Aerpace Industries Ltd Directors Report

Dear Members, Your Directors have pleasure in presenting their Fifteenth (15th) Annual Report of Aerpace
Industries Limited (hereinafter referred to as "the Company") along with the Audited Financial Statements of the
Company for the Financial Year ended March 31,2026 (hereinafter referred to as "financial year under review" or
"year under review" or "year" or "FY 2025-2026").

In compliance with the applicable provisions of the Companies Act, 2013, (including any statutory modification^)
or re-enactment(s) thereof, for time being in force) (hereinafter referred to as "Act") and the Securities and
Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (hereinafter referred
to as "SEBI Listing Regulations"), this Report covers the financial performance and other developments in respect
of the Company during the financial year ended March 31,2026 and upto the date of the Board Meeting held on
August 11, 2026 to approve this Report.

1. FINANCIAL HIGHLIGHTS

A summary of the financial performance of your Company forthe financial year ended March 31,2026, is asunder:

(Rs. in Lakhs)

	Standalone		Consolidated
Particulars	For the year ended on 31.03.2026	For the year ended on 31.03.2025	For the year ended on 31.03.2026	For the year ended on 31.03.2025
Continuing Operations: Income (A) Revenue from Operation	213.60	161.86
Other Income	190.36	140.20	22.13	59.44
Total Income	403.96	302.06	22.13	59.44
Total Expenditure	1416.33	684.18	1472.35	686.25
Profit Before Depreciation and Tax	(1012.37)	(382.12)	(1450.22)	(626.81)
Less: Depreciation	210.19	113.57	224.75	124.81
Prof it/(Loss) Before Tax from Continuing Operations	(1222.55)	(495.69)	(1674.97)	(751.62)

 

Less : Total Tax Expenses	(22.26)	(12.02)	(24.67)	(12.91)
Prof it/(Loss) for the year from Continuing Operations (A)	(1200.29)	(483.67)	(1650.30)	(739.43)
Discontinuing Operations	0	0	0	0
Loss from discontinuing operations before tax	0	0	0	0
Less : Tax from discontinuing operations	0	0	0	0
Loss from Discontinuing Operations (B)	0	0	0	0
Pre-acquisition Loss	-	-	-	-
Prof it/(Loss) for the year (A+B)	(1200.29)	(483.67)	(1650.30)	(739.43)
Total Comprehensive Income / Loss for the year	(1199.44)	(481.29)	(1649.13)	(737.11)

2. RESULTS OF OPERATIONS AND THE STATE OF THE COMPANYS AFFAIRS

During the financial year ended March 31,2026, the Company recorded operational revenue, including other
income, of Rs403.96 Lakhs on a standalone basis, as compared to Rs302.06 Lakhs in the previous financial year.The
Loss Before Tax stood at Rs1,222.55 Lakhs, as against Rs495.69 Lakhs in the previous financial year. The Net Loss for
the financial year ended March 31,2026, was Rs1,200.29 Lakhs, as compared to a Net Loss of Rs483.67 Lakhs in the
previous financial year.

On a consolidated basis, the operational revenue, including other income, stood at Rs22.13 Lakhs, as compared to
Rs59.44 Lakhs in the previous financial year. The Loss Before Tax was Rs1,674.97 Lakhs, as against T751.62 Lakhs in
the previous financial year, while the Net Loss for the financial year ended March 31,2026, stood at Rs1,650.30
Lakhs, as compared to a Net Loss of T739.43 Lakhs in the previous financial year.

In view of the above, the Company has undertaken various remedial measures to address the challenges and
improve its financial performance, including measures aimed at reducing costs across all areas of operations,
optimizing the utilization of available resources, and improving overall operational efficiency.

3. NATURE OF BUSINESS

During the financial year, the Company implemented certain operational/business updates and expanded
specific business activities. However, these changes do not result in any alteration in the principal nature of
business of the Company. The Company continues to operate in the same line of business as carried on
during the previous year.

4. DIVIDEND AND RESERVES

During the financial year under review, the Company has incurred losses. In view of the losses incurred and
after considering the financial position of the Company, the Board of Directors has not recommended any
dividend for the financial year ended March 31,2026. The Board believes that conserving the available
financial resources is essential for maintaining operational stability and supporting the Companys future
business objectives. Accordingly, no amount has been transferred to the General Reserve during the year
under review.

The loss incurred during the financial year has been carried forward under the head Retained Earnings in the
Financial Statements of the Company.

5. SHARE CAPITAL

As on March 31, 2026, the Authorized Share Capital of the Company stood at Rs. 40,00,00,000 (Rupees Forty
Crores only) divided into 40,00,00,000 (Forty Crores) equity shares of Re. 1/- (Rupee One only) each. The
Paid-up Share Capital as on March 31,2026 was Rs. 15,38,57,982 (Rupees Fifteen Crores Thirty-Eight Lakhs
Fifty-Seven Thousand Nine Hundred Eighty-Two only) divided into 15,38,57,982 (Fifteen Crores Thirty-Eight
Lakhs Fifty-Seven Thousand Nine Hundred Eighty-Two) Equity Shares of Re. 1/- (Rupee One only) each. There
was no change in the share capital structure of the Company during the financial year under review.

OTHER DISCLOSURES

During the year under review, the Company has not issued shares with differential voting rights, bonus shares
and sweat equity shares. The Company has also not carried out any buyback of its equity shares during the
said financial year.

Further, as on date of this report, the Company has proposed to issue and allot upto 1,50,00,000 warrants
convertible into equity shares at the price of Rs. 32.55 (Rupees Thirty-Two and Fifty-Five Paise), aggregating
upto Rs. 48,82,50,000 (Rupees Forty-Eight Crore Eighty-Two Lakhs Fifty Thousand) in one or more tranches,
on a preferential basis to N.K. Family Private Trust (Proposed Allottee) subject to the approval of Members
through Postal Ballot.

6. CORPORATE GOVERNANACE REPORT

Pursuant to Schedule V to the SEBI Listing Regulations, the following Reports/Certificates forms part of the
Annual Report:

-the Report on Corporate Governance;

-the Certificate duly signed by the Managing Director and Chief Financial Officer on the Financial Statements
of the Company for the year ended March 31, 2026, as submitted to the Board of Directors at its meeting held
on May 11, 2026;

-the declaration by the Managing Director regarding compliance by the Board members and senior
management personnel with the Companys Code of Conduct; and

-An analysis of the Business and Financial Performance is given in the Management Discussion and Analysis,
which forms a part of the Annual Report.

The Certificate issued by the Secretarial Auditor of the Company, confirming compliance with the conditions
of Corporate Governance as stipulated under Schedule V to the SEBI Listing Regulations is annexed to this
report as "Annexure A".

7. MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT

The Management Discussion and Analysis Report, forthe financial year under review as stipulated under
Regulation 34 of SEBI Listing Regulations, capturing Companys performance, industry trends and other
material changes with respect to your Company is forming part of this Annual Report.

8. MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE
FINANCIAL POSITION OF THE COMPANY WHICH HAVE OCCURRED
BETWEEN THE END OF THE FINANCIAL YEAR OF THE COMPANY TO
WHICH THE FINANCIAL STATEMENTS RELATE AND THE DATE OF THE
REPORT

There have been no material changes and commitments affecting the financial position of the Company
which have occurred between the end of the financial year of the Company to which the financial statements
relate and the date of this Report.

9. SUBSIDIARIES, ASSOCIATE COMPANIES AND JOINT VENTURES

During the year under review, the Company acquired 75% of the equity share capital of Aerpace General
Trading LLC on January 19, 2026. Consequently, Aerpace General Trading LLC became a subsidiary of the
Company. As on March 31, 2026, the Company had two subsidiaries, namely, Aerpace General Trading LLC
and Aerpace Supercars Private Limited.

A statement containing the salient features of the financial statements of the Companys subsidiaries in Form
AOC-1, pursuant to the first proviso to Section 129(3) of the Companies Act, 2013 read with Rule 5 of the
Companies (Accounts) Rules, 2014, is annexed to this Report as Annexure B. In accordance with the
provisions of Section 136 of the Companies Act, 2013, the standalone and consolidated financial statements
of the Company, along with the financial statements of its subsidiaries and all other relevant documents, are
available on the Companys website at www.aerpace.com.

The Company does not have any associate company, joint venture or holding company as on March 31, 2026.

10. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENT

Pursuant to the provisions of Section 186 of the Companies Act, 2013, the particulars of loans granted,
guarantees given and investments made by the Company during the financial year under review are provided
in the notes to the Financial Statements forming part of this Annual Report.

During the year, the Company granted loans to its subsidiary company(ies) in compliance with the provisions
of the Companies Act, 2013 and other applicable laws. The details thereof are disclosed in Note No. 7 to the
Financial Statements.

11. RISK MANAGEMENT

The Company has established a robust Risk Management system to identify & assess the key risks and
ensure smooth and efficient operations of the business. Your Company is aware of these risks and challenges
and has put in place mechanism to ensure that they are managed and mitigate with adequate timely actions.
The audit committee reviews business risk area covering operational, financial, strategic and regulatory risks.

12. INTERNAL FINANCIAL CONTROL SYSTEM THEIR ADEQUACY

The Board of Directors of your Company have adopted policies and procedures for ensuring the orderly and
efficient conduct of its business, including adherence to your Companys policies, safeguarding of its assets,
prevention and detection of frauds and errors, accuracy and completeness of the accounting records and
timely preparation of reliable financial disclosures.

13. PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH
RELATED PARTIES

The Related Party Transactions ("RPTs") entered into during the financial under review, were on an arms
length basis and were carried out in the ordinary course of business. As required under SEBI Listing
Regulations, the Company has adopted and updated its Policy on Materiality of Related Party Transactions
and on Dealing with Related Party Transactions in compliance with the applicable provisions of the SEBI
(Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time. The
updated Policy is available on the Companys website and can be accessed at www.aerpace.com.

Further, pursuant to Section 188 of the Act and Regulation 23 of the SEBI Listing Regulations, all material RPTs
shall require prior approval of the members through a resolution. Consent of the members by way of Ordinary
Resolution is sought by the Company for the material contracts/ arrangements/transactions proposed to be
entered into by the Company at the ensuing AGM shall be valid upto the date of the next AGM for a period not
exceeding fifteen months.

Pursuant to Regulation 23 of the SEBI Listing Regulations, a related party transaction shall be considered
material if it exceeds the threshold limits prescribed under the SEBI Listing Regulations and therefore requires
approval of the Members of the Company. In this regard, during the year under review, the Company had

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obtained the necessary approval of the Members for potential material related party transactions. The details
of Related Party Transactions as required under the applicable accounting standards are disclosed in the
notes to the Financial Statements forming part of the Annual Report. The particulars of contracts or
arrangements referred to in section 188 (1) of the Companies Act, 2013 with related parties and as mentioned
in form AOC-2 is attached as "Annexure C".

Members may note that the details of RPTs as required under Ind AS 24 are reported in the explanatory notes
to the financial statements. Pursuant to Regulation 23(9) of the SEBI Listing Regulations, your Company has
filed the reports on RPTs with BSE.

14. DIRECTORS AND KEY MANAGERIAL PERSONNEL

The following is the Board Composition as on March 31, 2026 and as on date of this report:

Name of Director	DIN	Designation
Mr. Milan Shah Bhupendra	08163535	Managing Director upto May 11, 2026 * re-designated as Non- Executive Non -Independent Director w.e.f. May 12, 2026
Mr. Prem Singh Rawat	01423453	Non-Executive Director-Chairperson
Mr. Sanjay Ram Takale	07111445	Non-Executive Director
Mr. Prakash Gaur	02246745	Non-Executive Director
Mr. Ravi Cheddilal Soni	02151813	Executive Director
Mrs. Darshana Avadhoot Sawant	10130596	Non- Executive Independent Director ** resigned w.e.f. April 14, 2026
Mr. Virendra Singh Verma	07843461	Non- Executive Independent Director # resigned w.e.f. June 9, 2026
Mrs. Akanksha Sunny Bilaney	07093148	Non- Executive Independent Director Chief Financial Officer
Mr. Anand Manoj Shah	11709310	$redesignated as Managing Director & Chief Financial Officerw.e.f. May 12,2026
Mrs. Anshu Shukla Pandey	11809932	Non- Executive Independent Director $$ appointed w.e.f. July 10, 2026

*As on the date of this Report, Mr. Rajnish Kumar and Mr. Nikunj Kampani have been appointed as Advisors to
the Board pursuant to the approval of the Board of Directors at its meeting held on July 09, 2026.

a) Re-appointment of Director retiring by rotation

In accordance with the provisions of Section 152(6) of the Companies Act, 2013 read with Companies
(Management & Administration) Rules, 2014 and Articles of Association of the Company, Mr. Sanjay Ram
Takale (DIN: 07111445) and Mr. Prem Singh Rawat (DIN: 01423453), Non-Executive Directors of the Company,
retire by rotation at the ensuing Annual General Meeting and being eligible, have offered themselves for
re-appointment. The Board recommends their re-appointment for the approval of the Members.

The Director of the Company have confirmed that they satisfy the fit and proper criteria as prescribed under
the applicable regulations and that they are not disqualified from being appointed as directors in terms of
section 164(2) of the Companies act, 2013.

b) Key Managerial Personnel ("KMP")

Pursuant to Section 203 of the Companies Act, 2013, the Company has following Key Managerial Personnel
as on March 31, 2026 and as on the date of this report:

1. Mr. Milan Shah Bhupendra, Managing Director (Redesignated as Non-Executive Director w.e.f. 12.05.2026)

2. Mr. Anand Manoj Shah, Chief Financial Officer [Redesignated as Managing Director & CFO w.e.f. 12.05.2026)

3. Ms. Neha Mankame, Company Secretary & Compliance Officer (Resigned on 28.02.2026)

4. Ms. Prachi Pa rag Kela, Company Secretary & Compliance Officer (Appointed w.e.f. 11.05.2026)

c) Changes in the Composition of the Board and Key Managerial Personnel

During the year, there were following changes in the composition of the Board of Directors and Key
Managerial Personnel:

1. As per the recommendation of the Nomination and Remuneration Committee, the Board at its Meeting held
on 26th September, 2025 had appointed Mr. Prakash Gaur (DIN: 02246745) as an Additional Director in the
capacity of Non-Executive Director of the Company and Ms. Darshana Avadhoot Sawant (DIN: 10130596) as
an Additional Director in the capacity of Non-Executive Independent Director of the Company. Further, in Extra
Ordinary General Meeting of the Company held on 24th December, 2025, the shareholders of the company
had approved the appointment of Mr. Prakash Gaur (DIN: 02246745) as Non-Executive Director and Ms.
Darshana Avadhoot Sawant (DIN: 10130596) as Non-Executive Independent Director of the Company.

2. Ms. Neha Mankame resigned as Company Secretary & Compliance Officer on 28.02.2026.

After the end of financial year, there were following changes in the composition of the Board:

1. Ms. Darshana Avadhoot Sawant (DIN: 10130596) had resigned from the position of Non-Executive
Independent Director of the Company with effect from April 14,2026.

2. The Board of Directors at its Meeting held on 11th May, 2026 had re-designated Mr. Milan Shah Bhupendra
(DIN: 08163535) from the position of Managing Director to Non-Executive Director of the Company with effect
from 12th May, 2026, Also, Mr. Anand Manoj Shah (DIN: 11709310) was redesignated/ elevated from Chief
Financial Officer to Managing Director & Chief Financial Officer subject to the approval of members with effect
from 12th May, 2026.

3. Mr. Virendra Singh Verma (DIN: 07843461) resigned from the position of Non-Executive Independent
Director of the Company with effect from June 09,2026

4. Ms. Anshu Shukla Pandey (DIN: 11809932) was appointed as an Additional Non-Executive Independent
Director of the Company with effect from July 10,2026 for a period of 5 years subject to approval of members.

The necessary resolutions for the redesignation of directors and their brief profile have been included in the
notice convening the ensuing Annual General Meeting. The brief resume of the Director seeking
re-designation at the ensuing Annual General Meeting, in pursuance of Regulation 36(3) of SEBI (Listing
Obligation & Disclosure Requirements) Regulation, 2015 is annexed to the Annual General Meeting Notice.

d) Declaration by Independent Directors

The Company have following Independent Director as on March 31, 2026 and as on the date of this report:

1. Mrs. Akanksha Sunny Bilaney (DIN: 07093148)

2. Mr. Virendra Singh Verma (DIN: 07843461) (resigned w.e.f. June 09, 2026)

3. Ms. Darshana Avadhoot Sawant (DIN: 10130596) (resigned w.e.f. April 14, 2026)

4. Ms. Anshu Shukla Pandey (DIN: 11809932) (appointed w.e.f. July 10, 2026)

The Company has received declaration of Independence from all the Independent Directors as required
under Section 149(7) of the Companies Act, 2013 confirming that they meet the criteria of independence
under Section 149(6) of the Companies Act, 2013 read with Regulation 16(1)(b) of SEBI (LODR).

All Independent Directors have furnished the declarations that they meet the criteria of independence as
provided under Section 149(6) of the Act and Regulation 16 of SEBI Listing Regulations, as amended from time
to time and abide by Code of Conduct for Directors and Senior Management Personnel framed by the
Company and as prescribed in Schedule IV to the Act. Further, they have confirmed that there has been no
change in the circumstances or situation which exist or may be reasonably anticipated, that could impair or
impact the ability of Independent Directors to discharge their duties with an objective independent judgment
and without any external influence. The Independent Directors hold high standards of integrity, expertise and
experience (including proficiency).

During the year under review, the Independent Directors of the Company had no pecuniary relationship or
transactions with the Company, other than sitting fees, paid to them for attending meetings of the Board of the
Company.

In the opinion of the Board, all our Independent Directors possess requisite qualifications, experience,
expertise and hold high standards of integrity for the purpose of Rule 8(5)(iii)(a) of the Companies (Accounts)
Rules, 2014. List of key skills, expertise and core competencies of the Board, including the Independent
Directors, is provided in the Corporate Governance Report annexed to this Annual Report.

e) Disclosure and Confirmations by Director and KMP

The Board has taken on record the following disclosures and confirmations submitted by the Directors and
KMP of the Company:

-Disclosure of interest pursuant to Section 184(1) read with Section 189(2) of the Act, submitted by the
Directors and KMP of the Company;

-Declaration confirming that they are not disqualified from being appointed or continuing as Directors in
terms of Section 164(2) of the Act, submitted by the Directors of the Company;

-Declaration regarding compliance with the Code of Conduct for Directors and Senior Management
Personnel of the Company, submitted by the Directors and KMP of the Company; and

-Confirmation that they are not debarred from holding the office of Director by virtue of any order passed by
the Securities and Exchange Board of India ("SEBI") or any other statutory/regulatory authority, submitted by
the Directors of the Company.

15. POLICIES ON APPOINTMENT OF DIRECTORS AND REMUNERATION

The Board of Directors comprises individuals possessing diverse skills, expertise and rich professional
experience across varied domains, thereby enhancing the quality, effectiveness and overall performance of
the Board. The Members of the Board, including the Members of the various Committees constituted
thereunder, provide invaluable guidance, strategic direction, and mature counsel to the management of the
Company, thereby contributing meaningfully to its governance and long-term objectives.

Board Diversity Policy

In recognition of the value of diversity in board composition, the Company has adopted a Board Diversity
Policy which can be accessed at www.aerpace.com.

Nomination and Remuneration Policy

In accordance with the provisions of Section 178 of the Act and Regulation 19 read with Part D of Schedule II to
the SEBI Listing Regulations, the Company has formulated a Nomination and Remuneration Policy ("NRC
Policy"), which inter alia sets out the guiding principles for the Nomination and Remuneration Committee for
identifying and recommending to the Board of Directors persons who are qualified to be appointed as
Directors or Senior Managerial Personnel of the Company; the criteria for determining the independence of
Directors proposed to be appointed as Independent Directors of the Company; and the criteria and
framework for determining the remuneration payable to the Key Managerial Personnel, and Senior
Management Personnel of the Company.

The NRC Policy is available on the website of the Company and may be accessed at the following link:
www.aerpace.com.

16. BOARD AND COMMITTEE MEETINGS

During the financial year ended March 31,2026, the Board met 7 (Seven) times i.e., May 14,2025, July 17,2025,
August 14, 2025, September 26, 2025, November 12, 2025, December 12, 2025 and February 12, 2026. The
intervening gap between the two consecutive meetings did not exceed one hundred and twenty days and the
necessary quorum was present for all the meetings held during the year.

17. BOARD COMMITTEES

The Companys Board has the following Committees:

-Audit Committee

-Stakeholder Committee

-Nomination & Remuneration Committee

Details of all the above-mentioned Committees constituted by the Board along with their composition, terms
of references and meetings held during the year are provided in the Report on Corporate Governance which
forms part of this Report.

18. ANNUAL EVALUATION OF THE BOARD, ITS COMMITTEES AND
INDIVIDUAL DIRECTORS

The Board, its Committees and Independent Directors continuously strive for efficient functioning of Board
and its Committees and better corporate governance practices. The Board of Directors, at its meeting held on
May 11, 2026, conducted a structured annual performance evaluation of its own functioning, the performance
of its Committees, and the individual performance of each Director, based on inputs received from all
Directors. The evaluation was carried out against various performance criteria, including, inter alia, Board
composition and structure, effectiveness of Board processes, quality and timeliness of information flow, and
overall functioning of the Board and its Committees.

The Board expressed its satisfaction with the overall evaluation process. The observations and feedback
emerging from the evaluation were duly noted and the Board and the management agreed on various action
points to be implemented in course of subsequent meetings. The evaluation process endorsed cohesiveness
amongst Directors, the openness of the management in sharing strategic information with the Board and
placing various proposals for the Boards consideration and approval to enable Board Members to discharge
their responsibilities.

The Independent Directors met on March 09, 2026, without the presence of other Directors or members of
Management. All the Independent Directors were present at the meeting. In the meeting, Independent
Directors inter alia reviewed the performance of Non-Independent Directors, the Board as a whole and the
performance of the Chairperson of the Company was evaluated, taking into account the views of Executive
Director and Non-Executive Director. They assessed the quality, quantity and timeliness of flow of information
between the Company Management and the Board. The Independent Directors expressed satisfaction with
overall functioning of the Board.

19. DIRECTORS TRAINING AND FAMILIARIZATION

The Company undertakes and makes necessary provision of an appropriate induction program for new
Director(s) and ongoing training for existing Directors. The new Director(s) is introduced to the Company
culture, through appropriate training programs. Such kind of training programs helps develop relationship of
the directors with the Company and familiarize them with Company processes. The management provides
such information and training either at the meeting of Board of Directors or at other places.

The induction process is designed to

-build an understanding of the Companys processes and

-fully equip Directors to perform their role on the Board effectively

20. DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to section 134(5) of the Companies Act, 2013, the Board, to the best of their knowledge, hereby
confirmed that

i. In the preparation of Annual Accounts and Financial Statements for the year ended March 31st, 2026, the
applicable accounting standards have been followed along with proper explanations relating to material
departures, if any;

ii. They have selected such accounting policies and applied them consistently and made judgment 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 loss 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 provision of this act for safeguarding the assets of the Company and for preventing and
detecting fraud and other irregularities.

iv. They have prepared annual accounts on a going concern basis.

v. They have laid down internal financial control to be followed by the company and that such internal financial
control is adequate and were operating effectively.

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.

21. AUDITORS AND AUDITORS REPORT

I. STATUTORY AUDITORS

The Board have approved the appointment of M/s. Ramanand & Associates, Chartered Accountants (Firm
Registration Number 117776W) as the Statutory Auditors for FY. 2024-25 to fill the causal vacancy caused by
the resignation of M/s Singrodia & LLP. Further, the shareholder at their Extra Ordinary General Meeting held

on 28th December, 2024 have approved the appointment of M/S. Ramanand & Associates, Chartered
Accountants for the Financial Year 2024- 25, to fill the casual vacancy caused by the resignation of M/s.
Singrodia & LLP, Chartered Accountants, to hold office until the conclusion of Annual General Meeting to be
held in the year 2025.

As per the recommendation of the Audit Committee and Board of Directors, the members of the company had
approved the appointment of M/s. Ramanand & Associates, Chartered Accountants (Firm Registration
Number 117776W), as a Statutory Auditors of the Company to hold office, for a term of five consecutive years
from the conclusion of 14th Annual General Meeting till the conclusion 18th Annual General Meeting to be
conducted in the financial year 2029-30.

Statutory Audit Report

The Statutory Auditors Report for the financial year ended March 31, 2026, on the financial statements of the
Company is a part of this Annual Report. The Auditors Report for the year

II.SECRETARIAL AUDITORS

Pursuant to the recommendation Audit Committee and the Board of Directors, the Members of the Company
had approved the appointment of M/s. Jain Preeti & Company, Practicing Company Secretaries (Firm
Registration No: 14964), as the Secretarial Auditors of the Company, for a term of five consecutive years,
commencing from Financial Year 2025-2026 upto Financial Year 2029-30.

Subsequent to the end of this financial year, M/s. Jain Preeti & Company, Practicing Company Secretaries (Firm
Registration No: 14964), tendered her resignation from the office of Secretarial Auditor of the Company on 5th
May, 2026, due to professional commitments and her inability to undertake Secretarial Audit for the financial
year 2025-26.

Consequently, the Board of Directors at its meeting held on 11th May, 2026, appointed M/s. Pravesh Palod &
Associates, Practicing Company Secretary (Peer Review Firm Registration No: 7406/2025), to fill the casual
vacancy caused by the resignation of M/s Jain Preeti & Company, Practicing Company Secretaries (Firm
Registration No: 14964) and to act as the Secretarial Auditor of the Company.

Pursuant to the provisions of Regulation 24A of the SEBI Listing Regulations provisions of Section 204 of the
Act read with the Companies (Appointment and Remuneration of Managerial personnel) Rules 2014, M/s.
Pravesh Palod & Associates, Practicing Company Secretary (Peer Review Firm Registration No: 7406/2025),
were appointed to undertake the Secretarial Audit of the Company for the year 2025-26. The Secretarial Audit
Report for the year 2025-26 is annexed as "Annexure D" and forms part of this Report.

Secretarial Audit Report

The Report of the Secretarial Auditor in Form MR-3 for the financial year ended March 31, 2026, is enclosed as
"Annexure-D" to this Report. The Report does not contain any qualification, reservation or adverse remark
except the matters reported in Annexure reported in "Annexure I"

III. REPORTING OF FRAUDS BY AUDITORS

During the year under review, neither the Statutory Auditors nor the Secretarial Auditor has reported to the Audit
Committee or the Board, any instances of fraud committed by its officers or employees under Section 143(12)
of the Act.

IV. INTERNAL AUDITORS

M/s Rohit Gondhiya & Associates Chartered Accountants (Firm Registration Number: 133649W) were
appointed as Internal Auditors of the Company for the financial year 2025-26.

Further, as on the date of this report, the Board of Directors had re-appointed at M/s. Rohit Gondhiya &
Associates Chartered Accountants (Firm Registration Number: 133649W) at its Meeting held on May 11, 2026
as Internal Auditor of the Company for the financial year 2026-27

22. EXTRACT OF ANNUAL RETURN

The Annual Return as required under Section 134(3)(a) read with Section 92(3) of the Act, is hosted on the
Companys website and can be accessed at www.aerpace.com.

23. PARTICULARS OF EMPLOYEE

The statement of disclosures required pursuant to Section 197(12) & 197(14) of the Act read with Rule 5(1) of the
Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of
the Company, is provided in "Annexure-E" to this Report.

The Company confirms that no employee was in receipt of remuneration in excess of limits prescribed under
the provisions of Section 197(12) of the Act, read with Rule 5(2) and 5(3) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014.

24. WHISTLE BLOWER/VIGIL MECHANISM

In compliance with the provisions of Section 177 of the Act and Regulation 22 of SEBI Listing Regulations
Companys Whistle Blower Policy/ Vigil Mechanism aims to provide the appropriate platform for whistle
blowers to report instances of any actual or suspected incidents of unethical practices, violation of applicable
laws and regulations or any other concerns pertaining to the conduct of business of the Company.

The Policy also provides for adequate safeguards against victimization of Director(s)/ employee(s) who avail of
the mechanism and also provides for direct access to the Chairperson of the Audit Committee in exceptional
cases. It is hereby affirmed that no person has been denied access to the Audit Committee.

The Whistle Blower Policy/ Vigil Mechanism is uploaded on the Companys website and can be accessed at
www.aerpace.com.

iy

The Audit Committee remains committed to ensuring a fraud-free work environment. All complaints, if any, are
investigated speedily, confidentially and in an impartial manner and appropriate action is taken to ensure that
the requisite standards of professional and ethical conduct are consistently maintained.

During the FY 2025-2026, no complaints or cases under this mechanism were reported to the Company.

25. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT
WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has in place a Prevention of Sexual Harassment (POSH) policy in accordance with the
requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act,
2013 ("POSH Act") and the Rules framed thereunder for prevention and effective redressal of complaints of
sexual harassment at workplace. All employees (permanent, contractual, temporary and trainees) are covered
under this policy.

An Internal Complaints Committee has been duly constituted in compliance with the POSH Act. As required
under Section 22 of POSH Act, following is the summary of sexual harassments complaints received and
disposed of during the financial year ended March 31, 2026.

Number of Complaints Received : Nil

Number of Complaints disposed off : Nil

Number of cases pending for more than 90 days : Nil

26. MATERNITY BENEFITS

The Company hereby confirms that it is in compliance with the provisions of the Maternity Benefit Act, 1961 as
amended from time to time. Adequate provisions have been made for grant of maternity leave and related
benefits to eligible women employees in accordance with the applicable provisions of the said Act.

The Company remains committed to maintaining a supportive, safe and inclusive workplace and ensuring
compliance with all applicable labour laws relating to employee welfare and maternity benefits.

27. CODE FOR PREVENTION OF INSIDER TRADING

Your Company has adopted a Code of Conduct to regulate, monitor and report trading by designated persons
their immediate relatives and connected persons as per the requirements under the Securities and Exchange
Board of India (Prohibition of Insider Trading) Regulations, 2015. This Code of Conduct also incorporates a code
of practices and procedures for fair disclosure of unpublished price sensitive information which has been
made available on the Companys website and can be accessed at www.aerpace.com.

28. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN
EXCHANGE EARNING AND OUTGO

A. Conversation of Energy:

20

The Company has initiated to take adequate measures for conservation of energy. The Company shall explore
alternative source of energy as and when the necessity arises.

B. Technology Absorption:

The Company continues to use the latest technologies for improving the productivity and quality of its services
and products.

C. Foreign Exchange Earnings and Outgo: (Rs. in lakhs)

Particulars	Current Year	Previous Year
Foreign Exchange Outgo	11.32	Nil
Foreign Exchange earned	Nil	Nil

29. INDUSTRIAL RELATION

The industrial relations remained cordial during the year review.

30. EMPLOYEE STOCK OPTION SCHEME

The Company had introduced the Aerpace Industries Limited Restricted Stock Unit Plan 2024 (Aerpace - RSU
2024) (ESOP Scheme) for the benefit of eligible employees of the Company and its Group Company(ies),
including its holding, subsidiary and associate company(ies), as approved by the Board of Directors at its
meeting held on November 30, 2024 and subsequently approved by the Members at the Extra-Ordinary
General Meeting held on December 28, 2024. The details with respect to Aerpace - RSU 2024 has been made
available in the website of Company and can be accessed at www.aerpace.com.

During the year under review, the Members of the Company approved certain amendments to the Aerpace -
RSU 2024 Plan and further approved an increase in the ESOP Pool from 70,00,000 (Seventy Lakhs) options to
1,45,00,000 (One Crore Forty-Five Lakhs) options at the Extra-Ordinary General Meeting held on December
24, 2025.

Further, the Company has granted stock options to eligible employees under the Employee Stock Option Plan
("ESOP Scheme") approved by the shareholders. The details of the stock options granted, vested, exercised
and lapsed, as applicable, are available on the website of the Company at www.aerpace.com and may be
accessed under the relevant section of the Companys website. The Company is in compliance with the
applicable provisions of the Companies Act, 2013 and the SEBI (Share Based Employee Benefits and Sweat
Equity) Regulations, 2021.

31. HUMAN RESOURCES

Your Company considers Great Brand and Great People as its biggest asset. The Company is continued to
organize various inbound and outbound training programs, recreation and team building activities to enhance
employee skills and motivation. Company also conducted various workshops and events for grooming and
upgrading vocational skills of the talent pool in order to meet future talent requirements.

32. CASH FLOW AND CONSOLIDATED FINANCIAL STATEMENTS

As required by Regulation 34(2) of Securities and Exchange Board of India (Listing Obligations and Disclosure
Requirements) Regulations, 2015, Cash Flow Statement & Consolidated Statement is appended.

33. SERVICE OF DOCUMENTS THROUGH ELECTRONIC MEANS

Subject to the applicable provisions of the Act, and applicable law, all documents, including the Notice and
Annual Report shall be sent through electronic transmission in respect of members whose email addresses
are registered in their demat account or are otherwise provided by the members to the Company or its
Registrar and Share Transfer Agent. A member shall be entitled to request for physical copy of any such
documents.

34. POSTAL BALLOT

During the financial year under review, the Company did not pass any resolution through Postal Ballot.
Accordingly, no Postal Ballot Notice was issued to the members of the Company during the year and the date
of this Report.

35. OTHER DISCLOSURES

Your Directors state that no disclosure or reporting is required in respect of the following matters as there were
no transactions on these items during the financial year under review:

a) . The Company has not accepted any deposits from public within the meaning of Section 73 and 74 of the Act
and Rules framed thereunder (including any amendments thereof) during the FY 2025-2026 and, as such, no
amount on account of principal or interest on deposit from public was outstanding as on the date of this
Report.

b) . The Company has duly complied with the applicable Secretarial Standards issued by the Institute of
Company Secretaries of India, i.e., SS-1, and SS-2 relating to "Meetings of the Board of Directors", and "General
Meetings" respectively.

c) . The provisions of section 135 of the Companies Act, 2013, related to Corporate Social Responsibility is not
applicable to the company.

d) . There were no significant and material orders passed by the Regulators/ Courts which would impact the
going concern status of the Company and its future operation.

e) . The Company has not defaulted in repayment of loans from banks and/or financial institutions. Further, as
the Company has not issued any debt securities, there is no delay or default in payment of interest or principal.

f) . The provision of Section 148 of the Act relating to maintenance of cost records and cost audit are not
applicable to the Company.

g) . There were neither any applications fled by or against the Company nor any proceedings were pending
under the Insolvency and Bankruptcy Code, 2016 during the year under review.

h) . During the year under review, the Company did not enter into any one-time settlement with any Bank or
Financial Institution. Accordingly, disclosure under Rule 8(5)(xii) of the Companies (Accounts) Rules, 2014
relating to the difference between the valuation done at the time of one-time settlement and the valuation
done at the time of availing the loan is not applicable.

i) . During the year under review, the provisions relating to credit rating were not applicable to the Company, as
the Company has neither issued any debt securities, including Non-Convertible Debentures (NCDs) or
commercial papers, nor accepted any public deposits requiring such rating.

36. ACKNOWLEDGEMENT

The Board of Director take this opportunity to thank all its shareholders, valued customer, banks, government
and statutory authorities, investor, and stock exchange for their continued support to the company. Your
directors wish to place on record their deep sense of appreciation for the committed services by employees.
Your directors acknowledge with gratitude the encouragement and support extended by our valued
shareholders and the Promoters of the Company.