Paras Defence and Space Technologies Ltd

To

The Members

Paras Defence and Space Technologies Limited

The Directors of your Company are pleased to present Fifteenth Annual Report on the business and operations of the Company along with the Audited Financial Statements for the financial year ended March 31, 2024.

1. FINANCIAL SUMMARY AND HIGHLIGHTS

On standalone basis, the total income for the financial year ended March 31, 2024 was ? 24,177.45 Lakhs, which is 8.61 % more than the previous year's income of ? 22,261.26 Lakhs. Our total income on consolidated basis for the financial year ended March 31, 2024 was ? 26,176.99 Lakhs as against ? 23,065.02 Lakhs for the financial year ended March 31, 2023.

On standalone basis, the net profit after tax (PAT) for the financial year ended March 31, 2024 stood at ? 3,423.50 Lakhs as against previous year's net profit of ? 3,592.82 Lakhs thereby recording a decline of 4.71 %. Our net profit after tax (PAT) on consolidated basis for the financial year ended March 31, 2024 amounted to ? 3,003.79 Lakhs as compared to ? 3,594.04 Lakhs in the previous year.

2. TRANSFER TO RESERVES

The Board of Directors has decided to retain the entire amount of profits for FY 2023-24 in the Retained Earnings.

3. DIVIDEND AND TRANSFER TO IEPF

The Board of Directors has not recommended dividend on equity shares for the FY 2023-24. The Company was not required to transfer any unpaid / unclaimed amount of dividend to IEPF during the financial year ended March 31, 2024.

The Company has in place a Dividend Distribution Policy in accordance with Regulation 43A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and the same is available on the Company's website at https://www. parasdefence.com/investors.

4. STATE OF THE COMPANY'S AFFAIRS

The information on Company's 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 this Report.

5. CHANGE IN THE NATURE OF BUSINESS

There were no changes in the nature of business during the financial year ended March 31, 2024.

6. MATERIAL CHANGES AND COMMITMENT, IF ANY AFFECTING FINANCIAL POSITION OF THE COMPANY

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

7. PARTICULARRS OF LOANS, GUARANTEES AND INVESTMENTS

Particularrs of loans given, investments made, guarantees given and securities provided during the year and as covered under Section 186 of the Companies Act, 2013 form part of the notes to the standalone financial statements of the Company provided in this annual report.

8. DEPOSITS

The Company has not accepted or renewed any amount falling within the purview of provisions of Section 73 of the Companies Act 2013 ("the Act") read with the Companies (Acceptance of Deposit) Rules, 2014 during the year under review. Hence, the requirement for furnishing of details relating to deposits covered under Chapter V of the Act or the details of deposits which are not in compliance with Chapter V of the Act is not applicable.

9. DETAILS OF SUBSIDIARY, ASSOCIATE AND JOINT VENTURE COMPANIES

A. SUBSIDIARIES

As on March 31, 2024, the Company has 7 (Seven) Subsidiaries, out of which 6 (Six) are Indian Subsidiaries and 1 (One) is Foreign Subsidiary. The details of the Subsidiaries are as follows:

#Name of the Company has been changed from "Paras Green Optics Private Limited" to "Paras Green UAV Private Limited" w.e.f. February 23, 2024. *Opel Technologies Pte. Ltd. became a material subsidiary of your Company w.e.f. April 01, 2023.

B. ASSOCIATE COMPANIES

As on March 31, 2024, there are 2 (Two) Associate Companies within the meaning of Section 2(6) of the Companies Act, 2013. The details of the Associate Companies are as follows:

C. JOINT VENTURE

As on March 31, 2024, there is no Joint Venture within the meaning of Section 2(6) of the Companies Act, 2013.

10. PERFORMANCE AND FINANCIAL HIGHLIGHTS OF SUBSIDIARY COMPANIES AND THEIR CONTRIBUTION TO OVERALL PERFORMANCE OF THE COMPANY

The consolidated financial statements of the Company forms a part of this Annual Report. A Statement containing salient features of the financial statement of subsidiaries pursuant to first proviso to Sub-Section (3) of Section 129 read with Rule 5 of Companies (Accounts) Rules, 2014 in the prescribed Form AOC-1 are enclosed as Annexure - 1 to this report.

11. SHARE CAPITAL

A. Authorized share capital

The Authorised Share Capital of the Company is H 6,050 Lakhs. During the period under review, there was no change in the authorised share capital of the Company.

B. Issued, Subscribed and Paid-up Share Capital

The Issued, Subscribed and Paid-up Share Capital of the Company is H 3,900 Lakhs. During the period under review, no allotment of securities have been made by the Company.

12. BONUS SHARES/ EQUITY SHARES WITH DIFFERENTIAL VOTING RIGHTS/ESOP/SWEAT EQUITY

During the year under review, the Company has not issued any equity shares with differential voting rights nor has granted any stock options or sweat equity.

As on March 31, 2024, none of the Directors of the Company hold instruments convertible into equity shares of the Company.

13. ISSUE OF DEBENTURES, BONDS AND ANY OTHERR NON-CONVERTIBLE SECURITIES/WARRANTS

During the year under review, the Company has not issued any debentures, bonds and any otherr non-convertible securities nor Company has issued any warrants.

14. CREDIT RATING

During the year under review, your Company has been rated by CRISIL Ratings Limited ("CRISIL") for its bank facilities as follows:

15. INTERNAL FINANCIAL CONTROLS AND THEIR ADEQUACY

The Company has in place adequate internal financial controls with reference to the financial statements. The Audit Committee reviews the internal control systems at regular intervals internally, the adequacy of internal audit function and significant internal audit findings with the management, also update and recommend the same to the Board for their review.

16. BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL

A. Composition of Board of Directors

The composition of Board of Directors of the Company as on March 31, 2024 is as follows:

B. Changes in the position of Directors of the Company

The details of change in position of Directors of the Company, during the year under review, are given in the table as hereunder:

C. Retirement by rotation and subsequent reappointment

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Company's Articles of Association, Mr. Munjal Sharad Shah (DIN: 01080863), retires by rotation at the forthcoming Fifteenth Annual General Meeting and being eligible has offered himself for reappointment.

D. Key Managerial Personnel (KMP)

The composition of Key Managerial Personnel of the Company as on March 31, 2024 is as follows:

E. Changes in the position of Key Managerial Personnel otherr than Directors of the Company

The details of change in position of Key Managerial Personnel of the Company during the year under review are given in the table as hereunder:

Apart from the above, there was no otherr change in the composition of the Key Managerial Personnel during the period under review.

F. Declarations Given by Independent Directors

The Company has received necessary declarations and disclosures from the Independent Directors under Section 149(7) and Section 184(1) of the Companies Act, 2013 ("the Act") stating that they meet the criteria of independence as laid down in Section 149(6) of the Act and under the applicable provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") and disclosing their interest in form MBP-1. All the Directors have certified that the disqualifications mentioned under Sections 164, 167 and 169 of the Act do not apply to them. The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV of the Act.

The Board of the Company has taken the disclosures on record after verifying the due veracity of the same. In the opinion of the Board, all the Independent Directors possess the integrity, expertise and experience including the proficiency required to be Independent Directors of the Company, fulfil the conditions of independence as specified in the Act and the SEBI Listing Regulations and are independent of the management and have also complied with the Code for Independent Directors as prescribed in Schedule IV of the Act. All the Independent Directors of the Company are also registered with the databank of Independent Directors as required under the provisions of the Act.

During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, otherr than sitting fees and reimbursement of expenses, if any.

The Directors and the senior management personnel have affirmed compliance with the Code of Conduct for Directors and Senior Management Personnel during the year under review.

G. Board and Committee Meetings

I. Board Meetings

The Board of Directors met 9 (Nine) times during the financial year under review. The details of the Board meetings and attendance of each Director thereat are provided in the Corporate Governance Report forming part of the Annual Report as Annexure - 2.

II. Committees of the Board

The Company has 5 (Five) Board-Level Committee(s), which have been established in compliance with the provisions of the Act and SEBI Listing Regulations:

i. Audit Committee

The Company's Audit Committee composition is in line with the requirements of Section 177 of the Companies Act, 2013 and Regulation 18 of the Listing Regulations.

The Members of the Audit Committee are financially literate and have requisite accounting and financial management expertise. The composition, terms of reference of the Audit Committee and the particularrs of meetings held and attendance thereat are mentioned in the Corporate Governance Report forming part of the Annual Report. During the year under review, all the recommendations of the Audit Committee in terms of its reference were considered positively by the Board of Directors of your Company.

ii. Otherr Committees

The details of otherr Committees of the Board are given under the Report on Corporate Governance section forming part of this Annual Report and the list of Committees of the Board is also available on the website of the Company viz. www. parasdefence.com.

17. COMPLIANCE WITH SECRETARIAL STANDARDS

During the period from April 01, 2023 to March 31, 2024, the Company complied with the Secretarial Standard - 1 and Secretarial Standard - 2, issued by the Institute of Company Secretaries of India.

18. SUSTAINABILITY AND CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Company's Sustainability, Environment, Social and Governance Report is provided separately as part of the Annual Report.

The brief outline of the Company's CSR initiatives undertaken during the year under review is furnished in Annexure-3 in the format as prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014, as amended from time to time. The Company's CSR Policy is placed on the website of the Company https://www.parasdefence.com/investors .

The brief terms of reference, particularrs of meetings held and attendance thereat are mentioned in the Corporate Governance Report forming part of the Annual Report.

19. PARTICULARRS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

In line with the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), the Company has formulated a Policy on Related Party Transactions and the same can be accessed using the following link: https://www. parasdefence.com/investors.

During the year under review, all otherr contracts / arrangements / transactions entered by the Company with Related Parties were in the ordinary course of business and on an arm's length basis. A statement giving details of all Related Party Transactions, as approved, is placed before the Audit Committee for review on a quarterly basis. The details of the transactions entered into between the Company and the related parties under Sections 188 and 134(3)(h) of the Act, are given in AOC - 2 enclosed as Annexure - 4 to this report.

The Disclosures as required under Indian Accounting Standard - 24 (Ind AS-24) "Related Party Disclosures" notified under Rule 7 of the Companies (Accounts) Rules, 2014 have been provided in notes forming part of the Standalone Financial Statements.

20. PARTICULARRS OF REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL (KMP) AND EMPLOYEES AND DISCLOSURES IN BOARD'S REPORT

The information required under Rule 5(2) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is provided in this Report. In terms of first proviso to Section 136 of the Companies Act, 2013, the Report and Accounts are being sent to the members excluding the certain information covered under aforesaid Annexure. Any member interested in obtaining the same may write to the Company Secretary at the Registered Office of the Company. None of the employees listed in the said Annexure - 5 is related to any Director of the Company except to the extent specified in the Financial Statements.

The disclosure on remuneration of Directors, Key Managerial Personnel and Employees as required under the Companies Act, 2013 and Rules made thereunder is enclosed as Annexure - 5 to this Report.

21. MANAGEMENT DISCUSSION AND ANALYSIS

In terms of provisions of Regulation 34(2)(e) and Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Management Discussion and Analysis Report is enclosed as Annexure - 6 to this Report.

22. BOARD EVALUATION

Pursuant to provisions of Section 134(3)(p) of the Companies Act, 2013 read with Rule 8(4) of the Companies (Accounts) Rules, 2014 and in terms of framework of Nomination and Remuneration Policy, the Nomination and Remuneration Committee and Board of Directors have carried out annual performance evaluation of the Directors.

23. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is enclosed as Annexure - 7 to this report.

24. AUDITORS

I. Statutory Auditors

Members of the Company at the AGM held on September 29, 2023, approved the reappointment of M/s. Chaturvedi & Shah LLP, Chartered Accountants (FRN: 101720W/ W100355) (‘C&S'), as the Statutory Auditors of the Company for a period of five years commencing from the conclusion of the 14^th AGM held on September 29, 2023 until the conclusion of 19^th AGM of the Company to be held in the year 2028.

The Auditors have issued an unmodified opinion on the Financial Statements, both standalone and consolidated, for the financial year ended March 31, 2024. The said Auditors' Report(s) for the financial year ended March 31, 2024 on the financial statements of the Company forms part of this Annual Report.

II. Cost Auditors

The provisions of Section 148 of the Companies Act, 2013 for maintaining the Cost Records are applicable to the Company.

Accordingly, the Company is maintaining the Cost Records as specified by the Central Government under the Rules made there under Section 148 of the Companies Act, 2013. Pursuant to the provisions of Section 148(3) of the Companies Act, 2013, the Board of Directors had appointed M/s. Dinesh Jain & Company, Cost Accountant, Mumbai (FRN: 100583), as Cost Auditors of the Company, for conducting the audit of cost records for the financial year ended March 31, 2024. A proposal for ratification of remuneration of the Cost Auditors is placed before the shareholders.

III. Secretarial Auditors

During the year under review, the Board of Directors had appointed M/s. DM & Associates, Company Secretaries LLP (FRN: L2017MH003500), Practicing Company Secretaries as the Secretarial Auditors to conduct secretarial audit of the Company for the financial year 2023-24. The secretarial audit report in Form MR-3 as issued by them is enclosed as Annexure - 8 to this Report. The comments provided by them are self-explanatory and hence does not require comments from the Board.

The Secretarial Audit was not applicable to any of the subsidiaries of the Company during the year under review.

IV. Internal Auditors

During the year under review, the Board of Directors had appointed M/s. Shaparia Mehta & Associates LLP, Independent Chartered Accountant Firm, as Internal Auditors for conducting the internal audit functions of the Company who have submitted their report thereon for the financial year 2023-24 to the Board and Committee for its review.

25. STATUTORY AUDITORS' REPORT

The Auditors' Report on the Financial Statements (Standalone and Consolidated) of the Company for the year under review, "with an unmodified opinion", as given by the Statutory Auditors, is disclosed in the Financial Statements forming part of this Annual Report. The Auditors' Report is unmodified and there are no qualifications or adverse remarks in their Report. Also, no frauds in terms of the provisions of Section 143(12) of the Companies Act, 2013 have been reported by the Statutory Auditors in their report for the year under review.

26. EXPLANATION OR COMMENTS ON QUALIFICATIONS, RESERVATIONS OR ADVERSE REMARKS OR DISCLAIMERS MADE BY THE AUDITORS AND THE PRACTICING COMPANY SECRETARY IN THEIR REPORTS

There are no qualifications, reservations or adverse remarks made by the Auditors (Statutory Auditors and Secretarial Auditors) in their report. Hence, no comments are offered by the Board of Directors.

27. ANNUAL RETURN

In compliance with Section 92(3) of the Companies Act, 2013 ("the Act") read with Section 134(3) of the Act, the Annual

Return of the Company as on March 31, 2024 will be available on the website of the Company at https://www.parasdefence. com/annual-returns/

28. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) of the Companies Act, 2013, the Directors, based on the representations received from the operating management and after due enquiry, confirm that:

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

b) they had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year March 31, 2024 and of the profit of the Company for that period;

c) they had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and otherr irregularities;

d) they had prepared the annual accounts on a going concern basis;

e) they had 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) they had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

29. HUMAN RESOURCES / INDUSTRIAL RELATIONS, INCLUDING NUMBER OF PEOPLE EMPLOYED

Your Company provides regular training to employees to improve skills. Your Company has put in place a performance appraisal system that covers all employees. Your Company had 418 permanent employees as on March 31, 2024 while the count was 404 as on March 31, 2023.

30. CORPORATE GOVERNANCE

The Company has complied with the corporate governance requirements under the Companies Act, 2013, and as stipulated under the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"). A separate section on corporate governance under the SEBI Listing Regulations, along with the certificate from the Practicing Company Secretary confirming the compliance, is enclosed as Annexure - 2D of this report.

31. COMPANY'S POLICY RELATING TO DIRECTORS' APPOINTMENT, PAYMENT OF REMUNERATION AND DISCHARGE OF THEIR DUTIES

Your Company has adopted a policy relating to appointment of Directors, payment of managerial remuneration, Directors' qualifications, positive attributes, independence of Directors and otherr related matters as provided under Section 178(3) of the Companies Act, 2013.

32. RISK MANAGEMENT POLICY

In line with regulatory requirements, the Company has framed risk management policy to identify and access with the regulatory risk areas and a risk mitigation process. A detailed exercise is being carried out at regular interval to identify, evaluate, manage and monitor all business risks. The Board periodically reviews the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework.

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

The Company is committed to provide a healthy environment to all the employees and thus does not tolerate any sexual harassment at workplace. The Company has in place, "Policy on prevention, Prohibition and Redressal of Sexual Harassment." The policy aims to provide protection to employees at the workplace and preventing and redressing complaints of sexual harassment and it covers matters connected or incidental thereto. The Company has complied with the provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the year under review, the Company has not received any compliant of sexual harassment.

34. WHISTLE BLOWER POLICY / VIGIL MECHANISM

Pursuant to Section 177(9) read with Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, your Company has duly established Whistle Blower Policy /Vigil Mechanism Policy ("Policy") to report to the management instances of unethical behavior, actual or suspected, fraud or violation of the Company's code of conduct. The functioning of the Policy is reviewed by the Audit Committee / Board on periodical basis. During the financial year ended March 31, 2024, the Company has not received any complaint under the Whistle Blower Policy of the Company.

35. CODE OF CONDUCT

The Board of Directors has approved a Code of Conduct which is applicable to the members of the Board of Directors and Senior Management Personnel. It is confirmed that all Directors and Senior Management Personnel have affirmed their adherence to the provisions of the Code of Conduct during the financial year 2023-24.

36. POLICIES AND DISCLOSURE REQUIREMENTS

In terms of provisions of the Companies Act, 2013 and provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has adopted the policies, which are available on Company's website - https://www.parasdefence.com/investors.

37. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT (BRSR)

The Company has provided Business Responsibility and Sustainability Report in line with the requirement based on SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") and the ‘National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business' notified by Ministry of Corporate Affairs (MCA). Pursuant to the provisions of Regulation 34 of the SEBI Listing Regulations, the said report is attached separately, which forms part of this Annual Report.

38. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNAL

During the year, there were no significant material orders passed by the Regulators / Courts / Tribunals which would impact the going concern status of the Company and its future operations.

39. DIFFERENCEBETWEENAMOUNTOFTHEVALUATION DONE AT THE TIME OF ONE TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF

During the year under review, there was no instance of onetime settlement with banks or financial institutions, hence the requirement to disclose the details of difference between the amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions, along with the reasons thereof, is not applicable.

40. IBC CODE & ONE-TIME SETTLEMENT

There is no proceeding pending against the Company under the Insolvency and Bankruptcy Code, 2016 (IBC Code). There has not been any instance of one-time settlement of the Company with any bank or financial institution.

41. ACKNOWLEDGEMENTS

Your Board takes this opportunity to thank all its employees for their dedicated service and firm commitment to the goals of the Company. Your Board also wishes to place on record its sincere appreciation for the wholehearted support received from members, clients, bankers and all otherr business associates. We look forward to continued support of all these partners in progress.