aerospace segment was undeniably the
engine of our success, driving both top-line growth and strong
profitability. This division not only held its dominant position
but also deepened its strategic value to our operations,
consistently delivering excellent margins. A defining moment
was the inauguration of the Rear Fuselage Assembly Line for
the D328eco® turboprop in Bangalore, a crucial step in our
partnership with Deutsche Aircraft. This milestone signals
our successful shift from concept to serial manufacturing,
showcasing our advanced aerospace capabilities and
reinforcing our strong commitment to the "Make in India"
initiative. This ongoing collaboration has significantly
enhanced our supply chain resilience, putting us in an excellent
position to capture the burgeoning opportunities in regional
aviation, directly supporting India''s broader connectivity and
sustainability ambitions. Even in the face of ongoing global
supply chain disruptions and commodity price pressures,
our aerospace business sustained its strong performance by
rigorously industrializing secured programs, thereby ensuring
the scalability and efficiency needed to fulfill demanding
customer schedules.

The A220 doors program is rapidly progressing. We''ve
positioned all sub-assembly and main-assembly jigs and
fixtures on the shop floor, and pre-production activities are
officially underway with our fully trained team. Parts are now
arriving to support assembly, a key step in our ramp-up. We
also swiftly added 30,000 sq. ft. of floor space in just three
months. The program remains on track with clear visibility and
strong momentum. First-Article Inspection is anticipated to
begin this September.

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: The Hydraulics segment recorded a revenue
of Rs. 45,804 lakhs compared to Rs. 44,834 lakhs in FY2024.
Segment EBITDA for the year was Rs. 2,415 lakhs, reported
alongside Rs. 3,771 lakhs in FY2024.

The Hydraulics segment maintains its position as a world
leader in gear pump manufacturing, with operations split
between Bangalore, India, and Swindon, UK. Facing a rapid
and seemingly irreversible decline in European supply chain
reliability over recent quarters, we''ve made a strategic
decision to transfer production from our UK facility to India,
with only select strategic lines remaining in the UK. This
changeover, while currently impacting our operations and
incurring significant transition costs, is projected to deliver
substantial savings in H2 FY26 and establish a more robust,
long-term business structure.

Government policy continues to play a pivotal role in driving
the sector forward. Supportive measures, including reduced
import duties, subsidies for agricultural equipment, and
simplified credit disbursement schemes, have enhanced
affordability and accessibility for farmers. The construction
equipment industry remains integral to India''s broader
economic development plans and is expected to play a critical
role in enabling infrastructure-led growth.

ivitiALLURGY: ihe Metallurgy segment recorded a revenue
of Rs. 33,483 lakhs compared to same period last year
Rs. 47,081 lakhs. Segment EBITDA was Rs. 1,004 lakhs
compared to Rs. 2,467 lakhs in FY2024.

The Metallurgy division encountered ongoing challenges due
to subdued industrial demand, especially in Europe, coupled
with inflationary pressures and elevated energy costs. These
factors contributed to a decline in revenues and margins for
the year.

US political shifts are changing the game for Ukraine war
funding and have temporarily delayed offtake of Erla''s shell
production. Meanwhile, with potential reductions in American
aid, Germany and EU are stepping up, accelerating their own
defence spending to ensure security, encouraging German
companies to increase defence production.

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 years.

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.

DIVIDEND:

Pursuant to the approval of the Board of Directors on 13th
November 2024, the Company paid an interim dividend of Rs.
2 per equity share of face value Rs. 10 each, to shareholders
whose names appeared in the Register of Members as on
29^th November 2024, the record date fixed for this purpose.
However, the Board did not recommend any final dividend,
as the Company aims to conserve cash for future growth.
Accordingly, the total dividend for the financial year ended
31st March 2025 stands at Rs. 2 per equity share of face
value Rs.10 each.

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

SHARE CAPITAL:

As of 31^st March 2025, 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 2025 was 679.14 lakhs,
comprising 67,91,443 equity shares of Rs. 10/- each.

TRANSFER TO RESERVES:

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 Company incurred capital
expenditure of Rs. 5,860 lakhs for physical infrastructure and
Rs. 850 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 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 https://www.dynamatics.com.

SUBSIDIARIES:

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 2025, is appended hereunder:
* JKM Erla Holdings GmbH, Germany, ceased to exist with effect from 30^th
September 2024, pursuant to the court order dated 16^th September 2024.

** JKM Automotive Limited filed an application for strike-off, as it was unable
to achieve its intended objectives and has not generated any income since its
incorporation.

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:

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.

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

JKM Automotive Limited (JAL) a wholly owned subsidiary
of JEAL, is a non-operating company. JAL has filed an
application for strike-off, as it was unable to achieve its
intended objectives and has not generated any income since
its incorporation. As of the date of this report, the application
is pending with the Ministry of Corporate Affairs (MCA).

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 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.

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.

JKM Erla Holdings GmbH, Germany (JKM Erla) 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 was assigned to JEAL, effective
August 1, 2023.

As an outcome of the corporate restructuring measures JKM
Erla ceased to exist with effect from 30^th September 2024,
pursuant to the court order dated 16^th September 2024.

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.

As part of the group''s strategy, the Company''s wholly owned
step-down subsidiary, Eisenwerk Erla GmbH, Germany (EEG)
had undertaken corporate restructuring measures which were
approved in August 2023. As a result, the 100% shareholdings
of Eisenwerk previously held by JKM Erla were assigned to
JEAL, effective August 1, 2023. Eisenwerk is currently in the
process of transformation from automotive/foundry-focus to
the aerospace business.

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 2024-25.

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 2025, 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 2025, 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 the appointment of Mr. Chalapathi
P (DIN: 08087615) as an Executive Director to hold office
for a term of three years w.e.f. 13^th November 2024, till 12^th
November 2027.

Mr. P S Ramesh (DIN: 05205364), retired as Executive
Director & COO - Hydraulics on 13^th November 2024, after
completing his term of appointment. The Board places on
record its appreciation for the contributions and guidance
made by Mr. P S Ramesh, during his stint with the Company
as Executive Director & COO - Hydraulics.

Dr. Ajay Kumar (DIN: 01975789), resigned as an Independent
Director on 15^th May 2025, owing to his appointment as
Chairman of the Union Public Service Commission, pursuant to
the order of the Hon''ble President of India, thereby assuming
a constitutional responsibility of national importance. Dr. Ajay
Kumar has confirmed that there are no other material reasons
for his resignation other than those stated above. The Board
places on record its appreciation for the contributions and
guidance made by Dr. Ajay Kumar, during his stint with the
Company as an Independent Director.

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 2025,
are:

• Mr. Udayant Malhoutra, CEO & Managing Director

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

• Mr. Shivaram V, Chief Legal Officer & 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:

Four 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

ar''r''ontorl h\/ tho Rnarrl

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 Board members visited Industrial Training
Institute (ITI) campus, Devanahalli, Bangalore, as a part
of familiarization program organized for the directors, key
managerial personnel and invitees. The visit was aimed to
showcase the company''s initiatives to promote education as
a part of its corporate social responsibility mission.

Further, a special visit was arranged for all the Directors
to the Dynamatic Manufacturing Limited (DML) facility
located in Peenya, Bangalore, providing them with first
hand exposure to the Company''s manufacturing and

product development operations. The Directors toured
DML''s advanced manufacturing unit, gaining insights into
the various processes involved in producing detailed parts
for aerostructure assemblies, the control systems in place,
and the overall scale of operations. Each Director spent
approximately four hours at the facility during this visit.

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 SEBI 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.

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: The report
issued by M/s. Deloitte Haskins & Sells LLP, (ICAI
Firm Registration No. 117366W/W-100018) Statutory
Auditors for financial year 2024-25 does not contain any
qualifications or adverse remarks.

b. by the Company Secretary in Practice in his
Secretarial Audit Report: Pursuant to the provisions
of Section 204 of the Companies Act, 2013 and
the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, Mr. Ratish Tagde
& Associates, Company Secretary in practice, was
appointed to undertake the Secretarial Audit for financial
year 2024-25. The Report of the Secretarial Auditor along
with the certificate of non-disqualification of Directors
for the year ended March 31, 2025, is annexed to the
Directors'' Report as Annexure 2. The report issued by
Secretarial Auditor for financial year 2024-25 does not
contain any qualifications or adverse remarks.

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):

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 https://dynamatics.com/

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.

Members who have a claim on the dividend and shares
may claim the same from the IEPF Authority by sending
the request letter along with the requisite documents to
Kfin Technologies Limited and thereafter file an online
application in the prescribed e-Form IEPF—5 upon
receiving the entitlement letter from the Company. The
e—Form IEPF—5 is available on the website of the IEPF
Authority www.iepf.gov.in. No claims shall lie against
the Company in respect of the dividend / shares so
transferred. Members / claimants can file only one
consolidated claim in a financial year as per the IEPF
Rules.

c) DEMAT Suspense Account Unclaimed Shares:

As on 31^st March 2025, 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:

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. 48 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 2024-25 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 Obligations &
Disclosure Requirements) Regulations, 2015, the Corporate
Governance Report, Management Discussion & Analysis
Report, and the Auditors'' Certificate regarding Compliance to
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 of 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 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:

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 financial year 2025 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
FY2025-26 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 FY2026.

Secretarial Auditor:

Pursuant to the provisions of section 204 of the Act, and the
Companies (Appointment and Remuneration of Managerial
Personnel) Rules, 2014, the Company had appointed M/s.
Ratish Tagde & Associates, Company Secretary in practice to
undertake the Secretarial Audit of the Company for Financial
Year ended March 31, 2025. The Secretarial Audit Report for
the financial year ended March 31, 2025, as required under
Section 204 of the Act and Regulation 24A of the SEBI Listing
Regulations are appended as Annexure 2 to this Report. The
Secretarial Audit Report does not contain any qualification,
reservation or adverse remark.

Further, as per Section 204 of the Companies Act, 2013
read with Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014, and SEBI (LODR) read
with SEBI (LODR) (Third Amendment) Regulations, 2024
the Board has recommended to appoint M/s. Ratish Tagde &
Associates, Company Secretary in practice as the Secretarial
Auditors of the Company for the term of 5 (five) consecutive
years i.e. from Financial Year April 1, 2025 to March 31,2030.

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 FY2025 and
accordingly Secretarial Audit Report of JEAL is annexed as
Annexure - 2A.

Tax Auditors:

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

RISK MANAGEMENT POLICY:

The Company has a Risk Management Policy and constituted
a Risk Management Committee as required under Listing
Regulations. The Committee oversees the Risk Management
process including risk identification, impact assessment,
effective implementation of the mitigation plans, risk reporting
and carries out other related activities as per the Listing
Regulations. The purpose of the Committee is to assist the
Board of Directors in fulfilling its oversight responsibilities
with regard to enterprise risk management.

The details and the process of Risk Management as
implemented in the Company are provided as part of
Management''s Discussion and Analysis which forms part of
this Report.

The said policy has been uploaded on Company''s website
(https://dynamatics.com/Investors/Shareholder-Information/).

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 RESPONSIBILTY (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://dynamatics.com/
Investors/Shareholder-Information/).

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 2024-25
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:

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 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 Committee members have been trained in handling
and resolving complaints and have also designed an online
POSH e-learning awareness module, for its employees.
During the financial year 2025, there were no complaints
received on sexual Harassment.

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.

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://dynamatics.com/Investors/Shareholder-
Information/).

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.

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:

Instrument Type	Rating / Outlook
Term loan	IND A / Stable
Fund / Non-fund based working capital limit	IND A / Stable / IND A1

Listing with Stock Exchanges:

The Company confirms that it has paid the Annual Listing
Fees for the year FY2025 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 50^th Annual General Meeting (AGM) of the
Company, along with the Annual Report for the fiscal year
2024-25. 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.

For and on behalf of the Board of Directors

UDAYANT MALHOUTRA CHALAPATHI P

CEO & Managing Director Executive Director & CFO

DIN : 00053714 DIN : 08087615

Place: Bengaluru
Date: 27^th May 2025

---

Mar 31, 2024

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:

(Rs in Lakhs)
	Consolidated		Standalone
Particulars	Year Ended 31 March 2024	Year Ended 31 March 2023	Year Ended 31 March 2024	Year Ended 31 March 2023
Revenue from Operations	1,42,933	1,31,577	58,186	58,112
Less: Cost of material and changes in inventories	66,815	63,102	27,785	27,018
Less: Employee benefit expenses	30,167	25,342	8,492	9,218
Less: Other Expenses	30,010	25,007	10,805	10,453
EBITDA	15,941	18,126	11,104	11,423
EBITDA Margin	11.20%	13.80%	19.08%	19.66%
Add: Other Income	4,282	976	1,830	536
Less: Finance Charges	6,255	6,538	5,026	5,158
Less: Depreciation and Amortisation Expenses	6,636	7,042	2,410	2,419
Profit before tax & Exceptional items	7,332	5,522	5,498	4,382
Profit before tax margin	5.13%	4.20%	9.45%	7.54%
Add: Exceptional items	6,231	-	5,132	-
Less: Tax expenses	1,382	1,243	1,181	1,467
Profit after tax	12,181	4,279	9,449	2,915
Profit after tax margin	8.52%	3.25%	16.24%	5.02%
Add: Other Comprehensive Income/(Losses)	1,211	676	427	(335)
Total comprehensive income, carried to Balance Sheet	13,392	4,955	9,876	2,580

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, the

foundation 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 ANDREDRESSAL OF SEXUAL HARASSMENT ATWORKPLACE:

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:

Instrument Type	Rating / Outlook
Long Term Issuer Rating	IND BBB /Positive
Fund Based Working Capital	IND BBB / Positive / IND
Limit	A2
Non-Fund Based Working Capital Limit	IND A2
Term loan	IND BBB /Positive

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.

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Mar 31, 2018

The Directors are pleased to present their 43rd Annual Report together with the Audited Statement of Accounts of the Company for the year ended 31st March, 2018.

1. FINANCIAL RESULTS

The Financial Results of the Company for the year ended 31st March, 2018, were as follows:

(Rs. in Lacs)

Particulars	Consolidated		Standalone
	Year Ended 31 March 2018	Year Ended 31 March 2017	Year Ended 31 March 2018	Year Ended 31 March 2017
Gross Revenue	140,842	153,918	56,895	53,143
Less: Excise duty	872	3,308	642	2,640
Net Revenue	139,970	150,610	56,253	50,503
Less: Cost of material and increase/decrease in stock	71,961	83,804	26,877	22,937
Less: Employee benefit expenses	24,838	22,958	8,178	6,718
Less: Other Expenses	29,932	27,320	12,089	11,128
EBITDA	13,239	16,528	9,109	9,720
EBITDA Margin	9.46%	10.97%	16.19%	19.25%
Add: Other Income	578	576	647	1,588
Less: Finance Charges	7,442	7,836	6,328	6,162
Less: Depreciation and Amortisation Expense	5,644	5,282	2,875	2,816
Less: Exceptional Expense	-	426	-	314
Profit before tax	731	3,560	553	2,016
Profit before tax margin	0.52%	2.36%	0.98%	3.99%
Less: Tax expense	659	1,598	174	484
Profit After Tax	72	1,962	379	1,532
Profit After Tax margin	0.05%	1.30%	0.67%	3.03%
Add: Other Comprehensive Income/(Losses)	2,226	(2,138)	(142)	(20)
Profit for the year	2,298	(176)	237	1,512
Profit available for appropriation	2,298	(176)	237	1,512
Balance carried to Balance Sheet	2,298	(176)	237	1,512

Note: Previous years’ figures have been recast wherever necessary. COMPANY PERFORMANCE

FY2018 was a year of important reforms in the Indian economy including the Goods & Service Tax (GST). While in the short term, it faced temporary challenges of implementation, on a long-term basis it will lead to improved business environment and renewed investment opportunities. Recent regulatory changes coupled with our strategy of rationalizing product mix resulted in a subdued business performance. Consolidated net sales for FY2018 decreased by 7.06% to Rs. 139,970 lacs as compared to Rs. 150,610 lacs in FY2017.

Consolidated EBITDA (excluding other income) for FY2018 decreased by 19.9% to Rs. 13,239 lacs as compared to Rs. 16,528 lacs during the same period last year. This EBITDA (excluding other income) included an impact of Rs. 957 lacs on account of unfavorable foreign exchange variations. After adjusting for this impact, EBITDA (excluding other income) for the year would have been Rs. 14,196 lacs, representing a decline of 14.1% compared to FY2017. EBITDA (excluding other income) margin for the year under review was 9.4% compared to 10.9% in FY2017. On account of the implementation of GST, our working capital utilization increased, leading to higher short-term borrowings and finance charges on a y-o-y basis.

The Aerospace & Defence segment recorded a revenue growth of 3.1% to reach Rs. 35,634 lacs compared Rs. 34,569 in FY2017. Continuing order book execution led to substantial revenue growth in Q4 FY2018. Further, ramp up of phase 2 Airbus orders started resulting in stabilization of overall operations. Segment EBITDA was Rs. 8,143 lacs compared with from Rs. 10,473 lacs in FY2018. While India operations registered a 11.5% growth in revenue, UK performance increased by 17% on constant currency basis.

During the year, the Aerospace & Defence segment continued its focus on product innovation and advanced technology platform. The division announced commercial production of Airbus A330 Long Range FTBs to be manufactured in India and the UK during the life of the program. The Company successfully started the ramp up of phase 2 of Airbus orders, putting in place a state-of-the-art infrastructure and achieved a full-scale industrialization of the entire value chain. Further, the Company became the sole supplier of major sub-assemblies for Bell 407 helicopter cabins.

Hydraulics segment continued its strong performance during Q4 and FY2018, mainly on account of better order off takes. Revenues for this segment increased by 12.4% to Rs. 31,111 lacs compared to Rs. 27,683 lacs in the same period last year. One-time impact of long term union wages revision led FY2018 EBITDA to decline by 6.8% to Rs. 3,712 lacs. With a recent established sales office in the US, the Company expects to expand further in the North American markets. With improved farm sentiment and infrastructure investments, this segment is expected to remain strong.

With a focus on margin expansion, low margin products rationalization continued for the Automotive and Metallurgy business during FY2018. Adoption of such rationalization strategy impacted the financials performance during the year but resulted in significant improvement in EBITDA during the last quarter of FY2018. Revenue for this segment was Rs. 73,225 lacs, representing a decline of 17.1% compared to same period last year. Segment EBITDA was Rs. 1,849 compared to Rs. 2,939 in FY2017. New order ramp up and new machining facility in Germany expected to drive growth for this division going forward.

SHARE CAPITAL

As of March 31, 2018, the Company had an authorized share capital of Rs. 2,500 lacs, divided into 2,00,00,000 equity shares of Rs. 10/- each and Rs. 500 lacs divided into 5,00,000 redeemable cumulative preference shares of Rs. 100/- each. During the year under review, there was no change in the Company’s issued, subscribed and paid-up equity share capital. As of 31st March, 2018, the Company had issued, subscribed and paid-up equity share capital of Rs. 634.14 lacs divided into 63,41,443 equity shares of Rs. 10/- each.

TRANSFER TO RESERVES

During the year under review, your Directors do not propose to transfer any amount to General Reserve.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has duly complied with the provisions of Section 186 of the Companies Act, 2013 during the year under review. The details of loans availed by the Company during the year under review are mentioned in the notes to accounts that form part of this Annual Report.

DIVIDEND

During the year under review, your Directors do not propose to declare any dividends due to poor economic conditions and paucity of profits.

CAPITAL EXPENDITURE

During the year under review, your Company incurred capital expenditure of Rs. 7,085 lacs for physical infrastructure and Rs. 218 lacs for procurement of intangible assets. Significant investments have been made in building infrastructure, state-of-the-art machinery, design software, data security, information systems, and design and development activities; for the future benefits of your Company.

DEPOSITS

During the year under review, the Company neither accepted any deposits nor there were any amounts outstanding at the beginning of the year which were classified as ‘Deposits’ in terms of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposit) Rules, 2014 and hence, the requirement for furnishing of details of deposits which are not in compliance with the Chapter V of the Companies Act, 2013 is not applicable.

SUBSIDIARIES

The Company has ten subsidiaries. Pursuant to Section 129(3) of the Companies Act, 2013 and Accounting Standard- 21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company include the Financial Statements of its Subsidiaries.

Consolidated Financial Statements forms part of this Annual Report. Statement containing the salient features of the Financial Statements of the Company’s subsidiaries, associate(s) and joint venture(s) are enclosed as Annexure 1 in form AOC-1 to this Annual Report.

In terms of provisions of Section 136 of the Companies Act, 2013, the Company shall place separate audited accounts of the Subsidiary Companies on its website at www.dynamatics.com

The structure of Dynamatic Technologies Limited and its subsidiaries as on March 31, 2018 is appended hereunder :

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.

JKM Ferrotech Limited, India (JFTL) is a subsidiary of Dynamatic Technologies. JFTL is into the manufacturing of ferrous alloy and castings, having its operations in Gummidipoondi, Tamil Nadu. This subsidiary has expertise in producing High Si-Mo automotive components and is certified to the highest quality standards specified by the Automotive Industry.

JKM Automotive Limited (JAL) is a wholly owned subsidiary of JKM Erla Automotive Limited.

OVERSEAS SUBSIDIARIES

JKM Global Pte. Limited, Singapore, is a wholly owned subsidiary of the Company. It continues to be a holding company for the overseas businesses.

Dynamatic Limited, UK, (DLUK) is a subsidiary of your Company having aerospace and hydraulics units at Bristol and Swindon.

Yew Tree Investments Limited, Bristol, UK is a wholly owned subsidiary of Dynamatic Limited, UK.

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

JKM Erla Holdings GmbH, Germany (JKM Erla GmbH) is engaged in the business of setting up automotive components processing/manufacturing units.

Eisenwerk Erla GmbH, Germany (Eisenwerk) is a subsidiary of the Company. Eisenwerk has been in business for over many years and is a preferred supplier to leading global OEMs such as Audi, BMW, Borg Warner Turbo Emission Systems, Volkswagen and Daimler. The capabilities of this subsidiary includes high precision, complex metallurgical products for automotive engines and turbochargers.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Inductions, Re-appointments, Retirements & Resignations

During the year under review, the Board of Directors at their meeting held on 09th August, 2017 appointed Mr. Arvind Mishra as Additional Director of the Company.

Mr. Raymond Keith Lawton (DIN:01687605) stepped down from the Board Directors of the Company with effect from 19th July, 2017.

Mr. Vijai Kapur (DIN:00056415) and Mr. Krishnaswamy Srinivasapuram (00056250) ceased to be with effect from 13th August, 2017.

Mr. Arvind Mishra has been appointed as Executive Director and Global Chief Operating officer, Hydraulics & Head of Homeland Security.

Mr. Hanuman Kumar Sharma (DIN:07012725) stepped down from the Board Directors of the Company with effect from 14th February, 2018.

Mr. Chalapathi P, has been appointed as a Chief Financial Officer of the company with effect from 13th December 2017.

Mr. Sirish Saraf (DIN:0001918219) vacated the office of Directorship under section 167 read with 164(2)(a) of Companies Act, 2013.

Mr. James Tucker, Non-Executive Director of the Company would retire by rotation in accordance with section 152 of the Companies Act, 2013 and being eligible, offers himself for reappointment.

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

Details of all the Directors have been covered in Corporate Governance Report which forms part of the Annual Report.

Declaration by Independent Directors

All Independent Directors of the Company meet the criteria of Independence laid down in Section 149(6) of the Companies Act, 2013. In line with the provisions of section 134(3)(d) of the Companies Act, 2013, the declaration from Independent Directors, confirming their independence in terms of section 149 of the Companies Act, 2013 have been obtained.

Key Managerial Personnel (KMP)

During the year under review, the Company has designated following personnel as KMPs as per the definition under Section 2(51) and Section 203 of the Act:

- Mr. Udayant Malhoutra, CEO & Managing Director

- Mr. P S Ramesh, Executive Director & COO - Aerospace, India

- Mr. Arvind Mishra has been appointed as Executive Director and Global Chief Operating officer, Hydraulics & Head of Homeland Security.

- Mr. Naveen Chandra P, Head Legal, Compliance and Company Secretary

- Mr. Chalapathi P, has been appointed as a Chief Financial Officer of the company with effect from 13th December 2017.

BOARD MEETINGS

The Company prepares a Board and allied committee meeting calendar and circulates to all the directors in advance for their concurrence. During FY2018, seven meetings of the Board of Directors were held.

Details of the composition of the Board and its Committees and of the Meetings held, attendance of the Directors at such Meetings and other relevant details are provided in the Corporate Governance Report. These Board meetings were held during the FY2018 and not more than one hundred and twenty days had intervened between two consecutive meetings of the Board.

COMMITTEES OF BOARD OF DIRECTORS

The Board has seven committees viz; the Audit and Risk Management Committee, Nomination and Remuneration Committee, Stakeholders’ Relationship Committee, Technology & Strategy Development Committee, Finance Committee, Corporate Social Responsibility Committee and 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 most of the recommendations made by all the Committees of Board of Directors during the year under review.

familiarization programme for the independent

DIRECTORS

An appropriate induction for new directors and ongoing training for all directors ensure high corporate governance in the Company. Dynamatic conducts induction programme for every new independent director to provide them an opportunity to build an understanding about Dynamatic, its businesses and the markets and regulatory environment in which it operates; familiarize with its management and its operations so as to gain a clear understanding of their roles and responsibilities and contribute significantly towards the growth of the Company. They have full opportunity to interact with Senior Management Personnel and are provided all the documents required and sought by them for enabling them to have a good understanding of the Company, its various operations and the industry in which it operates. Dynamatic Technologies firmly believes that a Board, which is well informed /familiarised with the Company, can contribute significantly to effectively discharge its role of trusteeship in a manner that fulfils stakeholders’ expectations.

During the year under review, the Company had carried out familiarisation programme for Independent Directors by organizing workshop at Auto unit, Eisenwerk Erla GmbH, Germany; Aerospace unit, Dynamatic Limited, Bristol, UK and Hydraulics unit, Dynamatic Limited, Swindon, UK.

In pursuit of this, the Directors are updated on a continuing basis on developments in the corporate and industry scenario including those pertaining to regulatory and economic environment, to enable them to take well informed and timely decisions. The details of the familiarisation programme may be accessed on the Company’s corporate website (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 as Annexure 2 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 2 which forms part of this report.

DIVERSITY IN THE BOARD

The Company recognizes and embraces the importance of a diverse board in its success. We believe that a truly diverse board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, ethnicity, race and gender, which will help us 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.

PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

The Companies Act, 2013 states that a formal annual evaluation needs to be performed by the Board of its own performance, various committees of the Board and that of the individual directors. Schedule IV of the Companies Act, 2013, states that the performance evaluation of independent directors shall be done by the entire Board, excluding the director being evaluated.

The evaluation of all the directors and the Board as a whole was carried out based on the criteria and framework adopted by the Board as explained in the Corporate Governance Report. The Board of Directors expressed their satisfaction with the evaluation process.

REMUNERATION POLICY

The philosophy for remuneration of directors, KMP and all other employees of the Company is based on the commitment of fostering a culture of leadership with trust. Furthermore, the Company believes in providing an opportunity that has a strong linkage to and reinforces the performance culture of the Company. The remuneration policy is aligned to this philosophy. The Company has laid down remuneration policy which is designed to attract, motivate, retain manpower and improve productivity by creating a congenial work environment, encouraging initiative, personal growth and teamwork besides offering appropriate remuneration package. Pursuant to the applicable provisions of the Companies Act, 2013 and the Listing Regulations, the Board, in consultation with its Nomination & Remuneration Committee, has formulated a framework containing, inter-alia, the criteria for performance evaluation of the entire Board of the Company and Individual Directors, including Independent Directors. The said policy has been enclosed as Annexure 3.

Members can download the complete remuneration policy on the Company’s website (www.dynamatics.com/investor. html).

CORPORATE SOCIAL RESPONSIBILTY (CSR)

- Dynamatic Technologies Ltd has strengthened its objectives of CSR and created a Skill Development Initiative Team to develop skills in trainees with ITI / Diploma and in serving workers from aerospace industry, who volunteer to enhance their skill levels. The team also focuses in upgrading the technical skills in operations such as sheet metal forming, material handling, painting and NDT etc.

- To accomplish this task in earnest, your company adopted ITI Devanahalli under PPP program and has developed and introduced special curriculum in Aerospace Fitter Trade to train the students in structural assembly techniques such as drilling, reaming, riveting and sealant application. Classes for the ITI trainees were conducted in some existing trades to provide basic introduction to aerospace technology and certain soft skills.

- During the current year an exclusive Building along with a Borewell to provide drinking water was constructed and state-of- the-art teaching aids, tools and materials were acquired to create a new Skill Development Center at ITI Devanahalli.

- This new Skill Development Center at ITI Devanahalli has adequate Training Rooms for theory classes, Workshop practices and Rest Rooms for the trainee students. The required infrastructure such as Compressor and Generator have been procured and installed. The Building is fully furnished and was inaugurated on 12th December 2017 by the amidst designatories and CEO & MD of Dynamatic Technologies Ltd. ITI authorities from the State Government, IMC Chairman and Members, and other industry partners were present on the occasion.

- Total amount spent for various CSR activities for ITI Devanahalli was over Rs. 7 lakh.

RISK MANAGEMENT POLICY

Risk management forms an integral part of the management system and determines the risk situation in business processes and organizational units. Risk management provides the organization at all levels with an instrument for detecting risks early and taking steps to eliminate, reduce, and consciously deal with risks The Company has a robust process in place to identify key risks across the Group and prioritise relevant action plans to mitigate these risks. The Audit & Risk Management Committee has been entrusted with the responsibility to assist the Board members about the risk assessment and its minimization procedures, which includes discussing the management submissions on risks, prioritising key risks and approving action plans to mitigate such risks. The Policy suggests framing an appropriate response action for the key risks identified, so as to make sure that risks are adequately compensated or mitigated.

The main objectives of the said policy are.

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

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 behavior, malpractices, wrongful conduct, fraud, 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 & Risk Management 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 & Risk Management Committee from time to time. The policy on vigil mechanism may be accessed on the Company’s website (https://www. dynamatics.com/investor.html)

POLICY FOR SAFETY AND WELL BEING OF WOMEN

To motivate our Women work force, Women’s Day was celebrated with full gusto in all the Divisions. In keeping with our resolve to ensure zero incidents of sexual harassment at workplace, provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder for prevention and redressal of complaints of sexual harassment at workplace are being strictly adhered to. Awareness programmes and workshops are held periodically to educate all employees. There have been no complaints of sexual harassment received during the year. Work on construction of a Creche in Aerospace Division has commenced and likely to be completed by end May 2018.

AUDITORS

Statutory Auditors

M/s. B S R & Co. LLP, Chartered Accountants are the Statutory Auditors of the Company for a period of five years with effect from 14th August 2014. M/s. B S R & Co., LLP have confirmed to the Company that they are not disqualified under section 141 of the Companies Act, 2013, or any other applicable provisions for the time being in force and are eligible for continuing as statutory auditors of the Company. M/s. B S R & Co., LLP have also confirmed to the Company that, their appointment, if made, would be within the limits prescribed under the Companies Act, 2013.

The report of the Statutory Auditors along with notes to Schedules is enclosed to this report. The observations made in the Auditors’ Report are self-explanatory and therefore do not call for any further comments. The Auditor’s Report does not contain any qualification, reservation or adverse remark.

Cost Auditors

As per Section 148 of the Act, the Company is required to have the audit of its cost records conducted by a Cost Accountant in practice. M/s Rao, Murthy & Associates who were appointed as Cost Auditors of the Company for the FY2018 conduct cost audits pertaining to relevant products prescribed under the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time.

Internal Auditors

The Internal Audit function is responsible for assisting the Audit & Risk Management Committee on an independent basis with a full status of the risk assessments and management. M/s. Ernst & Young, LLP were appointed as Internal Auditors of the Company for the FY2018.

Secretarial Auditor

The Company had appointed Mr. R Vijayakumar, Company Secretary in practice in Bangalore, to conduct its Secretarial Audit for the financial year ended 31st March, 2018. 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 4 to this report.

Tax Auditors

M/s BVS & Associates, Chartered Accountants, are the Tax Auditors of the Company. The Tax Auditor’s Report does not contain any qualification, reservation or adverse remark.

INTERNAL CONTROLS SYSTEMS AND THEIR ADEQUACY

According to Section 134(5)(e) of the Companies Act, 2013, the term Internal Financial Control (IFC) means the policies and procedures adopted by a company for ensuring the orderly and efficient conduct of its business, including adherence to the company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

The Company has a well-placed, proper and adequate internal financial control system which ensures that all assets are safeguarded and protected and that the transactions are authorised, recorded and reported correctly. The Company’s internal financial control system also comprises due compliances with Company’s policies, standard operating procedures and audit and compliance by an in-house internal audit division, supplemented by internal audit checks from M/s. Ernst &Young, LLP, the Internal Auditors and various transaction auditors.

The Internal Auditors independently evaluate the adequacy of internal controls and concurrently audit the majority of the transactions in value terms. Independence of the audit and compliance is ensured by direct reporting to the Audit & Risk Management Committee of the Board. A CEO and CFO Certificate, forming part of the Corporate Governance Report, further confirms the existence and effectiveness of internal controls and reiterates their responsibilities to report deficiencies to the Audit & Risk Management Committee and rectify the same. During the year, such controls were tested and no reportable material weaknesses in the design or operation were observed.

OTHER DISCLOSURES

Events Subsequent to the Date of the Financial Statements

There were material changes / commitments affecting the financial position of the company between March 31, 2018 and the date of Board’s Report.

The Board at its meeting held on 28th February, 2018 had approved the Divestment of Automotive and wind Farm business located at Chennai and Coimbatore. The shareholders had approved the proposal of Divestment through postal ballot process. Mr. Vijay Kumar (practicing Company Secretary had issued the scrutinizer report dated 16th May, 2018 and declared the resolution passed with requisite majority and the same is made available on the website of the Company.

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.

Demat Suspense Account unclaimed shares

As on 31st March, 2018 there are 22 members, holding 1,161 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.

Extract of the Annual Return

Pursuant to the provisions of section 92(3) of the Companies Act,2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return is made part of this Annual Report.

Listing with Stock Exchanges

The Company confirms that it has paid the Annual Listing Fees for the year 2017-2018 to NSE and BSE where the Company’s Shares are listed.

Consolidated Financial Statements

The Directors have pleasure in attaching the Consolidated Financial Statements prepared by the Company in accordance with the relevant Accounting Standards issued by the Institute of Chartered Accountants of India, which form part of the Annual Report.

RELATED PARTY TRANSACTIONS

With reference to Section 134(3)(h) of the Companies Act, 2013, all contracts and arrangements with related parties under Section 188(1) of the Act, entered into by the Company during the financial year, were in the ordinary course of business and on an arm’s length basis.

As per the Listing Regulations, all related party transactions are placed before the Audit & Risk Management Committee for approval. Prior omnibus approval of the Audit & Risk Management Committee has been obtained for the transactions which are of foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval are presented to the Audit & Risk Management Committee by way of a statement giving details of all related party transactions. The Company has developed a Related Party Transactions Manual for the purpose of identification and monitoring of such transactions. Particulars of Contracts or Arrangements with Related parties referred to in Section 188(1) is disclosed in Form AOC- 2 as Annexure 6.

ENVIRONMENTAL PROTECTION MEASURES

Your Company continuously strives to reduce our environmental footprint, while enhancing livelihood of people across our product value chain. Accordingly the Company has adopted a number of measures to improve in the field of environment, safety and health. Measures like standard operating procedures, training programmes for all levels of employees regarding resource conservation, environment protection and housekeeping have been conducted. Sustainable living is a part of long-term business strategy of the Company.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGOING

The information relating to conservation of energy and technology absorption are appended hereunder:

Conservation of Energy

All our facilities in India and abroad are built with the environment in mind and the processes are designed for efficiency, energy conservation and to ensure that no waste is transmitted into the environment. The industrial complexes are highly energy efficient and completely non-polluting. This is being systematized and quantifiable by implementing ISO 14000.

Technology Absorption

Research & Development plays a vital role in developing and adopting new technologies to enhance our operational efficiencies. The Company owns the world’s best hydraulic technologies. The Company has added technology from Plessey through the acquisition of Dynamatic Limited, UK, in 2007.

The Aerospace & Hydraulics units in India & the UK; Automotive units in India and Germany work together in resolving engineering challenges leading to better synergies across the group.

Research & Development (R&D)

R&D and Innovation continues to be an integral part of the Company’s growth strategy, business profitability, sustainability and as a part of its contribution towards the building of the Nation. Dynamatic Science Lab, created by consolidating various research and technology functions, helps to enhanced value delivery by leveraging skills and competencies to create new business opportunities. The Company’s Research & Development is actively driven by a Board level committee constituted as the Technology & Strategy Development Committee.

The Technology & Strategy Development Committee of the Board provides direction to the Company’s R&D strategy and on key issues pertaining to R&D technology. The Committee regularly reviews and updates the skills and competencies required, the structure and the processes needed to ensure that the R&D initiatives of today result in products necessary for the sustained and long term growth of the Company.

MANAGEMENT’S DISCUSSION & ANALYSIS REPORT

Pursuant to regulations 34 of the Listing Regulations, Management’s Discussion & Analysis Report for the year is presented in a separate section forming part of the Annual Report.

CORPORATE GOVERNANCE

Corporate Governance is a set of principles, processes and systems which govern a company. The Company believes that an effective corporate governance practices provides a strong foundation for a successful enterprise. The key principles on which a sound Corporate Governance system is based are independence, transparency, accountability, responsibility, compliance, ethics, values and trust. Corporate Governance enables an organization to perform efficiently and ethically generate long term wealth and create value for all its stakeholders.

Dynamatic Technologies is committed to maintain the best standards of Corporate Governance and adopted many ethical and transparent governance practices even before they were mandated by law. The Company has always strived towards building trust with shareholders, employees, customers, suppliers and other stakeholders based on the principles of good corporate governance. Strong leadership and best-in-class corporate governance practices are considered one of the major strength of the Company.

A detailed report on Corporate Governance, pursuant to the requirements of Regulation 34 of the Listing Regulations, forms part of the Annual Report. The certificate from the Practicing Company Secretary confirming compliance of the Corporate Governance norms as stipulated in the Listing Regulations is also included in the Annual Report.

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.	Wavell Investments Private Limited
5.	Mrs. Barota Malhoutra
6.	Vita Private Limited
7.	Christine Hoden (India) Private Limited
8.	Primella Sanitary Products Private Limited
9.	Greenearth Biotechnologies Limited

DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to the section 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of knowledge and belief and according to the information and explanations obtained by them, hereby confirm that:

a. In the preparation of accounts for the financial year ended March 31, 2018, the applicable Accounting Standards have been followed with proper explanation relating to material departures if any.

b. We have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 & Loss Account of the Company for the year under review.

c. We have taken proper and sufficient care for the maintenance of adequate records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d. We have prepared the accounts for the financial year ended March 31, 2018, on a ‘going concern’ basis.

e. We have laid down internal financial controls to be followed by the company and that the internal financial controls are adequate and are operating effectively.

f. We have devised proper systems to ensure compliance with the provisions of all applicable laws and the systems are adequate and operating effectively.

g. Transfer of amounts to Investor Education and Protection Fund

Pursuant to the provisions of the Companies Act, 2013 (as amended from time to time), dividends and shares which remained unclaimed for a period of seven years, have been transferred by the Company to the Investor Education and Protection Fund.

HUMAN RESOURCES

The Company believes that human resources are critical for the overall success of the organization and ensures to undertake best efforts for maintaining a cordial relationship with the employees. Dynamatic’s focus has always been to acquire, nurture and develop the best talent to prepare them for leadership roles within the organization. Various initiatives to improve the skills of its employees though training initiatives are ongoing exercise at the Company. Such initiatives are important to ensure job enrichment, engagement and accountability for performance, career progression, reward, recognition and welfare of the employees. Your Company has an excellent track record of cordial and harmonious industrial relations and over the years not a single man-day has been lost on account of labor unrest

ACKNOWLEDGMENTS

Your Directors would like to wish their sincere appreciation to the investors, financial institutions and banks for their continued support during the year. Your Directors would like to thank the regulatory authorities and government authorities and agencies for their continued guidance and support. Your Directors also wish to place on record their deep sense of appreciation to employees and executives at all levels for their efforts and dedication. Their hard work and commitment has enabled the Company to be on the forefront of the industry. We also take this opportunity to thank all our customers without whom our success story would not have been possible.

For and on behalf of the Board of Directors

Udayant Malhoutra P S Ramesh

CEO & Managing Director Executive Director

DIN : 00053714 & COO, Aerospace, India

DIN:05205364

Place : Bangalore

Date : 29 May 2018

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Mar 31, 2017

DIRECTORS'' REPORT TO SHAREHOLDERS

The Directors are pleased to present their 42nd Annual Report together with the Audited Statement of Accounts of the Company for the year ended 31st March, 2017.

strong operating margin profile of Aerospace & Defense and Hydraulics segments. Consolidated net profit after tax (PAT) for the year increased by 19.0% to Rs,1,460 lacs as compared to same period last year. PAT for the year included a one-time impact of Rs,1,012 lacs on account of various expenses such as prepayment charges, processing fees and ancillary charges incurred by the Company towards pre-payment of loan funds to the banks and financial institutions. Adjusting for this onetime impact, PAT for FY2017 increased by 73.4% to Rs,2,130 lacs.

The Aerospace & Defense segment recorded a robust revenue growth of 28.1% to reach Rs,34,568 lacs compared Rs,26,981 in FY2016. Successful deliveries of new projects along with a robust and continuing order book execution was the primary driver for this growth during the year. Segment EBITDA increased to Rs,10,473 lacs from Rs,7,636 lacs in FY2016, indicating a growth of 37.2%. This includes the turnover from the Aerospace division of Dynamatic Limited, UK, a subsidiary

1. FINANCIAL RESULTS

The Financial Results of the Company for the year ended 31st March, 2017, were as follows: (Rs, in Lacs)

	Standalone		Consolidated
Particulars	Year Ended 31 March 2017	Year Ended 31 March 2016	Year Ended 31 March 2017	Year Ended 31 March 2016
Gross Sales	53,180	45,883	1,54,084	1,52,809
Net Sales	50,540	43,137	1,50,776	1,49,378
Profit (Before Other Income, Interest, Depreciation & Taxation) (EBITDA)	9,760	7,430	16,534	14,108
Other Income	1,196	401	594	499
Interest & Finance Charges	5,709	5,163	7,411	7,275
Depreciation	3,114	2,911	5,439	5,243
Net Profit Before Taxation and Exceptional Items	2,133	(243)	4,278	2,089
Exceptional Items	(788)	-	(1,012)	-
Net Profit Before Taxation and after Exceptional Items Provision for Taxation:	1,345	(243)	3,266	2,089
- Current Tax	739	(104)	1,971	1,212
- Deferred Tax Charge	(153)	(268)	(165)	(351)
Net Profit After Tax	759	129	1,460	1,228
Balance brought forward from previous year	5,969	5,840	9,782	8,554
Amount available for appropriation Appropriations	6,728	5,969	11,242	9,782
Dividend on Equity Shares - Interim	-	-	-	-
Proposed Final Dividend on Equity Shares	-	-	-	-
Tax on Dividend	-	-	-	-
Transfer to General Reserve	-	-	-	-
Balance carried to Balance Sheet	6,728	5,969	11,242	9,782

Note: Previous years'' figures have been recast wherever necessary. COMPANY PERFORMANCE

Consolidated net sales for FY2017 increased marginally by 0.9% to Rs,150,776 lacs as compared to Rs,149,378 lacs in FY2016. However, on a constant currency basis, FY2017 revenue if adjusted for a foreign exchange impact of Rs,1,643 lacs would have been Rs,152,419 lacs, representing a growth of 2.0% y-o-y.

Consolidated EBITDA (excluding other income) for FY2017 increased by 17.2% to Rs,16,534 lacs as compared to Rs,14,108 lacs compared to the same period last year. This EBITDA (excluding other income) growth was achieved despite the impact of Rs,509 lacs on account of unfavorable foreign exchange variations. After adjusting for this impact, EBITDA (excluding other income) for the year was Rs,17,044 lacs, representing a growth of 20.8% compared to FY2016. EBITDA (excluding other income) margin for the year under review improved by 152 basis points (bps) to 11.0% from 9.4% in FY2016. This improvement in the margin was primarily driven by of the Company, to the extent of Rs,11,916 lacs and segment EBITDA of Rs,8,092 lacs.

During the year, the Aerospace & Defense segment continued its focus on product innovation and advanced technology platform. The division announced commercial production of Airbus A330 Long Range FTBs to be manufactured in India and UK during the life of the program. The Company also inaugurated new Aerospace facility in Bangalore - Dynamatic Aerotropolis in February 2017 with the strategic focus of further strengthening the Aerospace business. This facility has started order execution for Airbus A330 and Bell Helicopter during the year under review.

The revenues from Hydraulics segment increased by 6.0% to Rs,27,692 lacs compared to Rs,26,136 lacs in the same period last year. Segment EBITDA for the division improved by 22.0% to Rs,3,978 lacs compared to Rs,3,257 in FY2016. This growth was primarily driven by a strong performance of the Hydraulics segment in India and supported by marginal growth of the UK facility on a constant currency basis compared to same period last year. The Company has established a sales office in the US during the year which is expected to help Dynamatic to expand further in the North American market.

The Automotive and Metallurgy business was Rs,88,395 lacs, a decline of 8.0% from Rs,96,052 compared to same period last year. Segment EBITDA was Rs,2,939 compared to Rs,3,929 in FY2016. The performance of this segment remained subdued due to impact of demonetization in the second half of the fiscal year. The global Volkswagen challenges further added to the subdued performance of the division during the year.

SHARE CAPITAL

As of March 31, 2017, the Company had an authorized share capital of Rs,2,000 lacs, divided into 2,00,00,000 equity shares of Rs,10/- each and Rs,500 lacs divided into 5,00,000 redeemable cumulative preference shares of Rs,100/- each. During the year under review, there was no change in the Company''s issued, subscribed and paid-up equity share capital. As of 31st March, 2017, the Company had issued, subscribed and paid-up equity share capital of Rs,634.14 lacs divided into 63,41,443 equity shares of Rs,10/- each.

TRANSFER TO RESERvES

During the year under review, your Directors do not propose to transfer any amount to General Reserve.

PARTICULARS OF LOANS, GUARANTEES OR INvESTMENTS

The Company has duly complied with the provisions of Section 186 of the Companies Act, 2013 during the year under review. The details of loans availed by the Company during the year under review are mentioned in the notes to accounts that form part of this Annual Report.

dividend

During the year under review, your Directors have decided to plough back profits into business to support new project plans. The Board does not propose to declare any dividends.

CAPITAL EXPENDITURE

During the year under review, your Company incurred capital expenditure of Rs,8,049 lacs for physical infrastructure and Rs,2,997 lacs for procurement of intangible assets. Significant investments have been made in building infrastructure, state-of-the-art machinery, design software, data security, information systems, and design and development activities; for the future benefits of your Company.

DEPOSITS

During the year under review, the Company neither accepted any deposits nor there were any amounts outstanding at the beginning of the year which were classified as ''Deposits'' in terms of Section 73 of the Companies Act, 2013 read with the Companies (Acceptance of Deposit) Rules, 2014 and hence, the requirement for furnishing of details of deposits which are not in compliance with the Chapter V of the Companies Act, 2013 is not applicable.

SUBSIDIARIES

The Company has ten subsidiaries. Pursuant to Section 129(3) of the Companies Act, 2013 and Accounting Standard- 21 issued by the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company include the Financial Statements of its Subsidiaries.

Consolidated Financial Statements forms part of this Annual Report. Statement containing the salient features of the Financial Statements of the Company''s subsidiaries, associate(s) and joint venture(s) are enclosed as Annexure 1 in form AOC-1 to this Annual Report.

In terms of provisions of Section 136 of the Companies Act, 2013, the Company shall place separate audited accounts of the Subsidiary Companies on its website at www.dynamatics.com

The structure of Dynamatic Technologies Limited and its subsidiaries as on 31st March 2017 is appended hereunder :

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.

JKM Ferrotech Limited, India (JFTL) is a subsidiary of Dynamatic Technologies. JFTL is into the manufacturing of ferrous alloy and castings, having its operations in Gummidipoondi, Tamil Nadu. This subsidiary has expertise in producing High Si-Mo automotive components and is certified to the highest quality standards specified by the Automotive Industry.

JKM Automotive Limited (JAL) is a wholly owned subsidiary of JKM Erla Automotive Limited.

Overseas SUBSIDIARIES

JKM Global Pte. Limited, Singapore, is a wholly owned subsidiary of the Company. It continues to be a holding company for the overseas businesses.

Dynamatic Limited, UK, (DLUK) is a subsidiary of your Company having aerospace and hydraulics units at Bristol and Swindon.

Yew Tree Investments Limited, Bristol, UK is a wholly owned subsidiary of Dynamatic Limited, UK.

JKM Erla Holdings GmbH, Germany (JKM Erla GmbH) is engaged in the business of setting up automotive components processing/manufacturing units.

Eisenwerk Erla GmbH, Germany (Eisenwerk) is a subsidiary of the Company. Eisenwerk has been in business for over 630 years and is a preferred supplier to leading global OEMs such as Audi, BMW, Borg Warner Turbo Emission Systems, Volkswagen and Daimler. The capabilities of this subsidiary includes high precision, complex metallurgical products for automotive engines and turbochargers.

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

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Inductions, Re-appointments, Retirements & Resignations

During the year under review, the Board of Directors at their meeting held on 11th November, 2016 appointed Mr. Shirish Saraf (DIN: 01918219) as an Additional Director of the Company. Mr. Ramesh Venkataraman, an Independent Director, stepped down from the directorship effective 5th May, 2016.

Terms of Mr. Vijai Kapur (DIN: 00056415) and Air Chief Marshal

S. Krishnaswamy (Retd.) (DIN: 00056250) as Independent Directors of the Company will come to an end on 13th August 2017. As per Company''s policy on age criteria, the said Independent Directors would not be seeking re-appointment.

The Board places on record its sincere appreciation for all the contributions of the outgoing Directors. Mr. Hanuman Kumar Sharma (DIN: 07012725) and Mr. P S Ramesh (DIN: 05205364), Directors of the Company would retire by rotation in accordance with section 152 of the Companies Act, 2013 and being eligible, offers themselves for re-appointment.

None of the Directors of the Company are disqualified from being appointed as Directors as specified under Section 164 of the Companies Act, 2013. Details of all the Directors have been covered in Corporate Governance Report which forms part of the Annual Report.

Declaration by Independent Directors

The Company has received declaration from all Independent Directors that they meet the criteria of independence as laid down in Section 149(6) of the Companies Act, 2013 and regulation 27(2) of the Securities and Exchange Board of India (Listing Obligation & Disclosure Requirements) Regulations,

2015 (hereinafter referred as the "Listing Regulations"). The Company keeps a policy of transparency and arm''s length while dealing with its Independent Directors. There were no pecuniary transactions entered into with the Independent Directors apart from sitting fees. The Independent Directors have also confirmed that they have complied with the Company''s code of conduct.

Key Managerial Personnel (KMP)

During the year under review, the Company has designated following personnel as KMPs as per the definition under Section 2(51) and Section 203 of the Act:

- Mr. Udayant Malhoutra, CEO & Managing Director

- Mr. Hanuman Kumar Sharma, Group CFO & Executive Director

- Mr. P S Ramesh, Executive Director & COO - Aerospace, India

- Mr. Naveen Chandra P., Head Legal, Compliance and Company Secretary

board meetings

The Company prepares a Board and allied committee meeting calendar and circulates to all the directors in advance for their concurrence. During FY2017, four meetings of the Board of Directors were held.

Details of the composition of the Board and its Committees and of the Meetings held, attendance of the Directors at such Meetings and other relevant details are provided in the Corporate Governance Report. These Board meetings were held during the FY2017 and not more than one hundred and twenty days had intervened between two consecutive meetings of the Board.

COMMITTEES OF BOARD OF DIRECTORS

The Board has seven committees viz; the Audit and Risk Management Committee, Nomination and Remuneration Committee, Stakeholders'' Relationship Committee,

Technology & Strategy Development Committee, Finance Committee, Corporate Social Responsibility Committee and 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 all the recommendations made by all the Committees of Board of Directors during the year under review.

familiarization programme for the independent DIRECTORS

An appropriate induction for new directors and ongoing training for all directors ensure high corporate governance in the Company. Dynamatic conducts induction programme for every new independent director to provide them an opportunity to build an understanding about Dynamatic, its businesses and the markets and regulatory environment in which it operates; familiarize with its management and its operations so as to gain a clear understanding of their roles and responsibilities and contribute significantly towards the growth of the Company. They have full opportunity to interact with Senior Management Personnel and are provided all the documents required and sought by them for enabling them to have a good understanding of the Company, its various operations and the industry in which it operates. Dynamatic Technologies firmly believes that a Board, which is well informed /familiarized with the Company, can contribute significantly to effectively discharge its role of trusteeship in a manner that fulfils stakeholders'' expectations.

During the year under review, the Company had carried out familiarization programme for Independent Directors by organizing workshop at Auto unit, Eisenwerk Erla GmbH, Germany; Aerospace unit, Dynamatic Limited, Bristol, UK and Hydraulics unit, Dynamatic Limited, Swindon, UK.

In pursuit of this, the Directors are updated on a continuing basis on developments in the corporate and industry scenario including those pertaining to regulatory and economic environment, to enable them to take well informed and timely decisions. The details of the familiarization programme may be accessed on the Company''s corporate website (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 as Annexure 2 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 2 which forms part of this report.

Diversity IN THE BOARD

The Company recognizes and embraces the importance of a diverse board in its success. We believe that a truly diverse board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, ethnicity, race and gender, which will help us retain our competitive advantage. The Board has adopted a 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.

PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

The Companies Act, 2013 states that a formal annual evaluation needs to be performed by the Board of its own performance, various committees of the Board and that of the individual directors. Schedule IV of the Companies Act, 2013, states that the performance evaluation of independent directors shall be done by the entire Board, excluding the director being evaluated.

The evaluation of all the directors and the Board as a whole was carried out based on the criteria and framework adopted by the Board as explained in the Corporate Governance Report. The Board of Directors expressed their satisfaction with the evaluation process.

REMUNERATION POLICY

The philosophy for remuneration of directors, KMP and all other employees of the Company is based on the commitment of fostering a culture of leadership with trust. Furthermore, the Company believes in providing an opportunity that has a strong linkage to and reinforces the performance culture of the Company. The remuneration policy is aligned to this philosophy. The Company has laid down remuneration policy which is designed to attract, motivate, retain manpower and improve productivity by creating a congenial work environment, encouraging initiative, personal growth and teamwork besides offering appropriate remuneration package. Pursuant to the applicable provisions of the Companies Act, 2013 and the Listing Regulations, the Board, in consultation with its Nomination & Remuneration Committee, has formulated a framework containing, inter-alia, the criteria for performance evaluation of the entire Board of the Company and Individual Directors, including Independent Directors. The said policy has been enclosed as Annexure 3.

Members can download the complete remuneration policy on the Company''s website (www.dynamatics.com/investor. html).

CORPORATE SOCIAL RESPONSIBILTY (CSR)

Dynamatic Technologies understands the significance of growing its business in a socially responsible way. The Company believes that CSR is not an obligation but an intrinsic part of the overall corporate values. The objective of the Company is to grow its business, whilst reducing the environmental impact of its operations and increasing its positive social impact. Growing responsibly is crucial for creating long-term sustainable stakeholder value. In pursuit of this objective, a Corporate Social Responsibility (CSR) Committee has been formed by the Company which oversees and facilitates deliberation on the social and environmental consequences of each of the decisions made by the Board. The Committee also takes into account the interests of all shareholders, customers, employees, suppliers, business partners, local communities and other organizations in the Board''s decision making. The Company has formulated the CSR Policy under the guidance of Ernst & Young taking into consideration the requirements of the stakeholders of the Company. The said policy has been approved by the Board and is available on the website of the Company (www. dynamatics.com/investor.html)

Pursuant to the provisions of section 135, 198 & other applicable provisions of the Companies Act read with applicable rules, although CSR initiatives are not mandatory for the Company for the time being in force, it has voluntarily undertaken various initiatives during the year which are summarized below:

- Skill Development: The Company conducted skill development training for both instructors and students at Industrial Training Institute (ITI), Devanahalli, Bangalore. This was conducted with the objective to bridge the gap between industry and academic institute.

- Courses on Aerospace Engineering: Finalized the contractors for constructing a building that would be used as dedicated facility to impart courses on aerospace engineering.

- Plantation: With the objective to increase greenery and conserve the environment, Dynamatic seeded Rose plants in the ITI campus. Various fruit plants were also planted and their maintenance is also undertaken by the Company.

- Drinking Water: A bore well was dug for the supply of drinking water in the ITI campus and water purifiers were also installed.

RISK MANAGEMENT POLICY

The Company believes that managing risks goes hand-in-hand with maximizing returns. To this effect, there is a robust process in place to identify key risks across the Group and priorities relevant action plans to mitigate these risks. The Audit & Risk Management Committee has been entrusted with the responsibility to assist the Board members about the risk assessment and its minimization procedures, which includes discussing the management submissions on risks, prioritizing key risks and approving action plans to mitigate such risks. The Policy suggests framing an appropriate response action for the key risks identified, so as to make sure that risks are adequately compensated or mitigated.

The main objectives of the said policy are:

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 said policy has been uploaded on Company''s website

(www.dynamatics.com/investor.html)

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 behavior, malpractices, wrongful conduct, fraud, 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 & Risk Management 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 & Risk Management Committee from time to time. The policy on vigil mechanism may be accessed on the Company''s website (https://www. dynamatics.com/investor.html)

POLICY FOR SAFETY AND WELL BEING OF WOMEN

Dynamatic Technologies has zero tolerance for sexual harassment at 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 there under for prevention and redressal of complaints of sexual harassment at workplace. There have been no complaints of sexual harassment received during the year.

AUDITORS

Statutory Auditors

M/s. B S R & Co. LLP, Chartered Accountants are the Statutory Auditors of the Company for a period of five years with effect from 14th August 2014. M/s. B S R & Co., LLP have confirmed to the Company that they are not disqualified under section 141 of the Companies Act, 2013, or any other applicable provisions for the time being in force and are eligible for being appointed as statutory auditors of the Company. M/s. B S R & Co., LLP have also confirmed to the Company that, their appointment, if made, would be within the limits prescribed under the Companies Act, 2013.

The report of the Statutory Auditors along with notes to Schedules is enclosed to this report. The observations made in the Auditors'' Report are self-explanatory and therefore do not call for any further comments. The Auditor''s Report does not contain any qualification, reservation or adverse remark.

Cost Auditors

As per Section 148 of the Act, the Company is required to have the audit of its cost records conducted by a Cost Accountant in practice. M/s Rao, Murthy & Associates were appointed as Cost Auditors of the Company for the FY2017 conduct cost audits pertaining to relevant products prescribed under the Companies (Cost Records and Audit) Rules, 2014 as amended from time to time.

Internal Auditors

The Internal Audit function is responsible for assisting the Audit & Risk Management Committee on an independent basis with a full status of the risk assessments and management. M/s. Ernst & Young, LLP were appointed as Internal Auditors of the Company for the FY2017.

Secretarial Auditor

The Company had appointed Mr. R Vijayakumar, Company Secretary in practice in Bangalore, to conduct its Secretarial Audit for the financial year ended 31st March, 2017. 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 4 to this report.

Tax Auditors

M/s BVS & Associates, Chartered Accountants, are the Tax Auditors of the Company. The Tax Auditor''s Report does not contain any qualification, reservation or adverse remark.

INTERNAL CONTROLS SYSTEMS AND THEIR ADEQUACY

According to Section 134(5)(e) of the Companies Act, 2013, the term Internal Financial Control (IFC) means the policies and procedures adopted by a company for ensuring the orderly and efficient conduct of its business, including adherence to the company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information.

The Company''s internal control systems are commensurate with the nature of its business and the size and complexity of its operations. The Company has a well-placed, proper and adequate internal financial control system ensures adherence to its philosophy of sustainable growth with proactive risk management. The Company''s internal financial control system also comprises due compliances with Company''s policies, standard operating procedures and audit and compliance by an in-house internal audit division, supplemented by internal audit checks from M/s. Ernst & Young, LLP, the Internal Auditors and various transaction auditors and cover all offices, factories and key business areas.

The Internal Auditors independently evaluate the adequacy of internal controls and concurrently audit the majority of the transactions in value terms. Independence of the audit and compliance is ensured by direct reporting to the Audit & Risk Management Committee of the Board. A CEO and CFO Certificate, forming part of the Corporate Governance Report, further confirms the existence and effectiveness of internal controls and reiterates their responsibilities to report deficiencies to the Audit & Risk Management Committee and rectify the same. During the year under review, no material or serious observation has been received from the Statutory Auditors and the Internal Auditors of the Company on the inefficiency or inadequacy of such controls.

OTHER DISCLOSURES

Events Subsequent to the Date of the Financial Statements

There were no material changes / commitments affecting the financial position of the Company or that may require disclosure, between 31st March, 2017 and the date of Board''s 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.

Demat Suspense Account unclaimed shares

As on 31st March, 2017 there are 110 members, holding 4,423 equity shares of ''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.

Extract of the Annual Return

Pursuant to the provisions of section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in form MGT 9 is enclosed as Annexure 5 to this Annual Report.

Listing with Stock Exchanges

The Company confirms that it has paid the Annual Listing Fees for the year FY2018 to the NSE and the BSE where the Company''s equity shares are listed.

Consolidated Financial Statements

The Directors have pleasure in attaching the Consolidated Financial Statements prepared by the Company in accordance with the relevant Accounting Standards issued by the Institute of Chartered Accountants of India, which form part of the Annual Report.

RELATED PARTY TRANSACTIONS

With reference to Section 134(3)(h) of the Companies Act, 2013, all contracts and arrangements with related parties under Section 188(1) of the Act, entered into by the Company during the financial year, were in the ordinary course of business and on an arm''s length basis.

As per the Listing Regulations, all related party transactions are placed before the Audit & Risk Management Committee for approval. Prior omnibus approval of the Audit & Risk Management Committee has been obtained for the transactions which are of foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval are presented to the Audit & Risk Management Committee by way of a statement giving details of all related party transactions. The Company has developed a Related Party Transactions Manual for the purpose of identification and monitoring of such transactions. Particulars of Contracts or Arrangements with Related parties referred to in Section 188(1) is disclosed in Form AOC- 2 as Annexure 6.

ENVIRONMENTAL PROTECTION MEASURES

In view of the corporate responsibility on environmental protection, the Company has adopted a number of measures to improve in the field of environment, safety and health. Measures like standard operating procedures, training programmes for all levels of employees regarding resource conservation, housekeeping, Green Belt development and onsite emergency plan have been taken. Sustainable living is a part of long-term business strategy and your Company continuously strives to reduce our environmental footprint, while enhancing the livelihood of people across our product value chain.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

The information relating to conservation of energy and technology absorption are appended hereunder:

Conservation of Energy

All our facilities in India and abroad are built with the environment in mind and the processes are designed for efficiency, energy conservation and to ensure that no waste is transmitted into the environment. The industrial complexes are highly energy efficient and completely non-polluting. This is being systematized and quantifiable by implementing ISO 14000.

Technology Absorption

Research & Development plays a vital role in developing and adopting new technologies to enhance our operational efficiencies. The Company owns the world''s best hydraulic technologies. The Company has added technology from Plessey through the acquisition of Dynamatic Limited, UK, in 2007.

The Aerospace & Hydraulics units in India & the UK; Automotive units in India and Germany work together in resolving engineering challenges leading to better synergies across the group.

Research & Development (R&D)

R&D and Innovation continues to be an integral part of the Company''s growth strategy, business profitability, sustainability and as a part of its contribution towards the building of the Nation. Dynamatic Science Lab, created by consolidating various research and technology functions, helps to enhanced value delivery by leveraging skills and competencies to create new business opportunities. The Company''s Research & Development is actively driven by a Board level committee constituted as the Technology & Strategy Development Committee.

The Technology & Strategy Development Committee of the Board provides direction to the Company''s R&D strategy and on key issues pertaining to R&D technology. The Committee regularly reviews and updates the skills and competencies required, the structure and the processes needed to ensure that the R&D initiatives of today result in products necessary for the sustained and long term growth of the Company.

Expenditure on Research & Development

(Rs, in lacs)

Particulars		31st March, 2017	31st March, 2016
A.	Capital	28	52
B.	Recurring	523	635
	Total	551	687

FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars of foreign exchange earnings and outgo are as follows:

(Rs, in lacs)

Particulars	31st March, 2017	31st March, 2016
a. Total Foreign Exchange Earned	24,460	16,608
b. Total Foreign Exchange Used	8,562	7,439
- Import of Raw materials, components, stores and spares	8,154	5,840
- Foreign Travel	41	85
- Interest	169	121
- Capital Expenditure	93	1336
- Others	105	57

MANAGEMENT''S DISCUSSION & ANALYSIS REPORT

Pursuant to regulations 34 of the Listing Regulations, Management''s Discussion & Analysis Report for the year is presented in a separate section forming part of the Annual Report.

CORPORATE GOvERNANCE

Corporate Governance is a set of principles, processes and systems which govern a company. The Company believes that an effective corporate governance practices provides a strong foundation for a successful enterprise. The key principles on which a sound Corporate Governance system is based are independence, transparency, accountability, responsibility, compliance, ethics, values and trust. Corporate Governance enables an organization to perform efficiently and ethically generate long term wealth and create value for all its stakeholders.

Dynamatic Technologies is committed to maintain the best standards of Corporate Governance and adopted many ethical and transparent governance practices even before they were mandated by law. The Company has always strived towards building trust with shareholders, employees, customers, suppliers and other stakeholders based on the principles of good corporate governance. Strong leadership and best-in-class corporate governance practices are considered one of the major strength of the Company.

A detailed report on Corporate Governance, pursuant to the requirements of Regulation 34 of the Listing Regulations, forms part of the Annual Report. The certificate from the Practicing Company Secretary confirming compliance of the Corporate Governance norms as stipulated in the Listing Regulations is also included in the Annual Report.

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.	Wavell Investments Private Limited
5.	Mrs. Barota Malhoutra
6.	Vita Private Limited
7.	Christine Hoden (India) Private Limited
8.	Primella Sanitary Products Private Limited
9.	Greenearth Biotechnologies Limited

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the section 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of knowledge and belief and according to the information and explanations obtained by them, hereby confirm that:

a. in the preparation of accounts for the financial year ended 31st March, 2017, the applicable Accounting Standards have been followed with proper explanation relating to material departures if any.

b. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 & Loss Account of the Company for the year under review.

c. the Directors have taken proper and sufficient care for the maintenance of adequate records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

d. the Directors have prepared the accounts for the financial year ended 31st March, 2017, on a ''going concern'' basis.

e. the Directors have laid down internal financial controls to be followed by the company and that the internal financial controls are adequate and are operating effectively.

f. the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and the systems are adequate and operating effectively.

g. Pursuant to the provisions of the Companies Act, 2013 (as amended from time to time), dividends which remained unclaimed for a period of seven years, have been transferred by the Company to the Investor Education and Protection Fund.

HUMAN RESOURCES

The Company believes that human resources are critical for the overall success of the organization and ensures to undertake best efforts for maintaining a cordial relationship with the employees. Dynamatic''s focus has always been to acquire, nurture and develop the best talent to prepare them for leadership roles within the organization. Various initiatives to improve the skills of its employees though training initiatives are ongoing exercise at the Company. Such initiatives are important to ensure job enrichment, engagement and accountability for performance, career progression, reward, recognition and welfare of the employees. Your Company has an excellent track record of cordial and harmonious industrial relations and over the years not a single man-day has been lost on account of labor unrest.

ACKNOWLEDGMENTS

Your Directors would like to wish their sincere appreciation to the investors, financial institutions and banks for their continued support during the year. Your Directors would like to thank the regulatory authorities and government authorities and agencies for their continued guidance and support. Your Directors also wish to place on record their deep sense of appreciation to employees and executives at all levels for their efforts and dedication. Their hard work and commitment has enabled the Company to be on the forefront of the industry. We also take this opportunity to thank all our customers without whom our success story would not have been possible.

For and on behalf of the board of Directors

Udayant Malhoutra Hanuman Kumar Sharma

CEO & Managing Director Group CFO & Executive Director

DIN : 00053714 DIN: 07012725

Place : bangalore

Date : 29 May 2017

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Mar 31, 2016

The Directors are pleased to present their 41st Annual Report together with the Audited Statement of Accounts of the Company for
the year ended 31st March, 2016.

1. FINANCIAL RESULTS

The Financial Results of the Company for the year ended 31st March, 2016, were as follows:

(Rs. in Lacs)

Standalone Consolidated

Particulars Year Ended Year Ended Year Ended Year Ended
31 March 2016 31 March 2015 31 March 2016 31 March 2015

Gross Sales 45,883 48,762 1,52,809 1,66,860

Net Sales 43,137 45,688 1,49,378 1,62,918

Profit (Before
Interest,
Depreciation
& Taxation)
(EBITDA) 7,430 6,736 14,108 15,143

Other Income 401 746 499 1,026

Interest &
Finance Charges 5,163 5,373 7,275 7,995

Depreciation 2,911 2,850 5,243 5,091

Net Profit
Before Taxation
and Exceptional
Items (243) (741) 2,089 3,083

Exceptional
Items - 3,719 - 1,909

Net Profit
Before Taxation
and after
Exceptional Items (243) 2,978 2,089 4,992

Provision for
Taxation:

- Current Tax (104) 1,451 1,212 2,781

- Deferred Tax
Charge (268) (578) (351) (654)

Net Profit
After Tax 129 2,105 1,228 2,865

Balance brought
forward from
previous year 5,840 3,735 8,554 5,689

Amount available
for
appropriation 5,969 5,840 9,782 8,554

Appropriations

Dividend on
Equity Shares -
Interim - - - -

Proposed Final
Dividend on
Equity Shares - - - -

Tax on Dividend - - - -

Transfer to
General Reserve - - - -

Balance carried
to Balance Sheet 5,969 5,840 9,782 8,554

Note: Previous years'' figures have been recast wherever necessary.

COMPANY PERFORMANCE

Net sales on a consolidated basis decreased by 8.3% to Rs. 149,378 lacs as against Rs. 162,918 lacs in FY2015. This was a clear
reflection of the prevailing difficult global macroeconomic scenario. Recovery of the global auto industry remained fragmented
which had a bearing on our Automotive segment performance. Erratic monsoon over the past couple of years and drought like
situation in many parts of the country continued to impact the Indian agriculture industry resulting in weak farmer sentiment for
most of the year. Although there were early signs of recovery in the hydraulics industry environment during the last quarter of
the fiscal year 2016 both in the UK and India. In the Aerospace segment, the Company has made investments over the last two years
in building capacities for the execution of orders for Airbus, Boeing and Bell. During Q4 FY2016, commercial deliverables for the
projects to Boeing Chinook CH-47F Helicopter started resulting in improved performance of the Aerospace segment. Revenue growth
during the year also included a negative impact of unfavorable foreign exchange fluctuation of Rs.5,847 lacs, in particular
EURO-INR.

EBITDA on a consolidated basis was Rs.14,108 lacs as against Rs.15,143 lacs in FY2015 representing a decline of (6.8)%. Of this
decline, Rs. 263 lacs was due to unfavourable foreign exchange fluctuation, in particular EURO-INR. Despite a decline in the
topline, EBITDA margins were sustained at 9.4%. Interest Expenses declined from Rs. 7,995 lacs in FY2015 to Rs.7,275 lacs in
FY2016. Net Profit Before Tax for the year on a consolidated basis was Rs.2,089 lacs as against Rs.4,992 lacs in FY2015. Profit
during the year FY2015 also included an exceptional item of Rs. 1,909 lacs on account of gain on sale of non-core assets. Net
Profit After Tax on a consolidated basis is Rs. 1,228 lacs as against Rs. 2,865 lacs in FY2015.

The Aerospace & Defence segment grew from Rs.26,020 lacs in FY2015 to Rs. 26,981 lacs FY2016 on account of ramp up of the order
book and commercial deliveries of project to Boeing Chinook CH-47. Profit (Before Interest & Tax) increased from Rs. 5,403 lacs
to Rs.6,555 lacs. This includes the turnover from the Aerospace division of Dynamatic Limited, UK, a subsidiary of your Company,
to the extent of Rs. 12,233 lacs and Profit (Before Interest & Tax) of Rs. 1,297 lacs.

The Hydraulics and Precision Engineering segment declined to Rs.26,132 lacs from Rs.29,218 lacs in 2015 due to the poor
agriculture industry environment. Profit (Before Interest & Tax) decreased from Rs.2,806 lacs to Rs.2,338 lacs. This includes the
turnover from the Hydraulics division of Dynamatic Limited, UK, a subsidiary of your Company, to the extent of Rs.9,591 lacs and
Profit (Before Interest & Tax) of Rs.102 lacs.

The Automotive and Metallurgy business declined from Rs. 1,07,498 lacs to Rs. 96,052 lacs while Profit (Before Interest & Tax)
decreased to Rs.900 lacs from Rs.2,336 lacs. This includes the turnover from Eisenwerk Erla GmbH, a subsidiary of your Company to
the extent of Rs.83,146 lacs and Profit (Before Interest & Tax) of Rs. 3,627 lacs. Exports from India have gone down by 2% with
sales of Rs.15,310 lacs against the previous year''s Rs. 15,655 lacs.

SHARE CAPITAL

During the year under review, there was no change in the Company''s issued, subscribed and paid-up equity share capital. On 31st
March, 2016, it stood at Rs.634.14 lacs divided into 63,41,443 equity shares of Rs. 10/- each.

TRANSFER TO RESERVES

During the year under review, your Directors do not propose to transfer any amount to General Reserve. The Company has hedged a
part of its future foreign currency receivables to mitigate its foreign exchange fluctuation risks. The same has been designated
as a cash flow hedge with effect from April 1, 2008, applying the hedging criteria. The movement in the Mark To Market (MTM),
subsequent to the designation as a cash flow hedge, amounting to Rs.92 lacs (Consolidated) has been accounted under the Hedge
Reserve Account.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

The Company has duly complied with the provision of Section 186 of the Companies Act, 2013 during the year under review. The
details of loans, guarantees and investments covered under section 186 of the Companies Act, 2013 form part of the notes to the
financial statements provided in the Annual Report.

DIVIDEND

During the year under review, your Directors have decided to plough back profits into business to support new project plans. The
Board do not propose to declare any dividends.

CAPITAL EXPENDITURE

During the year under review, your Company incurred capital expenditure of Rs.3,229 lacs for physical infrastructure and Rs.33
lacs for the procurement of intangible assets. Significant investments have been made over the past two years in building
infrastructure, state-of-the-art machinery, design software, data security, information systems, and design and development
activities, for the future growth of your Company.

DEPOSITS

The Company has not accepted any deposit during the year under review. There were no deposits remaining unpaid/ unclaimed as at
the end of the financial year 2016 as such, no amount of principal of interest was outstanding, as on the balance sheet closure
date.

SUBSIDIARIES

The Company has eight subsidiaries. Pursuant to section 129(3) of the Companies Act, 2013 and Accounting Standard- 21 issued by
the Institute of Chartered Accountants of India, Consolidated Financial Statements presented by the Company include the Financial
Statements of its Subsidiaries.

Consolidated Financial Statements forms part of this Annual Report. Statement containing the salient feature of the financial
statement of the Company''s subsidiaries, associate(s) and joint venture(s) is enclosed as Annexure 1 in form AOC-1 to this Annual
Report.

In terms of provisions of Section 136 of the Companies Act, 2013, the Company shall place separate audited accounts of the
Subsidiary Companies on its website at www.dynamatics. com

The structure of Dynamatic Technologies Limited and its subsidiaries as on 31st March 2016 is appended hereunder:

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.

JKM Erla Automotive Limited, India (JEAL) continues to be a wholly owned subsidiary of the Company,

JKM Ferrotech Limited, India (JFTL) is a subsidiary of the Company. JFTL is into the manufacturing of ferrous alloy and
castings, having its operations in Gummidipoondi, Tamil Nadu

OVERSEAS SUBSIDIARIES

JKM Global Pte. Limited, Singapore, is a wholly owned subsidiary of the Company. It continues to be a holding company for the
overseas businesses.

Dynamatic Limited, UK, (DLUK) is a subsidiary of your Company having aerospace and hydraulics units at Bristol and Swindon
respectively.

Yew Tree Investments Limited, Bristol, UK is a wholly owned subsidiary of Dynamatic Limited, UK.

JKM Erla Holdings GmbH, Germany (JKM Erla GmbH) is engaged in the business of setting up automotive components
processing/manufacturing units.

Eisenwerk Erla GmbH, Germany (Eisenwerk) is a subsidiary of the Company. Eisenwerk has been in business for over 630 years and is
a preferred supplier to leading global OEMs.

DIRECTORS AND KEY MANAGERIAL PERSONNEL Inductions, Re-appointments, Retirements & Resignations

During the year under review, the Board of Directors at their meeting held on 28th May, 2015 appointed Mr. Rajendra Babu Subodh
as Additional Director and designated as Executive Director of the Company. The said appointment of Mr. Rajendra Babu Subodh has
also been considered and approved by the Shareholders by passing requisite resolutions in the Annual General Meeting (AGM) held
on 14th August, 2015. Mr. Rajendra Babu Subodh stepped down as Executive Director of the Company from the closing hours of 15th
March, 2016. Mr. Ramesh Venkataraman, an Independent Director, stepped down from the directorship effective 5th May, 2016.

Mr. Dietmar Hahn, Non-Executive Director of the Company would retire by rotation in accordance with section 152 of the Companies
Act, 2013 and being eligible, offers himself for re- appointment.

None of the Directors of the Company are disqualified from being appointed as Directors as specified under Section 164 of the
Companies Act, 2013. Details of all the Directors have been covered in Corporate Governance Report which forms part of the Annual
Report.

Declaration by Independent Directors

The Company has received declaration from all Independent Directors that they meet the criteria of independence as laid down in
Section 149(6) of the Companies Act, 2013 and regulation 25 of the Securities and Exchange Board of India (Listing Obligation &
Disclosure Requirements), Regulations 2015 (hereinafter referred as the "Listing Regulations"). The Company keeps a policy of
transparency and arm''s length while dealing with its Independent Directors. There were no pecuniary transactions entered into
with the Independent Directors apart from sitting fees.

Key Managerial Personnel (KMP)

The Company has designated following personnel as KMPs as per the definition under Section 2(51) and Section 203 of the Companies
Act 2013:

- Mr. Udayant Malhoutra, CEO & Managing Director

- Mr. Hanuman Kumar Sharma, CFO & Executive Director

- Mr. P S Ramesh, Executive Director & COO, Dynamatic Oldland Aerospace™, India

- Mr. Rajendra Babu Subodh*, Executive Director & COO, Dynamatic Oldland Aerospace™, India

- Mr. Naveen Chandra, Head Legal, Compliance and Company Secretary

- Resigned from the closing hours of 15th March, 2016

BOARD MEETINGS

The Company prepares a Board and allied committee meeting calendar which is circulated to all the directors in advance for their
concurrence. During FY2016, four meetings of the Board of Directors were held.

Details of the composition of the Board and its Committees and of the Meetings held, attendance of the Directors at such Meetings
and other relevant details are provided in the Corporate Governance Report. These Board meetings were held during the FY2016 and
not more than one hundred and twenty days has intervened between two consecutive meetings of the Board.

COMMITTEES OF BOARD OF DIRECTORS

Details of all the Committees of Board of Directors has been disclosed in the Corporate Governance Report. The Board has accepted
all the recommendations made by all the Committees of Board of Directors during the year under review,

FAMILIARIZATION PROGRAMME FOR THE INDEPENDENT DIRECTORS

The Company conducts induction programme for every new independent director to provide them an opportunity to familiarize with
the Company, its management and its operations so as to gain a clear understanding of their roles and responsibilities and
contribute significantly towards the growth of the Company. They have full opportunity to interact with Senior Management
Personnel and are provided all the documents required and sought by them for enabling them to have a good understanding of the
Company, its various operations and the industry in which it operates. Dynamatic Technologies firmly believes that a Board, which
is well informed /familiarised with the Company, can contribute significantly to effectively discharge its role of trusteeship in
a manner that fulfils stakeholders'' expectations.

In pursuit of this, the Directors are updated on a continuing basis on developments in the corporate and industry scenario
including those pertaining to regulatory and economic environment, to enable them to take well informed and timely decisions. The
details of the familiarisation programme may be accessed on the Company''s website (www.dynamatics. com).

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 as Annexure 2 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 also attached as Annexure 2 which
forms part of this report.

DIVERSITY OF THE BOARD

The Company recognizes and embraces the importance of a diverse board in its success. We believe that a truly diverse board will
leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical
background, age, ethnicity, race and gender, which will help us retain our competitive advantage. The Board has adapted a 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 directors, independent directors and woman director.

PERFORMANCE EVALUATION OF THE BOARD, ITS COMMITTEES AND INDIVIDUAL DIRECTORS

The Companies Act, 2013 states that a formal annual evaluation needs to be performed by the Board of its own performance and that
of the individual directors. Schedule IV of the Companies Act, 2013, states that the performance evaluation of independent
directors shall be done by the entire Board, excluding the director being evaluated.

The evaluation of all the directors and the Board as a whole was carried out based on the criteria and framework adopted by the
Board as explained in the Corporate Governance Report. The Board of Directors expressed their satisfaction with the evaluation
process.

REMUNERATION POLICY

The philosophy for remuneration of directors, KMP and all other employees of the Company is based on the commitment of fostering
a culture of leadership with trust. The remuneration policy is aligned to this philosophy. The Company has laid down remuneration
policy which is designed to attract, motivate, retain manpower and improve productivity by creating a congenial work environment,
encouraging initiative, personal growth and teamwork besides offering appropriate remuneration package. Pursuant to the
applicable provisions of the Companies Act, 2013 and the Listing Regulations, the Board, in consultation with its Nomination &
Remuneration Committee, has formulated a framework containing, inter-alia, the criteria for performance evaluation of the entire
Board of the Company and Individual Directors, including Independent Directors. The said policy has been enclosed as Annexure 3.

Members can download the complete remuneration policy on the Company''s website (www.dynamatics.com).

CORPORATE SOCIAL RESPONSIBILTY

At Dynamatic Technologies, Corporate Social Responsibility is an intrinsic part of the overall corporate growth objectives.
Growing responsibly is crucial for creating long-term sustainable stakeholder value. In pursuit of this objective, a Corporate
Social Responsibility (CSR) Committee has been formed by the Company which oversees and facilitates deliberation on the social
and environmental consequences of each of the decisions made by the Board. The Committee also takes into account the interests of
all shareholders, customers, employees, suppliers, business partners, local communities and other organisations in the Board''s
decision making. The Company''s CSR Policy has been approved by the Board and is available on the website of the Company (www.
dynamatics.com).

Pursuant to the provisions of section 135, 198 & other applicable provisions of the Companies Act read with applicable rules,
although CSR initiatives are not mandatory for the Company for the time being in force, it has voluntarily conducted skill
development training for the Industrial Training Institute (ITI), Devanahalli, Bengaluru. The said training program was arranged
for 10 days and included the topics from both non-core areas like building soft skills & work ethics and core areas like
engineering drawing, hand tools/cutting tools, drilling, fastening, riveting, sealant/adhesive application and bonding.

The Company supports Shirish Saraf Scholarship for meritorious students between 13 to 16 years'' age to study at the Charterhouse
School, England.

In an initiative to fight the menace of ''Dengue'', the Company has donated ''Fumigation Machine'' to Government High School, Pottery
Town, Bangalore.

RISK MANAGEMENT POLICY

The Company believes that managing risks goes hand-in- hand with maximising returns. To this effect, there is a robust process in
place to identify key risks across the Group and prioritise relevant action plans to mitigate these risks. The Audit & Risk
Management Committee has been entrusted with the responsibility to assist the Board members about the risk assessment and its
minimization procedures, which includes discussing the management submissions on risks, prioritising key risks and approving
action plans to mitigate such risks.

The objective of this Policy is to have a well-defined approach to risk. The Policy suggests framing an appropriate response
action for the key risks identified, so as to make sure that risks are adequately compensated or mitigated.

The main objectives of the said policy are:

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

WHISTLE BLOWER POLICY AND VIGIL MECHANISM

The Company has adopted a Whistle Blower Policy and Vigil Mechanism through which all stakeholders including Directors and
employees may report unethical behavior, malpractices, wrongful conduct, fraud, 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 & Risk Management
Committee. The said policy has been uploaded on the Company''s website (www.dynamatics.com)

POLICY FOR SAFETY AND WELL BEING OF WOMEN

Dynamatic Technologies has zero tolerance for sexual harassment at 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 for prevention and redressal of complaints of sexual
harassment at workplace. There have been no complaints of sexual harassment received during the year.

AUDITORS

Statutory Auditors

M/s. B S R & Co. LLP, Chartered Accountants are the Statutory Auditors of the Company for a period of five years with effect from
14 th August, 2014. M/s. B S R & Co., LLP have confirmed to the Company that they are not disqualified under section 141 of the
Companies Act, 2013, or any other applicable provisions for the time being in force and are eligible for being appointed as
statutory auditors of the Company. M/s. B S R & Co., LLP have also confirmed to the Company that, their appointment, if
ratified, would be within the limits prescribed under the Companies Act, 2013.

The report of the Statutory Auditors alongwith notes to Schedules is enclosed to this report. The observations made in the
Auditors'' Report are self-explanatory and therefore do not call for any further comments. The Auditor''s Report does not contain
any qualification, reservation or adverse remark.

Cost Auditors

M/s Rao, Murthy & Associates were appointed as Cost Auditors of the Company for the Financial Year 2015-16.

Internal Auditors

The Internal Audit function is responsible for assisting the Audit & Risk Management Committee on an independent basis with a
full status of the risk assessments and management. M/s. Ernst & Young, LLP were appointed as Internal Auditors of the Company
for the FY2016.

Secretarial Auditor

The Company had appointed Mr. R Vijayakumar, Company Secretary in practice in Bangalore, to conduct its Secretarial Audit for the
financial year ended 31st March, 2016. 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 4 to this report.

Tax Auditors

M/s BVS & Associates, Chartered Accountants, are the Tax Auditors of the Company. The Tax Auditor''s Report does not contain any
qualification, reservation or adverse remark.

INTERNAL CONTROLS SYSTEMS AND THEIR ADEQUACY

According to Section 134(5)(e) of the Companies Act, 2013, the term Internal Financial Control (IFC) means the policies and
procedures adopted by a company for ensuring the orderly and efficient conduct of its business, including adherence to the
company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and
completeness of the accounting records, and the timely preparation of reliable financial information.

The Company has a well-placed, proper and adequate internal financial control system which ensures that all assets are
safeguarded and protected and that the transactions are authorised, recorded and reported correctly. The Company''s internal
financial control system also comprises due compliances with Company''s policies, standard operating procedures and audit and
compliance by an in-house internal audit division, supplemented by internal audit checks from M/s. Ernst & Young, LLP, the
Internal Auditors and various transaction auditors.

The Internal Auditors independently evaluate the adequacy of internal controls and concurrently audit the majority of the
transactions in value terms. Independence of the audit and compliance is ensured by direct reporting to the Audit & Risk
Management Committee of the Board. A CEO and CFO Certificate, forming part of the Corporate Governance Report, further confirms
the existence and effectiveness of internal controls and reiterates their responsibilities to report deficiencies to the Audit &
Risk Management Committee and rectify the same. During the year, such controls were tested and no reportable material weaknesses
in the design or operation were observed.

OTHER DISCLOSURES

Events Subsequent to the Date of the Financial Statements

There were no material changes / commitments affecting the financial position of the Company or that may require disclosure,
between 31st March, 2016 and the date of Board''s 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.

Extract of the Annual Return

Pursuant to the provisions of section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and
Administration) Rules, 2014, an extract of annual return in form MGT 9 is enclosed as Annexure 5 to this Annual Report.

Listing with Stock Exchanges

The Company confirms that it has paid the Annual Listing Fees for the year FY2017 to the NSE and the BSE where the Company''s
equity shares are listed.

Consolidated Financial Statements

The Directors have pleasure in attaching the Consolidated Financial Statements prepared by the Company in accordance with the
relevant Accounting Standards issued by the Institute of Chartered Accountants of India, which form part of the Annual Report.

RELATED PARTY TRANSACTIONS

With reference to Section 134(3)(h) of the Companies Act, 2013, all contracts and arrangements with related parties under Section
188(1) of the Act, entered into by the Company during the financial year, were in the ordinary course of business and on an arm''s
length basis.

As per the Listing Regulations, all related party transactions are placed before the Audit & Risk Management Committee for
approval. Prior omnibus approval of the Audit & Risk Management Committee has been obtained for the transactions which are of
foreseen and repetitive nature. The transactions entered into pursuant to the omnibus approval are presented to the Audit & Risk
Management Committee by way of a statement giving details of all related party transactions. The Company has developed a Related
Party Transactions Manual for the purpose of identification and monitoring of such transactions. Particulars of Contracts or
Arrangements with Related parties referred to in Section 188(1) is disclosed in Form AOC- 2 as Annexure 6.

ENVIRONMENTAL PROTECTION MEASURES

In view of the corporate responsibility on environmental protection, the Company has adopted a number of measures to improve in
the field of environment, safety and health. Measures like standard operating procedures, training programmes for all levels of
employees regarding resource conservation, housekeeping, Green Belt development and onsite emergency plan have been taken.
Sustainable living is a part of long-term business strategy and your Company continuously strives to reduce our environmental
footprint, while enhancing the livelihood of people across our product value chain.

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS & OUTGO

The information relating to conservation of energy and technology absorption are appended hereunder:

Conservation of Energy

All our facilities in India and abroad are built with the environment in mind and the processes are designed for efficiency,
energy conservation and to ensure that no waste is transmitted into the environment. The industrial complexes are highly energy
efficient and completely non-polluting. This is being systematized and quantifiable by implementing ISO 14000.

Technology Absorption

Research & Development plays a vital role in developing and adopting new technologies to enhance our operational efficiencies.
The Company owns the world''s best hydraulic technologies such as Plessey and Dowty Technologies, both of which are from England.
The Company acquired the Dowty technology during its collaboration with Dowty in 1973 and it obtained the Plessey technology
through the acquisition of Dynamatic Limited, UK, in 2007.

The Aerospace and Hydraulics units in India and the UK; Automotive units in India and Germany work together in resolving
engineering challenges leading to better synergies across the group.

Research & Development (R&D)

R&D and Innovation continues to be an integral part of the Company''s growth strategy, business profitability, sustainability and
as a part of its contribution towards the building of the Nation. Dynamatic Science Lab, created by consolidating various
research and technology functions, helps to enhanced value delivery by leveraging skills and competencies to create new business
opportunities. The Company''s Research & Development is actively driven by a Board level committee constituted as the Technology
Development Committee.

The Technology Development Committee of the Board provides direction to the Company''s R&D strategy and on key issues pertaining
to R&D technology. The Committee regularly reviews and updates the skills and competencies required, the structure and the
processes needed to ensure that the R&D initiatives of today result in products necessary for the sustained and long term growth
of the Company.

Expenditure on Research & Development

(Rs. in lacs)

Particulars 31st March, 2016 31st March, 2015

A. Capital 52 92

B. Recurring 635 448

687 540

FOREIGN EXCHANGE EARNINGS AND OUTGO

Particulars of foreign exchange earnings and outgo are as follows:

(Rs. in lacs)

31st 31st
March, March,
2016 2015

a. Total Foreign Exchange Earned 16,608 16,932

b. Total Foreign Exchange Used 7,439 3,759

- Import of Raw materials,
components, stores and 5,840 3,048
spares

- Foreign Travel 85 40

- Interest 121 30

- Capital Expenditure 1,336 611

- Others 57 30

MANAGEMENT''S DISCUSSION & ANALYSIS REPORT

Pursuant to regulation 34 of the Listing Regulations, Management''s Discussion & Analysis Report for the year is presented in a
separate section forming part of the Annual Report.

CORPORATE GOVERNANCE

Corporate Governance is a set of principles, processes and systems which govern a company. The key principles on which a sound
Corporate Governance system is based are independence, transparency, accountability, responsibility, compliance, ethics, values
and trust. Corporate Governance enables an organization to perform efficiently and ethically generate long term wealth and
create value for all its stakeholders.

Dynamatic Technologies is committed to maintain the best standards of Corporate Governance and adopted many ethical and
transparent governance practices even before they were mandated by law. The Company has always strived towards building trust
with shareholders, employees, customers, suppliers and other stakeholders based on the principles of good corporate governance.

A separate section on Corporate Governance forming part of the Directors'' Report and the certificate from the Practicing Company
Secretary confirming compliance of the Corporate Governance norms as stipulated in the Listing Regulations is included in the
Annual Report.

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 Holding Private Limited

2. Udayant Malhoutra and Company Private Limited

3. JKM Offshore India Private Limited

4. Wavell Investments Private Limited

5. Mrs. Barota Malhoutra

6. Vita Private Limited

7. Christine Hoden (India) Private Limited

8. Primella Sanitary Products Private Limited

9. Greenearth Biotechnologies Limited

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the section 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of knowledge and belief and
according to the information and explanations obtained by them, hereby confirm that:

a. in the preparation of accounts for the financial year ended 31st March, 2016, the applicable Accounting Standards have been
followed with proper explanation relating to material departures if any.

b. the Directors have selected such accounting policies and applied them consistently and made judgments and estimates that were
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 & Loss Account of the Company for the year under review,

c. the Directors have taken proper and sufficient care for the maintenance of adequate records in accordance with the provisions
of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other
irregularities.

d. the Directors have prepared the accounts for the financial year ended 31st March, 2016, on a ''going concern'' basis.

e. the Directors have laid down internal financial controls to be followed by the company and that the internal financial
controls are adequate and are operating effectively.

f. the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and the systems are
adequate and operating effectively,

g. Pursuant to the provisions of the Companies Act, 2013 (as amended from time to time), dividends which remained unclaimed for
a period of seven years, have been transferred by the Company to the Investor Education and Protection Fund.

ACKNOWLEDGMENTS

Your Directors would like to wish their sincere appreciation to the Investors, Financial Institutions and Banks for their
continued support during the year. Your Directors would like to thank the Regulatory Authorities and Government authorities and
agencies for their continued guidance and support. Your Directors also wish to place on record their deep sense of appreciation
to employees and executives at all levels for their efforts and dedication. Their hard work and commitment has enabled the
Company to be on the forefront of the industry. We also take this opportunity to thank all our customers without whom our success
story would not have been possible,

For and on behalf of the Board of Directors

Udayant Malhoutra Hanuman Kumar Sharma

CEO & Managing Director CFO & Executive Director

DIN :00053714 DIN:07012725

Place : Bangalore

Date : 27th May, 2016

---

Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the Fortieth Annual Report together with the Audited Statement of Accounts for the year ended March 31,2015.

1. FINANCIAL RESULTS

The Financial Results of the Company for the year ended March 31,2015, were as follows:

(Rs. in Lacs)

Standalone Consolidated

Particulars Year Ended Year Ended Year Ended Year Ended 31 March 2015 31 March 2014 31 March 31 March 2015 2014 Gross Sales 48,727 47,194 166,825 163,859

Net Sales 45,653 42,892 162,883 158,754

Profit (Before Interest, Depreciation & Taxation) (EBITDA) 6,701 7,481 15,106 16,293

Other Income 781 290 1,062 353

Interest & Finance Charges 5,373 5,957 7,995 9,973

Depreciation 2,850 2,816 5,091 5,126

Net Profit Before Taxation and Exceptional Items (741) (1,002) 3,082 1,547

Exceptional Items 3,719 1,033 1,909 1,033

Net Profit Before Taxation and after Exceptional Items 2,978 31 4,992 2,580

Provision for Taxation:

- Current Tax 1,451 - 2,781 893

- Minimum Alternative Tax Charge - 23 - 23

- Minimum Alternate Tax Credit Entitlement - (23) - (23)

- Deferred Tax Charge (578) - (654) 310

- Wealth Tax - - - -

Net Profit After Tax 2,105 31 2,865 1,377

Balance brought forward from previous year 3,735 3,704 5,689 4,312

Amount available for appropriation 5,840 3,735 8,554 5,689

Appropriations

Dividend on Equity Shares

- Interim - - - -

Proposed Final Dividend on Equity Shares - - - -

Tax on Dividend - - - -

Transfer to General Reserve - - - -

Balance carried to Balance Sheet 5,840 3,735 8,554 5,689

Notes: Previous year figures have been recast wherever necessary.

DIVIDEND

During the year under review, your Directors do not propose to declare any dividends due to poor economic conditions and paucity of profits.

TRANSFER TO RESERVES

During the year under report, your Directors do not propose to transfer any amount to General Reserve. The Company has hedged a part of its future foreign currency receivables to mitigate its foreign exchange fluctuation risks. The same has been designated as a cash flow hedge with effect from April 1, 2008, applying the hedging criteria. The movement in the Mark To Market (MTM), subsequent to the designation as a cash flow hedge, amounting to Rs.417 lacs (Standalone), and Rs.631 lacs (Consolidated) has been accounted under Hedge Reserve Account.

CAPITAL EXPENDITURE

During the year under review, your Company incurred capital expenditure of Rs.4,395 lacs for physical infrastructure and Rs.176 lacs for procurement of intangible assets. Significant investments have been made in building infrastructure, state-of-the-art machinery, design software, data security, information systems, and design and development activities; for the future benefits of your Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

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

DEPOSITS

The Company has not accepted any deposits during the year under review. There were no deposits remaining unpaid/ unclaimed as at the end of the year 2015.

There has been no default in repayment of deposits or payment of interest there on during the year under review and there are no deposits which are not in compliance with the requirements of Chapter V of the Companies Act, 2013.

PROCEEDS FROM PUBLIC ISSUE, RIGHTS ISSUE, PREFERENTIAL ISSUE, ETC.,

Pursuant to a resolution passed in the Extraordinary General Meeting of shareholders dated 25 March 2013, amounts aggregating Rs.675 lacs and Rs.575 lacs (being 25% of the total value of warrants at the date of allotment) has been brought in by Mr. Udayant Malhoutra in his capacity as Promoter and by Wavell Investments Private Limited, being a Promoter group company, towards subscription of 338,440 and 288,300 convertible warrants of Rs.797.78 each respectively. These warrants give the right to the warrant holders to subscribe for one equity share of Rs.10 each in the Company per warrant which is exercisable within 18 (eighteen) months from the date of allotment i.e. 26 March 2013.

Out of these 288,300 and 338,440 convertible warrants, the Company after receiving balance 75% consideration issued 125,347 equity shares to Wavell Investments Private Limited during the year ended 31 March 2014 and 338,440 equity shares and 162,953 equity shares to Mr. Udayant Malhoutra and Wavell Investments Private Limited respectively during the year ended 31 March 2015.

The Board of Directors of the Company vide its meeting dated 8 September 2014 has delegated its power to the Finance Committee to act as deemed necessary in relation to the issue of equity shares by way of Qualified Institutional Placement (QIP) in accordance with Chapter VIII of Securities and Exchange Board of India ("Issue of Capital and Disclosure Requirements") Regulations, 2009, as amended and Section 42 of the Companies Act, 2013 read with Rule 14 of the Companies (Prospectus and Allotment of Securities) Rules, 2014 and other relevant provisions in connection with this QIP. The Finance Committee in its meeting dated 13 September 2014 has accorded its approval to create, issue, offer and allot equity shares subject to Shareholders' approval. The Company had obtained the Shareholders' approval by way of special resolution passed in Extraordinary General Meeting dated 11 October 2014. The Finance Committee on 17 October 2014 has approved the allotment of 300,000 equity shares pursuant to the QIP on the receipt of funds aggregating Rs.5,400 lacs. The said shares were allotted on 17 October 2014.

DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS

The Company has adequate internal financial controls during the year under review. This has been confirmed on a periodical basis by both the internal and statutory auditors of the Company.

DISCLOSURE ABOUT COST AUDIT

M/s Rao, Murthy & Associates were appointed as Cost Auditors of the Company for the Financial Year 2014-15. Form CRA-2 towards appointment of Cost Auditors was filed on March 31, 2015.

CONSOLIDATED FINANCIAL STATEMENTS

The Directors have pleasure in attaching the Consolidated Financial Statements prepared by the Company in accordance with the relevant Accounting Standards issued by the Institute of Chartered Accountants of India, which form part of the Annual Report.

REPORT ON SUBSIDIARY COMPANIES

Company has one or more subsidiaries, and Company in addition to its own Financial Statements, prepare Consolidated Financial Statements incorporating therein the Financial Statements of all of its subsidiaries in the same form and manner as that of its own, which shall be laid before the Shareholders at the Annual General Meeting of the Company.

Consolidated Financial Statements forms part of this Annual Report. Statement containing the salient feature of the financial statement of a company's subsidiary or subsidiaries, associate company or companies and joint venture or ventures is enclosed as ANNEXURE-1 in form AOC-1.

Copy of this Annual Report will be published on our website at www.dynamatics.com

EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS

There were no material changes / commitments affecting the financial position of the company between March 31, 2015 and the date of Board's Report.

2. BUSINESS

COMPANY PERFORMANCE

Total income on a consolidated basis is Rs.162,883 lacs as against Rs.158,754 lacs in 2013-14. EBITDA on a consolidated basis is Rs.15,106 lacs as against Rs.16,293 lacs in 2013-14. Net Profit Before Tax on a consolidated basis is Rs.4,992 lacs as against Rs.2,580 lacs in 2013-14. Net Profit After Tax on a consolidated basis is Rs.2,865 lacs as against Rs.1,377 lacs in 2013-14.

The Hydraulics and Precision Engineering business decreased to Rs.29,215 lacs from Rs.30,953 lacs in 2014. Profit (Before Interest & Tax) decreased from Rs.3,342 lacs to Rs.2,602 lacs. This includes the turnover from the Hydraulics division of Dynamatic Limited, UK, a subsidiary of your Company, to the extent of Rs.11,369 lacs and Profit (Before Interest & Tax) of Rs.261 lacs.

The Aerospace business grew from Rs.22,333 lacs to Rs.26,175 lacs and Profit (Before Interest & Tax) decreased from Rs.5,713 lacs to Rs.5,265 lacs. This includes the turnover from the Aerospace division of Dynamatic Limited, UK, a subsidiary of your Company, to the extent of Rs.14,591 lacs and Profit (Before Interest & Tax) of Rs.1,580 lacs.

The Automotive business increased from Rs.105,468 lacs to Rs.107,493 lacs while Profit (Before Interest & Tax) increased to Rs.2,149 lacs from Rs.2,112 lacs. This includes the turnover from Eisenwerk Erla GmbH, a subsidiary of your Company to the extent of Rs.91,685 lacs and Profit (Before Interest & Tax) of Rs.5,348 lacs. Exports from India have gone up by 44% with sales of Rs.15,655 lacs against the previous year's Rs.10,847 lacs.

SUBSIDIARIES

Your Company has eight subsidiaries, the brief particulars of which are given below:

The structure of Dynamatic Technologies Limited and its subsidiaries as on March 31, 2015 is as appended hereunder:

INDIAN, WHOLLY OWNED SUBSIDIARIES

JKM Research Farm Limited, India, (JKMRF) is a Wholly Owned subsidiary of the Company. It continues to be the Research & Development facilitator to the Company.

JKM Erla Automotive Limited, India (JKM Erla)

JKM Erla continues to be a wholly owned subsidiary of the Company.

JKM Ferrotech Limited, India (JFTL)

JFTL is into manufacturing of ferrous alloy and castings, having its operations in Gummidipoondi, Tamil Nadu. The facility has expertise in producing High Si-Mo automotive components and is certified to the highest quality standards specified by the Automotive Industry. The expertise in producing intricately shaped castings as well as the skill in handling ferrous alloys, particularly High Si-Mo and Ni-Resis makes JFTL a strong development partner for prototypes in Ferrous Alloy castings.

OVERSEAS, WHOLLY OWNED SUBSIDIARIES

JKM Global Pte. Limited, Singapore, is a wholly Owned subsidiary of your Company. It continues as an investment hub for overseas businesses.

Dynamatic Limited, Swindon, UK, (DLUK) is a wholly owned subsidiary of your Company held through JKM Global Pte. Limited, Singapore. The UK facilities have been restructured by way of merging Oldland Aerospace with Dynamatic Limited.

Yew Tree Investments Limited and Dynamatic Limited are the subsidiaries of JKM Global Pte Limited. Post restructure, DLUK has its Hydraulics unit in Swindon and its Aerospace unit, Dynamatic-Oldland Aerospace™ in Bristol.

The Hydraulics unit of DLUK located in Swindon, England, 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 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 Bristol & Swindon, and is a leader in Aeronautical Precision Engineering and is currently working on components for most of the Airbus family of aircraft.

Yew Tree Investments Limited, Bristol, UK is a wholly owned subsidiary of Dynamatic Limited, UK.

JKM Erla Holdings GmbH, Germany (JKM Erla GmbH) is engaged in the business of setting up automotive components processing/manufacturing units.

Eisenwerk Erla GmbH, Germany (Eisenwerk) became a subsidiary of the Company, subsequent to its holding company, JKM Erla GmbH, becoming a subsidiary of the Company. Eisenwerk has been in business for over 630 years and is a preferred supplier to leading global OEMs including Audi, BMW, Volkswagen, to name a few.

RESEARCH & DEVELOPMENT

The Company has emerged as one of India's leading Research & Development organisations, with numerous inventions and patents to its credit. The Company has defined an Intellectual Property (IP) strategy to build an effective portfolio for future monetisation, collaboration and risk mitigation, focusing on future technologies.

The Company owns the following Patents for various Products:

- From India

Five - (One from India, One Patent from the United States & three from the European Union).

- From England

Thirteen - (11 UK, 1 Italian and 1 US patent).In addition, the Company has 2 patents pending in multiple jurisdictions, awaiting registration.

The Company has 9 trademarks registered and 11 trademark applications pending, awaiting registration. Eisenwerk owns 1 trademark and 2 patents in Germany. The Company employs over 60 Scientists and 600 engineers and technicians with expertise in Mechanical Engineering, Advanced Computer Aided Engineering, Computer Aided Manufacture, Materials & Metallurgical Engineering, Fluid Dynamics, Defence& Aerospace Research. The state-of-the-art JKM Science Center brings together Design Engineering, Development, Prototyping, Metallurgical and Manufacturing Infrastructure enabling your Company to comprehensively address the needs of its global customers.

The Dynamatic Hydraulics™ Research Laboratory, (Refer page D-4) in Swindon, England, has advanced design knowledge focused on the Mobile Hydraulics Sector, excellent engineering capabilities and ownership of intellectual property.

This facility operates a comprehensive product testing and validation laboratory. This facility has completed testing and validation of new products for various customers like Cummins - Daventry, John Deere - USA, CNH, JCB, Terex, Mahindra& Mahindra and recently for Macdon and Manitou Gehl in the U.S. The Company has already successfully launched these new products in India and globally.

The Dynamatic-Oldland Aerospace™, in Bristol, England possesses people having specialised skill sets who are one of the few specialists in CNC Programming, globally. Improving process run times, reduction in cycle time, optimising machining strategies and high feed tooling have been achieved to optimise component by using new processes, use of latest cutting tools and fresh approach to the product.

The Dynamatic Hydraulics™ Research Laboratory, in Swindon, England, has advanced design knowledge focused on the Mobile Hydraulics Sector, excellent engineering capabilities and ownership of intellectual property.

This facility operates a comprehensive product testing and validation laboratory.

This facility has completed testing and validation of new products for various customers like Cummins - Daventry, John Deere - USA, CNH, JCB, Terex, Mahindra & Mahindra, etc. The Company has already successfully launched these new products in India and globally.

The Dynamatic-Oldland Aerospace™, in Bristol, England possesses people having specialised skill sets who are one of the few specialists in CNC Programming, globally. Improving process run times, reduction in cycle time, optimising machining strategies and high feed tooling have been achieved to optimise component by using new processes, use of latest cutting tools and fresh approach to the product.

The Company's Wholly Owned Subsidiary, JKM Research Farm Limited, operates a unique facility for testing and analysing complete aggregates and systems for mobile equipment.

QUALITY MANAGEMENT SYSTEM (QMS)

Dynamatic Hydraulics™

During the year, your Company has successfully completed re-certification audits to ISO: 9001 specifications for Quality Management System and also to ISO: 14001 specifications for its Environmental Management System. Your Company's QMS which is compliant to ISO standards since 1999, has evolved and matured and is highly system driven. This year, these two management systems are merged in to one called Integrated Management System (IMS) and was audited by UL India. The re-certification audit which was for 11 man days was successfully completed and your company has been awarded certification by UL India for the next 3 years.

Your Company has continued its efforts in addressing and complying with health and safety requirements. The activities are focused on health & safety of its employees on the shop floor. Awareness campaigns have been undertaken to enforce the use of Personnel Protective Equipment (PPE) at work. The medical check for all the employees has been completed with the guidance of company Medical Officer. At the same time, the Company has been successful in merging the EMS & OHSAS requirements into a common management system called Integrated Management System. This has avoided unnecessary duplication of work in monitoring and maintenance of records.

The Dynamatic Quality Management System (DQMS) addresses the quality requirements and management expectations set out by the global major players such as John Deere, Cummins, CNH, Mahindra & Mahindra etc. DQMS utilises some of the best tools such as 5S,

Business Process Re-engineering, Overall Equipment Effectiveness, Root cause analysis, Six Sigma, Statistical Process Control, Total Productive Maintenance, Visual Control, Learning-by-doing, Employee Participation Program (EPP) etc.

Lean Management concepts together with 5S tools are being used on the shop floor to increase the Overall Equipment Effectiveness (OEE) of the operations. This is achieved by reducing rejections, set ups, cycle time and through effective material management. The Employee Participation Program has resulted in the participation of employees in innovative activities and their contributions have resulted in continual improvements to work and work processes.

During this financial year, special attention is paid towards risk assessment and mitigation activities. Disaster recovery plan is revisited and meticulously followed.

SUPPLY CHAIN MANAGEMENT AND PRODUCTIVITY

To enhance its competitive edge, your company has taken up many measures to sustain the growth, more so to make it totally system driven. During this year focus was laid on making the purchase process stronger and reliable.

- Dual sources were developed for most of the critical parts. New aluminium GDC sources were developed.

- New source for aluminium extrusion was established. Alternate source for steel bar stock was introduced.

- The entire purchase group was restructured and empowered to purchase RM and child parts for the respective units.

- All purchase transactions are made through ERP to facilitate quick data retrieval.

- Work order concept is being introduced to ensure control over material purchase in time and absolute control over inventory.

- A finished goods despatch procedure is documented to ensure the accumulated cenvat utilisation.

These measures have helped us to have control over creditors and smooth cash flow during the challenging days.

The Company's supply chain program aims at upgrading the vendors so as to enable them meet the demanding requirements of Quality, Cost & Delivery. Vendor training & audits are being conducted at regular intervals.

The vendors have been advised to be cautious and cost effective to address the recession in the market. New suppliers have been identified to ensure dual source and most cost effective supplies.

NEW OPERATIONAL MODEL

The market scenario offers a tough competition and working towards target costing is imminent. To contain the operational costs, as a drive towards lean management, many measures have been initiated. Such a step will help us to institutionalise the good shop floor practices that have been evolved and tested successfully in the past.

Dependency on the agri-sector has its own disadvantages. Monsoon, govt. subsidies, etc., play a seasonal role and hence it is always better to widen our product range beyond agri-sector. Attempt to develop new products is contemplated so that series production can eventually happen in the coming years.

The Marketing strategy meet with key distributors has given insight on the market requirement and need for new products. Your company will take up new product development with all enthusiasm and vigor. During this Meet, an updated product catalogue was released. A special book let 'Pumps User's Guide' was released and distributed to all distributors as an educational tool.

All efforts are put to increase the total turnover and at the same time the operational margins. New OEMs have been added and new products are productionised and released to market. To contain the operational costs, man power cost is being monitored.

As a part of new operational requirement, new products are being developed through outsourcing rather than adding resources in house. This keeps the operations lean and flexible.

Dynamatic Limited, Hydraulics, UK, is accredited to ISO 9001:2008 standards and has through recently passing the latest quality audit renewed its certification from British Standards Institute (BSI) for a further three years through to 2018. Dynamatic Limited's lean initiatives, continuous improvement activities and employee engagement continue to be the focus of all employees. The UK facilities recently reached partner status in the John Deere Achieving Excellence results and has passed the latest BSI quality audit.

JKM AutomotiveTM and Dynametal® have gone through a very significant change in operation as a result of several strategic initiatives taken by the Company in the last two years.

There were multiple products manufactured and supplied by the Company to Hyundai and other customers which were having no synergy with the Dynamatic strategic vision of focusing on two foundries viz Aluminium and Ferrous Foundry and associated machining of components. All the products which does not fall into this category have been surrendered back to customer and we could make a smooth transition to the new suppliers without having a single minute line stoppage at customers. We could make one machine shop redundant in this process, cut down losses by running non-profitable products and could also monetise the redundant plant.

Currently JKM automotive is predominantly running turbo charger compressor housing, inlet Manifolds and Exhaust manifolds which constitute 80% of sales is fed by the Company's own foundries in Chennai.

Dynamatic-Oldland Aerospace™, India has the largest infrastructure in the Indian private sector for the manufacture of exacting Air Frame Structures and Precision Aerospace Components, having its manufacturing facilities in Bangalore and Nasik. This Division is one of the first to have NADCAP approval for Heat Treatment and Non-Destructive-Test Facilities in India and is well supported by its AS 9100 'C' - Annual certification by UL covering both the manufacturing facilities. The division successfully got NADCAP appointed for spot welding of Alum Titanium items. This Division is also a certified supplier for major OEMs like Airbus, Boeing & Bell Helicopters, for supply of aircraft components and assemblies.

Dynamatic-Oldland Aerospace™, UK a division of Dynamatic Limited, UK is a unique state- of-the-art aeronautical manufacturing facility in Bristol & Swindon UK, possessing complex 5 axis machining capabilities for the manufacture of Aerospace components and tooling. This Division is a certified supplier to Airbus UK, GKN Aerospace Europe & USA, Spirit AeroSystems, Boeing, Magellan Aerospace, GE Aviation Systems, Lockheed Martin & Augusta Westlands. We are supported by BSI ISO 9001:2000 and AS 9100 revc. Dynamatic-Oldland AerospaceTM has been accredited with Environmental Management System (EMS) certification ISO: 14001.

Powermetric® Design, has approval of Certification from the Center for Military Airworthiness & Certification (CEMILAC), has proposed its design capabilities to Indian as well as foreign aerospace organisations. The CEMILAC certification which is mandatory for defence& aerospace design will enable Powermetric® to undertake design, validation and development activities of aerospace parts/ products using various sophisticated computational tools newly and indigenously designed and developed foldable strut has been certified by CEMILAC for its air worthiness. Powermetric design team has executed the digital engineering program for BELL helicopter, using the legacy engineering data and delivering digitised 3-D model of parts on high end CAD platform.

Powermetric is also focusing on new research areas viz., Clean and Green Energy management and application.

Powermetric has also designed and developed special sheet metal stretch forming machines for aerospace industry for producing accurate and repeatable parts for fuselage skins of aircrafts. The curved profile of aircraft's sub-structure or frame can also be produced by these machines.

Dynamatic Homeland Security™ Designs and Develops cutting edge Security Solutions to enhance the Nation's capabilities in countering modern day Security Threats. Our strong Research and Development capabilities combined with the powerful partnerships we have forged with leading "global security technology" companies enable us to offer potential customers like National Defense Forces, Police, Para Military & Disaster Management Agencies, solutions for Intelligence, Surveillance and Reconnaissance (ISR) missions that will enhance their abilities to prepare and plan for emergencies as well as their response and recovery skills.

Tactical Un-Manned Aerial Vehicles

Dynamatic Technologies has teamed with AeroVironment, Inc., a world leader in Unmanned Aircraft Systems, to address the growing global demand for Unmanned Aerial Vehicles (UAVs). Over 30000 operational UAVs worldwide and millions of Combat hours of Operation make these platforms most reliable and mission capable tool for our Security Forces. Dynamatic has the license to produce largest quantities of UAVs in India in the Private Sector.

Dynamatic has indigenously developed a Vertical Take Off and Landing UAV "Patang" for ISR missions for Police and Para Military. With over 60 minutes of endurance, Patang provides the security forces the longest Mission Tme in this class of UAVs.

Mobile Command and Control Vehicles

Dynamatic's "Prahari "is custom designed vehicle based ISR platform for Surveillance in urban areas by the law enforcement agencies. Prahari's unique architecture facilitates the monitoring; control and recording of ongoing activities from the integral payloads on the vehicle as well as from wireless IP based payloads located remotely. This makes it the ideal surveillance platform for the Police Forces.

Prahari is currently in use by a State Police Department.

AWARDS, RECOGNITION AND IMPORTANT MILESTONES

- Dynamatic Hydraulics™ UK has recently on January 1st 2015 signed a Long Term Agreement with John Deere which enables the business to quote for additional J-D business within the Deere organisation.

- Received certification for foldable strut used for ALH. Recognised by CEMILAC for design capabilities.

- JKM Automotive™ has received supplier appreciation award from Hyundai Motors in vendor convention.

- Received award from John Deere for designing, developing and sustaining the product quality of "Internal Gear Pump"

- Distributor's meet was held along with the key branch managers to Bangalore on behalf of Dynamatic Hydraulics™.

- Two days session was conducted to brainstorm on measures to increase sales and enhance Dynamatic Hydraulics™ brand equity.

- A new 1 MP series pump was also launched during the meet. The pump was manufactured to focusing on the industrial sector where pumps below 150 bar pressure are being used. The advantage of the pump is that it is lighter as it is fully made out of aluminium and also shorter as it uses specially designed shorter bush bearings.

- The highest flow pump, 680 lpm, designed for the Indian Railways has been approved by DLW, Varanasi. With this success, we remain as a key supplier to Indian Railways.

- New Contracts:-Aircraft - Airbus single aisle FTB

- Contract long term extension Jan 1st 2016 - Dec 31st 2020 Customer Spirit AeroSystems.

- Offering a 3% discount on our Value added.

- This Package feeds the Flap track beam assembly line in DTL Bangalore.

- Aircraft - Airbus Long range FTB

- New Contract "Phase two" term Jan 1st 2015 - Dec 31st 2020 Customer DTL Bangalore.

- Mahindra & Mahindra has awarded Dynamatic Hydraulics™ the responsibility of production of pumps for their prestigious 'M' star project which is named as CRUSADE and Dynamatic Hydraulics™ is the single source for this customer.

CONSERVATION OF ENERGY AND TECHNOLOGY ABSORPTION

The information relating to conservation of energy and technology absorption are appended hereunder:

a) CONSERVATION OF ENERGY

All our facilities in India and abroad are built with the environment in mind and the processes are designed for efficiency, energy conservation and to ensure that no waste is transmitted into our environment. The industrial complexes are highly energy efficient and completely non-polluting. This is being systematised and quantifiable by implementing ISO 14000 and OHSAS 18000.

b) TECHNOLOGY ABSORPTION

Research & Development plays a vital role in developing and adopting new technologies to enhance our operational efficiencies. The Company owns the world's best Hydraulic Technologies viz. Plessey and Dowty Technologies, both of which are from England.

The Company acquired the Dowty Technology during its collaboration with Dowty in 1973 and it obtained the Plessey Technologies through the acquisition of Dynamatic Limited, UK, in 2007. Our R&D effort is also focused on the automotive products as a proprietary product.

(i) Efforts made in technology absorption:

Research & Development (R&D)

Research & Development, Technology Development and Innovation continues to be an integral part of the Company for achieving growth, business profitability, sustainability and as a part of its contribution towards the building of a Nation. Dynamatic Science lab, created by consolidating various research and technology functions, helps to create enhanced value delivery by leveraging skills and competencies to create new business opportunities. The Company's Research & Development is actively driven by a Board-level Committee constituted as the Technology Development Committee.

The Technology Development Committee of the Board provides direction to the Company's Research and Development strategy and on key issues pertaining to Research & Development technology. The Committee regularly reviews and updates the skills and competencies required, the structure and the processes needed to ensure that the Research & Development initiatives of today result in products necessary for the sustained and long term growth of the Company.

Specific areas in which Research & Development (R&D) is being carried out by the Company Research & Development Activities in India and Europe

Highlights:

- Development of new design for robust hydraulic gear pumps for Earth-moving Sectors for both Domestic & Export market.

- Development of Fixed Clearance Gear Pump with Low Pressure High Flow capability, catering to specific requirement of High HP Tractors.

- Design & Development of Value Enriched Global Gear Pump catering to various Tractor applications.

- Development of Bi-Directional Gear Pump for Marine Engine Transmission application for European & US based customers.

- Design and Development of Lubricating Oil Pumps for world renowned Diesel Engine Manufacturers.

- Development of Lubricating & Scavenging Oil Pumps suitable for very High H.P. Diesel Engines employed in Indian Railways.

- Development of various types of Hydraulic Gear Motors both for Domestic & Export customers.

- Design & Development of Gear Pump-Motor Combo Unit for Hi-End Agricultural Farm Mechanisation equipment catering to US Market.

- Design & Development of total Tractor Hydraulic aggregates including Hitch Control Valve and Lift assembly with Draft Control feature incorporated.

- Design & Development of Pressure & Flow controlled Compact Gear Pump.

- Extensive deployment of Product Life Cycle Management Tools viz. Windchill across various functional units of the Company at plant level imparting fast and accurate engineering data transfer & project management.

- Value Addition & Value Engineering for existing products and processes.

- Interactive participation with both Domestic & Export customers towards the Design & Development of New Gear Pumps & Gear Motors suitable for customer's new equipment design.

- Regular usage of Hi-End Design Analytical tools, viz. ANSYS, CFD, Pro-Mechanica, Fatigue analysis tools, etc. complemented with in-depth Product Validation & Verification strategies.

- Dynamatic Hydraulics™ has also placed its footprint in the community of International Research, by presenting research papers in the field of Fluid Power & ANSYS related topics.

- Continuous synergy between Dynamatic, UK & Dynamatic, India Design team towards new product design & development, product & process optimisation, etc.

- Development of new Machine Tools, Machine Tools Structures including CNC machines upgrade.

- Factory Automation.

- New projects for Defence sector. The Dynamatic Homeland Security™ team has responded to the requirement of Mini UAVs from the Artillery wing of the Indian Armed forces and is also responding to a global tender for Mini UAVs from CRPF.

- Design and Development of Electric Vehicle Charging Point for charging electric cars across the world. Integration with electronics, hardware, software, back office, network service provider and man-machine interface is near completion.

- Design and Development of Mobile Surveillance Vehicle (MSV) for Defence applications: Field trials and validation is completed and has attracted lot of enquiries from various Government, as well as Private agencies.

- The Company continues to participate in various collaborative projects in India and overseas.

- Dynamatic Homeland Security™ has concluded

a contract for 5 numbers of Mobile Command and Control Vehicle (MCCV) to a State Ministry of Home Affairs. This MCCV- "Prahari" is custom designed for surveillance in urban areas by the law enforcement agencies. Its unique architecture facilitates the monitoring, recording and relaying of ongoing activities from the vehicle as well as from remote locations. This makes Prahari an ideal surveillance and reconnaissance tool for the Police Forces and Para Military. This state government is going to use Prahari for: Mobile monitoring of important events and public gatherings, keep an eye on VVIP Security, general surveillance, monitoring and recording at the time of riots or any other contingency, general patrolling of critical areas and critical assets, assisting police officials for pre and post analysis of any critical incident and assistance to emergency service Dynamatic has entered in to a teaming agreement with M/s. AeroVironment Inc, USA for the growing demand of Un-manned Aerial Vehicles in India.

- With over 23,000 UAVS delivered worldwide and currently operational, AeroVironment is one of the largest UAV manufacturers in the world and its products are extensively used by the military forces of the United States and 17 other countries. The combination of AeroVironment's technical capabilities in Unmanned Aerial Systems and Dynamatic's precision engineering capabilities and strong brand equity of both Companies will facilitate the availability of world- class UAVs in India.

Benefits derived as a result of the above R&D

All the following efforts have led to innovative product and process developments, leading to new market creation and higher value addition. Few of the key mile-stones achieved, are mentioned below:

- Design and development of new products have resulted in new business development and extending our R&D vision, for future market requirements.

- Capitalising on new business opportunities in various verticals, including Green power and Energy distribution technologies.

- Contributing to India's Defence indigenisation and technological up-gradation program and also participating in India's security programs.

- Design and development of new products for Indian aerospace program

- Participation in import substitution program of Indian defence projects

- New process improvements through value engineering, towards cost reduction and import substitution.

- Improvement of existing designs and ongoing testing of products and materials with product value enrichment in perspective.

EXPENDITURE ON R&D

Rs. in lacs

31 March 31 March Particulars 2015 2014

(a) Capital 92 21

(b) Recurring 448 258

Total 540 278

CHANGE IN THE NATURE OF BUSINESS, IF ANY

There was no change in the nature of business during the year under review. The Department of Industrial Policy and Promotion, Ministry of Commerce has permitted the Company to carry on activities.

FUTURE PLAN OF ACTION

The Company plans to increase its efforts in developing new and cost-effective applications in the above sectors, through continuous innovation.



MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT

Management's Discussion and Analysis Report for the year, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report.

The Company is committed to maintain the best standards of Corporate Governance and adheres to the Corporate Governance requirements set out by Securities and Exchange Board of India (SEBI). The Company has also implemented several best corporate governance practices prevalent globally.

National Stock Exchange of India Limited (NSE), in association with Credit Rating and Information Services of India Limited (CRISIL), has initiated Independent Equity Research Report (IER), on certain companies. IER is reckoned among the best practices globally in the equity research-independence space. The Company has been covered under an Independent Equity Research Report carried out by CRISIL under the aegis of NSE-IPFT.

The reports can be viewed at www.ier.co.in or at National Stock Exchange home page: at NSE-IPFT Sponsored Research Reports.

Mr. R. Vijaykumar, Company Secretary in Practice, had conducted the Corporate Governance audit for the year under review. A separate section on Corporate Governance and a certificate from Mr. R. Vijaykumar, regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with Stock Exchanges in India is presented in a separate section forming part of this Annual Report.

a) BOARD MEETINGS

During the year 2014-15, 7 (seven) Board meetings were held. The details of the Board Meetings are furnished in the Corporate Governance Report which forms part of this Annual Report.

b) BOARD DIVERSITY

The Company recognises and embraces the importance of a diverse board in its success. We believe that a truly diverse board will leverage differences in thought, perspective, knowledge, skill, regional and industry experience, cultural and geographical background, age, ethnicity, race and gender, which will help us retain our competitive advantage. The Board has adapted the policy on appointment, continuation and cessation of Directors which sets out the approach to diversity in the composition of the Board.

c) DIRECTORS AND KEY MANAGERIAL PERSONNEL: Appointments

During the year under review, the Board of Directors a their meeting held on November 14, 2014, Mr. P S Ramesh and Mr. Hanuman Kumar Sharma appointed as Directors of the Company. Mr. James Tucker was appointed as additional Director in the Board Meeting held on February 14, 2015. The appointment of Mr. P S Ramesh, Mr. Hanuman Sharma and Mr. James Tucker have also been considered and approved by the Shareholders by passing requisite resolutions by way of postal ballot.

Mr. Subodh Rajendra Babu was co-opted as an Additional Director at the Board Meeting held on May 28, 2015. In terms of relevant provisions of the Companies Act, 2013, Mr. Subodh Rajendra Babu holds office up to the date of the forthcoming Annual General Meeting. The Company has received a notice under Section 160 of the Companies Act, 2013 from a member signifying his intention to propose the name of Mr. Subodh Rajendra Babu for appointment as Director of the Company at the next Annual General Meeting. This item has been included in the notice convening the Annual General Meeting of the Company.

Re-appointments

Mr. Raymond Keith Lawton, Non-Executive Director of the Company would retire by rotation in accordance with section 152 of the Companies Act, 2013 and eligible, offers himself for re-appointment.

None of the Directors of the Company are disqualified from being appointed as Directors as specified under Section 264 of the Companies Act, 2013.

Details of all the Directors have been covered in Corporate Governance Report which forms part of the Annual Report.

d) DECLARATION FROM INDEPENDENT DIRECTORS

All Independent Directors of the Company meet the criteria of Independence laid down in Section 149(6) of the Companies Act, 2013. In line with the provisions of section 134(3)(d) of the Companies Act, 2013, the declaration from Independent Directors, confirming their independence in terms of section 149 of the Companies Act, 2013 have been obtained.

e) FORMAL ANNUAL EVALUATION

Formal evaluation of the Board is made based on the guidelines laid down by the Nomination & Remuneration Committee.

f) REMUNERATION POLICY

The Nomination and Remuneration Committee has laid down remuneration policy which is designed to attract, motivate, retain manpower and improve productivity by creating a congenial work environment, encouraging initiative, personal growth and teamwork besides offering appropriate remuneration package.

The policy applies to Directors, senior management including its Key Managerial Personnel and other employees of the Company.

Members can download the complete remuneration policy on the Company's website at (http://www.dynamatics. com/downloads/REMUNERATION_POLICY_2015. pdf).

RATIO OF REMUNERATION TO EACH DIRECTOR

Details / Disclosures of Ratio of Remuneration to each Director to the median employee's remuneration forms part of this annual report as ANNEXURE-2.

Disclosure of details in case of payment of remuneration to Managerial Personnel under Schedule V Part II, Section II (A)

g) VIGIL MECHANISM

A vigil mechanism has been established by the Board of Directors and employees. Equal opportunity of being heard is given to all employees and Directors under the said vigil mechanism.

h) RISK MANAGEMENT POLICY

To incorporate the changes mandated under the Companies Act, 2013 and the amended clause 49 of the Listing Agreement entered into between DTL and National Stock Exchange of India Limited and Bombay Stock Exchange Limited ('SEBI Circular'), the Board at their meeting held on August 14, 2014, decided to rename the Audit Committee as "Audit and Risk Management Committee". The charter of new Audit and Risk Management Committee have been amended suitably.

The Audit and Risk Management Committee of the Board has reviewed the Risk Management Policy developed by your Company.

The main objective of the said policy are:

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

ii. To establish a framework for DTL's 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 DTL;

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 said policy has been uploaded on Company's website at www.dynamatics.com

i) RELATED PARTY TRANSACTION

Particulars of contracts or arrangements with Related parties referred to in Section 188(1) is disclosed in Form AOC- 2 as ANNEXURE-3.

j) JUSTIFICATION FOR ENTERING INTO RELATED PARTY TRANSACTIONS

All related party transactions are between wholly owned subsidiaries and the Company and all these transactions are at arms' length basis.

k) DIRECTORS' RESPONSIBILITY STATEMENT

The Directors' Responsibility Statement as required under 134 (5) of the Companies Act, 2013.

The Board of Directors do hereby confirm that:

I. In the preparation of accounts for the financial year ended March 31, 2015, the applicable Accounting Standards have been followed with proper explanation relating to material departures if any.

II. We have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 & Loss Account of the Company for the year under review.

III. We have taken proper and sufficient care for the maintenance of adequate records in accordance with the provisions of the Companies Act, 2013, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

IV. We have prepared the accounts for the financial year ended March 31,2015, on a 'going concern' basis.

V. We have laid down internal financial controls to be followed by the company and that the internal financial controls are adequate and are operating effectively.

VI. We have devised proper systems to ensure compliance with the provisions of all applicable laws and the systems are adequate and operating effectively.

VII. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of the Companies Act, 2013 (as amended from time to time), dividends which remained unclaimed for a period of seven years, have been transferred by the Company to the Investor Education and Protection Fund.

l) PROMOTERS

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

Persons constituting promoters coming within the definition of 'Promoter' for the purpose of regulations 2(1)(s) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 include the following:

Sl. No. Name of the entity / person

1. JKM Holding Private Limited

2. Mr. Udayant Malhoutra

3. Udayant Malhoutra and Company Private Limited

4. JKM Offshore India Private Limited

5. Wavell Investments Private Limited

6. Mrs. Barota Malhoutra

7. Vita Private Limited

8. Christine Hoden (India) Private Limited

9. Primella Sanitary Products Private Limited

10. Greenearth Biotechnologies Limited

m) DISCLOSURES REQUIRED UNDER LISTING AGREEMENT

Disclosures required under various clauses of the listing agreement, are made elsewhere in this Annual Report. The Certification by CEO & Managing Director and CFO of the Company forms part of this Annual Report.

Listing With Stock Exchanges

The Company confirms that it has paid the Annual Listing Fees for the year 2015-2016 to NSE and BSE where the Company's Shares are listed.

Significant & Material Orders Passed By The Regulators

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

Pursuant to the provisions of section 92(3) of the Companies Act,2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in form MGT 9 is enclosed as ANNEXURE-4 to this Annual Report.

4. AUDITORS

Statutory Auditors

M/s BSR & Co. LLP are the Statutory Auditors of the Company for a period of five years with effect from August 14, 2014.

M/s. B S R & Co., LLP have confirmed to the Company that they are not disqualified under section 141 or any other applicable provisions for the time being in force and are eligible for being appointed as statutory auditors of the Company. M/s. B S R & Co., LLP have also confirmed to the Company that, their appointment, if made, would be within the limits prescribed under the Companies Act, 2013.

The Report of the Statutory Auditors on the Financial Statements forms part of this Annual Report.

Cost Auditors

M/s Rao, Murthy & Associates were appointed as Cost Auditors of the Company for the Financial Year 2014-15.

Secretarial Auditors

Mr. R Vijayakumar, Practising Company Secretary is the Secretary Auditor of the Company.

Secretarial audit report as provided by Mr. R Vijayakumar, Practising Company Secretary is enclosed to this Report as ANNEXURE-5

QUALIFICATIONS IN AUDIT REPORTS

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

(a) by the statutory auditor in his report; and

There are no qualifications, reservations or adverse remarks reported by M/s. B S R & Co., LLP, statutory auditors in their report for the year under review.

(b) by the company secretary in practice in his secretarial audit report;

Mr. Vijayakumar, Company Secretary in practice, has made no qualifications or reservations or adverse remark 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.

Although it is not mandatory to constitute Corporate Social Responsibility Committee ('CSR Committee'), the Company on its own initiative has constituted the CSR Committee for overseeing and facilitating deliberation on the social and environmental consequences of each of the decisions made by the Board; effectively factoring the interests of all Shareholders, customers, employees, suppliers, business partners, local communities and other organisations in the Board's decision making; developing the CSR Policy and monitoring the same from time to time. The Company has formulated the CSR Policy under the guidance of Ernst & Young, international consultants taking into consideration the requirements of the stakeholders of the Company. The said policy has been approved by the Board and the same has been posted on the website of the Company (www.dynamatics.com)

Reason For Not Spending

As said above, CSR initiatives are not mandatory under applicable law for the time being in force. The CSR policy approved by the Board of Directors is under implementation and a comprehensive report on the CSR activities and the amount spent will be provided in the next Annual Report.

ACKNOWLEDGMENTS

Your Directors would like to thank for the co-operation received from the Financial Institutions, Banks, Government Authorities, Customers, Vendors, Shareholders and Investors during the year under review.

Your Directors also wish to place on record their deep sense of appreciation for the committed services of Executives, Managers, Staff and Workers of the Company and look forward to their continued support in the future.

For and on behalf of the Board of Directors

Vijai Kapur Chairman

DIN No.: 00056415

Place : Bangalore Date : May 28, 2015

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Mar 31, 2013

The Directors have pleasure in presenting the Thirty Eighth Annual Report together with the Audited Statement of Accounts for the year ended March 31, 2013.

1. FINANCIAL RESULTS

The Financial Results of the Company for the year ended March 31, 2013, were as follows:

(Rs. in Lacs)

Standalone Consolidated

Particulars Year Ended 31 Year Ended 31 Year Ended 31 Year Ended 31 March 2013 March 2012 March 2013 March 2012

Gross Sales 44,944 48,244 149,298 1,54,173

Net Sales 40,622 44,369 143,717 1,49,715

Profit (Before Interest, Depreciation & Taxation) (EBITDA) 7,397 6,867 14,324 15,181

Interest & Finance Charges 4,625 3,948 8,456 7,145

Depreciation 2,629 2,511 4,638 4,340

Net Profit Before Taxation and Exceptional Items 143 408 1,230 3,696

Exceptional Items - 175 - 175

Net Profit Before Taxation and after Exceptional Items 143 233 1,230 3,521

Provision for Taxation:

- Current Tax - - 1,124 1,388

-Minimum Alternative Tax Charge - 89 - 89

- Minimum Alternate Tax Credit Entitlement - (89) - (89)

- Deferred Tax Charge 113 68 1,297 (331)

- Wealth Tax - - - -

Net Profit After Tax 30 165 (1,191) 2,464

Balance brought forward from previous year 3,674 4,031 5,503 3,561

Amount available for appropriation 3,704 4,196 4,312 6,025

Appropriations

Dividend on Equity Shares - Interim - 325 - 325

Proposed Final Dividend on Equity Shares - 108 - 108

Tax on Dividend - 72 - 72

Transfer to General Reserve - 17 - 17

Balance carried to Balance Sheet 3,704 3,674 4,312 5,503

Notes: Previous year fgures have been recast wherever necessary.

DIVIDEND

During the year under review, your Directors do not propose to declare any dividend due to poor economic conditions and paucity of profits.

TRANSFER TO RESERVES

During the year under report, your Directors do not propose to transfer any amount to General Reserve.

The Company has hedged a part of its future foreign currency receivables to mitigate its foreign exchange fluctuation risks. The same has been designated as a cash flow hedge with effect from April 1, 2008, applying the hedging criteria. The movement in the Mark To Market (MTM), subsequent to the designation as a cash flow hedge, amounting to Rs.1,495 lacs (Standalone), and Rs.2,299 lacs (Consolidated) has been accounted under Hedge Reserve Account.

Pursuant to Notification No. G.S.R. 225(E) dated March 31, 2009 issued by the Ministry of Corporate Affairs, the Company had opted (on March 31, 2009) to adjust the exchange differences relating to long term monetary items with retrospective effect from April 1, 2007 vis-à-vis recognition of aforesaid exchange differences as income/ expense in the profit and loss account in the earlier years.

Accordingly, foreign exchange loss amounting to Rs.120 lacs and foreign exchange gain amounting to Rs.51 lacs for the year ended March 31, 2012 and March 31, 2013 respectively, has been adjusted to the cost of fixed assets.

COMPANY PERFORMANCE

Total income on a consolidated basis was Rs.145,758 lacs as against Rs.151,850 lacs in 2011-12. EBITDA on a consolidated basis was Rs.14,324 lacs as against Rs.15,181 lacs in 2011-12. Net Profit Before Tax on a consolidated basis was Rs.1,230 lacs as against Rs.3,521 lacs in 2011-12. Net Profit After Tax on a consolidated basis was Rs.(1,191) lacs as against Rs.2,464 lacs in 2011-12.

The Hydraulics and Precision Engineering business increased to Rs.31,139 lacs from Rs.30,388 lacs in 2012. Profit (Before Interest & Tax) declined from Rs.3,706 lacs to Rs.2,083 lacs. This includes the turnover from the Hydraulics division of Dynamatic Limited, UK, a subsidiary of your Company, to the extent of Rs.12,838 lacs and Profit (Before Interest & Tax) of (Rs.61) lacs.

The Aerospace business grew from Rs.14,123 lacs to Rs.17,151 lacs and Profit (Before Interest & Tax) grew from Rs.4,573 lacs to Rs.4,885 lacs. This includes the turnover from the Aerospace division of Dynamatic Limited, UK, a subsidiary of your Company, to the extent of Rs.10,722 lacs and Profit (Before Interest & Tax) of Rs.2,437 lacs.

The Aluminium Castings business declined from Rs.5,484 lacs to Rs.4,488 lacs and Profit (Before Interest & Tax) declined from (Rs.854) lacs to a loss of (Rs.635) lacs.

The Automotive business declined from Rs.113,513 lacs to Rs.107,964 lacs while Profit (Before Interest & Tax) declined from Rs.3,112 lacs to Rs.2,337 lacs. This includes the turnover from Eisenwerk Erla GmbH, a subsidiary of your Company to the extent of Rs.76,844 lacs and Profit (Before Interest & Tax) of Rs.4,448 lacs.

Exports from India have gone down by 9% with sales of Rs.10,210 lacs against the previous year''s Rs.11,249 lacs.

Capital expenditure

During the year, your Company incurred capital expenditure of Rs.8,784 lacs for physical infrastructure and Rs.1,213 lacs for procurement of intangible assets.

Significant investments have been made in building infrastructure, state-of-the-art machinery, design software, data security, information systems, design and development activities; for the future benefits of your Company.

2. SUBSIDIARIES

Your Company has eight subsidiaries, the brief particulars of which are given below.

The structure of Dynamatic Technologies Limited and its subsidiaries as on March 31, 2013

INDIAN, WHOLLY OWNED SUBSIDIARIES

JKM Research Farm Limited, India, (JKMRF) is a Wholly Owned subsidiary of the Company. It continues to be the Research & Development facilitator to the Company.

JKM Erla Automotive Limited, India (JKM Erla)

Demerger of automotive division of the Company with JKM Erla is under evaluation.

JKM Ferrotech Limited, India (JFTL)

JFTL is into manufacturing of ferrous alloy and castings, having its operations in Gummidipoondi, Tamil Nadu. The facility has expertise in producing High Si-Mo automotive components and is certified to the highest quality standards specified by the Automotive Industry. The expertise in producing intricately shaped castings as well as the skill in handling ferrous alloys, particularly High Si-Mo and Ni-Resis makes JFTL a strong development partner for prototypes in Ferrous Alloy castings.

OVERSEAS, WHOLLY OWNED SUBSIDIARIES

JKM Global Pte. Limited, Singapore, is a Wholly Owned subsidiary of your Company. It continues as an investment hub for overseas businesses.

Dynamatic Limited, Swindon, UK, (DLUK) is a Wholly Owned subsidiary of your Company held through JKM Global Pte. Limited, Singapore.

The UK facilities have been restructured by way of merging Oldland Aerospace with Dynamatic Limited.

Yew Tree Investments Limited and Dynamatic Limited are the subsidiaries of JKM Global Pte Limited. Post restructure, DLUK has its Hydraulics unit in Swindon and its Aerospace unit, Dynamatic-Oldland AerospaceTM in Bristol.

The Hydraulics unit of DLUK located in Swindon, England, 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 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 AerospaceTM, a division of Dynamatic Ltd UK is located in Bristol & Swindon, and is a leader in Aeronautical Precision Engineering and is currently working on components for most of the Airbus family of aircraft.

Yew Tree Investments Limited, Bristol, UK is a Wholly Owned subsidiary of Dynamatic Limited, UK.

JKM Erla Holdings GmbH, Germany (JKM Erla GmbH) is engaged in the business of setting up automotive components processing/manufacturing units.

Eisenwerk Erla GmbH, Germany (Eisenwerk) became a subsidiary of the Company, subsequent to its holding company, JKM Erla GmbH, becoming a subsidiary of the Company. Eisenwerk has been in business for over 630 years and is a preferred supplier to leading global OEMs including Audi, BMW, Volkswagen, to name a few.

REPORT ON SUBSIDIARY COMPANIES

As per Section 212 of the Companies Act, 1956, it is required to attach Directors'' Report, Balance Sheet and Profit & Loss Account of the subsidiary companies to this Report. The Ministry of Corporate Affairs, Government of India, vide its Circular No. 2/2011 dated February 8, 2011, has provided an exemption to the Companies from complying with Section 212 of the Companies Act, 1956, provided such companies publish audited consolidated financial statements in the Annual Report. However, a statement showing the relevant details of the subsidiaries is enclosed as ANNEXURE - II, forming part of this report. Accordingly, the Annual Report does not contain the financial statements of the subsidiaries. The audited annual accounts and related information of the subsidiaries, where applicable, will be made available on request.

The financial performance and the review of Business of DLUK, JKMRF, JFTL and Eisenwerk Erla are forming part of this Report.

These documents will also be available for inspection at the registered office during business hours at Bangalore, India. The same will also be published on our website at www.dynamatics.com

3. RESEARCH & DEVELOPMENT

Your Company is a repository of diverse technologies and has transformed itself into a knowledge-based organization through sustained Research & Development efforts. All technology development efforts are guided at the Board level through the Technology Development Committee.

Your Company''s focus on Research & Development has resulted in strong development initiatives; enabling the Company to foray into providing new services, launching new products and enhancing product value to our customers.

JKM Science Center at Bangalore, spread over an area of 40,000 sq. ft. houses design laboratories viz. Dynamatic® Research & Development Center and Powermetric® Design; a sophisticated Material Science Laboratory; a prototype manufacturing unit and a Training Center.

Your Company''s Design efforts are focused on

- Design, Validation and Prototyping of new products.

- New Project Management employing Product Life Cycle Management Tool through APQP approach

- Effective deployment of analytical tools, viz. ANSYS, CFD, Pro-Mechanica, & Automation Studio, etc.

- Improvement of existing designs.

- Continuous improvement of existing processes.

- Ongoing testing of products and materials.

Intellectual Property

The Company has emerged as one of India''s leading Research & Development organisations, with numerous inventions and patents to its credit. The Company has defined an Intellectual Property (IP) strategy to build an effective portfolio for future monetization, collaboration and risk mitigation, focussing on future technologies. The Company owns the following Patents for various Products:

- From India

Four - (One International Patent, three from the European Union).

- From England

Eleven - (11 UK, 1 Italian and 1 US patent).

In addition, the Company has 2 patents pending in multiple jurisdictions, awaiting registration.

The Company has 10 trademarks registered and 4 trademark applications pending, awaiting registration.

Eisenwerk owns 1 trademark and 2 patents in Germany.

The Company employs over 60 Scientists and 600 engineers and technicians with expertise in Mechanical Engineering, Advanced Computer Aided Engineering, Computer Aided Manufacture, Materials & Metallurgical Engineering, Fluid Dynamics, Defence & Aerospace Research. The state-of-the-art JKM Science Center brings together Design Engineering, Development, Prototyping, Metallurgical and Manufacturing Infrastructure enabling your Company to comprehensively address the needs of its global customers.

The Dynamatic® Hydraulics Research Laboratory, in Swindon, England, has advanced design knowledge focused on the Mobile Hydraulics Sector, excellent engineering capabilities and ownership of intellectual property.

This facility operates a comprehensive product testing and validation laboratory.

This facility has completed testing and validation of new products for various customers like Cummins - Daventry, John Deere - USA, CNH, JCB, Terex, Mahindra & Mahindra, etc. The Company has already successfully launched these new products in India and globally. The Dynamatic-Oldland AerospaceTM, in Bristol, England possesses people having specialized skill sets who are one of the few specialists in CNC Programming, globally. Improving process run times, reduction in cycle time, optimizing machining strategies and high feed tooling have been achieved to optimize component by using new processes, use of latest cutting tools and fresh approach to the product.

The Company''s Wholly Owned subsidiary, JKM Research Farm Limited, operates a unique facility for testing and analysing complete aggregates and systems for mobile equipment.

4. QUALITY MANAGEMENT SYSTEM (QMS)

Dynamatic® Hydraulics

During the year, your Company, has successfully completed surveillance audits to ISO:9001 specifications for, Quality Management System and also to ISO:14001 specifications for its Environmental Management System. Your Company''s QMS which is compliant to ISO standards since 1999, has evolved and matured and is highly system driven.

The Company has started addressing and implementing health and safety activities for certification to Occupational Health & Safety Assessment Series (OHSAS) standards. The activities are focused on health & safety of its employees on the shop floor. Awareness campaigns have been undertaken to enforce the use of Personnel Protective Equipment (PPE) at work. At the same time, the Company has been attempting to merge the EMS & OHSAS requirements into a common management system called Integrated Management System. This will avoid unnecessary duplication of work in monitoring and maintenance of records. The audits for both systems can also be combined and carried out at the same time.

The Dynamatic® Quality Management System (DQMS) addresses the quality requirements and management expectations set out by the global major players such as John Deere, Cummins, CNH, Mahindra & Mahindra etc. DQMS utilises some of the best tools such as 5S, Business Process Re-engineering, Overall Equipment Effectiveness, Root cause analysis, Six Sigma, Statistical Process Control, Total Productive Maintenance, Visual Control, Learning-by-doing, Employee Participation Program (EPP) etc.

Lean Management concepts together with 5S tools are being used on the shop floor to increase the Overall Equipment Effectiveness (OEE) of the operations. This is achieved by reducing rejections, set ups, cycle time and through effective material management. The Employee Participation Program has resulted in the participation of employees in innovative activities and their contributions have resulted in continual improvements to work and work processes. Quality tools viz. 5S, Six Sigma etc, have resulted in enhanced product quality, innovation and cost effectiveness.

The learning in establishing the green field units-JKM pump division and The Center for Bush Excellence, are imbibed into the existing main Unit in Dynamatic Park.

Automating the processes and de-skilling them has helped us to move from operator''s domain to machine domain. Fresh recruits also can learn quickly and manage the operations. Thrust is always on reducing paperwork by using electronic means to communicate and store data.

Supply Chain Management and Productivity

The Company''s supply chain program aims at upgrading the vendors so as to enable them meet the demanding requirements of Quality, Cost & Delivery. Vendor training & audits are being conducted at regular intervals.

The demand for hydraulic pumps has been growing rapidly and keeping pace with this demand has been a challenging task. Your Company''s investment in the capital equipment has been the highest in this year. New generation CNC machines have been added to the production line to increase its capacity. The production capacity has been ramped up by 30% in the past two quarters. To create space for the new machines and test rigs, a new unit is being set-up close to the main factory. All efforts have been made to keep the operational costs as low as possible.

New Operational Model:

The market scenario offers a tough competition and working towards target costing is imminent. To contain the operational costs, as a drive towards lean management, it is being contemplated to fragment the operations into optimally sized multiple units. Such a step will help us to institutionalize the good shop floor practices that have been evolved and tested successfully in the II and III units.

Dynamatic Limited, Hydraulics, UK is accredited to ISO 9001:2008 standards and certification from British Standards Institute (BSI). Dynamatic Limited''s lean initiatives continue to be the focus of cost reduction initiatives and projects. The UK facilities continue to have 0 (zero) defects per million and 100% on time delivery.

JKM Automotive™ and Dynametal® continues to strengthen its Quality and Safety standards by upgrading to the latest versions of existing certifications. The divisions are certified to Quality, Occupational Health and Safety and Environmental Management Systems such as ISO Systems such as ISO / TS 16949, OHSAS 18000, ISO 14000 and FORD Q1. JKM Automotive™ has also been audited and approved by various global OEM''s such as Hyundai, Ford, Fiat, Nissan, Daimler, Cummins, John Deere, etc.

As a part of continuous internal improvement program, we have successfully implemented Quality controls and kept at single digit PPM levels with Hyundai supplies. The unit initiated manufacture of Pressure Die Castings inhouse. We started enjoying uninterrupted power supply for our units which is bringing savings in our power costs.

Dynamatic-Oldland AerospaceTM, India has the largest infrastructure in the Indian private sector for the manufacture of exacting Air Frame Structures and Precision Aerospace Components, having its manufacturing facilities in Bangalore and Nasik.

This Division is one of the first to have NADCAP approval for Heat Treatment and Non-Destructive-Test Facilities in India and is well supported by its AS 9100 ''C'' – Annual certification by UL covering both the manufacturing facilities.

This Division is also a certified supplier for major OEMs like Airbus, Boeing, Bell Helicopters and Northrop Grumman for supply of aircraft components and assemblies.

Dynamatic-Oldland AerospaceTM, UK a division of Dynamatic Limited UK is a unique state-of-the-art aeronautical manufacturing facility in Bristol & Swindon UK, possessing complex 5 axis machining capabilities for the manufacture of Aerospace components and tooling.

This Division is a certified supplier to Airbus UK, GKN Aerospace Europe & USA, Spirit Aerosystems, Boeing, Magellan Aerospace, GE Aviation Systems, Lockheed Martin & Augusta Westlands. We are supported by BSI ISO 9001:2000 and AS 9100 revc. Dynamatic-Oldland AerospaceTM has been accredited with Environmental Management System (EMS) certification ISO:14000.

Powermetric® Design, after obtaining Design Approval Certification from the Center for Military Airworthiness

& Certification (CEMILAC), has proposed its design capabilities to Indian as well as foreign aerospace organisations. The CEMILAC certification which is mandatory for defence & aerospace design, will enable Powermetric® to undertake design, validation and development activities of aerospace parts/products using various sophisticated computational tools.

Powermetric is also focusing on new research areas viz., Clean and Green Energy management and application.

Dynamatic Homeland Security™ offers cutting edge solutions to enhance the nation''s capabilities in countering modern day security threats-internal as well as external.

Our strong research and development capabilities, combined with powerful partnerships we have forged with leading global security technology companies ike Blue- Bird Aero systems for UAVs, Elgo team for crash rated Bollards and Barriers, Gatekeeper Inc for Under vehicle scanners enables us to offer potential customers like the Ministry of Defense, Ministry of Home Affairs, solutions that will help them prepare and plan for emergencies as well as boost their response and recovery skills.

5. AWARDS, RECOGNITION AND IMPORTANT MILESTONES

- Dynamatic® Hydraulics UK has received the ''Highest CNH Business Growth Award'' which was presented at the 1st CNH and IVECO P & S Suppliers Convention in France during April 2012.

- During 2011, Dynamatic® Hydraulics UK conducted a ''Gear Pump Seminar'' to John Deere engineers in Waterloo. This seminar was to increase the understanding of gear pump operation and application.

- Dynamatic-Oldland AerospaceTM Division, UK -

Successful re-negotiations on existing business contracts has resulted in long term agreements for a further 5 years.

6. DEPOSITS

As on March 31, 2013, the Company has no unclaimed deposits by the deposit holders of the Company.

7. DIRECTORS

Mr. Dietmar Hahn was co-opted as an Additional Director at the Board Meeting held on November 8, 2012. In terms of relevant provisions of the Companies Act, 1956, Mr. Dietmar Hahn holds office up to the date of the forthcoming Annual General Meeting. The Company has received a notice under Section 257 of the Companies Act, 1956 from a member signifying her intention to propose the name of Mr. Dietmar Hahn for appointment as Director of the Company at the next Annual General Meeting. This item has been included in the notice convening the Annual General Meeting of the Company.

Mr. V. Sunder resigned as the President & Group CFO of the Company with effect from September 30, 2012 and was re- designated as Non-Executive Director of the Company, liable to retire by rotation with effect from the same date. Mr. V. Sunder placed his resignation as the Non-Executive Director on the Board with effect from June 3, 2013.

Under Section 256 read with Section 255 of the Companies Act, 1956, Mr. S. Govindarajan and Dr. K. Aprameyan, Directors of the Company retire by rotation at the ensuing Annual General Meeting, and are not being re-appointed as Directors of the Company as per Company''s policy on age criteria for election to the Board. Ms. Malavika Jayaram who also retires by rotation at the ensuing Annual General Meeting, being eligible, offers herself for re-appointment.

None of the Directors of the Company are disqualified for being appointed as Directors as specified under Section 274 of the Companies Act, 1956 as amended by the Companies (Amendment) Act, 2000.

Details of all the Directors have been covered in Corporate Governance Report forming part of the Annual Report.

8. DIRECTORS'' RESPONSIBILITY STATEMENT

The Directors'' Responsibility Statement as required under Section 217(2AA) of the Companies (Amendment) Act, 2000.

The Board of Directors hereby confirms that:

i) In the preparation of accounts for the financial year ended March 31, 2013, the applicable Accounting Standards have been followed with proper explanation relating to material departures if any.

ii) We have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 & Loss Account of the Company for the year under review.

iii) We have taken proper and sufficient care for the maintenance of adequate records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) We have prepared the accounts for the financial year ended March 31, 2013, on a Rs.going concern'' basis.

9. CONSOLIDATED FINANCIAL STATEMENTS

The Directors have pleasure in attaching the Consolidated Financial Statements prepared by the Company in accordance with the relevant Accounting Standards issued by the Institute of Chartered Accountants of India, which form part of the Annual Report.

10. AUDITORS

M/s. B S R & Associates, Chartered Accountants, Statutory Auditors of the Company retire at the ensuing Annual General Meeting and offer themselves for re- appointment.

They have confirmed to the Company that their re- appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for re-appointment within the meaning of Section 226 of the said Act.

The Report of the Statutory Auditors on the Financial Statements forms part of this Annual Report.

M/s. Rao Murthy & Associates, have been appointed as the Cost Auditors of the Company with effect from May 30, 2013.

11. PARTICULARS OF EMPLOYEES

The Company places a high premium on the development and retention of its Human Resources as well as in providing employees with safe and healthy work environments. The Corporate Human Resource Department under the leadership of the Head - Group HR continues to focus on formulating HR practices and strategic policies which will enable the Company to continue with its talent identification, recruitment, and development initiatives, thereby creating a merit oriented, values based work culture across the organization. The Performance Management System which was introduced in 2011 has helped the Company design programmes to train and develop employees for improved performance, through skill-sets development and attitudinal changes. The Company continues to remain focused on the maintenance of cordial industrial relations with its work force and in fostering a system of participative management, which enhances the employees'' sense of belonging within the Company.

Information required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended is forming part of this Report. However, as per provisions of Section 219(1)(b)(iv), the Report and Accounts are being sent to all shareholders of the Company excluding the statement of particulars of employees. Any shareholder interested in obtaining such particulars, may inspect the same at the Registered Office of the Company.

12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGOING

The information relating to conservation of energy, technology absorption, foreign exchange earnings and outgo required to be disclosed under the Companies (Disclosure of Particulars in the Report of Board of

Directors) Rules, 1988 is given in ANNEXURE – I, forming part of this report.

13. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of Section 205A(5) of the Companies Act, 1956, dividends which remained unclaimed for a period of seven years, have been transferred by the Company to the Investor Education and Protection Fund.

14. MANAGEMENT''S DISCUSSION AND ANALYSIS REPORT

Management''s Discussion and Analysis Report for the year, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report.

15. CORPORATE GOVERNANCE

The Company is committed to maintain the best standards of Corporate Governance and adheres to the Corporate Governance requirements set out by Securities and Exchange Board of India (SEBI). The Company has also implemented several best corporate governance practices prevalent globally.

National Stock Exchange of India Limited (NSE), in association with Credit Rating and Information Services of India Limited (CRISIL), has initiated Independent Equity Research Report (IER), on certain companies. IER is reckoned among the best practices globally in the equity research-independence space. The Company has been covered under an Independent Equity Research Report carried out by CRISIL under the aegis of NSE-IPFT.

The reports can be viewed at www.ier.co.in or at National Stock Exchange home page: at NSE-IPFT Sponsored Research Reports.

M/s. VEV and Co., Company Secretaries, had conducted the Corporate Governance audit for the year under review.

A separate section on Corporate Governance and a Certificate from M/s. VEV and Co., Company Secretaries, regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with Stock Exchange/s in India is presented in a separate section forming part of this Annual Report.

16. PROMOTERS

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

Persons constituting promoters coming within the definition of ''Promoter'' for the purpose of regulations

2(1)(s) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 2011 include the following:



Sl. No. Name of the Entity

1 JKM Holdings Pvt. Ltd.

2 Mr. Udayant Malhoutra

3 Udayant Malhoutra and Company Pvt. Ltd.

4 JKM Offshore India Pvt. Ltd.

5 Wavell Investments Pvt. Ltd.

6 Mrs. Barota Malhoutra

7 Vita Pvt. Ltd.

8 Christine Hoden (India) Pvt. Ltd.

9 Primella Sanitary Products Pvt. Ltd.

17. DISCLOSURES REQUIRED UNDER LISTING AGREEMENT

Disclosures required under various clauses of the listing agreement, are made elsewhere in this Annual Report.

The Certification by CEO & Managing Director and CFO of the Company is attached in ANNEXURE - IV, forming part of this report.

ACKNOWLEDGMENTS

Your Directors would like to thank for the co-operation received from the Financial Institutions, Banks, Government Authorities, Customers, Vendors, Shareholders and Investors during the year under review.

Your Directors also wish to place on record their deep sense of appreciation for the committed services of Executives, Managers, Staff and Workers of the Company and look forward to their continued support in the future.

For and on behalf of the Board of Directors

Vijai Kapur

Chairman

Place : Bangalore

Date : August 8, 2013

---

Mar 31, 2012

The Directors have pleasure in presenting the Thirty Seventh Annual Report together with the Audited Statement of Accounts for the year ended March 31, 2012.

1. FINANCIAL RESULTS

The Financial Results of the Company for the year ended March 31, 2012, were as follows:

(Rs. in Lacs)

Standalone Consolidated Particulars Year Ended 31 Year Ended Year Ended Year Ended March 2012 31 March 2011 31 March 2012 31 March 2011

Gross Sales 48,244 38,479 1,54,173 52,543

Net Sales 44,369 35,430 1,49,715 49,495

Profit (Before Interest, Depreciation & Taxation) (EBITDA) 6,867 6,620 15,181 8,283

Interest & Finance Charges 3,948 2,405 7,145 2,746

Depreciation 2,511 2,041 4,340 2,504

Net Profit Before Taxation and Exceptional Items 408 2,174 3,696 3,033

Exceptional Items 175 - 175 -

Net Profit Before Taxation and after Exceptional Items 233 2,174 3,521 3,033

Provision for Taxation:

- Current Tax - 442 1,388 629

- Minimum Alternative Tax Charge 89 - 89 -

- Minimum Alternate Tax Credit Entitlement (89) (64) (89) (64)

- Deferred Tax Charge 68 312 (331) 300

- Wealth Tax - - - -

Net Profit After Tax 165 1,484 2,464 2,168

Balance brought forward from previous year 4,031 3,325 3,561 2,172

Amount available for appropriation 4,196 4,809 6,025 4,340

Appropriations

Dividend on Equity Shares - Interim 325 325 325 325

Proposed Final Dividend on Equity Shares 108 216 108 217

Tax on Dividend 72 89 72 89

Transfer to General Reserve 17 148 17 148

Balance carried to Balance Sheet 3,674 4,031 5,503 3,561

Notes: Previous year figures have been recast wherever necessary.

DIVIDEND

During the year, your Directors, based on the performance of the Company, declared an Interim Dividend of Rs.6/- (Rs..3/- on each instance) per share of face value Rs.10/- each at its Board meetings held on November 14, 2011 and February 13, 2012 and paid on 5,414,703 Equity Shares absorbing Rs.32,488,218/-. Your Directors recommend a Final Dividend of Rs.2/- per share of face value Rs.10/- each on 5,414,703 Equity Shares of Rs.10/- each, absorbing Rs.10,829,406/- for the year under report. Hence the Total Dividend payout for the year under review is Rs.43,317,624/- (exclusive of tax).

TRANSFER TO RESERVES

Your Directors propose to transfer Rs.17 lacs to General Reserve, during the year under report.

The Company has hedged a part of its future foreign currency receivables to mitigate its foreign exchange fluctuation risks. The same has been designated as a cash flow hedge with effect from 1st April, 2008, applying the hedging criteria. The movement in the Mark To Market (MTM), subsequent to the designation as a cash flow hedge, amounting toRs.1,600 lacs, has been accounted under Hedge Reserve Account.

Pursuant to Notification No. G.S.R. 225(E) dated March 31, 2009 issued by the Ministry of Corporate Affairs, the Company had opted (on March 31, 2009) to adjust the exchange differences relating to long term monetary items with retrospective effect from April 1, 2007 vis-a-vis recognition of aforesaid exchange differences as income/ expense in the profit and loss account in the earlier years.

Accordingly, foreign exchange loss amounting to Rs.34 lacs and foreign exchange loss amounting to Rs.122 lacs for the year ended March 31, 2011 and March 31, 2012 respectively, has been adjusted to the cost of fixed assets.

COMPANY PERFORMANCE

Total income on a consolidated basis was Rs.151,850 lacs, as against Rs.50,368 lacs in 2010-11. EBITDA on a consolidated basis was Rs.15,181 lacs as against Rs.8,283 lacs in 2010-11. Net Profit Before Tax on a consolidated basis was Rs.3,521 lacs, as against Rs.3,033 lacs in 2010-11. Net Profit After Tax on a consolidated basis was Rs.2,464 lacs, as against Rs.2,168 lacs in 2010-11.

The Hydraulics and Precision Engineering business grew to Rs.30,038 lacs from Rs.23,037 lacs in 2011. Profit (Before Interest & Tax) grew from Rs.1,957 lacs to Rs.3,706 lacs. This includes the turnover from the Hydraulics division of Dynamatic Limited, UK, a subsidiary of your Company, to the extent of Rs.9,810 lacs and Loss (Before Interest & Tax) of (Rs.119) lacs.

The Aerospace business grew from Rs.10,242 lacs to Rs.14,118 lacs and Profit (Before Interest & Tax) grew from Rs.3,185 lacs to Rs.4,573 lacs. This includes the turnover from the Aerospace division of Dynamatic Limited, UK, a subsidiary of your Company, to the extent of Rs.8,931 lacs and Profit (Before Interest & Tax) of Rs.2,356 lacs.

The Aluminium Castings business grew from Rs.3,371 lacs to Rs.5,116 lacs and Loss (Before Interest & Tax) declined from (Rs.72) lacs to a loss of (Rs.854) lacs.

The Automotive business grew from Rs.19,249 lacs to Rs.113,099 lacs while Profit (Before Interest & Tax) grew from Rs.206 lacs to Rs.3,112 lacs. This includes the turnover from Eisenwerk Erla GmbH, a subsidiary of your Company to the extent of Rs.90,600 lacs and Profit (Before Interest & Tax) of Rs.4,030 lacs.

Exports from India have grown at 67% with sales of Rs.11,247 lacs against the previous year's Rs.6,728 lacs.

Capital expenditure

During the year, your Company incurred capital expenditure of Rs.1,321 lacs for physical infrastructure, Rs.8,454 lacs for technological infrastructure and Rs.1,140 lacs for procurement of intangible assets.

Significant investments have been made in building infrastructure, state-of-the-art machinery, design software, data security, information systems, design and development activities; for the future benefits of your Company.

2. SUBSIDIARIES

Your Company has seven Subsidiaries, the brief particulars of which are given below.

The structure of Dynamatic Technologies Limited and its Subsidiaries as on March 31, 2012

INDIAN, WHOLLY OWNED SUBSIDIARIES

JKM Research Farm Limited, India, (JKMRF) is a Wholly Owned Subsidiary of the Company. It continues to be the Research & Development facilitator to the Company.

JKM Erla Automotive Limited, India (JKM Erla)

During the year, the Company, through its Wholly Owned Subsidiary, JKM Erla Automotive Limited, acquired Eisenwerk Erla GmbH Germany from the Chennai based SANMAR Group.

Post acquisition, JKM Erla Holdings GmbH, Eisenwerk Erla GmbH and JKM Ferrotech Limited became the wholly owned subsidiaries of JKM Erla Automotive Limited.

Eisenwerk Erla GmbH generates revenues in excess of Euro 100 million between its two units located in Germany and India.

The Company had entered the automotive business in 1997 through its 73% owned joint-venture with Daerim Enterprise Company Limited, Korea. JKM Daerim Automotive Limited commenced business as a supplier of critical engine and transmission parts to Hyundai Motor India Limited and has grown to be a partner to all major automotive Original Equipment Manufacturers (OEM's) in the country. In 2008, this Subsidiary was merged with the Company.

The Board of Directors of the Company, at its meeting held on May 7, 2011, had decided to demerge the 'Automotive Division' of the Company into JKM Erla Automotive Limited with effect from April 1, 2011 and also received 'No Objection Letter' from the stock exchanges. Taking into consideration the tight timelines available for integration of multiple corporate structures within the automotive business, as well as the financial / tax implications, the Board of Directors of the Company, at its meeting held on February 13, 2012, decided to withdraw the Scheme of Arrangement. It is proposed to evaluate an appropriate scheme during the following year.

JKM Ferrotech Limited, India (JFTL)

JFTL became a subsidiary of the Company subsequent to its holding company Eisenwerk Erla GmbH, Germany, becoming a subsidiary of the Company.

JFTL is into manufacturing of ferrous alloy and castings, having its operations in Gummudipundi, Chennai. The facility has expertise in producing High Si-Mo automotive components and is certified to the highest quality standards specified by the Automotive Industry. The expertise in producing intricately shaped castings as well as the skill in handling ferrous alloys, particularly High Si-Mo and Ni-Resis makes JFTL a strong development partner for prototypes in Ferrous Alloy castings.

OVERSEAS, WHOLLY OWNED SUBSIDIARIES

JKM Global Pte. Limited, Singapore, (JKMGB) is a Wholly Owned Subsidiary of your Company. It continues as an investment hub for overseas businesses.

Dynamatic Limited, Swindon, UK, (DLUK) is a Wholly Owned Subsidiary of your Company held through JKM Global Pte. Limited, Singapore.

The UK facilities have been restructured by way of merging Oldland Aerospace with Dynamatic Limited.

Yew Tree Investments Limited and Dynamatic Limited are

the subsidiaries of JKM Global Pte Limited. Post restructure, DLUK has its Hydraulics unit in Swindon and its Aerospace unit, Dynamatic Oldland Aerospace in Bristol.

The Hydraulics unit of DLUK located in Swindon, England, 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 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 Ltd UK is located in Bristol & Swindon, and is a leader in Aeronautical Precision Engineering and is currently working on components for most of the Airbus family of aircraft including the A300/310, A320, A330/340, A380, A400M, C130J and future Lynx Helicopter. Central to the Dynamatic Oldland Aerospace approach is their commitment to a continual improvement program based on Lean & Agile innovative engineering principles.

Yew Tree Investments Limited, Bristol, UK (YTIL) is a Wholly Owned Subsidiary of Dynamatic Limited, UK.

JKM Erla Holdings GmbH, Germany (JKM Erla GmbH)

became a subsidiary of the Company, subsequent to its holding company, JKM Erla Automotive Limited, becoming a subsidiary of the Company. It is engaged in the business of setting up automotive components processing/manufacturing units.

Eisenwerk Erla GmbH, Germany (Eisenwerk) became a subsidiary of the Company, subsequent to its holding company, JKM Erla GmbH, becoming a subsidiary of the Company. Eisenwerk has been in business for over 630 years and is a preferred supplier to leading global OEMs including Audi, BMW, Volkswagen, to name a few.

REPORT ON SUBSIDIARY COMPANIES

As per Section 212 of the Companies Act, 1956, we are required to attach Directors' Report, Balance Sheet and Profit & Loss Account of our Subsidiaries to this Report. The Ministry of Corporate Affairs, Government of India vide its Circular No. 2/2011 dated February 8, 2011, has provided an exemption to the companies from complying with Section 212, provided such companies publish audited consolidated financial statements in the annual report. However, a statement showing the relevant details of the Subsidiaries is enclosed as ANNEXURE - II, forming part of this report. Accordingly, the Annual Report does not contain the financial statements of our Subsidiaries. The audited annual accounts and related information of our subsidiaries, where applicable, will be made available on request.

The financial performance and the review of Business of DLUK, JKMRF, JFTL and Eisenwerk Erla are forming part of this Report.

These documents will also be available for inspection at the registered office during business hours at Bangalore, India. The same will also be published on our website at www.dynamatics.com

3. RESEARCH & DEVELOPMENT

Your Company is a repository of diverse technologies and has transformed itself into a knowledge-based organization through sustained Research & Development efforts. All technology development efforts are guided at the Board level through the Technology Development Committee.

Your Company's focus on Research & Development has resulted in strong development initiatives; enabling the Company to foray into providing new services, launching new products and enhancing product value to our customers.

JKM Science Center at Bangalore, spread over an area of 40,000 sq. ft. houses design laboratories viz. Dynamatic® Research & Development Center and Powermetric® Design;

a sophisticated Material Science Laboratory; a prototype manufacturing unit and a Training Center.

Your Company's Design efforts are focused on

- Design, Validation and Prototyping of new products.

- New Project Management employing Product Life Cycle Management Tool through APQP approach

- Effective deployment of analytical tools, viz. ANSYS, CFD, Pro-Mechanica, & Automation Studio, etc.

- Improvement of existing designs.

- Continuous improvement of existing processes.

- Ongoing testing of products and materials.

Intellectual Property

The Company has emerged as one of India's leading Research

& Development organisations, with numerous inventions and patents to its credit. The Company has defined an Intellectual Property (IP) strategy to build an effective portfolio for future monetization, collaboration and risk mitigation, focussing on future technologies. The Company owns the following Patents for various Products:

- From India

Four - (One International Patent, three from the European Union).

- From England

Eleven - (11 UK, 1 Italian and 1 US patent).

In addition, the Company has 2 patents pending in multiple jurisdictions, awaiting registration.

The Company has 10 trademarks registered and 4 trademark applications pending, awaiting registration.

Eisenwerk owns 1 trademark and 2 patents in Germany.

The Company employs over 60 Scientists and 600 engineers and technicians with expertise in Mechanical Engineering, Advanced Computer Aided Engineering, Computer Aided Manufacture, Materials & Metallurgical Engineering, Fluid Dynamics, Defence & Aerospace Research. The state-of-the- art JKM Science Center brings together Design Engineering, Development, Prototyping, Metallurgical and Manufacturing Infrastructure enabling your Company to comprehensively address the needs of its global customers.

The Dynamatic® Hydraulics Research Laboratory, in

Swindon, England, has advanced design knowledge focused on the Mobile Hydraulics Sector, excellent engineering capabilities and ownership of intellectual property.

This facility operates a comprehensive product testing and validation laboratory.

This facility has completed testing and validation of new products for various customers like Cummins - Daventry, John Deere - USA, CNH, JCB, Terex, Mahindra & Mahindra, etc. The Company has already successfully launched these new products in India and globally.

The Dynamatic Oldland Aerospace, in Bristol, England possesses people having specialized skill sets who are one of the few specialists in CNC Programming, globally. Improving process run times, reduction in cycle time, optimizing machining strategies and high feed tooling have been achieved to optimize component by using new processes, use of latest cutting tools and fresh approach to the product.

The Company's Wholly Owned Subsidiary, JKM Research Farm Limited, operates a unique facility for testing and analysing complete aggregates and systems for mobile equipment.

4. QUALITY MANAGEMENT SYSTEM (QMS)

Dynamatic® Hydraulics

During the year your Company has successfully completed surveillance audits to ISO:9001 specifications for, Quality Management System and also to ISO:14001 specifications for its Environmental Management System. Your Company's QMS which is compliant to ISO standards since 1999, has evolved and matured and is highly system driven.

The Company has started addressing and implementing health and safety activities for certification to Occupational Health & Safety Assessment Series (OHSAS) standards. The activities are focused on health & safety of its employees on the shop floor. Awareness campaigns have been undertaken to enforce the use of Personnel Protective Equipment (PPE) at work. At the same time, the Company has been attempting to merge the EMS & OHSAS requirements into a common management system called Integrated Management System. This will avoid unnecessary duplication of work in monitoring and maintenance of records. The audits for both systems can also be combined and carried out at the same time.

The Dynamatic® Quality Management System (DQMS) addresses the quality requirements and management expectations set out by the global major players such as John Deere, Cummins, CNH, Mahindra & Mahindra etc. DQMS utilises some of the best tools such as 5S, Business Process Re-engineering, Overall Equipment Effectiveness, Root cause analysis, Six Sigma, Statistical Process Control, Total Productive Maintenance, Visual Control, Learning-by-doing, Employee Participation Program (EPP) etc.

Lean Management concepts together with 5S tools are being used on the shop floor to increase the Overall Equipment Effectiveness (OEE) of the operations. This is achieved by reducing rejections, set ups, cycle time and through effective material management. The Employee Participation Program has resulted in the participation of employees in innovative activities and their contributions have resulted in continual improvements to work and work processes. Quality tools viz. 5S, Six Sigma etc, have resulted in enhanced product quality, innovation and cost effectiveness.

The learning in establishing the green field units-JKM pump division and The Center for Bush Excellence, are imbibed into the existing main Unit in Dynamatic Park.

Automating the processes and de-skilling them has helped us to move from operator's domain to machine domain. Fresh recruits also can learn quickly and manage the operations.

Thrust is always on reducing paperwork by using electronic means to communicate and store data.

Supply Chain Management and Productivity

The Company's supply chain program aims at upgrading the vendors so as to enable them meet the demanding requirements of Quality, Cost & Delivery. Vendor training & audits are being conducted at regular intervals.

The demand for hydraulic pumps has been growing rapidly and keeping pace with this demand has been a challenging task. Your Company's investment in the capital equipment has been the highest in this year. New generation CNC machines have been added to the production line to increase its capacity. The production capacity has been ramped up by 30% in the past two quarters. To create space for the new machines and test rigs, a new unit is being set-up close to the main factory. All efforts have been made to keep the operational costs as low as possible.

Dynamatic Limited, Hydraulics, UK, is accredited to ISO 9001:2008 standards and has recently renewed its certification from British Standards Institute (BSI). Dynamatic Limited's lean initiatives continue to be the focus of all employees using 5S techniques. The UK facilities continue to have 0 (zero) Defects per million and 100% on time delivery as reported in the John Deere supplier web site JDSN.

JKM Automotive™ and Dynametal® continues to strengthen its Quality and Safety standards by upgrading to the latest versions of existing certifications. The divisions are certified to Quality, Occupational Health and Safety and Environmental Management Systems such as ISO / TS 16949, OHSAS 18000, ISO 14000 and FORD Q1. JKM Automotive™ has also been audited and approved by various global OEM's such as Hyundai, Ford, Fiat, Nissan, Daimler, Cummins, John Deere, etc.

As a part of continuous internal improvement program, we have successfully implemented Quality controls and kept at single digit PPM levels with Hyundai supplies. We have improved on Material cost ratio enjoying a reduction by 3% through better material control and buying efficiency. The unit initiated manufacture of Pressure Die Castings inhouse and Alloy making for its requirements, as part of backward integration. This would further bring down our present material cost ratio by 3%. We started enjoying uninterrupted power supply for our units which would bring savings in our power costs.

Dynamatic Oldland Aerospace, India has the largest infrastructure in the Indian private sector for the manufacture of exacting Air Frame Structures and Precision Aerospace Components, having its manufacturing facilities in Bangalore and Nasik.

This Division is one of the first to have NADCAP approval for Heat Treatment and Non-Destructive-Test Facilities in India and is well supported by its AS 9100 'C' - Annual certification by UL covering both the manufacturing facilities.

This Division is also a certified supplier for major OEMs like

Airbus, Boeing, Bell Helicopters, Northrop Grumman for supply of aircraft components and assemblies.

Dynamatic Oldland Aerospace, UK a division of Dynamatic Limited UK is a unique state-of-the-art aeronautical manufacturing facility in Bristol & Swindon UK, possessing complex 5 axis machining capabilities for the manufacture of Aerospace components and tooling.

This Division is a certified supplier to Airbus UK, GKN Aerospace Europe & USA, Spirit Aerosystems, Boeing, Magellan Aerospace, GE Aviation Systems, Lockheed Martin & Augusta Westlands. We are supported by BSI ISO 9001:2000 and AS 9100 revc. Dynamatic Oldland Aerospace has been accredited with Environmental Management System (EMS) certification ISO:14000.

Powermetric® Design, after obtaining Design Approval Certification from the Center for Military Airworthiness & Certification (CEMILAC), has proposed its design capabilities to Indian as well as foreign aerospace organisations. The CEMILAC certification which is mandatory for defence & aerospace design, will enable Powermetric® to undertake design, validation and development activities of aerospace parts/products using various sophisticated computational tools.

Powermetric is also focusing on new research areas viz., Clean and Green Energy management and application.

Dynamatic Homeland Security™ offers cutting edge solutions to enhance the nation's capabilities in countering modern day security threats-internal as well as external.

Our strong research and development capabilities, combined with powerful partnerships we have forged with leading global security technology companies like Blue- Bird Aero systems for UAVs, Elgo team for crash rated Bollards and Barriers, Gatekeeper Inc for Under vehicle scanners enables us to offer potential customers like the Ministry of Defense, Ministry of Home Affairs, solutions that will help them prepare and plan for emergencies as well as boost their response and recovery skills.

5. AWARDS, RECOGNITION AND IMPORTANT MILESTONES

- Dynamatic® Hydraulics UK has received the 'Highest CNH Business Growth Award' which was presented at the 1st CNH and IVECO P & S Suppliers Convention in France during April 2012.

- During 2011, Dynamatic® Hydraulics UK conducted a 'Gear Pump Seminar' to John Deere engineers in Waterloo. This seminar was to increase the understanding of gear pump operation and application.

- Dynamatic Oldland Aerospace Division, UK - Successful re-negotiations on existing business contracts has resulted in long term agreements for a further 5 years.

6. DEPOSITS

As on March 31, 2012, the Company has no unclaimed deposits by the deposit holders of the Company.

7. DIRECTORS

Ms. Claire Louise Tucker was co-opted as an Additional Director at the Board Meeting held on August 13, 2011. In terms of relevant provisions of the Companies Act, 1956, Ms. Claire Louise Tucker holds office up to the date of the forthcoming Annual General Meeting. The Company has received a notice under Section 257 of the Companies Act, 1956 from a member signifying her intention to propose the name of Ms. Claire Louise Tucker for appointment as Director of the Company at the next Annual General Meeting. This item has been included in the notice convening the next Annual General Meeting of the Company.

Under Section 256 of the Companies Act, 1956, Air Chief Marshall S. Krishnaswamy (Retd.), Mr. Vijay Kapur and Mr. Raymond Keith Lawton, Directors of the Company retire by rotation at the ensuing Annual General Meeting, and being eligible, offer themselves for re-appointment.

Mr. B. Seshnath-Executive Director & Chief Marketing Officer of the Company placed his resignation, which the Board of Directors, at its meeting held on August 3, 2012, accepted and his resignation would be effective August 10, 2012.

None of the Directors of the Company are disqualified for being appointed as Directors as specified under Section 274 of the Companies Act, 1956 as amended by the Companies (Amendment) Act, 2000.

Details of all the Directors has been covered in Corporate Governance Report forming part of the Annual Report.

8. DIRECTORS' RESPONSIBILITY STATEMENT

The Directors' Responsibility Statement as required under Section 217(2AA) of the Companies (Amendment) Act, 2000.

The Board of Directors hereby confirms that:

i) In the preparation of accounts for the financial year ended March 31, 2012, the applicable Accounting Standards have been followed with proper explanation relating to material departures if any.

ii) We have selected such accounting policies and applied them consistently and made judgments and estimates that were 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 & Loss Account of the Company for the year under review.

iii) We have taken proper and sufficient care for the maintenance of adequate records in accordance with the provisions of the Companies Act, 1956, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities.

iv) We have prepared the accounts for the financial year ended March 31, 2012, on a 'going concern' basis.

9. CONSOLIDATED FINANCIAL STATEMENTS

The Directors have pleasure in attaching the Consolidated Financial Statements prepared by the Company in accordance with the relevant Accounting Standards issued by the Chartered Accountants of India, which form part of the Annual Report and Accounts.

10. AUDITORS AND AUDITORS' REPORT

M/s. B S R & Associates, Chartered Accountants, Statutory Auditors of the Company retire at the ensuing Annual General Meeting and offer themselves for re-appointment.

They have confirmed to the Company that their re-appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for re-appointment within the meaning of Section 226 of the said Act.

The Report of the Auditors on the Financial Statements forms part of this Annual Report.

11. PARTICULARS OF EMPLOYEES

The Company places a high premium on the development and retention of its Human Resources as well as in providing employees with safe and healthy work environments. The Corporate Human Resource Department under the leadership of the Head - Group HR continues to focus on formulating HR practices and strategic policies which will enable the Company to continue with its talent identification, recruitment, and development initiatives, thereby creating a merit oriented, values based work culture across the organization. The Performance Management System which was introduced in 2011 has helped the Company design programmes to train and develop employees for improved performance, through skill-sets development and attitudinal changes. The Company continues to remain focused on the maintenance of cordial industrial relations with its work force and in fostering a system of participative management, which enhances the employees' sense of belonging within the Company.

Information required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended is forming part of this Report. However, as per provisions of Section 219(1)(b)(iv), the Report and Accounts are being sent to all shareholders of the Company excluding the statement of particulars of employees. Any shareholder interested in obtaining such particulars, may inspect the same at the Registered Office of the Company.

12. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGOING

The information relating to conservation of energy, technology absorption, foreign exchange earnings and outgo required to be disclosed under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in ANNEXURE - I, forming part of this report.

13. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of Section 205A(5) of the Companies Act, 1956, dividends which remained unclaimed for a period of seven years, have been transferred by the Company to the Investor Education and Protection Fund.

14. MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT

Management's Discussion and Analysis Report for the year, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report.

15. CORPORATE GOVERNANCE

The Company is committed to maintain the best standards of Corporate Governance and adheres to the Corporate Governance requirements set out by Securities and Exchange Board of India (SEBI). The Company has also implemented several best corporate governance practices prevalent globally.

National Stock Exchange of India Limited (NSE), in association with Credit Rating and Information Services of India Limited (CRISIL), has initiated Independent Equity Research Report (IER), on certain companies. IER is reckoned among the best practices globally in the equity research-independence space. The Company has been covered under an Independent Equity Research Report carried out by CRISIL under the aegis of NSE-IPFT.

The reports can be viewed at www.ier.co.in or at National Stock Exchange home page: at NSE-IPFT Sponsored Research Reports.

M/s. VEV and Co, Company Secretaries, had conducted the Corporate Governance audit for the year under review.

A separate section on Corporate Governance and a Certificate from M/s. VEV and Co, Company Secretaries, regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with Stock Exchange/s in India is presented in a separate section forming part of this Annual Report

16. PROMOTERS

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

Persons constituting promoters coming within the definition of 'Promoter' for the purpose of regulation 2(1) (s) of the SEBI

(Substantial Acquisition of Shares and Takeovers) Regulations, 2011 include the following:

SL. No. Name of the Entity

1 Mrs. Barota Malhoutra

2 Christine Hoden (India) Pvt.Ltd

3 JKM Holdings Pvt. Ltd

4 JKM Offshore India Pvt.Ltd

5 Primella Sanitary Products Pvt.Ltd

6 Mr.Udayant Malhoutra

7 Udayant Malhoutra and Company Pvt.Ltd

8 Vita Pvt.Ltd

9 Wavell Investments Pvt.Ltd

17. DISCLOSURES REQUIRED UNDER LISTING AGREEMENT

Disclosures required under various clauses of the listing agreement, are made elsewhere in this Annual Report.

The Certification by CEO & Managing Director and President & Group CFO of the Company is attached in ANNEXURE - IV, forming part of this report.

ACKNOWLEDGMENTS

Your Directors would like to thanks for the co-operation received from the Financial Institutions, Banks, Government Authorities, Customers, Vendors, Shareholders and Investors during the year under review.

Your Directors also wish to place on record their deep sense of appreciation for the committed services of Executives, Managers Staff and Workers of the Company and look forward to their continued support in the future.

For and on behalf of the Board of Directors

DR. K. APRAMEYAN

Chairman

Place : Bangalore Date : August 3, 2012

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Mar 31, 2011

Dear Members,

The Directors have pleasure in presenting the Thirty Sixth Annual Report together with the Audited Statement of Accounts for the year ended 31st March, 2011.

1. FINANCIAL RESULTS

The Financial Results of the Company for the year ended 31st March, 2011, were as follows:

(Rs. in Lacs) Standalone Consolidated

Particulars Year Ended Year Ended Year Ended Year Ended

31 March 2011 31 March 2010 31 March 2011 31 March 2010

Gross Sales 38,478.30 32,067.61 52,552.38 46,284.31

Net Sales 35,429.87 29,772.27 49,503.95 43,988.97

Profit (Before Interest, Depreciation & Taxation) (EBITDA) 6,621.86 5,393.46 8,329.51 6,329.60

Interest & Finance Charges 2,405.43 2,142.65 2,745.66 2,492.25

Depreciation 2,040.65 1,856.63 2,504.33 2,253.90

Net Profit Before Taxation and Extra ordinary item 2,175.78 1,394.18 3,079.52 1,583.45

Extraordinary items - - 46.68

Net Profit Before Taxation and after Extraordinary item 2,175.78 1,394.18 3,032.84 1,583.45

Provision of Taxation:

- Current Tax 441.70 218.17 615.34 438.88

- Minimum Alternate Tax Credit Entitlement (64.32) (119.28) (64.32) (119.28)

- Deferred Tax Charge 310.76 211.26 310.76 210.10

- Wealth Tax 3.43 2.29 3.43 2.29

Net Profit After Tax 1,484.21 1,081.74 2,167.63 1,051.46

Balance brought forward from previous year 3,324.83 2,826.38 2,172.41 1,704.24

Amount available for appropriation 4,809.04 3,908.12 4,340.04 2,755.70

Appropriations

Dividend on Equity Shares - Interim 324.88 243.66 324.88 243.66

Proposed Final Dividend on Equity Shares 216.59 162.44 216.59 162.44

Tax on Dividend 89.09 69.01 89.09 69.01

Transfer to General Reserve 148.42 108.18 148.42 108.18

Balance carried to Balance Sheet 4,030.06 3,324.83 3,561.06 2,172.41

Notes: Previous year fgures have been recast wherever necessary.

DIVIDEND

During the year, your Directors, based on the performance of the Company, declared an Interim Dividend of 60% and paid on 5,414,703 Equity Shares absorbing Rs.32,488,218/-. Your Directors recommend a Final Dividend of 40% on 5,414,703 Equity Shares of Rs.10/- each, absorbing Rs.21,658,812/- for the year under report. Hence the Total Dividend payout for the year under review is Rs.54,147,030/- (exclusive of tax).

TRANSFER TO RESERVES

Your Directors propose to transfer Rs.148.42 lacs to General Reserve, during the year under report. An amount of Rs.705.23 lacs is proposed to be retained in the profit and loss account.

The Company has hedged a part of its future foreign currency receivables to mitigate its foreign exchange fluctuation risks.

The same has been designated as a cash flow hedge with effect from 1st April, 2008, applying the hedging criteria. The movement in the Mark To Market (MTM), subsequent to the designation as a cash flow hedge, amounting to Rs.274.93 lacs, has been accounted under Hedge Reserve Account.

Pursuant to Notification No. G.S.R. 225(E) dated 31st March, 2009 issued by the Ministry of Corporate Affairs, the Company had opted (on 31st March, 2009) to adjust the exchange differences relating to long term monetary items with retrospective effect from 1st April, 2007 vis-à-vis recognition of aforesaid exchange differences as income/ expense in the profit and loss account in the earlier years.

Accordingly, foreign exchange gain amounting to Rs.357.17 lacs and foreign exchange loss amounting to Rs.33.81 lacs for the year ended 31st March, 2010 and 31st March, 2011 respectively, has been adjusted to the cost of fixed assets.

COMPANY PERFORMANCE

Your Directors are pleased to inform that your Company has shown a significant growth in profitability and sales during the period under review.

Total income on a consolidated basis was Rs.50,367.82 lacs, as against Rs.44,515.89 lacs in 2009-10.

EBITDA on a consolidated basis was Rs.8,282.83 lacs as against Rs.6,329.60 lacs in 2009-10.

Net Profit Before Tax on a consolidated basis was Rs.3,032.84 lacs, as against Rs.1583.45 lacs in 2009-10.

Net Profit After Tax on a consolidated basis was Rs.2,167.63 lacs, as against Rs.1,051.46 lacs in 2009-10.

The Hydraulics and Precision Engineering business grew to Rs.23,037.31 lacs from Rs.19,357.84 lacs in 2010. Profit (Before Interest & Tax) grew from Rs.985.45 lacs to Rs.1,956.53 lacs. This includes the turnover from the Hydraulics division of Dynamatic Limited, UK, a subsidiary of your Company, to the extent of Rs.8,534.08 lacs and Profit (Before Interest & Tax) of Rs.17.52 lacs.

The Aerospace business grew from Rs.7,821.34 lacs to Rs.10,241.56 lacs and Profit (Before Interest & Tax) grew from Rs.1,432.58 lacs to Rs.3,185.15 lacs. This includes the turnover from the Aerospace division of Dynamatic Limited, UK, a subsidiary of your Company, to the extent of Rs.5,875.99 lacs and Profit (Before Interest & Tax) of Rs.1,060.72 lacs.

The Aluminium Castings business declined from Rs.3,496.27 lacs to Rs.3371.04 lacs and Profit (Before Interest & Tax) declined from Rs.201.48 lacs to a loss of Rs.71.73 lacs.

The Automotive business grew from Rs.19,004.49 lacs to Rs.19,249.28 lacs while Profit (Before Interest & Tax) declined from Rs.1,051.00 lacs to Rs.206.24 lacs.

Exports from India have grown at 87% with sales of Rs.6,728.18 lacs against the previous year's Rs.3,604.12 lacs.

Capital expenditure

During the year, your Company incurred capital expenditure of Rs.847.49 lacs for physical infrastructure, Rs.4,952.75 lacs for technological infrastructure and Rs.120.31 lacs for procurement of intangible assets.

Significant investments have been made in building infrastructure, state-of-the-art machinery, design software, data security, information systems, design and development activities; for the future benefits of your Company.

2. SUBSIDIARIES

Your Company has five Subsidiaries, the brief particulars of which are given below.

INDIAN, WHOLLY OWNED SUBSIDIARIES

JKM Research Farm Limited, India, (JKMRF) is a Wholly Owned Subsidiary of your Company. It continues to be the Research & Development facilitator to the Company.

JKM ERLA Automotive Limited, India (JKM ERLA)

During the year your Company, had promoted JKM ERLA Automotive limited, India, a Wholly Owned Subsidiary of the Company.

Dynamatic Technologies Limited, through its Wholly Owned Subsidiary, JKM Erla Automotive Limited, is in the process of acquiring Eisenwerk Erla GmbH Germany from the Chennai based SANMAR Group.

Eisenwerk Erla GmbH generates revenues in excess of Euro 100 million between its two units located in Germany and India.

This acquisition is an important milestone for your Company.

The potential advantages of the acquisition are:

- Global player in the exhaust and turbocharger segments of the automotive industry.

- Manufacturing locations in Europe and Asia.

- Experienced management team.

- Provides the Company 100% ownership of one of the finest ferrous foundries in Europe, capable of manufacturing extremely intricate ferrous castings, from difficult-to-cast materials.

- Marquee customers in the Automotive and Turbocharger markets.

Dynamatic Technologies Limited had entered the automotive business in 1997 through its 73% owned joint-venture with Daerim Enterprise Company Limited, Korea. JKM Daerim Automotive Limited commenced business as a supplier of critical engine and transmission parts to Hyundai Motor India Limited and has grown to be a partner to all major automotive Original Equipment Manufacturers (OEM's) in the country. In 2008, this Subsidiary was merged with your Company.

Your Company is in the process of de-merging its existing Automotive business into JKM Erla Automotive Limited, a Wholly Owned Subsidiary of the Company.

The Board of Directors have approved the Scheme of Arrangement by way of the de-merger of the Automotive unit into the Company subject to the approval of shareholders and compliance with the relevant provisions of the Companies Act, 1956.

The Company will soon be sending you a separate Notice for your approval in the said matter.

OVERSEAS, WHOLLY OWNED SUBSIDIARIES

JKM Global Pte. Limited, Singapore, (JKMGB) is a Wholly Owned Subsidiary of your Company. It continues as an investment hub for overseas businesses.

Dynamatic Limited, Swindon, UK, (DLUK) is a Wholly Owned Subsidiary of your Company held through JKM Global Pte. Limited, Singapore.

During the year, the UK facilities have been re-structured by way of merging Oldland Aerospace with Dynamatic Limited, effective from 31st October, 2010. Yew Tree Investments Limited and Dynamatic Limited are the subsidiaries of JKM Global Pte Limited. Post restructure, DLUK has its Hydraulics unit in Swindon and its Aerospace unit, Dynamatic Oldland

AerospaceTM in Bristol.

The Hydraulics unit of DLUK located in Swindon, England, 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 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 AerospaceTM, located in Bristol, is a leader in Aeronautical Precision Engineering and is currently working on components for most of the Airbus family of aircraft including the A300/310, A320, A330/340, A380 and A400M. Central to the Dynamatic-Oldland's approach is their commitment to a continual improvement program based on Lean & Agile engineering principles.

Yew Tree Investments Limited, Bristol, UK (YTIL) is a Wholly Owned Subsidiary of Dynamatic Limited, UK.

With the restructuring of the UK Subsidiaries, Oldland Aerospace Limited and DM 38 Limited have become dormant companies during the year under review.

REPORT ON SUBSIDIARY COMPANIES

As per Section 212 of the Companies Act, 1956, we are required to attach Directors Report, Balance Sheet and Profit and Loss Account of our Subsidiaries to this Report. The Ministry of Corporate Affairs, Government of India vide its Circular No. 2/2011 dated 8th February, 2011, has provided

an exemption to the companies from complying with Section 212, provided such companies publish audited consolidated financial statements in the annual report. However, a statement showing the relevant details of the Subsidiaries is enclosed as ANNEXURE - II, forming part of this report. Accordingly, the Annual Report does not contain the financial statements of our Subsidiaries. The audited annual accounts and related information of our subsidiaries, where applicable will be made available on request.

The financial performance and the review of Business of DLUK and JKMRF are attached forming part of this Report.

These documents will also be available for inspection at the registered office during business hours at Bangalore, India. The same will also be published on our website at

www.dynamatics.com

3. RESEARCH & DEVELOPMENT

Your Company is a repository of diverse technologies and has transformed itself into a knowledge-based organization through sustained Research & Development efforts. All technology development efforts are guided at the Board level through the Technology Development Committee.

Your Company's focus on Research & Development has resulted in strong development initiatives; enabling the Company to foray into providing new services, launching new products and enhancing product value to our customers.

JKM Science Center at Bangalore, spread over an area of 40,000 sq. ft. houses design laboratories viz. Dynamatic® Research & Development Center and Powermetric® Design; a sophisticated Material Science Laboratory; a

prototype manufacturing unit and a Training Center.

Your Company's Design efforts are focused on

- Design, Validation and Prototyping of new products.

- Improvement of existing designs.

- Continuous improvement of existing processes.

- Ongoing testing of products and materials.

Intellectual Property

Your Company has emerged as one of India's leading Research & Development organisations, with numerous inventions and patents to its credit.

Your Company has defined an Intellectual Property (IP) strategy to build an effective portfolio for future monetization, collaboration and risk mitigation, focussing on future technologies.

Dynamatic Technologies owns the following Patents for various Products:

- From India

Four - (One International Patent, three from the European Union).

- From England

Eleven - (11 UK, 1 Italian and 1 US patent).

In addition, your Company has two patents pending in multiple jurisdictions, awaiting registration.

Dynamatic® employs over 60 Scientists and 600 engineers and technicians with expertise in Mechanical Engineering, Advanced Computer Aided Engineering, Computer Aided Manufacture, Materials & Metallurgical Engineering, Fluid Dynamics, Defence & Aerospace Research. The state-of-the- art JKM Science Center brings together Design Engineering, Development, Prototyping, Metallurgical and Manufacturing Infrastructure enabling your Company to comprehensively address the needs of its global customers.

The Dynamatic® Hydraulics Research Laboratory, in Swindon, England, has advanced design knowledge focused on the Mobile Hydraulics Sector, excellent engineering capabilities and ownership of intellectual property.

This facility operates a comprehensive product testing and validation laboratory. During the year, this facility has completed testing and validation of new products for various customers like Cummins, John Deere, CNH Daventry, JCB, Terex, Mahindra & Mahindra etc. During the year, your Company has successfully launched these new products in India and globally.

The Dynamatic Oldland AerospaceTM, in Bristol, England possesses people having specialized skill sets who are one of the few specialist in CNC Programming, globally. Improving process run times, reduction in cycle time, optimizing machining strategies and high feed tooling been achieved to optimize component by using new processes, use of latest cutting tools and fresh approach to the product.

Your Company's Wholly Owned Subsidiary, JKM Research Farm Limited, operates a unique facility for testing and analysing complete aggregates and systems for mobile equipment.

4. QUALITY MANAGEMENT SYSTEM (QMS)

Dynamatic® Hydraulics

During the year your Company has successfully completed surveillance audits to ISO:9001 specifications for, Quality Management System and also to ISO:14001 specifications for its Environmental Management System. Your Company's QMS which is compliant to ISO standards since 1999, has evolved and matured and is system driven.

Your Company has started addressing and implementing health and safety activities for certification to Occupational Health & Safety Assessment Series (OHSAS) standards. The activities are focused on health & safety of its employees on the shop floor. Awareness campaigns have been undertaken to enforce the use of Personnel Protective Equipment (PPE) at work. At the same time, the Company has been attempting to merge the EMS & OHSAS requirements into a common management system called Integrated Management System. This will avoid unnecessary duplication of work in monitoring and maintenance of records. The audits for both systems can also be combined and carried out at the same time.

The Dynamatic® Quality Management System (DQMS) addresses the quality requirements and management expectations set out by the global major players such as John Deere, Cummins, CNH, Mahindra & Mahindra etc. DQMS utilises some of the best tools such as 5S, Business Process Re-engineering, Overall Equipment Effectiveness, Root cause analysis, Six Sigma, Statistical Process Control, Total Productive Maintenance, Visual Control, Learning-by-doing, Employee Participation Program (EPP) etc.

Lean Management concepts together with 5S tools are being used on the shop floor to increase the Overall Equipment Effectiveness (OEE) of the operations. This is achieved by reducing rejections, set ups, cycle time and through effective material management. The Employee Participation Program has resulted in the participation of employees in innovative activities and their contributions have resulted in continual improvements to work and work processes. Quality tools viz. 5S, Six Sigma etc, have resulted in enhanced product quality, innovation and cost effectiveness.

Supply Chain Management and Productivity

Your Company's supply chain program aims at the up- gradation of vendors to enable them to meet the demanding requirements of Quality, Cost & Delivery. Vendor training & audits are being conducted at regular intervals.

The demand for hydraulic pumps has been growing rapidly and keeping pace with this demand has been a challenging task. Your Company's investment in the capital equipment has been the highest in this year. New generation CNC machines have been added to the production line to increase its capacity. The production capacity has been ramped up by 30% in the past two quarters. To create space for the new machines and test rigs, a new unit is being set-up close to the main factory. All efforts have been made to keep the operational costs as low as possible.

Dynamatic Limited, Hydraulics, UK, is accredited to ISO 9001:2008 standards and has recently renewed its certification from British Standards Institute (BSI). Dynamatic Limited's lean initiatives, continue to be the focus of all employees using 5S techniques. The UK facilities continue to have 0 (zero) Defects per million and 100% on time delivery as reported in the John Deere supplier web site JDSN.

JKM Automotive™ and Dynametal® continues to strengthen its Quality and Safety standards by upgrading to the latest versions of existing certifications. The divisions are certified to Quality, Occupational Health and Safety and Environmental Management Systems such as ISO / TS 16949, OHSAS 18000, ISO 14000 and FORD Q1. JKM Automotive™ has also been audited and approved by various global OEM's such as Hyundai, Ford, Fiat, Nissan, Daimler, Cummins and John Deere, etc.

As a part of the worldwide supplier improvement program initiated by Honeywell, JKM Automotive™ has been Honeywell's first supplier outside Europe to implement Honeywell Operating System (HOS). This has been guided by a dedicated team from Honeywell Global HOS team. JKM Automotive™ has successfully implemented the first

3 phases and is currently working towards implementing phase 4 since January 2011. Significant improvements have been witnessed at both foundry and machine shop in areas such as setting time, through-put time from pouring to despatch, output per employee, kaizen, strategic deployment program and various other shop floor initiatives.

Dynamatic Oldland AerospaceTM, India has the largest infrastructure in the Indian private sector for the manufacture of exacting Air Frame Structures and Precision Aerospace Components, having its manufacturing facilities in Bangalore and Nasik. The Division is well supported by its AS 9100 'B' - Annual certification by UL covering Nasik work centre & NADCAP approvals for Heat Treatment and Non-Destructive- Test Facilities in India. This is the first time such capabilities have been built in the Indian private sector. This Division is also certified by industry majors like Airbus & Boeing for supply of aircraft components and assemblies.

Dynamatic Oldland AerospaceTM, UK is supported by its ISO 9001:2000 and AS 9100 from the BSI. During the year, the Company has successfully completed customer audits by GKN, Yeovil, Spirit AeroSystems, G. E. Aerospace, Westland Helicopters Limited.

Dynamatic Oldland AerospaceTM has been accredited with Environmental Management System (EMS) certification ISO:14000.

Dynamatic Oldland AerospaceTM has received an award from the West of England Aerospace Forum (WEAF) for its Lean Manufacturing and Continuous Improvements initiatives.

Powermetric® Design, after obtaining Design Approval Certification from the Center for Military Airworthiness & Certification (CEMILAC), has proposed its design capabilities to Indian as well as foreign aerospace organisations. The CEMILAC certification which is mandatory for defence & aerospace design, will enable Powermetric® to undertake design, validation and development activities of aerospace parts/products using various sophisticated computational tools.

Powermetric is also focusing on new research areas viz., Clean and Green Energy management / and application.

5. AWARDS, RECOGNITION AND IMPORTANT MILESTONES

- Dynamatic® Hydraulics has received the 'Best Performance Award' in the Supply Chain Management Category from the Swaraj Tractor Division of Mahindra & Mahindra for outstanding SCM performance.

- Dynamatic® has received an 'Award of Appreciation'

from Voltas Limited (A Tata Enterprise) for the consistent quality of products supplied.

- Dynamatic Oldland Aerospace Division, UK, has been recognized by GKN Aerospace for 'Excellent performance in the areas of delivery and quality'.

- Dynamatic Technologies Limited was featured on the cover of the Aviation Week, for the issue of the month of June 2010.

- Dynamatic Technologies has successfully achieved 'Single Source Supplier' status for the Airbus 320 Flap Track Beams being supplied to Spirit AeroSystems (Europe) Limited.

- Dynamatic Technologies Limited has conducted the Ground Breaking Ceremony at its 35 acres site located in Karnataka Industrial Area Development Board's (KIADB) Aerospace Park near the International Airport in Bangalore, in the presence of Mr. S. V. Ranganath, Chief Secretary to the Government of Karnataka, Mr. Klaus Richter, Executive Vice President & Head of EADS / Airbus Procurement, Mr. V. P. Baligar, Principal Secretary, Industries Department, Government of Karnataka and Mr. Philippe Advani, Vice President, Head of EADS / Airbus Global Sourcing Network.

- Dynamatic® Tech Day was conducted at Mahindra and Mahindra, where Indra Pump was launched. This is the next generation hydraulic gear pump designed and developed by Dynamatic® for Mahindra.

6. DEPOSITS

As on 31st March, 2011, your Company has no unclaimed Deposits by the Deposit holders of the Company.

7. DIRECTORS

Under Section 256 of the Companies Act, 1956, Dr. K. Aprameyan, Mr. Govind Mirchandani and Ms. Malavika Jayaram, Directors of the Company retire by rotation at the ensuing Annual General Meeting, and being eligible, offer themselves for re-appointment.

Details of Directors has been covered in Corporate Governance Report forming part of the Annual Report.

8. DIRECTORS' RESPONSIBILITY STATEMENT

The Directors' Responsibility Statement as required under Section 217(2AA) of the Companies (Amendment) Act, 2000, in respect of the financial statements is annexed as ANNEXURE - III, forming part of this report.

9. CONSOLIDATED FINANCIAL STATEMENTS

Your Directors have pleasure in attaching the Consolidated Financial Statements prepared by the Company in accordance with the relevant Accounting Standards issued by the Chartered Accountants of India, which form part of the Annual Report and Accounts.

10. AUDITORS AND AUDITORS' REPORT

M/s. B S R & Associates, Chartered Accountants, Statutory Auditors of the Company retire at the ensuing Annual General Meeting and offer themselves for re-appointment.

They have confirmed to the Company that their re-appointment, if made, would be within the prescribed limits under Section 224(1B) of the Companies Act, 1956 and that they are not disqualified for re-appointment within the meaning of Section 226 of the said Act.

The Notes on Accounts referred to in the Auditors' Report are self-explanatory and do not call for any further comments.

11 . SECRETARIAL AUDIT REPORT

As a measure of good corporate governance practice, your Company underwent a Secretarial Audit for the financial year ended 31st March, 2011. An independent Practicing Company Secretary, conducted this audit; who is a past member of Central Council of the Institute of Company Secretaries of India.

12. PARTICULARS OF EMPLOYMENT

Your Company places a high premium on the development and retention of its Human Resources as well as in providing employees with safe and healthy work environments. With the establishment of the Corporate Human Resource Department under the leadership of the Head - Group HR, there is a renewed focus on formulating HR practices and strategic policies which will enable your Company to continue with its talent identification, recruitment, and development initiatives, thereby creating a merit oriented, values based work culture across the organization. A new Performance Management System has already been put in place to help your Company train and develop employees for improved performance, through skill-sets development and attitudinal changes. Your Company continues to remain focused on the maintenance of cordial industrial relations with its work force and in fostering a system of participative management, which enhances the employees' sense of belonging within the Company.

Information required under Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, as amended is forming part of this Report.

13. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGOING

The information relating to conservation of energy, technology absorption, foreign exchange earnings and outgo required to be disclosed under the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is given in ANNEXURE – I, forming part of this report.

14. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of Section 205A(5) of the Companies Act, 1956, dividends which remained unclaimed for a period of seven years, have been transferred by the Company to the Investor Education and Protection Fund.

15. MANAGEMENT'S DISCUSSION AND ANALYSIS REPORT

Management's Discussion and Analysis Report for the year is under review, as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India, is presented in a separate section forming part of the Annual Report.

16. CORPORATE GOVERNANCE

Your Company is committed to maintain the best standards of Corporate Governance and adheres to the Corporate Governance requirements set out by Securities and Exchange Board of India (SEBI). The Company has also implemented

several best corporate governance practices prevalent globally.

National Stock Exchange of India Limited (NSE), in association with Credit Rating and Information Services of India Limited (CRISIL), has initiated Independent Equity Research Report (IER), on certain companies. IER is reckoned among the best practices globally in the equity research-independence space. During the year, your Company has been covered under an Independent Equity Research Report carried out by CRISIL under the aegis of NSE-IPFT.

The reports can be viewed at www.ier.co.in or at National Stock Exchange home page: at NSE-IPFT Sponsored Research Reports.

M/s. B S R & Associates, Chartered Accountants, Statutory Auditors of the Company had conducted the Corporate Governance audit for the year under review.

A separate section on Corporate Governance and a Certificate from the Statutory Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under Clause 49 of the Listing Agreement with Stock Exchange/s in India is presented in a separate section forming part of this Annual Report.

Your Company is taking all initiatives to implement the Corporate Governance voluntary guidelines 2009 and Corporate Social Responsibility voluntary guidelines 2009 issued by Ministry of Corporate Affairs, Government of India.

17. PROMOTERS

The list of the promoters are disclosed for the purpose of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997.

Persons constituting promoters coming within the definition of 'Promoter' for the purpose of regulations 3(1) (e) (iii) (b) of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 include the following:

SL.No Name of the Entity / Person

1 Mrs. Barota Malhoutra

2 Christine Hoden (India) Pvt. Limited

3 JKM Holdings Pvt. Limited

4 JKM Offshore India Pvt. Limited

5 Primella Sanitary Products Pvt. Limited

6 Mr. Udayant Malhoutra

7 Udayant Malhoutra and Company Pvt. Limited

8 Vita Pvt. Limited

9 Wavell Investments Pvt. Limited

18. DISCLOSURES REQUIRED UNDER LISTING AGREEMENT

Disclosures required under various clauses of the listing agreement, are made elsewhere in this Annual Report.

The Certification by CEO & Managing Director and President & Group CFO of the Company is attached in ANNEXURE - V, forming part of this report.

ACKNOWLEDGMENTS

Your Directors would like to thanks for the co-operation received from the Financial Institutions, Banks, Government Authorities, Customers, Vendors, Shareholders and Investors during the year under review.

Your Directors also wish to place on record their deep sense of appreciation for the committed services of Executives, Managers Staff and Workers of the Company and look forward to their continued support in the future.

For and on behalf of the Board of Directors

Place : Bangalore VIJAI KAPUR Date : 28th May, 2011 Chairman

---

Mar 31, 2010

The Directors have pleasure in presenting the Thirty Fifth annual Report together with the audited statement of accounts for the year ended 31st March 2010.

FINANCIAL RESULTS

The Financial Results of the company for the year ended 31st march, 2010, were as follows:

(Rs. in lacs)

Particulars Year Ended Year Ended

31.03.2010 31.03.2009

Gross profit (Before interest,

Depreciation & taxation) (EBITDA) 5,563.22 4,830.79

Interest & Finance charges 2,142.65 1,770.43

Depreciation 1,856.63 1,721.20

Net profit Before taxation and

Forex impact 1,563.94 1,339.16

Forex impact 169.76 218.04

Net profit Before taxation and

after Forex impact 1,394.18 1,121.12

Provision for current year taxation 218.17 56.45

MAT Credit entitlement (119.28) (121.45)

Provision for Deferred tax 211.26 646.88

Provision for Fringe Benefit tax - 49.25

Provision for Wealth tax 2.29 2.97

Net profit after tax 1,081.74 487.02

Balance brought forward from

previous year 2,826.38 2,641.46

Amount available for appropriation 3,908.12 3,128.48

Appropriations

Dividend on equity shares - interim 243.66 135.37

Proposed Final Dividend on

Equity shares 162.44 81.22

Tax on Dividend 69.01 36.81

Transfer to general Reserve 108.18 48.70

Balance carried to Balance sheet 3,324.83 2,826.38

Notes: Previous year figures have been recast wherever necessary.

DIVIDEND

During the year, your Directors, based on the performance of the company, declared an interim Dividend of 45% and paid on 5,414,703 equity shares absorbing Rs.24,366,164/-. your Directors recommend a Final Dividend of 30% on 5,414,703 equity shares of Rs.10/- each, absorbing Rs.16,244,109/- for the year under report. hence the total Dividend payout for the year under review is Rs.40,610,273/- (exclusive of tax).

TRANSFER TO RESERVES

your Directors propose to transfer Rs.108.18 lacs to general Reserve, during the year under report. an amount of Rs.498.45 lacs is proposed to be retained in the profit and loss account.

The company has hedged a part of its future foreign currency receivables to mitigate its foreign exchange fluctuation risks. the same has been designated as a cash flow hedge with effect from april 1, 2008 applying the hedging criteria. the mark to market loss on this contract at the date of designation of the hedge amounting to Rs.54.94 lacs (after discounting) has been credited to the profit and loss account. the movement in the market to market (MTM) subsequent to the designation as a cash flow hedge amounting to Rs.120.64 lacs has been accounted under hedge Reserve account.

Pursuant to notification no. G.S.R. 225(e) dated march 31, 2009 issued by the ministry of corporate affairs, the company had opted (on 31st march 2009) to adjust the exchange differences relating to long term monetary items with retrospective effect from April 1, 2007 vis-à-vis recognition of aforesaid exchange differences as income / expense in the profit and loss account in the earlier years.

Accordingly, foreign exchange loss amounting to Rs.825.29 lacs and foreign exchange gain amounting to Rs.357.17 lacs for the year ended march 31, 2009 and march 31, 2010 respectively, has been adjusted to the cost of fixed assets.

COMPANY PERFORMANCE

Your Directors are pleased to inform that your company has shown a significant growth in profitability compared to the growth in sales of your company.

Total income on a consolidated basis was Rs.44,515.89 lacs, as against Rs.41,962.25 lacs in 2008-09.

EBITDA (before forex impact) on a consolidated basis was Rs.6,725.16 lacs as against Rs.5,278.87 lacs in 2008-09.

Net profit Before ta x (after forex impact) on a consolidated basis was Rs.1,583.45 lacs, as against Rs.35.28 lacs in 2008-09.

Net profit after Ta x (after forex impact) on a consolidated basis was Rs.1,051.46 lacs, as against a loss of Rs.522.83 lacs in 2008-09.

The hydraulics and precision engineering business remained at the same level of Rs.19,357.84 lacs compared to Rs.19,425.60 lacs in 2009, however, profit (Before interest & tax) grew from Rs.877.61 lacs to Rs.985.45 lacs. this includes the turnover from Dynamatic limited, UK, a subsidiary of your company, to the extent of Rs.8,114.26 lacs and loss (Before interest & tax) of Rs.502.59 lacs.

The Aerospace business grew from Rs.3,771.96 lacs to Rs.7,821.34 lacs and profit (Before interest & tax) grew from Rs.552.90 lacs to Rs.1,432.58 lacs. this includes the turnover from Dm 38 limited, UK, a subsidiary of your company, to the extent of Rs.6,236.19 lacs and profit (Before interest & tax) of Rs.1,007.63 lacs.

The Aluminium castings business declined from Rs.4,094.63 lacs to Rs.3,496.27 lacs and profit (Before interest & tax) declined from Rs.230.43 lacs to Rs.201.48 lacs.

The Automotive business declined from Rs.21,425.45 lacs to Rs.19,004.49 lacs while profit (Before interest & tax) grew from Rs.903.29 lacs to Rs.1051.00 lacs.

Exports from india have grown at 31% with sales of Rs.3,413.92 lacs against the previous years Rs.2,615.71 lacs.

Capital expenditure

During the year, your company incurred capital expenditure of Rs.1161.40 lacs for physical infrastructure, Rs.2256.39 lacs for technological infrastructure, Rs.566.46 lacs for procurement of intangible assets.

Significant investments have been made in Building infrastructure, state-of-the-art machinery, Design software, Data security, information systems and Design and Development activities for the future benefits of your company.

RESEARCH & DEVELOPMENT

Your Company is a repository of diverse technologies and has transformed itself into a knowledge-based organisation through sustained Research & Development efforts. all technology development efforts are guided at the Board level committee through the technology Development committee.

Your Companys focus on Research & Development has resulted in strong development initiatives; enabling the company to foray into providing new services, launching new products and enhancing product value to our customers.

JKM Science Center at Dynamatic park Peenya, Bangalore, spread over an area of 40,000 sq. ft., houses design laboratories viz. Dynamatic® Research & Development center and Powermetric® Design, a sophisticated material science laboratory, a prototype manufacturing unit and a training center.

Your Companys Design efforts are focused on

- Design, Validation and Prototyping of new products.

- Improvement of existing designs.

- Continuous improvement of existing processes.

- Ongoing testing of products and materials.

Your company has emerged as one of indias leading Research & Development organisations, with numerous inventions and patents to its credit.

Dynamatic® employs over 50 scientists and 500 engineers and technicians with expertise in mechanical engineering, advanced computer aided engineering, computer aided manufacture, materials & metallurgical engineering, Fluid Dynamics, Defence & aerospace Research. this state- of-the-art facility brings together Design engineering, Development, prototyping, metallurgical and manufacturing infrastructure enabling your company to comprehensively address the needs of its global customers.

The Dynamatic® Hydraulics Research Laboratory in Swindon, England, has advanced design knowledge focused on the mobile hydraulics sector, excellent engineering capabilities and ownership of intellectual property.

This facility operates a comprehensive product testing and validation laboratory. During the year, this facility has completed testing and validation of new products for various customers like cummins, John Deere, CNH Daventry, JCB, Terex, etc. your company will be very shortly launching these new products globally.

Your Companys wholly owned subsidiary, JKM Research Farm limited, operates a unique facility for testing and analysing complete aggregates and systems for mobile equipments.

QUALITY MANAGEMENT SYSTEM

Dynamatic® Hydraulics

During the year, your company has successfully completed the 2nd surveillance audit to iso:9001 specifications for Quality management system and also to iso:14001 specifications for environmental management system. the Quality management system has been upgraded to version ISO 9001:2008.

The Dynamatic® Quality management system (DMS) comprises of quality requirements of global customers such as John Deere, cummins, CNH, Mahindra & Mahindra etc. DMS utilises some of the best tools such as 5s, Business process re-engineering, overall equipment effectiveness, Root cause analysis, six Sigma, statistical process control, total productive maintenance, Visual control, learning-by- doing, EPP (employee participation program) etc.

Lean Management concepts together with 5s tools are being used on the shop floor to increase the OEE (overall equipment effectiveness) of the operations. this is achieved by reducing rejections, set ups, cycle time and through effective material management. employee participation programs have resulted in the participation of employees in innovative activities and their contributions have resulted in continual improvements in work and work process. Quality tools viz. 5s, six sigma etc have resulted in enhanced product quality, innovation and cost effectiveness.

Your Companys supply chain program aims at up-grading vendors to enable them to meet demanding requirements of Quality, cost & Delivery. Vendor training & audits are being conducted at regular intervals.

Your Company has released its supplier Quality management (SQM) manual at the Dynamatic® Vendor meet which was held on 13th march 2010 in Bangalore. the manual, which forms an important part of the Dynamatic® management system, captures the key tenets of the Dynamatic®s supplier Quality system, which every Dynamatic® supplier is expected to meet or exceed while undertaking work for your company. the SQM booklet links the Dynamatic® suppliers to its customers and channelizes the flow of information in the supply chain.

JKM AutomotiveTM and Dynametal® facilities are certified to the highest quality and safety standards specified by the automotive industry including ts:16949, ohsas:18000 and iso:14000, as well as, to Ford Q1 quality standards. your companys automotive division has been audited and approved by various global automotive majors including Hyundai, TATA motors, Fiat, Ford, Renault, Daimler, John Deere and cummins.

JKM Automotivetm supplies function-critical aluminium compressor housings to honeywell turbo technologies. the castings are made at Dynametal®, machined and tested at

JKM Automotivetm and supplied to honeywells plants in Pune, Italy and France. Honeywell has developed its own operating system named Honeywell operating system (HOS) and has implemented it in all its manufacturing plants, across all the Honeywell group operations. as part of extending this to the suppliers manufacturing facility, JKM automotivetm is the only supplier outside Europe chosen by Honeywell to implement HOS. a dedicated team from honeywells Hos group is guiding JKM automotivetm and Dynametal® in understanding, implementing and sustaining HOS. the whole operating system is implemented in 5 phases and each of them signifies the maturity of operating system. JKM automotivetm has already successfully implemented the first two phases and is working on implementing phase 3 of HOS.

Dynamatic Aerospace® has the largest infrastructure in the Indian private sector for manufacture of exacting air Frame structures and precision aerospace components. the division is well supported by its as 9100 quality certification & NADCAP approvals for heat treatment and Non-Destructive-test Facilities. this is the first time such capabilities have been built in the Indian private sector. this division is also certified by industry majors like airbus & Boeing for supply of aircraft components and assemblies.

During The year, Powermetric® Design has successfully obtained the Design approval certification from the center for military airworthiness & certification (CEMILAC). CEMILAC was established in 1995 to consolidate air certification work, and, is one of DRDos significant agencies vested with the responsibility of airworthiness and certification of military aircraft and airborne stores. The CEMILAC certification which is mandatory for defense & aerospace design, will enable Powermetric® to undertake design and development in the areas of static & Dynamic analysis, geometric modeling and manufacturing Drawings, tooling Design, sheet metal processing and NC programming of Air-Frame components.

Oldland Aerospace Limiteds quality approvals and standards includes airbus UK, g.e. aerospace, GKN aerospace services (LOW & Yeovil), Westland helicopters limited, Bs en ISO 9001:2000 and as 9100.

Oldland aerospace limited has been accredited with environmental management system (ems) certification iso:14000.

Oldland aerospace has received an award from West of England aerospace Forum (WEAF) for its lean manufacturing and continuous improvements initiatives.

Dynamatic Limited, UK is accredited to ISO 9001:2008 standards and has recently completed the BSI audit successfully. Dynamatic limiteds lean initiatives continue to be the focus of all employees using 6s techniques.

DEPOSITS

As On 31st march, 2010, your company has no unclaimed Deposits by the Deposit holders of the company.

SUBSIDIARIES

Brief particulars of Subsidiaries are given below:

JKM Research Farm Limited, India, (JKMRF) is a Wholly owned subsidiary of your company. it continues to be the Research & Development facilitator to the Company.

JKM Global Pte. Limited, Singapore, (JKMGB) is a Wholly owned subsidiary of your company. it continues as an investment hub for overseas businesses.

Dynamatic Limited, Swindon, UK, (DLUK) is a Wholly owned subsidiary of your company held through JKM global Pte. limited, Singapore. DlUK located in Swindon, England produces high performance engineered hydraulic products. the plant has over 50 years of experience in gear pump design and manufacture, and caters to agriculture, construction and 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.

DM 38 Limited, Bristol, UK, (DM 38) is a Wholly owned subsidiary of your company held through JKM Global Pte. limited, Singapore. it is the company through which yew tree investments limited was acquired.

Yew Tree Investments Limited, Bristol, UK, (YTIL) is a Wholly owned subsidiary of your company held through Dm 38 limited, uK. ytil has been the holding company of oldland aerospace limited, and, owns the land & Building in which oldland aerospace limited operates.

Oldland Aerospace Limited, (OAL), Bristol, UK, (Formerly Oldland CNC Limited) is a Wholly owned subsidiary of your company held through yew tree investments limited, uK. oal is a leader in aeronautical precision engineering, currently working on components for most of the airbus family of aircraft including a300/310, a320, a330/340, a380 and a400m. central to the oldland approach is their commitment to a continual improvement program based on lean & agile engineering principles.

REPORT ON SUBSIDIARY COMPANIES

The Company has obtained exemption from the government of india, ministry of corporate affairs from attaching the Balance sheet, profit and loss account and other documents of the subsidiary companies to this Report pursuant to section 212 of the companies act, 1956. however, a statement showing the relevant details of the subsidiaries is enclosed and is a part of the annual Report. the company will make available the annual accounts of the subsidiary companies and related detailed information to any member of the company who may be interested in obtaining the same. the annual accounts of the subsidiary companies will also be kept open for inspection at the Registered office of the company. the consolidated financial statements presented by the company include financial results of its subsidiary companies.

DIRECTORS

Under Section 256 of the Companies act, 1956, Mr. Vijai Kapur, Mr. Raymond Keith lawton and Mr. s. govindarajan, retire by rotation at the ensuing annual general meeting and being eligible, offer themselves for re-appointment.

Details of Directors are presented in corporate governance report forming part of the annual Report.

DIRECTORS RESPONSIBILITY STATEMENT

The Directors Responsibility statement as required under section 217(2aa) of the companies (amendment) act, 2000, in respect of the financial statements is annexed to this report.

CONSOLIDATED FINANCIAL STATEMENTS

Your Directors have pleasure in attaching the consolidated Financial statements prepared by the company in accordance with the relevant accounting standards issued by the chartered accountants of india, which form part of the annual Report and accounts.

AUDITORS AND AUDITORS REPORT

M/s. B s R & Associates, chartered accountants, statutory auditors of the company retire at the ensuing annual general meeting and offer themselves for re-appointment.

They have confirmed to the company that their re- appointment, if made, would be within the prescribed limits under section 224(1B) of the companies act, 1956 and that they are not disqualified for re-appointment within the meaning of section 226 of the said act.

The notes on accounts referred to in the auditors Report are self-explanatory and do not call for any further comments.

SECRETARIAL AUDIT REPORT

As a measure of good corporate governance practise, your company underwent a secretarial audit for the financial year ended 31st march, 2010. an independent practicing company secretary, conducted this audit, who is a past member of central council of the institute of company secretaries of india.

PARTICULARS OF EMPLOYMENT

Your Company believes that a well-trained, motivated and satisfied employee base is a key to your companys competitive advantage. your company has extremely cordial relations with all its employees and your company strives on mutual trust created among the employees and the management. the skill sets of its employees gives your company the flexibility to adapt to the demanding needs of global customers.

Information Required under section 217(2a) of the companies act, 1956, read with the companies (particulars of employees) Rules, 1975, as amended is forming part of this Report.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGOING

The Information relating to conservation of energy, technology absorption, foreign exchange earnings and outgo required to be disclosed under the companies (Disclosure of particulars in the Report of Board of Directors) Rules, 1988 is given in ANNEXURE – I forming part of this report.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Pursuant to the provisions of section 205a(5) of the companies act, 1956, dividends which remained unclaimed for a period of 7 years have been transferred by the company to the investor education and protection Fund.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Managements Discussion and analysis Report for the year under review, as stipulated under clause 49 of the listing agreement with the stock exchanges in india is presented in a separate section forming part of the annual Report.

CORPORATE GOVERNANCE

Your Company is committed to maintaining the best standards of corporate governance and adheres to the corporate governance requirements set out by seBi. the company has also implemented several best corporate governance practices prevalent globally.

A separate section on corporate governance and a certificate from the practicing company secretary, regarding compliance of conditions of corporate governance as stipulated under clause 49 of the listing agreement with stock exchange/s together with the management Discussion and analysis of the financial position of the company, form part of this Report.

PROMOTERS

The names of the Promoters are disclosed for the purpose of the SEBI (Substantial Acquisition of Shares and Takeovers) Regulations, 1997:

Persons constituting promoters coming within the definition of ‘promoter for the purpose of Regulations 3(1)(e)(iii)(b) of the securities and exchange Board of india (substantial acquisition of shares and takeovers) Regulations, 1997, include the following:

Sl. No. Name of the Entity

1. Mrs. Barota malhoutra

2. Christine hoden (india) pvt. ltd.

3. JKm holdings pvt. ltd.

4. JKm offshore india pvt. ltd.

5. Primella sanitary products (pvt). ltd.

6. Mr. udayant malhoutra

7. Udayant malhoutra and company pvt. ltd.

8. Vita pvt. ltd.

9. Wavell investments pvt. ltd.

DISCLOSURES REQUIRED UNDER LISTING AGREEMENT

Disclosures required under various clauses of listing agreement are made elsewhere in this annual Report.

ACKNOWLEDGMENT

Your Directors would like to express their grateful appreciation for the co-operation received from the Financial institutions, Banks, government authorities, customers, Vendors, shareholders and investors during the year under review. your Directors also wish to place on record their deep sense of appreciation for the committed services of executives, managers staff and Workers of the company and look forward their continued support in the future.

By order of the Board of Directors



PLACE : BANGALORE Dr. K. APRAMEYAN

DATE : 22nd JULY, 2010 Chairman of the Meeting