Dear Shareholder
As you must be aware, the past few years have witnessed heightened
geopolitical conflicts across various parts of the world. This widespread uncertainty has
prompted governments globally to strengthen their defence frameworks, resulting in higher
defence spending.
In India, as well, the Government has subsequently raised the defence
allocation to position the country as a net exporter of defence equipment. There has also
been enhanced emphasis on the aerospace sector.
Both the defence and aerospace sectors continue to demonstrate
resilience and growth potential, driven by increasing government investments and a
heightened focus on technology-backed innovation. In India, initiatives to foster
self-reliance in critical sectors, such as defence and space technology, are gaining
momentum. This development aligns well with our strategic objectives and positions us
favourably for the future.
Technological advancements and geopolitical considerations are shaping
the global defence industry with governments prioritising it for ensuring national
security and technological superiority. India's efforts to reduce dependency on
imports and foster indigenous capabilities present a compelling opportunity for companies
like ours, dedicated to pioneering advanced defence and aerospace solutions.
At Paras Defence, we are focused on innovation and excellence to drive
our longterm growth. We benefit from diversified revenue streams, with a significant
contribution from the defence engineering vertical and continued growth in optics and
optronic systems, both of which provide a solid foundation for our sustained success.
Also, I would like to state that our emphasis remains on delivering
high-complexity, high-value products, catering to niche markets with limited competition.
Our work on sophisticated systems, such as submarine periscopes, hyperspectral imaging
cameras and EOI cameras for tanks and UAV platforms, exemplifies our competitive edge when
it comes to meeting the evolving needs of the defence sector. We are extremely bullish on
our anti-drone systems, which are among the most cutting- edge in the market, including
anti-drone jamming systems, anti-drone detection systems and more. These systems have not
only great domestic potential but also considerable export opportunities. We aim to become
the leading anti-drone company in India, leveraging our technological capabilities to tap
into this growing market. Moreover, we are exploring opportunities in space programmes and
emerging technologies like quantum computing.
Central to our growth strategy is R&D. The new manufacturing
license will enable us to advance our R&D efforts, foster focused innovation and
create top-notch electrooptic products for both domestic and international markets. By
diving deeper into indigenisation and collaborating closely with partners such as the
Defence Research and Development Organisation (DRDO), we are not only strengthening our
technological capabilities but also contributing to Aatmanirbhar Bharat.
We are now transitioning from a component-based business model to a
project and product-based approach, which will enable us to deliver greater value to our
stakeholders. This shift is expected to improve profit margins over time, particularrly as
the Indian defence and space sectors continue to focus on boosting manufacturing and
exports.
The strong growth in our order book, which has more than doubled year
on year, looking ahead, we are optimistic about the future. We are committed to increasing
our participation in high-value projects while exploring new avenues for collaboration,
both domestically and globally.
We are now transitioning from a component- based business model to a
project and product- based approach, which will enable us to deliver greater value to our
stakeholders. This shift is expected to improve profit margins over time, particularrly as
the Indian defence and space sectors continue to focus on boosting manufacturing and
exports.
I would like to conclude by expressing my sincere gratitude to our
partners, team members and stakeholders for their cooperation. At Paras Defence, we
believe that we can continue to innovate, excel and lead the way in the domestic defence
and aerospace sectors, ensuring that we remain at the forefront of industry
transformation.
Thank you for being a part of our journey so far.
Yours sincerely
k) Whether Paras Defence ESOP 2024 is to be implemented and
administered directly by the Company or through a trust
The Paras Defence ESOP 2024 will be implemented directly by the Company
under the guidance of the Board of Directors/ its Nomination and Remuneration Committee.
l) Whether Paras Defence ESOP 2024 involves new issue of shares by the
Company or secondary acquisition by the trust
The Paras Defence ESOP 2024 will involve only new issue of shares by
the Company.
m) The amount of loan to be provided for implementation of the Paras
Defence ESOP 2024 by the Company to the trust, its tenure, utilization, repayment terms,
etc.
Not Applicable.
n) Maximum percentage of secondary acquisition (subject to limits
specified under the regulations) that can be made by the trust for the purposes of the
Paras Defence ESOP 2024
Not Applicable.
o) Disclosure and accounting policies
The Company shall follow the laws/regulations applicable to accounting
and disclosure related to Employee Stock Options, including but not limited to SEBI (SBEB
and Sweat Equity) Regulations as well as section 133 of the Companies Act, the Guidance
Note on Accounting for Employee Share- based Payments and/ or any relevant Accounting
Standards as may be prescribed by the Regulatory authorities from time to time, including
the disclosure requirements prescribed therein.
The Company shall make disclosures to the prospective Option Grantees
containing statement of risks, information about the Company and salient features/Scheme
document of the Paras Defence ESOP 2024 in a format as prescribed under SEBI (SBEB and
Sweat Equity) Regulations, 2021.
The Company shall disclose details of Grant, Vest, Exercise and lapse
of the Employee Stock Options in the Directors' Report or in an annexure thereof as
prescribed under the Companies Act, 2013 read with rules made thereunder and under SEBI
(SBEB and Sweat Equity) Regulations or any otherr Applicable Laws as in force.
p) Method of valuation of Options
The Company will follow IFRS/ IND AS/ any otherr requirements for
accounting of the stock Options as are applicable to the Company for the same.
Since the Company opts for expensing of share based employee benefits
using the fair value method, the following statement will not be applicable viz.
In case the Company opts for expensing of share based employee benefits
using the intrinsic value intrinsic value, the difference between the employee
compensation cost so computed and the employee compensation cost that shall have been
recognized if it had used the fair value, shall be disclosed in the Directors' Report
and the impact of this difference on profits and on earnings per share ("EPS")
of the Company shall also be disclosed in the Directors' Report.
q) Lock-in period, if any
The Shares issued upon exercise of Options shall be freely transferable
and shall not be subject to any lock-in period restriction after such exercise. However,
the Board or Committee as may be authorised by the Board may, in some cases, provide for
lock-in of Shares issued upon exercise of Options, which shall be mentioned in grant
letter issued to the Option Grantee.
Provided that the transferability of the Shares shall be subject to the
restriction for such period in terms of the Securities Exchange Board of India
(Prohibition of Insider Trading), Regulations, 2015, as amended from time to time or for
such otherr period as may be stipulated from time to time in terms of Company's Code
of Conduct for Prevention of Insider Trading, as and when these regulations applicable to
the Company.
r) Terms & conditions for buyback, if any, of specified securities
covered under the SEBI (SBEB and Sweat Equity) Regulations
The procedure for buy-back of specified securities issued under SEBI
SBEB and Sweat Equity Regulations, if to be undertaken at any time by the company and the
applicable terms and conditions, including:
(i) permissible sources of financing for buy-back;
(ii) any minimum financial thresholds to be maintained by the company
as per its last financial statements; and
(iii) limits upon quantum of specified securities that the company may
buy-back in financial year.
For the purpose of this Clause, specified securities means as defined
under the Securities and Exchange Board of India (Buyback of Securities) Regulations,
2018;
s) Rights of the Option holder
The Employee shall not have right to receive any dividend or to vote or
in any manner enjoy the benefits of a shareholder in respect of the Option granted to him,
till shares are allotted upon exercise of Option.
t) Consequence of failure to exercise Option
All unexercised Options shall lapse if not exercised on or before the
exercised period ends.
Further, no amount paid/payable by the Employee at the time of the
grant, vesting or exercise of the Options, hence, no amount is required to be forfeited if
the Employee does not exercise the same within the exercise period.
u) Certificate from Secretarial Auditors
The Board of Directors shall at each annual general meeting place
before the Members a certificate from the secretarial auditors of the company that the
scheme(s) has been implemented in accordance with the prescribed regulations and in
accordance with the resolution of the company in the general meeting.
v) Terms of the scheme:
1) The Company shall not vary the terms of the Paras Defence ESOP 2024
in any manner, which may be detrimental to the interests of the Option grantees: Provided
that the Nomination and Remuneration Committee shall be entitled to vary the terms of the
Paras Defence ESOP 2024 to meet any regulatory requirements without seeking
shareholder's approval by special resolution in terms of regulation 7 of SEBI (SBEB
and Sweat Equity) Regulations.
2) Subject to clause (a) of sub-rule (5) of Rule 12 of the Companies
(Share Capital and Debentures) Rules, 2014 and relevant regulation of SEBI (SBEB and Sweat
Equity) Regulations, the Company may by special resolution in a general meeting vary the
terms of the scheme offered pursuant to an earlier resolution of the general body but not
yet exercised by the Employee provided such variation is not prejudicial to the interests
of the Option grantees.
3) The notice for passing special resolution for variation of terms of
the Paras Defence ESOP 2024 scheme shall disclose full details of the variation, the
rationale therefore and the details of the Option grantees who are beneficiaries of such
variation.
4) The Company may re-price the Options as the case may be which are
not exercised, whether or not they have been vested if the terms of the grants were
rendered unattractive due to fall in the price of the shares in the stock market; provided
that the Company ensures that such re-pricing shall not be detrimental to the interest of
the Option grantees and approval of the Members in general meeting has been obtained for
such re-pricing.
w) Transferability of Employee Stock Options:
1) The Options granted to an Employee shall not be transferable to any
person and shall not be pledged, hypothercated, mortgaged or otherrwise alienated in any
manner. However, in the event of the death of the Option grantee, the right to exercise
all the Options granted to him till such date shall be vest in his legal heirs or
nominees.
2) In the event of resignation or termination of the Option grantee,
all the Options which are granted and yet not vested as on that day shall lapse.
3) In the event that an Option grantee who has been granted benefits
under a Paras Defence ESOP 2024 scheme is transferred or deputed to its Subsidiary
Company(ies) or Associate Company(ies) or Group Company(ies) (present or future) prior to
vesting or exercise, the vesting and exercise as per the terms of grant shall continue in
case of such transferred or deputed Employee, even after the transfer or deputation.
x) Otherr terms
The Board or Nomination and Remuneration Committee shall have the
absolute authority to vary, modify or alter the terms of the Paras Defence ESOP 2024 in
accordance with the Companies Act, 2013, as amended read with rules made thereunder, any
regulations and guidelines as prescribed by the SEBI or regulations that may be issued by
any appropriate authority, from time to time, unless such variation, modification or
alteration is detrimental to the interest of the Option grantees.
The Board of Directors or Nomination and Remuneration Committee may, if
it deems necessary, modify, change, vary, amend, suspend or terminate the Paras Defence
ESOP 2024, subject to compliance with the applicable laws and regulations.
The shares may be allotted directly to the Option grantees in
accordance with the Paras Defence ESOP 2024 and such Paras Defence ESOP 2024 may also
contain provisions for providing financial assistance to the Employees to enable the
Employees to acquire or subscribe to the shares.
Consent of the members is sought pursuant to the provisions of section
62 (1) (b) and all otherr applicable provisions, if any, of the Companies Act, 2013, as
amended and as per the requirement of regulation 6 of the SEBI (SBEB and Sweat Equity)
Regulations.
None of the Directors and Key Managerial Personnel of the Company
including their relatives are interested or concerned in the resolution No. 11(A) and
11(B), except to the extent of their shareholding entitlements, if any, under the Paras
Defence ESOP 2024 scheme.
Your directors recommend the Resolution set 11(A), and 11(B)of the
Notice for approval by the Members as Special Resolution/s.
| Sharad Virji Shah |
| Chairman |