MTAR Technologies Ltd Directors Report

Dear Members,

The Board of Directors take pleasure in presenting the 27th (Twenty-Seventh) Annual Report including inter-alia Directors Report, its annexures and audited financial statements (including standalone and consolidated financial statements along with respective Auditors Report thereon) for the year ended 31st March, 2026. The consolidated performance of the Company and its subsidiaries have been referred to wherever required. The Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 are referred to as Act and Listing Regulations respectively.

1. FINANCIAL SUMMARY/HIGHLIGHTS:

The performance of the Company for the financial years ended has been as under:

(Amount in Rs.Mn)

Particulars	Standalone 2025-26	Standalone 2024-25	Consolidated 2025-26	Consolidated 2024-25
Revenue from Operations	8761.08	6759.57	8762.06	6759.95
Other Income	236.88	57.36	230.90	51.50
Profit/loss before Depreciation, Finance Costs, Exceptional items and Tax Expense	1947.43	1263.92	1942.96	1259.84
Less: Depreciation/Amortisation/Impairment	343.63	317.74	350.25	322.35
Profit/loss before Finance Costs, Exceptional items and Tax Expense	1603.80	946.18	1592.71	937.49
Less: Finance Costs	293.44	221.60	293.58	221.79
Profit/loss before Exceptional items and Tax Expense	1310.36	724.58	1299.13	715.70
Add/(less): Exceptional items	(37.67)	0	(37.67)	0
Profit/loss before Tax Expense	1272.69	724.58	1261.46	715.70
Less: Tax Expense (Current & Deferred)	319.45	186.05	321.16	186.83
Profit/loss for the year (1)	953.24	538.53	940.30	528.87
Total Comprehensive Income/loss (2)	(3.61)	(2.99)	(3.61)	(2.99)
Total (1+2)	949.63	535.54	936.69	525.88
Balance of profit/loss for earlier years	2994.35	2458.81	2976.34	2450.46
Less: Transfer to Debenture Redemption Reserve	0	0	0	0
Less: Transfer to Reserves	0	0	0	0
Less: Dividend paid on Equity Shares	0	0	0	0
Less: Dividend Paid on Preference Shares	0	0	0	0
Less: dividend Distribution Tax	0	0	0	0
Balance carried forward	3943.98	2994.35	3913.03	2976.34

2. FINANCIAL PERFORMANCE AND THE STATE OF THE COMPANYS AFFAIRS:

Revenues-Standalone

During the year under review, the Company has recorded a total income of Rs. 8997.96 Mn and a net profit of Rs. 953.24 Mn as compared to a total income of Rs. 6816.93 Mn and a net profit of Rs. 538.53 Mn achieved in the previous financial year 2024-25.

Revenues-Consolidated

During the year under review, the Company has recorded a total income of Rs. 8992.96 Mn and a net profit of Rs. 940.30 Mn as compared to a total income of Rs. 6811.45 Mn and a net profit of Rs 528.87 Mn achieved in the previous financial year 2024-25.

Business update and state of companys affairs

The information on Companys affairs and related aspects is provided under Management Discussion and Analysis Report, which has been prepared, inter-alia, in compliance with Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and forms part of the Annual Report.

Change in the nature of the business, if any

During the period under review and the date of Boards Report, there was no change in the nature of business pursuant to inter-alia Section 134 of the Companies Act, 2013 and Companies (Accounts) Rules, 2014.

3. RESERVES:

The Closing balance of reserves, including retained earnings, of the Company as at March 31, 2026 is Rs. 7949.23 Mn.

4. DIVIDEND:

The Company has decided not to pay any dividend for the financial year 2025-26 keeping in mind its capex, growth plans and working capital requirements.

In terms of Regulation 43A of the Securities and Exchange Board of India ("SEBI") (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations), the Dividend Distribution Policy was adopted to set out parameters and circumstances that will be taken into account by the Board while determining the distribution of dividend to the shareholders. The Policy is available on the website of the Company under the web link https://mtar.in/policies-related-documents.

5. MATERIAL CHANGES & COMMITMENT AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

During the year under review, the Company initiated a Scheme of Amalgamation on involving its wholly owned subsidiaries, Gee Pee Aerospace and Defence Private Limited and Magnatar Aero Systems Private Limited, with MTAR Technologies Limited. The Honble National Company Law Tribunal ("NCLT"), Hyderabad Bench-II, vide its order dated April 29, 2026, allowed the applicable on and dispensed with the requirement of convening the meetings of the shareholders and creditors of the respective companies. Further, vide order dated July 10, 2026, the Honble NCLT admitted the petition filed in respect of the Scheme. The matter is presently pending before the Honble NCLT for further hearings and passing of the final order.

There have been no other material changes and commitments affecting the financial position of the Company which have occurred from the end of Financial Year 2025-26 till the date of this Annual Report

6. FUNDRAISING BY ISSUANCE OF DEBT SECURITIES, IF ANY:

Pursuance to SEBI Circular No. SEBI/HO/DDHS/CIR/P/2018/144 dated November 26, 2018, read with SEBI Circular No. SEBI/HO/DDHS/DDHS-RACPOD1/P/CIR/2023/172 dated October 19, 2023, the Directors confirm that the Company is not defined as a "Large Corporate" as per the framework provided in the said Circular. Further, your Company has not raised any funds by issuance of debt securities.

7. BOARD MEETINGS:

The Board of Directors duly met four (4) times during the financial year 2025-26 on 22nd May 2025, 05th August 2025, 05th November 2025 and 29th January 2026. The intervening gap between the meetings did not exceed 120 days, as prescribed under the Act and Listing Regulations. All the meetings were conducted through Physical mode and option of attending the meeting through audio-visual means was also given to those directors who could not attend the meeting physically.

The details of board meetings and the attendance of the Directors are provided in the Corporate Governance Report, which forms part of this Integrated Annual Report.

8. INDEPENDENT DIRECTORS MEETING:

The Independent Directors met on 05th November 2025 & 17th February 2026, without the attendance of Non-Independent Directors and members of the management. The Independent Directors reviewed the performance of Non-Independent Directors, the Committees and the Board as a whole along with the performance of the Chairman, taking into account the views of Executive Directors and Non-Executive Directors and assessed the quality, quantity and timeliness of flow of information between the management and Board that is necessary for the Board to effectively and reasonably perform their duties. The performance of the aforementioned assessments were found satisfactory.

9. APPOINTMENT/RE-APPOINTMENT/RESIGNATION/RETIREMENT OF DIRECTORS/CEO/CFO AND KEY MANAGERIAL PERSONNEL:

During the year under review and as on the date of this annual report following are the changes in the directors and key managerial personnel as detailed below:

a) Appointments made during the year:

Ms. Priyanka Agarwal was appointed as the Company Secretary, Compliance Officer and the Nodal Officer of the Company w.e.f. 02.02.2026.

Mr. Anushman Reddy was re-appointed owing to retirement by rotation in the previous Annual General meeting which was held on 18.09.2025 during the year under the review.

Mr. P. Srinivas Reddy was re-appointed owing to retirement by rotation at the previous Annual General Meeting held on 18.09.2025 during the year under the review.

Mr. Akepati Praveen Kumar Reddy was re-appointed owing to retirement by rotation at the previous Annual General Meeting held on 18.09.2025 during the year under the review.

b) Resignations:

The following Resignations have taken place during the year:

Ms. Naina Singh has resigned as the Company Secretary, Compliance Officer and the Nodal Officer of the Company w.e.f.20.01.2026

The Board places on record its sincere appreciation for the invaluable contribution made by her during her tenure.

c) Information u/r 36(3) of SEBI (LODR), Regulations, 2015:

As required under regulation 36 (3) of the SEBI (LODR), Regulations, 2015, brief particulars of the Directors seeking appointment/re-appointments are given as Annexure A to the notice of the AGM forming part of this Annual Report.

10. REVISION OF FINANCIAL STATEMENTS:

There was no revision of the financial statements for the year under review.

11. DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS:

The Company has, inter alia, received the following declarations from all the Independent Directors as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 ("Act") and under Regulation 16(1)(b) read with Regulation 25 of the SEBI (LODR), Regulations, 2015 confirming that:

a. They meet the criteria of independence as prescribed under the provisions of the Act, read with Schedule IV and Rules made thereunder, and the Listing Regulations. There has been no change in the circumstances affecting their status as Independent Directors of the Company;

b. They have complied with the Code for Independent Directors prescribed under Schedule IV to the Act; and

c. They have registered themselves with the Independent Directors Database maintained by the Indian Institute of Corporate Affairs and have qualified the online proficiency self-assessment test or are exempted from passing the test as required in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualifications of Directors) Rules, 2014 (as may be applicable).

d. They had no pecuniary relationship or transactions with the Company, other than sitting fees, commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Board of Directors and Committee(s).

The Board of Directors of the Company has taken on record the declaration and confirmation submitted by the Independent Directors after undertaking due assessment of the veracity of the same.

12. AUDIT COMMITTEE RECOMMENDATIONS:

During the year, all recommendations of Audit Committee were approved by the Board of Directors.

13. FAMILIARIZATION PROGRAM FOR INDEPENDENT DIRECTORS:

Independent Directors are familiarized about the Companys operations and businesses. Interaction with the business heads and key executives of the Company is also facilitated. Detailed presentations on important policies of the Company were also made to the directors. Direct meetings with the Chairman are further facilitated to familiarize the incumbent Director about the Company/its businesses and the group practices. The details of the familiarization programme of the Independent Directors are available on the website of the Company at the link: https://mtar.in/policies-related-documents.

14. BOARD EVALUATION:

Performance of the Board and its Committees were evaluated on various parameters such as structure, composition, diversity, experience, corporate governance competencies, performance of specific duties and obligations, quality of decision-making and overall Board effectiveness. Performance of individual Directors was evaluated on parameters such as meeting attendance, participation and contribution, engagement with colleagues on the Board, responsibility towards stakeholders and independent judgement. All the Directors were subjected to peer-evaluation.

All the Directors participated in the evaluation process. The results of evaluation were discussed in the Board meeting held on 05th November 2025 & 17th February 2026. The Board discussed the performance evaluation reports of the Board, its Committees and Individual Directors. The Board upon discussion noted the suggestions / inputs of the Directors. Recommendations arising from this entire process were deliberated upon by the Board to augment its effectiveness and optimize individual strengths of the Directors.

The detailed procedure followed for the performance evaluation of the Board, its Committees and Individual Directors is enumerated in the Corporate Governance Report.

15. POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION AND OTHER DETAILS:

The assessment and appointment of Members to the Board is based on a combination of criterion that includes ethics, personal and professional stature, domain expertise, gender diversity and specific qualification required for the position. The potential of Board Member(s) is also assessed on the basis of independence criteria defined in Section 149(6) of the Companies Act, 2013 and Regulation 16 of SEBI (LODR) Regulations, 2015.

2013 and Regulation 19(4) of SEBI (LODR) Regulations, 2015, on the recommendations of the Nomination and Remuneration Committee, the Board adopted a remuneration policy for Directors, Key Management Personnel (KMPs) and Senior Management. The brief particulars of the Policy are attached a part of Corporate Governance Report.

We affirm that the remuneration paid to the Directors is as per the terms laid down in the Nomination and Remuneration Policy of the Company.

16. DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the requirement of Section 134(3)(c) and 134(5) of the Companies Act, 2013 and on the basis of explanation given by the executives of the Company and subject to disclosures in the Annual Accounts of the Company from time to time, we state as under:

a. That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b. That the Directors 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 profit of the Company for that period;

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

d. That the Directors have prepared the annual accounts on a going concern basis:

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

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

17. INVESTOR EDUCATION AND PROTECTION FUND (IEPF):

Pursuant to the provisions of Section 124 of the Act, Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules") read with the relevant circulars and amendments thereto, the amount of dividend remaining unpaid or unclaimed for a period of seven years from the due date is required to be transferred to the Investor Education and Protection Fund ("IEPF"), constituted by the Central Government.

During the year, no amount of dividend was unpaid or unclaimed for a period of seven years and therefore no amount is required to be transferred to Investor Education and Provident Fund under the Section 125(1) and Section 125(2) of the Act.

18. INFORMATION ABOUT THE FINANCIAL PERFORMANCE /FINANCIAL POSITION OF THE SUBSIDIARIES/ASSOCIATES/JOINT VENTURES:

Magnatar Aero Systems Private Limited is the wholly owned subsidiary of the Company incorporated on 04.11.2019 and is non-operational.

Gee Pee Aerospace and Defence Private Limited, a wholly owned subsidiary of the Company incorporated on 20.06.1988 made a total income of Rs. 25.57 Mn as on 31.03.2026 and net loss after tax of Rs. 11.85 Mn.

As per the provisions of Section 129 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the financial statements of the subsidiary companies is prepared in Form AOC-1 and is attached as Annexure VIII and forms part of this report.

19. ANNUAL RETURN:

Pursuant to Section 92(3) and 134(3)(a) of the Act and the Companies (Management and Administration) Rules, 2014, the draft Annual Return for Financial Year 2025-26 is available on the website of the Company at the link: https://mtar.in/annual-return/. The Annual General Meeting is proposed to be held on Monday, 28th September 2026. The Company shall upload a copy of final Annual Return for Financial Year 2025-26 as soon it is filed with Registrar of Companies.

20. BUSINESS RESPONSIBILITY & SUSTAINABILITY REPORT:

As stipulated under Regulation 34 of the Listing Regulations, the Business Responsibility & Sustainability Report describing the initiatives taken by the Company from an environmental, social and governance perspectives forms part of this Annual Report and is annexed as Annexure I.

21. AUDITORS:

a. Statutory Auditors

M/s. S.R. Batliboi & Associates, (Firm Registration No. 101049W/E300004), are the Statutory Auditors of the Company.

At the 26th Annual General Meeting of the Company held on 18th September 2025, the Members approved the re-appointment of M/s. S.R. Batliboi & Associates as the Statutory Auditors of the Company for a second term of four years, to hold office from the conclusion of the 26th Annual General Meeting till the conclusion of the 30th Annual General Meeting to be held in the Financial Year 2028-29.

Accordingly, M/s. S.R. Batliboi & Associates continue to be the Statutory Auditors of the Company for the Financial Year 2025-26, in accordance with the provisions of Sections 139, 142 and other applicable provisions, if any, of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014, as amended from time to time.

Statutory Auditors Report

The standalone and the consolidated financial statements of the Company have been prepared in accordance with Ind AS notified under Section 133 of the Act. The Statutory Auditors report does not contain any qualifications, reservations, adverse remarks or disclaimers. The Statutory Auditors of the Company have not reported any fraud to the Audit Committee as specified under section 143(12) of the Act, during the year under review.

The Statutory Auditors were present in the last AGM held on 18th September, 2025.

Frauds reported by Statutory Auditors

During the Financial Year 2025-26, the Auditors have not reported any matter under section 143(12) of the Companies Act, 2013, therefore no detail is required to be disclosed under section 134(3) (ca) of the Companies Act, 2013.

b. Secretarial Auditor

The Members of the Company, at their 26th Annual General Meeting held on 18th September, 2025, approved the appointment of M/s. S.S. Reddy & Associates, Practicing Company Secretaries (Firm Registration No. S2008AP101300), as the Secretarial Auditors of the Company for a period of 5 (five) consecutive years, commencing from the Financial Year 2025-26 to the Financial Year 2029-30.

M/s. S.S. Reddy & Associates shall undertake the Secretarial Audit of the Company for the aforesaid period and issue the necessary Secretarial Audit Report in accordance with the provisions of Section 204 of the Companies Act, 2013, the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as amended from time to time.

The Secretarial Audit Report for the FY 2025-26 confirms that the Company has complied with the provisions of the Act, Rules, Regulations and Guidelines and that there were no deviations or non-compliances except as stated below. The Secretarial Audit Report is provided as Annexure-II to this Report.

The Secretarial Auditor has observed that there was a delay of one day in the submission of the disclosure of Related Party Transactions (RPT) along with the XBRL of financial results for the half year ended 30th September, 2025 on the National Stock Exchange of India Limited (NSE) for which a fine of Rs. 5000/- (Rupees Five Thousand Only) excluding GST was levied by the NSE. In this regard, the management replied that there was delay in filing due to technical error and management assured to take precautions to avoid delay in filings.

Further, the Secretarial Auditor has also observed that there were two (2) instances of non-compliance (i.e., trading in the equity shares of the Company without obtaining prior pre-clearance from the Compliance Officer and entering into contra trade transactions by few designated persons) with the provisions of the SEBI (Prohibition of Insider Trading) Regulations, 2015, the Companys Code of Conduct to Regulate, Monitor and Report Trading by Insiders, and the requirements of SEBI Circular No. SEBI/HO/ISD/ISD/CIR/P/2020/135 dated July 23, 2020.

In this regard, the management replied that the matter was placed before the Board of Directors, which took cognizance of the aforesaid instances of non-compliance. The Board directed the concerned Designated Persons to disgorge the profits arising from such transactions to the SEBI Investor Protection and Education Fund, in accordance with SEBI Circular No. SEBI/HO/ISD/ISD/CIR/P/2020/135 dated July 23, 2020.

Further, a strict warning was issued to the concerned Designated Persons, cautioning them that any recurrence of such non-compliance would be viewed seriously and may attract appropriate disciplinary action and penalties in accordance with the Companys Code of Conduct and applicable law.

The Board of Directors also levied a penalty of Rs. 30,835.74 on the concerned Designated Person, in addition to directing disgorgement of the profit earned from the transaction. The concerned Designated Person was accordingly directed to remit the profit so disgorged along with the penalty amount to the SEBI Investor Protection and Education Fund, in accordance with the aforesaid SEBI Circular.

Secretarial Audit Report

The Board has duly reviewed the Secretarial Audit Report for the year ended 31st March, 2026 according to the provisions of Section 204 of the Companies Act, 2013 and has noted that during the year, the Company does not have any reservation, qualification or adverse remarks except as mentioned above.

Annual Secretarial Compliance Report

The Company has filed the Annual Secretarial Compliance Report for the financial year 2025-26, which was received from M/s. S.S. Reddy & Associates, practicing company secretaries, with the BSE Limited and National Stock Exchange of India Limited within the stipulated time as specified under Regulation 24A of the SEBI (LODR) Regulations.

c. Cost Auditor

Your Company maintained the required cost records as specified by the Central Government under sub-section 1 of section 148 of the Act.

M/s. Sagar & Associates, Cost Accountants, (Firm Registration No.), were appointed as the Cost Auditors of the Company for the financial year 2025-26, based on the recommendation of the Audit Committee, approval of the Board of Directors and subsequent ratification by the Shareholders of the Company at the 26th Annual General Meeting held on 18th September, 2025, in accordance with the provisions of Section 148 of the Companies Act, 2013 and the Companies (Cost Records and Audit) Rules, 2014, as amended from time to time.

The relevant cost audit report for FY 2025-26 was filed within the stipulated time.

The remuneration of Cost Auditors for the financial years 2026-27, 2027-28 and 2028-29 has been approved by the Board of Directors on the recommendation of Audit Committee at their respective meetings held on 12th May, 2026, in terms of the Companies Act, 2013 and Rules thereunder, and the requisite resolution for ratification of remuneration of the Cost Auditors by the members has been set out in item no. 4 of the Notice of 27th Annual General Meeting of your Company.</p>

Maintenance of cost records as specified by the Central Government under Section 148(1) of the Act is not applicable to the Company. The Cost Audit Report does not contain any qualifications, reservations, adverse remarks or disclaimers.

d. Internal Auditor

The Company had appointed M/s. Seshachalam & Co., Chartered Accountants as Internal Auditors of the Company for the Financial Year 2025-26. There were no adverse remarks or qualification on accounts of the Company from the Internal Auditor.

22. INTERNAL AUDIT AND FINANCIAL CONTROLS

The Company has adequate internal controls consistent with the nature of business and size of the operations, to effectively provide for safety of its assets, reliability of financial transactions with adequate checks and balances, adherence to applicable statuses, accounting policies, approval procedures and to ensure optimum use of available resources. These systems are reviewed and improved on a regular basis.

The Company has appointed M/s. Pundarikashyam and Associates, Chartered Accountants to review the effectiveness of the Internal Financial Controls over Financial Reporting (ICoFR) of the Company for FY 2025-26 and there are no major observations reported in their report.

23. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The Company has not given loans or made any investments (except for parking excess funds in FDs with Scheduled banks, as and when required and provided guarantee to its Wholly Owned Subsidiary Company(ies) during the year under review attracting the provisions under section 186 of the Companies Act, 2013 The details of such transactions and the disclosures pertaining to compliance with Section 186 of the Companies Act, 2013 are provided in Note No. 12 to the Standalone Financial Statements.

24. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES:

Our Company has formulated a policy on related party transactions which is also available on Companys website at https://mtar.in/policies-related-documents/ This policy deals with the review and approval of related party transactions.

All related party transactions that were entered into during the financial year 2025-26 were on arms length basis and were in the ordinary course of business. There were no material significant related party transactions made by the Company with the Promoters, Directors, Key Managerial Personnel or the Senior Management Personnel which may have a potential conflict with the interest of the Company at large.

Particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 in the prescribed Form AOC-2 is appended as Annexure III which forms part of this Report.

All related party transactions were placed before the Audit Committee/Board for approval. Prior approval of the Audit Committee was obtained for the transactions which are foreseen and are in repetitive in nature. Members may refer to note no.38 to the financial statements which sets out related party disclosures pursuant to IND AS-24.

25. CONSOLIDATED FINANCIAL STATEMENTS:

The Consolidated Financial Statements of your Company for the year ended 31st March, 2026 have been prepared in accordance with the provisions of Section 129(3) of the Companies Act and applicable Accounting Standards and form part of this report.

Pursuant to SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 read with first proviso of Section 129(3) of the Companies Act read with Rule 5 of the Companies (Accounts) Rules, 2014, a separate statement containing salient features of the Financial Statements of Subsidiary Companies in Form AOC-1 as Annexure VIII is appended to this report. The separate Audited Financial Statements in respect of the Subsidiaries are also available on the website of the Company at https://mtar.in/financial-information/.

26. NAMES OF THE COMPANIES WHICH HAVE BECOME OR CEASED TO BE ITS SUBSIDIARIES, JOINT VENTURES OR ASSOCIATE COMPANIES DURING THE YEAR:

During the year under review no Company has become or ceased to become its subsidiaries, joint ventures or associate Company.

27. DISCLOSURE OF PARTICULARS WITH RESPECT TO CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars as prescribed under Section 134(3) (m) of the Companies Act, 2013, is provided hereunder:

A. Conservation of Energy:

During the Financial Year 2025-26, your Company strived to imbibe energy conservation principles and initiatives across all its facilities. The Company has produced in aggregate 1,172,469 kWh units with the help of solar panels.

The other key initiatives across multiple areas are highlighted below -

HVAC - Your Company has undertaken initiatives such as Installation of VFD with solenoid valves for Compressor cooling water system, AC optimum utilization through installation of timer control units, etc.

Lighting - Similar to last year, your Company has continued the initiative to replace old lighting fittings with new-age energy efficient LED fittings within and outside some of our facilities. The installation of motion sensors at various locations has helped us to reduce the energy consumption at various sites.

Awareness Generation - This included improving awareness amongst employees to switch off major energy consuming equipment or units when idle as well as employing an energy review tool and energy balance tool to identify projects.

Apart from the above initiates, the Company also has a specific conservation of energy policy with SOPs to be followed. It is assured that the same are in place and adequate measures are taken to follow the SOPs.

B. Research & Development and Technology Absorption:

1. Research and Development (R&D): During the year the Company developed Bellows which is part of SOFC power unit manufactured by the Company instead of procurement from overseas.

2. Technology absorption, adoption and innovation: NIL

C. Foreign Exchange Earnings and Out Go:

Foreign Exchange Earnings: INR 7267.66 Mn

Foreign Exchange Outgo: INR 4264.55 Mn

28. COMMITTEES:

The Committees of the Board focus on certain specific areas and make informed decisions in line with the delegated authority. The following statutory Committees are constituted by the Board function according to their respective roles and defined scope:

Audit Committee
Nomination and Remuneration Committee
Corporate Social Responsibility Committee
Stakeholders Relationship Committee
Risk Management Committee
POSH Committee

Other than above committees, the Company has an internal non-statutory committee namely, Technology Committee.

Details of composition, terms of reference and number of meetings held for respective Committees are given in the Report on Corporate Governance, which forms a part of this Integrated Report.

The Company has adopted a Code of Conduct for its employees including the Managing Director. In addition, the Company has adopted a Code of Conduct for its Non-Executive Directors which includes a Code of Conduct for IDs, that suitably incorporates the duties of IDs as laid down in the Act. The same can be accessed at https://mstar.in/policies-related-documents/. All Senior Management personnel have affirmed compliance with the Code of Conduct of the Company for the financial year 2025-26.

The Managing Director has also confirmed and certified the same. The certification is enclosed as Annexure B to Report on Corporate Governance.

29. VIGIL MECHANISM/WHISTLE BLOWER POLICY:

The Company has formulated a Vigil Mechanism/Whistle Blower Policy pursuant to Regulation 22 of the Listing Regulations and Section 177(10) of the Act, enabling stakeholders to report any concern of unethical behaviour, suspected fraud or violation. The said policy inter-alia provides safeguard against victimization of the Whistle Blower. Stakeholders including directors and employees have access to the Managing Director and Chairperson of the Audit Committee.

During the year under review, no stakeholder was denied access to the Chairperson of the Audit Committee. The policy is available on the website of the Company at https://mtar.in/policies-related-documents/.

30. CORPORATE SOCIAL RESPONSIBILITY POLICY AND ITS REPORT:

The Company has attracted the provisions of Corporate Social Responsibility ("CSR") u/s 135 of Companies Act, 2013 and accordingly, has formed the CSR Committee to foresee the CSR activities, adopted the CSR policy and also created a separate bank account exclusively for CSR. The Report on Corporate Social Responsibility activities of the Company is enclosed as Annexure IV. Details of the CSR policy of the Company are available on our website https://mtar.in/policies-related-documents/.

In terms of Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 as amended ("CSR Rules") and in accordance with the CSR Policy, during the financial year 2025-26, your Company has spent Rs. 1,91,10,000/- (representing 2% of the average net profit for the past the three financial years, being FY 2022-23, FY 2023-24 and FY 2024-25).

Corporate Social Responsibility continues to be the core value of your Company embedded in the value of caring, which focuses on serving and improving the communities in which we live. The major areas of activities undertaken by the Company are education, employment enhancing vocational skills, art & culture, health care centers and voluntary support.

31. PUBLIC DEPOSITS:

Your Company has not accepted any deposits under Chapter V of the Companies Act, 2013 read with the Rule 8(v) of Companies (Accounts) Rules 2014, during the financial year under review.

Details of deposits not in compliance with the requirements of the Act:

Since the Company has not accepted any deposits during the Financial Year ended 31st March, 2026, there has been no non-compliance with the requirements of the Act.

Pursuant to the Ministry of Corporate Affairs (MCA) notification dated 22nd January 2019 amending the Companies (Acceptance of Deposits) Rules, 2014, the Company has filed with the Registrar of Companies (ROC) requisite returns in Form DPT-3, for the financial year 2025-26, for outstanding receipt of money/loan by the Company, which is not considered as deposits.

32. MATERNITY BENEFIT PROVIDED BY THE COMPANY UNDER MATERNITY BENEFIT ACT, 1961:

The Company confirms that it has duly complied with the provisions of the Maternity Benefit Act, 1961. All eligible women employees have been extended the statutory benefits prescribed under the Act, including paid maternity leave, continuity of salary and service during the leave period, and post-maternity support such as nursing breaks and flexible return-to-work options, as applicable.

The Company remains committed to fostering an inclusive and supportive work environment that upholds the rights and welfare of its women employees in accordance with applicable laws.

33. SIGNIFICANT & MATERIAL ORDERS PASSED BY COURTS/REGULATORS/TRIBUNALS:

During the year under review, the Company initiated a Scheme of Amalgamation involving its wholly owned subsidiaries, Gee Pee Aerospace and Defence Private Limited and Magnatar Aero Systems Private Limited, with MTAR Technologies Limited.

The Honble National Company Law Tribunal ("NCLT"), Hyderabad Bench-II, vide its order dated April 29, 2026, allowed the application and dispensed with the requirement of convening the meetings of the shareholders and creditors of the respective companies. Further, vide order dated July 10, 2026, the Honble NCLT admitted the petition filed in respect of the Scheme. The matter is presently pending before the Honble NCLT for further hearings and passing of the final order.

34. DISCLOSURE OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate. The Company maintains appropriate system of internal control, including monitoring procedures, to ensure that all assets are safeguarded against loss from unauthorized use or disposition. Company policies, guidelines and procedures provide for adequate checks and balances, and are meant to ensure that all transactions are authorized, recorded and reported correctly.

During the period under review, there is no material observations have been noticed for inefficiency or inadequacy of such controls by the internal control auditor M/s. Pundarikashyam and Associates.

Further, details of internal financial control and its adequacy are included in the Management Discussion and Analysis Report which is appended as Annexure V and forms part of this Report.

35. INSURANCE:

The properties and assets of your Company are adequately insured.

36. CREDIT & GUARANTEE FACILITIES:

The Company has availed Working Capital and Term Loan facilities from State Bank of India, HDFC Bank, ICICI Bank Limited, Union Bank of India and Export-Import Bank of India and appointed SBICAP Trustee Company Limited as custodian of all security documents under Multiple Banking arrangements.

37. RISK MANAGEMENT POLICY:

Business Risk Evaluation and Management is an ongoing process within the Organization. The Company has a robust risk management framework to identify, monitor and minimize risks and also to identify business opportunities.

As a process, the risks associated with the business are identified and prioritized based on severity, likelihood and effectiveness of current detection. Such risks are reviewed by the senior management periodically.

Risk Management Committee of your Company assists the Board in a) overseeing and approving the Companys enterprise-wide risk management framework; and (b) overseeing that all the risks that the organization faces such as strategic, financial, credit, market, liquidity, security, property, IT, legal, regulatory, reputational, other risks have been identified and assessed, and there is an adequate risk management infrastructure in place capable of addressing those risks.

The development and implementation of risk management policy has been covered in the Management Discussion and Analysis, which forms part of this Report.

38. SHARE CAPITAL:

During the year under review and as on the date of the report, there was no change in the authorised share capital of the Company which stands at Rs.66,00,00,000/- (Rupees Sixty-Six Crores Only) divided into 6,60,00,000 (Six Crore Sixty-Lakhs Only) equity shares of Rs.10/- (Rupees Ten Only) each.

Further during the year under review and as on the date of this report there was no change in the paid-up share capital and the subscribed capital of the Company which stands at Rs.30,75,95,910/- (Rupees Thirty Crores Seventy-Five Lakhs Ninety-Five Thousand Nine Hundred and Ten Only) divided into 3,07,59,591 (Three Crores Seven Lakhs Fifty-Nine Thousand Five Hundred and Ninety-One Only) equity shares of Rs.10/- (Rupees Ten Only) each.

39. CORPORATE GOVERNANCE AND SHAREHOLDERS INFORMATION:

The Company has implemented all of its major stipulations as applicable to the Company. As stipulated under Regulation 34 read with schedule V of SEBI (LODR) Regulations, 2015, a report on Corporate Governance duly audited is appended as Annexure VI for information of the Members.

A requisite certificate from the Secretariat Auditors of the Company confirming compliance with the conditions of Corporate Governance is attached to the Report on Corporate Governance.

40. MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT:

The Management Discussion and Analysis Report, pursuant to the provisions of SEBI (LODR) Regulations, 2015 provides an overview of the affairs of the Company, its legal status and autonomy, business environment, mission & objectives, sectoral and segment-wise operational performance, strengths, opportunities, constraints, strategy and risks and concerns, as well as human resource and internal control systems is appended as Annexure V for information of the members.

41. POLICIES:

The SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 mandated the formulation of certain policies for all listed companies. All the applicable policies are available on our website https://mtar.in/policies-related-documents/

42. ENVIRONMENTS AND HUMAN RESOURCE DEVELOPMENT:

Your Company always believes in keeping the environment pollution-free and is fully committed to its social responsibility. The Company has been taking utmost care in complying with all pollution control measures from time to time strictly as per the directions of the Government.

43. COMPLIANCE WITH SECRETARIAL STANDARDS:

The Company has devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and such systems are adequate and operating effectively. During the year under review, the Company was in compliance with the Secretarial Standards (SS) i.e., SS-1 and SS-2, relating to "Meetings of the Board of Directors" and "General Meetings", respectively.

44. STATUTORY COMPLIANCE:

The Company has complied with the required provisions relating to statutory compliance with regard to the affairs of the Company in all respects.

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

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaint Committee (ICC) has been set up to redress complaints received regarding sexual harassment.

The Board constituted its Internal Complaints Committee (ICC) to protect against sexual harassment of women at the workplace and for the prevention and redressal of complaints of sexual harassment and for matters connected therewith or incidental thereto.

Constitution of Committee:

Name	Designation
J. Srikelka	Presiding Officer*
Priyanka Agarwal	Member
Ajayinder Talari	Member
Dr. Mahtab Bamji	External Member

*Appointed w.e.f. 02.02.2026

Ms. Naina Singh resigned as the Company Secretary, Compliance Officer and the Nodal Officer of the Company w.e.f. 20.01.2026, following which she ceased to be a member of the Committee.

All employees are covered under this policy. However, during the reporting period, the ICC received no complaints and no cases were pending for more than ninety (90) days.

46. STATEMENT SHOWING THE NAMES OF THE TOP TEN EMPLOYEES IN TERMS OF REMUNERATION DRAWN AND THE NAME OF EVERY EMPLOYEE AS PER RULE 5(2) & (3) OF THE COMPANIES (APPOINTMENT & REMUNERATION) RULES, 2014:

A table containing the particulars in accordance with the provisions of Section 197(12) of the Act, read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is appended as Annexure VII(a) to this Report.

A statement showing the names of the top ten employees in terms of remuneration drawn and the name of every employee is annexed to this Annual report as Annexure VII(b).

During the year, none of the employees is drawing a remuneration of Rs.1,02,00,000/- and above per annum or Rs.8,50,000/- and above in aggregate per month, the limits specified under the 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 other than those mentioned in Annexure VII(b).

47. RATIO OF REMUNERATION TO EACH DIRECTOR:

Under section 197(12) of the Companies Act, 2013, and Rule 5(1) (2) & (3) of the Companies (Appointment & Remuneration) Rules, 2014 read with Schedule V of the Companies Act, 2013 the ratio of remuneration of each Director to the median remuneration of the employees is as follows.

Director	Total Remuneration (Mn.)	Ratio to Median Remuneration
P. Srinivas Reddy	31.02	94:1
A. Praveen Kumar Reddy	9.91	30:1
Anushman Reddy	14.86	45:1

48. CODE OF CONDUCT FOR THE PREVENTION OF INSIDER TRADING:

Pursuant to the provisions of SEBI (Prohibition of Insider Trading) Regulations, 2015 as amended from time to time, the Company has formulated a Code of Conduct for Prevention of Insider Trading ("Insider Trading Code") and a Code of Practices and Procedures for fair disclosure of Unpublished Price Sensitive Information ("UPSI").

The Code of Practices and Procedures for fair disclosure of UPSI is available on the website of the Company at https://mstar.in/policies-related-documents/

49. DECLARATION FROM DIRECTORS:

None of the Directors of the Company are disqualified from being appointed as Directors as specified under Section 164(1) and 164(2) of the Act read with Rule 14(1) of the Companies (Appointment and Qualifications of Directors) Rules, 2014 (including any statutory modification(s) and/or re-enactment(s) thereof for the time being in force) or are debarred or disqualified by the Securities and Exchange Board of India ("SEBI"), Ministry of Corporate Affairs ("MCA") or any other such statutory authority.

All members of the Board and Senior Management have affirmed compliance with the Code of Conduct for Board and Senior Management for the financial year 2025-26.

The Independent Directors of the Company have confirmed their independence in terms of the provisions of the Act, read with Schedule IV and Rules issued thereunder and the Listing Regulations.

The Company had obtained a certificate from an independent and reputed Practicing Company Secretaries Firm confirming that none of the Directors on the Board of the Company has been debarred or disqualified from being appointed and/or continuing as Directors by SEBI, MCA or any other such statutory authority.

50. EVENT BASED DISCLOSURES:

During the year under review, the Company has not taken up any of the following activities except as mentioned:

1. Issue of sweat equity share: NA

2. Issue of shares with differential rights: NA

3. Issue of shares under employees stock option scheme: NA

4. Disclosure on purchase by Company or giving of loans by it for purchase of its shares: NA

5. Buy back shares: NA

6. Disclosure about revision: NA

7. Preferential Allotment of Shares: NA

8. Transfer of shares: Yes

51. CORPORATE INSOLVENCY RESOLUTION PROCESS INITIATED UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (IBC):

No corporate insolvency resolution processes were initiated/admitted against the Company under the Insolvency and Bankruptcy Code, 2016, during the year under review.

52. DETAILS OF DIFFERENCE BETWEEN VALUATION AMOUNT ON ONE TIME SETTLEMENT AND VALUATION WHILE AVAILING LOAN FROM BANKS AND FINANCIAL INSTITUTIONS, IF ANY:

During the year under review, there has been no one-time settlement of loans taken from banks and financial Institutions.

53. MD & CFO CERTIFICATION:

As required by Regulation 17(8) read with Schedule II of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the MD/CFO certification is attached as Annexure C to the Corporate Governance Report.

54. NON-EXECUTIVE DIRECTORS COMPENSATION AND DISCLOSURES:

None of the Independent/Non-Executive Directors has any pecuniary relationship or transactions with the Company which, in the judgment of the Board, may affect the independence of the Directors other than the Sitting fees, commission and reimbursement of expenses and related party transactions with necessary audit committee and Board approval and disclosure in Financial Statements.

55. INDUSTRY BASED DISCLOSURES AS MANDATED BY THE RESPECTIVE LAWS GOVERNING THE COMPANY:

The Company is not a NBFC, Housing Companies etc., and hence industry based disclosures are not required.

56. FAILURE TO IMPLEMENT CORPORATE ACTIONS:

During the year under review, no corporate actions were done by the Company, which have failed to be implemented.

57. CREDIT RATING:

During the year under review, the ICRA Limited has reaffirmed the credit rating for banks facilities and the details of the same are mentioned below:

Instrument	Rated Amount (Rs. In Crores)	Rating Action
Long Term-Fund Based-Cash Credit	280.00	A (Stable); Reaffirmed
Long Term-Fund Based-Term Loan	108.49	A (Stable); Reaffirmed
Long Term / Short Term-Non Fund Based-others	200.00	A (Stable)/A1; Reaffirmed
Long Term / Short Term-Unallocated Limits	81.51	A (Stable)/A1; Reaffirmed
Total	670.00

58. AGREEMENTS/MOU ENTERED BY THE COMPANY:

During the period under review, the Company has modified its previous agreements with Israel Aerospace Industries Ltd., Thales Global Services SAS and GKN Westland Aerospace Inc. to accomodate the revised scope of work.

There are no major agreements/MoUs entered by the Company except for the ones mentioned above.

59. ACKNOWLEDGEMENTS:

Your Directors wish to place on record their appreciation of the contribution made by the employees at all levels, to the continued growth and prosperity of your Company. Your Directors also wish to place on record their appreciation of business constituents, banks and other financial institutions and shareholders of the Company for their continued support for the growth of the Company.

Place: Hyderabad

Date: 29.07.2026