Aimtron Electronics Ltd

To,

The Members,

Your Directors have pleasure in presenting their 13th Annual Report on the business and operations of the Company and the accounts for the Financial Year ended 31st March, 2024.

1. Financial summary

The financial results for the year are as under:

2. Dividend

The Board of Directors' does not recommend any dividend for financial year ended on 31st March, 2024.

3. Reserves

Your Board does not propose to carry to any reserves for the financial year 2023-24.

4. Brief description of the Company's working during the year/State of Company's affair

Total turnover during the year 2023-24 was Rs. 9,297.59 lacs compared to Rs. 8,350.62 lacs of previous year 2022-23 which shows increase of Rs. 946.97 lacs (11.34%). There is profit of Rs. 1,359.94 lacs (after tax) during the year 2023-24 compared to profit of Rs. 1,200.04 lacs (after tax) during the year 2022-23.

5. Change in the nature of business, if any

There is no change in the nature of business during the financial year 2023-24.

6. 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.

The Company entered into the capital market with its Initial Public Offering (IPO) and allotted in aggregate 54,04,800 equity shares of face value of Rs.10/- each, for the issue price of Rs. 161/- each (including premium of Rs. 151/- each) on June 6, 2024 on NSE Emerge Platform. The Company received approval on June 5, 2024 for listing.

Apart from the above, there have been no other material changes and commitments, which affect the financial position of the company which have occurred between the end of the financial year to which the financial statements relate and the date of this Report.

7. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future

No significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future during the financial year and or subsequent to the close of the financial year of the Company to which the balance sheet relates and the date of the report.

8. Details in respect of adequacy of internal financial controls with reference to the Financial Statements

The Auditors of the Company has taken adequate steps for internal financial controls with reference to the Financial Statements.

9. Details of Subsidiary/Joint Ventures/Associate Companies

Your Company has no Subsidiary/Joint Ventures/Associate Companies during the year.

10. Performance and financial position of each of the subsidiaries, associates and joint venture companies included in the consolidated financial statement, if any.

Your Company has no Subsidiary/Joint Ventures/Associate Companies during the year.

11. Deposits

Your Company has not accepted any deposit during the year and there was no deposit at the beginning of the year. Therefore the details relating to deposits, covered under Chapter V of the Act is not applicable.

However, the Company has accepted unsecured loans from Directors of the Company and the opening balance was Rs. 196.70 lacs and the closing balance was Rs. 173.32 lacs.

12. Statutory Auditors & Internal Auditors

Statutory Auditors:

M/s. SPVP & Co., Chartered Accountants has been appointed for a period five years pursuant to the provisions of section 139 of the Companies Act 2013 at the AGM held on 11th November, 2021 and is eligible to act as statutory auditor for the current financial year.

Internal Auditors:

The requirement of appointing internal auditors under section 138 of the Companies Act, 2013 read with Companies (Accounts) Rules, 2014 didn't apply on the Company for financial year 2023-24.

In purview of the above requirements, Board has appointed M/s. CNK & Associates LLP, Chartered Accountants as Internal Auditors of Company for F.Y. 2024-25 at the meeting of the board of directors held on 6th July, 2024.

13. Auditors' Report

The observations of the Auditors are explained, wherever necessary, in an appropriate note to the Audited Statement of Accounts. No qualification, reservation or adverse remark or disclaimer has been made by the auditor in their auditors' report for the year 2023-24.

14. Share Capital

Authorized Capital:

During the year under review, the Company had increased its Authorized Share Capital from Rs. 3,00,00,000/- (Three Crore Only) to Rs. 25,00,00,000/- (Rupees Twenty Five Crore Only) by passing Special Resolution at the Annual General Meeting held on 30th September, 2023.

Issued, Subscribed & Paid-Up Capital:

During the year under review, the Company has increased its Paid-up Capital in the manner set forth below:

Further, during the period under review, your Company has not bought back any of its securities / has not issued any Sweat Equity Shares / has not issued shares with Differential Voting rights / has not issued any shares under Employee stock option plan and there has been no change in the voting rights of the shareholders.

Further, after the completion of the Financial year and before adoption of Board's report, the Company came out with the Initial Public Offer and hence issued and allotted 54,04,800 equity shares of Rs. 10 each at the premium of Rs. 151 per equity share, henceforth increasing the paid-up share capital of the Company to Rs. 20,41,38,250. The Company got listed on the NSE EMERGE platform of National Stock Exchange on June 6, 2024.

15. Annual return

As per latest amendment in section 92 of the Companies Act, 2013, a copy of annual return will be displayed on Company's web site i.e. www.aimtron.in after filing annual return, on completion of ensuing annual general meeting, with the Registrar of Companies within the time stipulated in said Section 92 of Act.

16. Conservation of energy, technology absorption and foreign exchange earnings and outgo

The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are attached herewith (Annexure-A)

17. Corporate Social Responsibility (CSR)

The Company is required to spend towards corporate social responsibility under Section 135 of the Companies Act, 2013. The Annual report on CSR Activities for the year under review as per Annexure II inserted vide MCA notification dated 22nd January, 2021 in terms of section 135 of the Companies Act, 2013 is attached herewith (Annexure-B).

18. Directors & Key Managerial Personnel

(A) Following changes incorporated during the financial year 2023-24:

(B) Declaration by an Independent Director(s) and re- appointment, if any Declarations :

A declaration, by Independent Directors that they have met the criteria provided in sub-section (6) of Section 149 of the Companies Act, 2013, have been received.

The Independent Directors of the Company have also confirmed compliance of relevant provisions of Rule 6 of the Companies (Appointments and Qualifications of Directors) Rules, 2014.

Re-appointments :

Mr. Nirmal M Vasani (DIN: 07442862), retires by rotation at the ensuing annual general meeting and being eligible offered herself for re-appointment as Director.

The Company has received consent and declaration under form DIR-8 pursuant to Section 164 (2) read with Rule 14 (1) of Companies (Appointment and Qualification of Directors) Rules, 2014 from Mr. Nirmal M Vasani.

Details of Mr. Nirmal M Vasani, Non-Executive Director seeking re-appointment as per Regulation 36 of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulation, 2015 with the National stock exchange is already annexed to the notice of the annual general meeting.

(C) Formal Annual Evaluation

The Company has devised a policy for performance evaluation of Independent Directors, Board, Committees and individual Directors which includes criteria for performance evaluation of executive directors and non-executive directors.

In evaluating the suitability of individual Board members, the Committee may take into account factors, such as:

• General understanding of the Company's business;

• Educational back ground and experience:

• Personal and professional ethics, integrity and values;

• Willingness to devote sufficient time and energy in carrying out their duties and responsibilities effectively.

(D) Opinion of the Board:

Your Board is of opinion that independent directors of the Company, possess requisite qualifications, experience and expertise and they hold good standard of integrity in various fields.

19. Number of meetings of the Board of Directors

During the year from 1st April, 2023 to 31st March, 2024 the Board of Directors met ten times on the following dates:

The intervening gap between the Meetings was within the period prescribed under Companies Act, 2013 and the Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, read with the erstwhile Listing Agreement.

20. Audit Committee

The Audit Committee was constituted by the Board of Directors at their meeting held on November 27, 2023, in accordance with the Section 177 of the Companies Act, 2013 and Rule 6 of the Companies (Meeting of board and its power) Rules, 2014.

The members of the Audit Committee of the Company as on 31st March, 2024 are as under:

There was no occasion regarding non acceptance of any recommendation of the Audit Committee during the year.

The Audit Committee Meetings were duly convened during the year ended 31st March, 2024 on following dates:

21. Details of establishment of vigil mechanism for directors and employees

Your Company has established a robust Vigil Mechanism for reporting of concerns through the Whistle Blower Policy of your Company, which is in compliance of the provisions of section 177 of the Companies Act, 2013, read with rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014, and the Listing Regulations. The Policy provides for framework and process whereby concerns can be raised by its employees against any kind of discrimination, harassment, victimization or any other unfair practice being adopted against them. Adequate safeguards are provided against victimization to those who avail of the mechanism, and access to the Chairman of the Audit Committee, in exceptional cases, is provided to them.

22. Nomination and Remuneration Committee

The Nomination and Remuneration Committee was constituted by the Board of Directors at their meeting held on November 27, 2023, in accordance with the Section 178 of the Companies Act, 2013 Rule 6 of the Companies (Meeting of board and its power) Rules, 2014.

The members of Nomination and Remuneration Committee of the Company as on 31st March, 2024 are as under:

The policy formulated by nomination and remuneration committee:

The terms of reference of the committee inter alia include succession planning for Board of Directors and Senior Management Employees, identifying and selection of candidates for appointment of Directors/Independent Directors based on certain laid down criteria, identifying potential individuals for appointment of Key Managerial personnel and other senior managerial position and review the performance of the Board of Directors and Senior Management personnel including Key managerial personnel based on certain criteria approved by the Board. While reviewing the performance, the committee ensures that the remuneration is reasonable and sufficient to attract, retain and motivate the best managerial talents, remuneration commensurate with the performance of individual and group and also maintains a balance between both short and long-term objectives of the company.

23. Stakeholders Committee:

The Stakeholders' Relationship Committee was constituted by the Board of Directors at their meeting held on November 27, 2023, in accordance with the Section 178(5) of the Companies Act, 2013.

The members of stakeholders Committee of the Company as on 31st March, 2024 are as under:

24. Particulars of loans, guarantees or investments under section 186:

The Company has taken consent of shareholders at the Extra Ordinary General Meeting held on 2nd November, 2023 prescribed under section 186 of the Companies Act, 2013, for making loans or investments in one or more tranches by subscription, purchase or otherwise in any body corporate or provide guarantee and security in connection with a loan made by any other person in excess of the limits prescribed under section 186 of the Companies Act, 2013 but subject to maximum limit of Rs. 100.00 Crores

The Company has not given any guarantees or made investments under section 186 to any person or body corporate except loans to employees of the Company as per Company's policy for employees and Inter Corporate Loan to Aimtron Technologies Private Limited during the year under review.

25. Particulars of contracts or arrangements with related parties:

During the year under review, pursuant to the 4th proviso of Section 188(1) of the Companies Act, 2013, the Company has entered into transactions with related parties that are in the ordinary course of business and on arm's length basis mentioned below:

26. Managerial Remuneration

Therefore, the related party transactions executed do not require any approval of the Board of Directors or shareholders under the Section 188 of the Act However, the Company has taken necessary omnibus approvals from the Audit Committee for executing related party transactions during the period under review.

Pursuant to related party transactions under Section 188(1)(f) of the Companies Act, 2013 i.e. for leasing of premises with Aimtron Technologies Private Limited, Form AOC 2 is attached herewith (Annexure-A).

Disclosures pursuant to section 197(12) of the Companies Act, 2013 read with Rule 5(1), 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are enclosed herewith (Annexure-C).

27. Secretarial Audit Report

During the year under review, as per the provisions of Section 204 and other applicable provisions, if any of the Companies Act, 2013, Secretarial audit was not applicable for the period under review.

However, in accordance with the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed M/s. DRP & Associates, Practicing Company Secretaries as Secretarial Auditor of the Company for the F.Y. 2024-25 at the meeting of the Board of Directors held on 6th July, 2024.

28. Corporate Governance Report

Being Company got listed on NSE Emerge platform on 6th June, 2024 as SME, and pursuant to the provisions of Regulation 15 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the compliance with the corporate governance provisions as specified in regulations 17 to 27 and clause

(b) to (i) of sub-regulation (2) of regulation 46 and Para C, D and E of schedule V are not applicable to the Company being SME Listed Company.

Hence Corporate Governance does not form part of this Board's Report.

The management discussion and analysis report as stipulated in Regulation 34 (2) (e) of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulation, 2015 has been annexed to Directors' report herewith (Annexure-D).

29. Code of Conduct

The Company has adopted a code of conduct for its directors and senior designated management personnel. All the Board members and senior management personnel have affirmed their compliance of code of conduct.

30. Risk management policy

In today's economic environment, risk management is a very important part of business. The main aim of risk management is to identify, monitor and take precautionary measures in respect of the events that may pose risks for the business. Your Company's risk management is embedded in the business processes. Your company has identified the following risks:

31. Directors' Responsibility Statement

Our Directors' state 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) the directors 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 and of the profit and loss of the company for that period;

(c) the directors had 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) the directors had prepared the annual accounts on a going concern basis;

(e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively;

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

32. Compliance with Secretarial Standards and SEBI (Listing Obligation and Disclosure Requirement) Regulations 2015:

The Company has complied with secretarial standards issued by the Institute of Company Secretaries of India and SEBI (Listing Obligations and Disclosure Requirement) Regulations 2015 from time to time.

33. Disclosure regarding maintenance of Cost Records:

Cost records as specified by the Central Government under sub-section 1 of section 148 of the Companies Act, 2013, are maintained by the Company for the financial year 2023-24.

34. Details of fraud reported by auditors under sub-section (12) of section 143 other than those which are reportable to the Central Government.

There was no fraud reported by auditors under sub-section (12) of section 143 other than those which are reportable to the Central Government.

35. Details of proceedings under the Insolvency and Bankruptcy Code, 2016

There was no proceeding pending against the Company under the Insolvency and Bankruptcy Code, 2016 during the year under review.

36. Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013:

The Company has been employing about 41 women employees in various cadres within the factory premises. The Company has in place an anti-harassment policy in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaint Committee has been set up to redress complaints received regularly and are monitored by women line supervisors who directly report to the Executive Director. All employees (permanent, contractual, temporary, trainees) are covered under the policy. There was no complaint during the financial year 2023-24 and hence no complaint is outstanding as on 31.03.2024 for redressal.

37. Acknowledgements

The Board of Directors gratefully acknowledge the assistance and co-operation received from the Bank of Baroda and all other statutory and non-statutory agencies for their co-operation. The Board of Directors also wish to place on record their gratitude and appreciation to the members for their trust and confidence shown in the Company. The Board of Directors would like to especially thank all the employees of the Company for their dedication and loyalty.