డైరెక్టర్ల నివేదిక Aeroflex Industries Ltd.

Mar 31, 2026

It gives your Directors great pleasure to present the Thirty-Second (32^nd) Annual Report, highlighting the Company''s performance and achievements during the financial year ended March 31, 2026, along with the Audited Standalone and Consolidated Financial Statements.

1. FINANCIAL SUMMARY AND HIGHLIGHTS

Your Company''s performance during the financial year as compared to the previous financial year is summarized as below:

(f in Lakhs, except EPS data)
Particulars	Standalone		Consolidated
	FY 2025-26	FY 2024-25	FY 2025-26	FY 2024-25
Total Revenue	41,402.34	37,529.27	44,329.42	37,876.24
Profit before tax, depreciation, exceptional items and Interest	9,903.94	8,068.36	10,109.77	8,157.96
Less: Interest	93.60	34.97	93.65	35.92
Less: Depreciation	2,412.67	1,100.26	2,607.74	1,127.23
Profit before Tax and Exceptional Items	7,397.67	6,933.13	7,408.38	6,994.81
Less: Exceptional Items Diminishing in value of Investment	Nil	19.28	Nil	Nil
Profit before Tax	7,397.67	6,913.85	7,408.38	6,994.81
Less: Provisions for tax:
Current Tax	1,897.00	1,662.00	1,897.00	1,673.00
Deferred Tax (Assets)/Liability	(63.93)	75.53	(66.70)	84.54
Taxation of Earlier Year	36.38	(13.49)	25.38	(13.49)
Profit after tax	5,528.22	5,189.81	5,552.70	5,250.76
Earnings per equity share	4.26	4.01	4.28	4.06

2. STATE OF COMPANY''S AFFAIRS

The Company''s core business of hose and assemblies continues to demonstrate steady growth, supported by strong demand across end-user industries and its established global customer relationships. FY26 has been a landmark year, marked by the Company''s successful entry into skid assemblies and advanced flow control solutions for high-performance liquid cooling applications which is widely used in the data center and AI infrastructure. To support this growth opportunity, the Company has expanded its skid assembly capacity to 6,000 skids, with plans to scale up to 15,000 skids by Q2FY27. The Company also showcased its comprehensive portfolio of advanced flexible flow solutions at the Data Center World (Washington, USA), reinforcing its strategic focus on next-generation thermal management technologies for global markets.

During the financial year ended March 31, 2026, the Company reported a Standalone Revenue from Operations of f 41,247.20 lakhs, registering a robust growth over the previous year''s revenue of f 37,290.45 lakhs. The Standalone Net Profit for the year stood at f 5,528.22 lakhs, as compared to f 5,189.81 lakhs in the previous financial year, reflecting strong operational performance and continued focus on cost efficiencies.

On a consolidated basis, the Company achieved a Revenue from Operations of f 44,193.51 lakhs (previous year: f 37,622.79 lakhs) and a Net Profit of f 5,552.70 lakhs (previous year: f 5,250.76 lakhs), continuing its upward growth trajectory.

Despite a challenging global economic environment, further impacted by ongoing geopolitical tensions, Aeroflex Industries Limited demonstrated resilience

and operational agility. The Company''s sustained emphasis on product innovation, stringent quality standards, and customer-centric approach enabled it to reinforce its leadership position and enhance competitiveness across both domestic and international markets.

With a resilient and cash-generative core business, strong engineering capabilities, and a growing presence in new age industries, the Company is well positioned to sustain its growth momentum and well prepared to capture long-term growth opportunities.

3. DIVIDEND

Your Directors have pleasure in recommending payment of final dividend f 0.40 (Forty paisa Only) being 20% per share on Equity Share of f 2 for the financial year ended 31^st March 2026. This will absorb total cash outflow of f 5,29,32,307.2. The final dividend, if approved by the members, would be paid within 30 days of aGm to those members whose names appear in the Register of Members or List of Beneficial Owners as on the Record Date.

The dividend payment is based on the parameters outlined in the Dividend Distribution Policy of the Company which is in accordance with Regulation 43A of the SEBI Listing Regulations. The said Policy is available on the Company''s website at https://www. aeroflexindia.com/wp-content/uploads/Dividend-Distribution-Policy.pdf.

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

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

5. CHANGES IN THE NATURE OF BUSINESS

There was no change in the nature of business of the Company during the Financial Year ended 31^st March 2026.

6. TRANSFER TO RESERVES

During the year no amount was transferred to any Reserves.

7. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION 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 Act, read along with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as Annexure - A.

8. PARTICULARS OF EMPLOYEES AND RELATED DISCLOSURES

During the year under review, no employee of the Company was in receipt of remuneration in excess of the limits prescribed under rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached to this report vide Annexure - B.

9. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) of the Companies Act, 2013, the Directors to the best of their knowledge hereby state and confirm that:

a. in the preparation of the annual accounts for the year ended March 31, 2026, the applicable accounting standards read with requirements set out under Schedule III to the Act have been followed and there are no material departures from the same;

b. the Directors have selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2026 and of the profit of the Company for the year ended on that date;

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

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

e. 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. 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.

10. DIRECTORS & KEY MANAGERIAL PERSONNEL

As on 31^st March 2026, the Board comprised 7(Seven) Directors including 4 (Four) Independent Directors. The Board has an appropriate mix of Executive, Non-

Executive and One-women Independent Director, which is in compliance with the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and is also aligned with the best practices of Corporate Governance.

I. Retirement by Rotation

In accordance with the provisions of Section 152 of the Companies Act, 2013 read with Companies (Management & Administration) Rules, 2014 and Articles of Association of the Company, Mr. Asad Daud (DIN: 02491539), Director of the Company, retires by rotation at the ensuing Annual General Meeting of the Company and being eligible, has offered himself for re-appointment.

Based on the recommendation of the Nomination Remuneration and Compensation Committee and considering his experience, expertise, and valuable contribution to the affairs of the Company, the Board recommends his re-appointment to the Members for approval at the ensuing AGM.

II. Re-appointment of Directors

The members of the Company, vide Special resolutions passed at the Annual General Meeting held on August 05, 2025 approved the following re-appointments:

a) Re-appointment of Mr. Parthasarathi Sarkar (DIN: 00047272) as an Independent Director.

Mr. Parthasarathi Sarkar (DIN: 00047272) was re-appointed as an Independent Director of the Company for a second term of five (5) consecutive years, commencing from September 03, 2025, and ending on September 02, 2030.

The re-appointment was based on the performance evaluation carried out by the Board and the recommendation of the Nomination Remuneration and Compensation Committee. While considering the recommendation, the Board took into account Mr. Sarkar''s expertise, experience, contribution to the Board''s deliberations and his continued fulfilment of the criteria of independence as prescribed under the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Accordingly, the Board recommended his re-appointment, which was subsequently approved by the Members.

b) Re-appointment of Mr. Mustafa Abid Kachwala (DIN: 03124453) as Whole-Time Director of the Company.

Mr. Mustafa Abid Kachwala (DIN: 03124453) was re-appointed as WholeTime Director of the Company for a further period of three (3) years with effect from April 01,2026 up to March 31,2029.

The Board of Directors places on record its sincere appreciation for the valuable contributions, leadership and dedicated efforts made by him towards the growth and operations of the Company during his tenure. Based on the performance evaluation carried out by the Board and on the recommendation of the Nomination Remuneration and Compensation Committee, and having regard to his experience and continued contribution to the Company, the Board recommended his re-appointment as Whole-Time Director, which was subsequently approved by the Members.

III. Cessation

During the year, there has been no cessation or resignation of any Director.

IV. Key Managerial Personnel ("KMP")

During the financial year ended March 31, 2026 the following persons were acting as Key Managerial Personnel of the Company in compliance with the provisions of Section 203 of the Companies Act, 2013:

Sr. No.	Name of the KMP	Designation
1.	Mr. Asad Daud	Managing Director
2.	Mr. Mustafa Abid	Whole Time
	Kachwala	Director & Chief Financial Officer
3.	Ms. Ruthu	Company Secretary
	Parampogi	& Compliance
	(appointed with effect from July 28, 2025)	officer

During the year under review, the following changes took place in the Key Managerial Personnel ("KMP") of the Company:

1. Resignation:

Ms. Kinjal Kamlesh Shah (Membership No.: A58678) resigned from the position of Company Secretary & Compliance Officer of the Company with effect from July 15, 2025.

2. Appointment:

Based on the recommendation of the Nomination Remuneration and Compensation Committee, the Board of Directors appointed Ms. Ruthu Parampogi (Membership No. A60982) as the Company Secretary & Compliance Officer of the Company with effect from July 28, 2025.

V. Declaration from Independent Directors

All Independent Directors of the Company have submitted declarations confirming that they meet the criteria of independence prescribed under Section 149(6) of the Companies Act, 2013 ("the Act") and Regulation 16(1 )(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The Independent Directors have also confirmed compliance with the provisions of Regulation 25(8) of the SEBI Listing Regulations and have affirmed that they are not aware of any circumstance or situation that exists or may reasonably be anticipated to impair or impact their ability to discharge their duties with an objective and independent judgment.

The Independent Directors have complied with the requirements relating to registration in the Independent Directors'' Databank maintained by the Indian Institute of Corporate Affairs in accordance with the provisions of Section 150 of the Act read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

Based on the declarations received from the Independent Directors and after undertaking due assessment of the veracity of the same, the Board is of the opinion, that all the Independent Directors possess the requisite qualifications, expertise, experience, proficiency and integrity and fulfil the conditions specified under the Act and the Rules made thereunder as well as the SEBI Listing Regulations. The Board is satisfied that the Independent Directors are independent of the management.

The Company has obtained a certificate from M/s. T. F. Khatri & Associates, Practicing Company Secretaries, Secretarial Auditor of the Company, confirming that none of the Directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as Directors by the Securities and Exchange Board of India, the Ministry of Corporate Affairs or any other statutory authority.

VI. Annual performance evaluation by the Board

Pursuant to the provisions of Section 134(3) (p) of the Companies Act, 2013, the applicable Rules made thereunder and the SEBI (Listing

Obligations and Disclosure Requirements) Regulations, 2015, the Nomination Remuneration and Compensation Committee has laid down the criteria and framework for carrying out the annual performance evaluation of the Board of Directors, its Committees, Individual Directors, Independent Directors and the Chairman & Managing Director.

The annual performance evaluation was conducted through a structured questionnaire covering various aspects of the functioning of the Board and its Committees, including the composition of the Board, diversity of skills and experience, effectiveness of Board processes, quality and timeliness of information flow, strategic oversight, governance practices, participation in discussions, decision-making processes and overall Board effectiveness. The evaluation framework also included specific criteria for assessing the performance and contribution of Individual Directors.

All the Directors participated in the evaluation process and provided their feedback through the prescribed evaluation mechanism. The performance of the Board, its Committees, Individual Directors and the Chairman & Managing Director was evaluated based on the responses received.

In accordance with the provisions of the Companies Act, 2013 and the SEBI Listing Regulations, a separate meeting of the Independent Directors was held on March 25, 2026, wherein the performance of

the Chairman & Managing Director, NonIndependent Directors and the Board as a whole was reviewed. The Independent Directors also assessed the quality, quantity and timeliness of the flow of information between the management and the Board, which is necessary for the Board to effectively and reasonably perform its duties.

The performance of each Independent Director was evaluated by the entire Board, excluding the Director being evaluated, taking into account factors such as attendance, participation and contribution at Board and Committee meetings, exercise of independent judgment, safeguarding the interests of stakeholders and contribution towards strengthening corporate governance practices within the Company.

The Nomination Remuneration and Compensation Committee reviewed the evaluation process and its outcomes and was satisfied that the evaluation framework remained objective, comprehensive and effective.

The Board reviewed the outcome of the evaluation process and noted with satisfaction the overall effectiveness of the Board, its Committees and Individual Directors. No

material concerns or adverse observations were identified during the evaluation process. The suggestions and feedback received, wherever applicable, were discussed by the Board and will be considered for further strengthening the governance framework and enhancing Board effectiveness.

VII. Familiarization Program for Independent Directors

Pursuant to the provisions of Regulation 25(7) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations") read with Schedule IV of the Companies Act, 2013 ("the Act"), the Company has adopted a Familiarization Programme for its Independent Directors with the objective of familiarizing them with the Company, its business operations, industry environment, regulatory framework, roles, rights, responsibilities and duties as Independent Directors.

The Familiarization Programme is designed to assist the Independent Directors in gaining a comprehensive understanding of the Company''s business model, operational and functional aspects, strategic initiatives, industry dynamics, governance practices and risk management framework. The programme also aims to keep the Independent Directors updated on significant developments in the business and regulatory environment on an ongoing basis, thereby enabling them to effectively discharge their duties and contribute meaningfully to the deliberations of the Board and its Committees.

During the year under review, a familiarization programme was conducted by M/s. G H V & Co., Practicing Company Secretaries. The programme covered, inter alia, holistic business understanding and strategic value creation, corporate governance and regulatory developments, Board governance, risk oversight and fiduciary responsibilities, ethical leadership, accountability and measures for enhancing Board effectiveness.

Details of the Familiarization Programme are available on the Company''s website at https:// www.aeroflexindia.com/investor-relation/

11. SUBSIDIARY & ASSOCIATE COMPANIES Subsidiary Company

As on March 31,2026, the Company had one Wholly

Owned Subsidiary, namely Hyd-Air Engineering

Private Limited.

During the year under review, Hyd-Air Engineering Private Limited undertook significant infrastructure enhancements, including upgrades to its Quality Laboratory and Research & Development Centre. The subsidiary recorded an encouraging year-on-year revenue growth of approximately 50%, reflecting improved operational performance, enhanced capabilities and continued business expansion.

There were no material changes in the nature of the relationship between the Company and its subsidiary during the year under review.

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, a statement containing salient features of the financial statements of Hyd-Air Engineering Private Limited in Form AOC-1, is annexed as Annexure - C.

Holding Company

Your Company is a subsidiary of Aeroflex Enterprises Limited (Formerly known as SAT Industries Limited), which holds 59.84% of the paid-up equity share capital of the Company.

Joint Ventures and Associates

During the financial year ended March 31,2026, the Company did not have any Associate Company or Joint Venture within the meaning of the Companies Act, 2013.

Accordingly, the disclosure requirements relating to Associate Companies and Joint Ventures are not applicable to the Company for the year under review.

12. CONSOLIDATED FINANCIAL STATEMENT

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013 read with Rule 6 of the Companies (Accounts) Rules, 2014, the Consolidated Financial Statements of the Company have been prepared in accordance with the Indian Accounting Standards ("Ind AS") prescribed under Section 133 of the Companies Act, 2013 read with the Companies (Indian Accounting Standards) Rules, 2015, as amended from time to time.

The audited Consolidated Financial Statements, together with the Independent Auditors'' Report thereon, form an integral part of this Annual Report and are presented along with the Standalone Financial Statements of the Company.

The Board of Directors confirms that the Consolidated Financial Statements present a true and fair view of the consolidated financial position, performance and cash flows of the Company and its subsidiary for the financial year ended March 31,2026.

13. DEPOSITS

The Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the rules made thereunder. Accordingly, no amount of principal or interest was outstanding as on the Balance Sheet date, and there were no deposits which were not in compliance with the requirements of Chapter V of the Companies Act, 2013.

14. MEETINGS OF THE BOARD

During the Financial Year 2025-26, Seven (7) meetings of the Board of Directors were held in compliance with the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The intervening gap between any two consecutive Board Meetings did not exceed the period prescribed under the applicable laws.

The details regarding the number of Board Meetings held during the year, attendance of the Directors thereat and other related information are provided in the Corporate Governance Report, which forms an integral part of this Annual Report.

15. INDEPENDENT DIRECTORS MEETING

Pursuant to the provisions of Schedule IV to the Companies Act, 2013 and Regulation 25(3) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate meeting of the Independent Directors of the Company was convened on March 25, 2026, without the attendance of Non-Independent Directors and members of Management.

At the meeting, the Independent Directors reviewed the performance of the Non-Independent Directors and the Board as a whole, evaluated the performance of the Chairperson of the Company, and assessed the adequacy, quality, quantity, and timeliness of the flow of information between the Company''s management and the Board.

16. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

During the financial year under review, the Company granted a loan to its wholly owned subsidiary, i.e. Hyd-Air Engineering Private Limited amounting to '' 525 Lakhs. The loan was granted in compliance with the applicable provisions of the Companies Act, 2013 and on arm''s length terms.

The Company did not provide any guarantees or securities under Section 186 of the Companies Act, 2013 during the financial year ended March 31,2026.

Details of the investments made by the Company are disclosed in the Standalone Financial Statements. Members are requested to refer to Note No. 5 to the Standalone Financial Statements for further details.

The Company has complied with the provisions of Section 186 of the Companies Act, 2013 in respect of the loans granted and investments made during the year under review.

17. PARTICULARS OF CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All contracts, arrangements and transactions entered into by the Company with related parties during the financial year under review were in the ordinary course of business and on an arm''s length basis and were in compliance with the applicable provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Audit Committee reviews the Related Party Transactions on a periodic basis.

The Company has formulated a policy on dealing with Related Party Transactions. The same is available on the Company''s website at https://www. aeroflexindia.com/wp-content/uploads/Related-Party-Transction-Policy.pdf.

Details of all transactions with related parties are disclosed in the accompanying Standalone Financial Statements. Members may refer to Note No. 37, which provides the related party disclosures in accordance with Ind AS 24.

Since all Related Party Transactions entered into by the Company during the year were in the ordinary course of business and on an arm''s length basis, the disclosure of particulars of contracts or arrangements with related parties in Form AOC-2, as prescribed under Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014, is not applicable to the Company.

18. POLICY ON APPOINTMENT AND REMUNERATION FOR DIRECTORS, KEY MANAGERIAL PERSONNEL AND SENIOR MANAGEMENT EMPLOYEES

Pursuant to the provisions of Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, and based on the recommendation of the Nomination Remuneration and Compensation Committee, the Board of Directors has adopted a policy on selection and appointment of Directors, Key Managerial Personnel ("KMPs") and Senior Management Personnel ("SMPs"), and their remuneration. The policy also lays down the criteria for determining qualifications, positive attributes, independence of a director and other related matters.

The Nomination Remuneration and Compensation Committee identifies and evaluates individuals proposed to be appointed as Directors, KMPs or

SMPs, having regard to their integrity, qualifications, expertise and experience, and recommends their appointment to the Board.

Further, the proposed appointee is required to possess the requisite qualifications, expertise and experience commensurate with the position. The Committee exercises discretion in determining whether such qualifications, expertise and experience are adequate for the role.

The Company shall not appoint or continue the employment of any person as Managing Director, Whole-time Director or Manager beyond the age of seventy years, unless approved by the shareholders through a special resolution with justification. Further, in accordance with Regulation 17(1A) of the SEBI (LODR) Regulations, 2015, the appointment or continuation of a Non-Executive Director beyond the age of seventy-five years shall also require approval of the shareholders by way of a special resolution, along with justification in the explanatory statement.

The Nomination and Remuneration Policy has been placed on the website of the Company viz. https:// www.aeroflexindia.com/wp-content/uploads/ Nomination-and-Remuneration-Policy.pdf.

19. CORPORATE SOCIAL RESPONSIBILITY

The Company''s CSR initiatives and activities are aligned to the requirements of Section 135 of the Act. The Annual Report on CSR activities for the year under review is set out in Annexure - D of this Report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR Policy is available on the Company''s website at https://www. aeroflexindia.com/wp-content/uploads/Policy-on-Corporate-SocialResponsibility.pdf.

For details regarding the composition, meetings and other particulars of the CSR Committee, Members are requested to refer to the Corporate Governance Report, which forms part of this Annual Report.

20. THE 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

There were no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company''s operations in future.

21. THE WEB ADDRESS, WHERE ANNUAL RETURN REFERRED TO IN SUB-SECTION (3) OF SECTION 92 HAS BEEN PLACED

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31,2026 is available on the Company''s website at https://www. aeroflexindia.com/.

22. AUDITORS

Statutory Auditors

In accordance with the provisions of Section 139(1) of the Companies Act, 2013, M/s. Shweta Jain & Co LLP., Chartered Accountants (FRN: 127673W/ W101149), were appointed as the Statutory Auditors of the Company for a first term of five (5) consecutive years and shall complete their term at the conclusion of the ensuing Annual General Meeting of the Company.

Based on the recommendation of the Audit Committee, the Board ofDirectors has recommended the re-appointment of M/s. Shweta Jain & Co LLP., Chartered Accountants (FRN: 127673W/W101149), as Statutory Auditors of the Company for a second term of five (5) consecutive years, subject to the approval of the members at the ensuing Annual General Meeting. The proposed re-appointment shall be effective from the conclusion of the 32^nd Annual General Meeting and shall continue until the conclusion of the 37^th Annual General Meeting of the Company to be held in the financial year 2031.

The Company has received written consent and a certificate from M/s. Shweta Jain & Co LLP confirming that their re-appointment, if approved by the Members, would be in accordance with the provisions of Sections 139, 141 and other applicable provisions of the Companies Act, 2013 and that they satisfy the criteria prescribed thereunder.

Secretarial Auditors

During the year under review, the Members of the Company, at the Annual General Meeting held on August 05, 2025, approved the appointment of M/s. T. F. Khatri & Associates, Practicing Company Secretaries (FCS: 9093), as the Secretarial Auditors of the Company for a term of five (5) consecutive years commencing from the financial year 2025-26 and continuing up to the financial year 2029-30.

Secretarial Audit Report:

In terms of Section 204 of the Companies Act, 2013, a Secretarial Audit Report issued by the Secretarial Auditor in Form No. MR-3 is annexed with this Report as Annexure - E. There are no qualifications, reservations or adverse remarks made by Secretarial Auditors in their Report.

Annual Secretarial Compliance Report:

A Secretarial Compliance Report for the financial year ended March 31, 2026, on compliance with all applicable SEBI Regulations and circulars/guidelines issued thereunder, pursuant to Regulation 24A of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, has been obtained from M/s. T.F. Khatri & Associates (FCS: 9093), Practicing Company Secretaries, Secretarial Auditor of the Company.

Internal Auditors

Pursuant to Section 138 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, the Board, based on the recommendation of the

Audit Committee, appointed M/s. D M Jain & Co., Chartered Accountants, as the Internal Auditors of the Company for Financial Year 2025-26.

The Internal Auditors undertake periodic review of the Company''s internal control systems, processes, risk management framework and compliance mechanisms. The quarterly reports submitted by the Internal Auditors are placed before the Audit Committee for its review, deliberation and necessary guidance/action.

Cost Auditors

During the financial year 2025-26, the provisions relating to maintenance of cost records and appointment of Cost Auditor under Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 were not applicable to the Company.

Subsequent to the close of the financial year, the said provisions have become applicable to the Company. In terms of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014, the Board of Directors, based on the recommendation of the Audit Committee, has approved the appointment of M/s. Rampurawala Mohammed A & Co. (Firm No.:003011), Cost Accountants, as the Cost Auditor for the financial year 2026-27.

The remuneration payable to the Cost Auditors, as approved by the Board of Directors based on the recommendation of the Audit Committee, shall be placed before the Members for ratification at the ensuing Annual General Meeting.

Disclosure on maintenance of Cost Records:

The Company is required to maintain cost records pursuant to the provisions of Section 148(1) of the Companies Act, 2013. Accordingly, the Company has maintained the prescribed cost records and accounts in accordance with the applicable provisions of the Companies Act, 2013 and the Companies (Cost Records and Audit) Rules, 2014.

23. REMARKS ON QUALIFICATIONS BY STATUTORY AUDITORS AND SECRETARIAL AUDITORS

The Reports issued by the Statutory Auditors and the Secretarial Auditors of the Company for the financial year ended March 31,2026, do not contain any qualifications, reservations, adverse remarks, observations or disclaimers.

Further, pursuant to the provisions of Section 143(12) of the Companies Act, 2013, the Statutory Auditors of the Company have not reported any instance of fraud committed against the Company by its officers or employees during the financial year under review.

24. CORPORATE GOVERNANCE

The report on Corporate Governance along with certificate from a Practicing Company Secretary certifying compliance with conditions on Corporate Governance as stipulated under Regulation 34(3) read with Para C of Schedule V of the Listing Regulations is presented in separate section forming part of this Annual Report as Corporate Governance Report.

25. COMPOSITION OF AUDIT COMMITTEE

As of March 31, 2026, the Audit Committee of the Board of Directors of the Company comprised 3 (Three) Members, namely Mr. Ramesh Chandra Soni, Mr. Arpit Khandelwal, Independent Directors and Mr. Asad Daud, Managing Director of the Company.

Mr. Ramesh Chandra Soni is the Chairman of Audit Committee of the Company. The Company Secretary and Compliance Officer of the Company acts as Secretary of the Audit Committee.

During the financial year under review, all recommendations made by the Audit Committee were duly considered and accepted by the Board of Directors.

The Audit Committee, inter alia, reviews matters relating to financial reporting, auditing, accounting policies, internal financial controls, risk management and compliance. The Committee also reviews the reports submitted by the Internal Auditors, oversees the internal audit function and monitors the vigil mechanism of the Company.

Further details regarding the composition, terms of reference, meetings and attendance of the Audit Committee are provided in the Corporate Governance Report, which forms an integral part of this Annual Report.

26. COMMITTEES OF THE BOARD

In accordance with the provisions of the Companies Act, 2013 and the applicable provisions of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has constituted the following Five committees of the Board, namely:

1. Audit Committee

2. Stakeholders'' Relationship Committee

3. Nomination Remuneration and Compensation Committee

4. Corporate Social Responsibility Committee and

5. Banking, Finance & Investment Committee

The details of the above-mentioned committee along with their composition, terms of reference, number of meetings held and attendance at the meetings are provided in the Corporate Governance Report which forms an integral part of this Annual Report.

The Committees of the Board are constituted with an appropriate balance of Executive, Non-Executive and Independent Directors, wherever applicable, to ensure effective oversight, independent judgment and good governance practices. The Committees deliberate on matters within their respective areas of responsibility and make recommendations to the Board, wherever required. The decisions and recommendations of the Committees are placed before the Board for its consideration and noting/approval in accordance with the applicable provisions.

27. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the financial year under review, as required under Regulation 34 read with Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 is presented in a separate section, forming part of the Annual Report.

28. CEO/CFO CERTIFICATE:

The Certifications required as stipulated under Regulation 17(8) and in terms of Part B, Schedule II of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, from Mr. Asad Daud, Managing Director and Mr. Mustafa Abid Kachwala, Whole-time Director & Chief Financial Officer of the Company for the Financial Year 2025-2026 is annexed as Annexure - F.

29. SHARE CAPITAL

As at March 31, 2026, the authorised share capital of the Company stood at ? 56,00,00,000 (Rupees Fifty-Six Crores only), comprising 17,50,00,000 (Seventeen Crore Fifty Lakhs) equity shares of ? 2/-each, 10,00,000 (Ten Lakhs) Series "A" Compulsorily Convertible Preference Shares of ? 10/- each, and 10,00,000 (Ten Lakhs) Series "A" Compulsorily Convertible Preference Shares of ? 200/- each.

During the financial year under review, the Company allotted equity shares on a preferential basis. The said allotment was made in accordance with the applicable provisions of the Companies Act, 2013 and the SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2018, after obtaining the necessary approvals, including approval of the Members of the Company and in-principle approvals from BSE Limited and National Stock Exchange of India Limited.

The Board of Directors, at its meeting held on February 03, 2026, approved the allotment of 30,10,398 (Thirty Lakhs Ten Thousand Three Hundred and Ninety-Eight) fully paid-up equity shares of face value of ? 2/- (Rupees Two only) each at an issue

price of ? 182.70 (Rupees One Hundred Eighty-Two and Seventy Paise only) per equity share, including a premium of ? 180.70 (Rupees One Hundred Eighty and Seventy Paise only) per share, aggregating to ? 54,99,99,714.60 (Rupees Fifty-Four Crore Ninety-Nine Lakh Ninety-Nine Thousand Seven Hundred Fourteen and Sixty Paise only).

Consequent to the aforesaid allotment, the issued, subscribed and paid-up equity share capital of the Company as at March 31, 2026 stood at ? 26,46,61,536 (Rupees Twenty-Six Crore Forty-Six Lakh Sixty-One Thousand Five Hundred and Thirty-Six only), comprising 13,23,30,768 (Thirteen Crore Twenty-Three Lakhs Thirty Thousand Seven Hundred and Sixty-Eight) equity shares of face value of ? 2/- (Rupees Two only) each.

30. RISK MANAGEMENT

The Company has established a comprehensive Risk Management framework supported by a well-defined Risk Management Policy, which provides an approach for identification, assessment, monitoring and mitigation of various risks associated with the Company''s operations.

The Risk Management framework encompasses risk identification, risk mapping, trend analysis, assessment of risk exposure, evaluation of potential impact and implementation of appropriate risk mitigation measures. The Company undertakes periodic review of key risks and mitigation strategies to ensure effective management of business and operational risks.

As on March 31,2026, the Company is not required to constitute a Risk Management Committee in terms of Regulation 21 of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015.

31. INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has adequate internal financial controls with reference to the financial statements in place and such controls are commensurate with the size, scale and complexity of its operations.

The internal financial controls are designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with applicable accounting principles. The Company has documented policies and procedures for ensuring orderly and efficient conduct of business, safeguarding of assets, prevention and detection of frauds and errors, accuracy and completeness of accounting records and timely preparation of reliable financial information.

35. GENDER-WISE COMPOSITION OF EMPLOYEES:

The Company believes in promoting diversity, equity and inclusion and providing equal opportunities to all employees. The gender-wise composition of employees as on March 31,2026, is as follows:

Sr. No.	Particulars	No. of Employees during the year under review
1.	Male Employees	553
2.	Female Employees	54
3.	Transgender	NIL
	Employees

The Company believes that the existing internal financial controls are adequate and operating effectively as intended.

32. NAME OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE SUBSIDIARIES, JOINT VENTURE OR ASSOCIATE COMPANIES DURING THE YEAR

During the financial year under review, no company has become or ceased to be a subsidiary, joint venture or associate company of the Company.

33. COMPLIANCE WITH THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

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 ("POSH Act") and has in place a policy for prevention, prohibition and redressal of sexual harassment at the workplace.

During the financial year 2025-26, no complaint of sexual harassment was received by the Internal Complaints Committee.

The details of complaints received and disposed of during the financial year under review are as follows:

a) No. of complaints of sexual harassment received in the year: Nil

b) No. of complaints disposed off during the year: Nil

c) No. of cases pending for more than ninety days: Nil

34. COMPLIANCE WITH THE MATERNITY BENEFIT ACT, 1961:

The Company has complied with the applicable provisions of the Maternity Benefit Act, 1961, including the amendments made thereunder and the rules framed thereto. The Company is committed to providing a safe, inclusive and supportive workplace and ensuring that eligible employees are provided maternity benefits in accordance with the applicable statutory requirements.

The Company continues to foster an inclusive workplace environment based on equal opportunity and merit.

36. VIGIL MECHANISM/WHITSLE BLOWER POLICY

The Company has established a Vigil Mechanism/ Whistle Blower Policy in accordance with the provisions of Section 177(9) and (10) of the Companies Act, 2013, Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Regulation 9A of the SEBI (Prohibition of Insider Trading) Regulations, 2015.

The Policy provides a formal mechanism for Directors and employees to report genuine concerns, including unethical behaviour, actual or suspected fraud, and violations of the Company''s Code of Conduct and Business Ethics. It ensures direct access to the Chairperson of the Audit Committee and safeguards against victimisation of the whistle blower.

The Policy is available on the Company''s website at https://www.aeroflexindia.com/wp-content/ uploads/Vigil-Mechanism-policy.pdf.

37. COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has complied with the applicable Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI) on Meetings of Board of Directors (SS-1) and General Meetings (SS-2). under Section 118(10) of the Companies Act, 2013, during the financial year under review.

38. AEROFLEX INDUSTRIES LIMITED -EMPLOYEE STOCK OPTION PLAN 2024 ("ESOP 2024")

The Members of the Company had approved the "Aeroflex Industries Limited - Employee Stock Option Plan, 2024" ("ESOP 2024") at the 30^th Annual General Meeting of the Company held in the year 2024. During the financial year under review, no employee stock options were granted under ESOP 2024.

39. GENERAL

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

(a) Issue of equity shares with differential rights as to dividend, voting or otherwise.

(b) Issue of sweat equity shares or shares under any scheme to employees of the Company.

(c) None of the Whole-time Director or Managing director of the Company received any remuneration or commission from any of its holding or subsidiary.

(d) No application was filed under the Insolvency and Bankruptcy Code, 2016.

(e) No instance of one-time settlement with any Bank or Financial Institution.

40. ACKNOWLEDGEMENTS

The Board of Directors thank the Company''s employees, customers, vendors, investors and academic partners for their continuous support.

The Directors also thank the Government of India, Governments of various states in India, Governments of various countries and concerned Government departments and agencies for their co-operation.

---

Mar 31, 2025

It gives your Directors great pleasure to present the Thirty-First (31^st) Annual Report, highlighting the Company''s performance and achievements during the financial year ended 31^st March 2025, along with the Audited Standalone and Consolidated Financial Statements.

1. FINANCIAL HIGHLIGHTS

Your Company''s performance during the financial year as compared to the previous financial year is summarised as below:

Particulars	(INR in Lakhs, except EPS data) Standalone Consolidated i __ _
	FY 2024-25	FY 2023-24	FY 2024-25	FY 2023-24
Sales and other income	37,529.27	32,168.72	37,876.24	32,175.05
Profit before tax, depreciation, exceptional items and Interest	8,068.35	6,566.83	8,157.96	6,565.08
Interest	34.97	213.86	35.92	213.86
Depreciation	1,100.26	626.19	1,127.23	626.19
Profit before Tax and Exceptional Items	6,933.13	5,726.78	6,994.81	5,725.03
Less: Exceptional Items Diminishing in value of Investment	(19.28)
Less: Provisions for tax:
Current Tax	1,662.00	1,415.70	1,673.00	1,415.70
Deferred Tax (Assets)/ Liability	75.53	43.93	84.54	43.93
Taxation of Earlier Year	(13.49)	91.99	(13.49)	92.00
Profit after tax	5,189.81	4,175.15	5,250.76	4,173.40
Earnings per equity share	4.01	3.39	4.06	3.39

2. STATE OF COMPANY''S AFFAIRS

Aeroflex Industries Limited is primarily engaged in the manufacturing of Metallic Flexible Flow Solutions, which are widely used across diverse industries including oil and gas, aerospace, petrochemicals, renewable energy, electric mobility and other critical engineering sectors. The Company continues to maintain its position as a leading player in the flexible flow solutions segment, known for its quality, reliability, and customer-centric innovation.

During the financial year ended 31st March 2025, the Company reported a Standalone Revenue from Operations of INR 37,290.45 Lakhs, registering a robust growth over the previous year''s revenue of INR 31,784.40 Lakhs. The Standalone Net Profit for the year stood at INR 5,189.81 Lakhs, as compared to INR 4,175.15 Lakhs in the previous financial year, reflecting strong operational performance and efficient cost management.

On a consolidated basis, the Company achieved a Revenue from Operations of INR 37,622.79 Lakhs (previous year: INR 31,790.73 Lakhs) and a Net Profit of INR 5,250.76 Lakhs (previous year: INR 4,173.40 Lakhs), continuing its upward growth trajectory.

In response to increasing market demand and in alignment with its long-term strategic vision, the Company undertook significant capacity expansion initiatives during the year. These included installation of advanced machinery and enhancement of operational capabilities aimed at improving efficiency, product output, and delivery timelines. These expansions are expected to support future growth, cater to a broader customer base, and strengthen the Company''s global footprint.

Despite the challenging global economic environment, Aeroflex Industries demonstrated resilience and agility in its operations. The Company''s emphasis on product innovation, quality assurance, and customer satisfaction enabled it to consolidate its leadership position and enhance its competitiveness in both domestic and international markets.

Aeroflex remains committed to sustainable growth, value creation for stakeholders, and adherence to the highest standards of corporate governance.

3. DIVIDEND

Your Directors have pleasure in recommending payment of final dividend Re. 0.30/- (thirty paisa Only) being 15 % per share on Equity Share of INR 2/- for the financial year ended 31st March, 2025. This will absorb total cash outflow of INR 3,87,96,111/-. The final dividend, if approved by shareholders in the ensuing Annual General meeting, will be paid to those members whose names shall appear on the Register of Members / List of Beneficiaries.

The Board of Directors of the Company has approved a Dividend Distribution Policy in line with Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"). This has been uploaded on the Company''s website at https://www.aeroflexindia.com/wp-content/uploads/ Dividend-Distribution-Policy.pdf.

4. MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statement relates and the date of report.

5. CHANGES IN THE NATURE OF BUSINESS

During the year under review there has been no change in the business of the Company.

6. TRANSFER TO RESERVE

During the year no amount was transferred to any Reserves.

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

The i nformation on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134(3) (m) of the Act, read along with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as Annexure - A

8. PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (''Rules'') are annexed to this report as Annexure — B

I n terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Rules, a statement

showing the names and other particulars of employees drawing remuneration in excess of the limits set out in the said Rules forms part of this report. Further, the report and the annual accounts are being sent to the Members excluding the aforesaid statement. In terms of Section 136 of the Act, the said statement will be open for inspection upon request by the Members. Any Member interested in obtaining such particulars may write to the Company Secretary and Compliance officer at [email protected].

9. DIRECTORS'' RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls and compliance system established and maintained by the Company, work performed by the internal, statutory, and secretarial auditors and external agencies including audit of internal financial controls over financial reporting by the statutory auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during financial year 2024-25.

Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of its knowledge and ability confirms that:

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

ii) they have selected such accounting policies and applied them consistently and made judgment and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

iii) they have taken proper and sufficient care for the maintenance of adequate accounting records, and the adequate steps have been taken to make it afresh, in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) they have prepared the annual accounts on a going concern basis.

v) they have had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

10. DIRECTORS & KEY MANAGERIAL PERSONNEL

As on 31^st March, 2025, the Board comprised of 7(Seven) Directors including 4 (Four) Independent Directors. The Board has an appropriate mix of Executive, Non-Executive and Independent Directors, which is in compliance with the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and is also aligned with the best practices of Corporate Governance.

I. Retirement by Rotation

I n accordance with the provisions of Section 152 of the Companies Act, 2013 read with Companies (Management & Administration) Rules, 2014 and Articles of Association of the Company, Mr. Harikant Ganeshlal Turgalia (DIN: 00049544) Director of the Company, retires by rotation at the ensuing Annual General Meeting of the Company and being eligible, have offered himself for reappointment and your Board recommends his reappointment.

II. Appointment and Re- appointment

During the year under review, Mr. Ramesh Chandra (DIN: 00049497) was re-appointed as an Independent Director of the Company to hold office for a second term of five consecutive years commencing from 15th October 2024 to 14th October 2029. Aforesaid appointment was approved by the Members at the 30th AGM held on 5th July 2024.

Moreover, the first term of Mr. Parthasarathi Sarkar (DIN:00047272) as Independent Director of the Company expires on 2nd September 2025. The Board placed on record its appreciation for the valuable services rendered by Mr. Parthasarathi Sarkar with his association as an independent director of the Company and proposes to re-appoint him as an Independent Director for the second term of 5 (five) consecutive years commencing from 3rd September 2025 to 2nd September 2030 subject to approval of the shareholders.

Brief details of directors proposed to be reappointed/ remuneration to be approved as stipulated under Regulation 36(3) of the SEBI (Listing Obligations & Disclosure Requirements)

Regulations, 2015 and Secretarial Standard - 2 (SS-2) issued by the Institute of Company Secretaries of India (ICSI), are provided in Notice of Annual General Meeting of the Company.

III. Cessation

During the year under review, there has been no cessation or resignation of any Director.

IV. Key Managerial Personnel ("KMP")

During the financial year ended 31st March, 2025, the following persons were acting as Key Managerial Personnel of the Company in compliance with the provisions of Section 203 of the Companies Act, 2013:

Sr. No.	Name of the KMP	Designation
1.	Mr. Asad Daud	Managing Director
2.	Mr. Mustafa Abid	Whole Time Director &
	Kachwala	Chief Financial Officer
3.	Ms. Kinjal Shah	Company Secretary & Compliance officer

V. Declaration from Independent Directors

All Independent Directors of the Company have given declarations under Section 149(7) of the Act, that they meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. In terms of Regulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Independent Directors have confirmed that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence. The Independent Directors of the Company have undertaken requisite steps towards the inclusion of their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs, in terms of Section 150 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are persons of high integrity and repute. They fulfill the conditions specified in the Act as well as the Rules made thereunder and are independent of the management.

The Company had sought a certificate from the M/s. S.K. Jain & Co, Secretarial Auditor of the Company confirming that none of the Directors on the Board of the Company have been debarred or disqualified from being appointed and/or continuing as Directors by the SEBI/MCA or any other such statutory authority.

VI. Annual performance evaluation by the Board

The annual evaluation of the Board of Directors, individual Directors, and Committees was conducted in accordance with the provisions of the Companies Act, 2013, and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Board''s performance was assessed based on inputs received from all Directors, considering criteria such as Board composition and structure, effectiveness of Board processes, quality of information, and overall functioning. Similarly, the performance of various Committees was evaluated by the Board after obtaining feedback from Committee members, focusing on aspects like Committee composition and the effectiveness of meetings. These evaluation criteria broadly align with the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India.

The Board and the Nomination and Remuneration Committee (NRC) reviewed the performance of individual Directors against parameters including their preparedness for meetings, meaningful participation, and contributions to Board and Committee discussions.

In a separate meeting exclusively of the Independent Directors, the performance of NonIndependent Directors and the Board as a whole was reviewed. The Independent Directors also evaluated the Chairman of the Board, considering the perspectives of both Executive and NonExecutive Directors. Furthermore, the Board assessed the quality, adequacy, and timeliness of information flow between the Company''s management and the Board, ensuring the Board is well-equipped to discharge its duties effectively. The performance of Independent Directors was reviewed by the entire Board, excluding the Independent Director under evaluation.

VII. Familiarisation Programme for Independent Directors

The Company has established and implemented a framework for Familiarisation Programmes for Independent Directors. The primary objective of this framework is to provide Independent Directors with comprehensive insights into the Company''s business, operations, and regulatory environment, thereby enabling them to contribute effectively and meaningfully to the Board''s decision-making process.

During the financial year under review, the Company conducted Familiarisation Programmes for its Independent Directors to enhance their understanding of the Company''s strategic priorities, business model, and governance practices.

Details of the Familiarisation Programme are available on the Company''s website at https:// www.aeroflexindia.com/investor-relation/

11. SUBSIDIARY & ASSOCIATE COMPANIES Subsidiary Company

Hyd-Air Engineering Private Limited is a Wholly Owned Subsidiary of the Company.

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, a statement containing salient features of the financial statements of Hyd-Air Engineering Private Limited in Form AOC-1, is annexed as Annexure - C

Aeroflex Industries Limited, U.K, a Wholly Owned Subsidiary Company incorporated in United Kingdom was dissolved w.e.f. 18th March 2025. Consequently, it ceased to be a subsidiary of the Company from the said date.

Holding Company

Your Company is a subsidiary of Aeroflex Enterprises Limited (Formerly known as SAT Industries Limited) with a holding of 61.23%.

Joint Ventures and Associates

The Company had no Joint Venture or Associate Company during the financial year under review.

12. CONSOLIDATED FINANCIAL STATEMENT

The Consolidated Financial Statements required pursuant to section 129(3) of the Companies Act, 2013 read with Rule 6 of the Companies (Accounts) Rule,

2014 have been prepared in accordance with the relevant accounting standards as per the Companies (Indian Accounting Standard) Rules, 2015. The audited consolidated financial statement is provided along with the Standalone Financial Statement.

13. DEPOSITS

The Company has not accepted any Deposit within the meaning of Section 73 of the Companies Act, 2013 and rules made there under. As such, no amount of principal or interest was outstanding as of the Balance Sheet date, nor is there any deposit in non-compliance of Chapter V of the Companies Act, 2013.

14. MEETINGS OF THE BOARD

Seven meetings of the Board of Directors were held during the year. The particulars of meetings held and attended by each Director are detailed in the Corporate Governance Report forming part of the Annual Report.

15. INDEPENDENT DIRECTORS MEETING

During the year under review a separate meeting of the Independent Directors of the Company was held on 11th March 2025, without the presence of other Directors and members of Management. The Independent Directors reviewed the performance of Non-Independent Directors and the Board as a whole, performance of Chairperson of the Company and assessed the quality, quantity and timeliness of flow of information between the Company management and the Board.

16. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The Company has not given any loan or guarantee or provided any security during the year under review. Particulars of investments made are provided in the Standalone Financial Statement. Members may refer to Note 5 to the Standalone Financial Statement.

17. PARTICULARS OF CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All the transactions with related parties entered into during the financial year were in ordinary course of business and on arm''s length basis. No Material Related Party Transactions were entered into during the financial year under review by the Company. Accordingly, the disclosure on Related Party Transactions, as required under Section 134(3) of the Companies Act, 2013, in Form AOC-2 is not applicable.

The Company has formulated a policy on dealing with Related Party Transactions. The same is available on the Company''s website at https://www.aeroflexindia. com/wp-content/uploads/RPT-Policy-15.01.2025.pdf.

The details of all the transactions with Related Parties are provided in the accompanying financial statements. Members may refer to Note 36 to the Standalone Financial Statement which sets out related party disclosures pursuant to IND AS-24.

18. POLICY ON APPOINTMENT AND REMUNERATION FOR DIRECTORS, KEY MANAGERIAL PERSONNEL AND SENIOR MANAGEMENT EMPLOYEES

Pursuant to the provisions of Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and on recommendation of the Nomination & Remuneration Committee, the Board of Directors have adopted a policy for selection and appointment of Directors, Key Managerial Personnel (''KMPs''), Senior Management Personnel (''SMPs'') and their remuneration including criteria for determining qualifications, positive attributes, independence of a director and other related matters, the key features of which is as follows:

The Committee shall identify and ascertain the integrity, qualification, expertise and experience of the person proposed to be appointed as Director, KMP or Senior Managerial Personnel and recommend to the Board his/her appointment.

A person should possess adequate qualification, expertise and experience for the position for which appointment is considered. The Committee has discretion to decide whether qualification, expertise and experience possessed by the person is sufficient as per the requirement of the concerned position.

The Company shall not appoint or continue employment of any person as Managing Director, Whole-time Director or Manager who has attained the age of seventy years provided that the term of person holding this position may be extended beyond the age of seventy years with the approval of the shareholders by passing a special resolution based on the justification stating reasons/ clarification for extension of appointment beyond seventy years. Additionally in compliance with Regulation 17 (1A) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Company shall not appoint or continue the appointment of a non-executive director who has attained the age of seventy-five years, unless a special

resolution is passed by the shareholders, to that effect, in which case the explanatory statement annexed to such motion shall indicate the justification appointing such person.

The Nomination and Remuneration Policy has been placed on the website of the Company viz. https://www. aeroflexindia.com/wp-content/uploads/Nomination-and-Remuneration-Policy.pdf.

19. CORPORATE SOCIAL RESPONSIBILITY

Pursuant of the provisions of Section 135 read with Companies (Corporate Social Responsibility) Rules, 2014, the Company has formed Corporate Social Responsibility committee and Corporate Social Responsibility (CSR) Policy.

The brief outline of the Corporate Social Responsibility (CSR) Policy of your company along with the initiative taken by it are set out in Annexure- D of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The policy is available on the website of the Company, https://www. aeroflexindia.com/wp-content/uploads/Policy-on-Corporate-Social-Responsibility.pdf.

As on the year ended 31^st March 2025, the composition of the CSR Committee is as follows:

Sr. No.	Name of the Committee Members	Designation
1.	Mr. Asad Daud	Chairperson
2.	Mr. Ramesh Chandra Soni	Member
3.	Mr. Mustafa Abid Kachwala	Member
4.	Mr. Arpit Khandelwal	Member

20. THE 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

During the year under review there has been no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company''s operations in future.

21. COPY OF ANNUAL RETURN

As required under Section 92(3) read with the Section 134(3)(a) of the Companies Act, 2013 and the Companies (Management and Administration) Rules, 2014, the copy of Annual Return in Form MGT-7 as on 31st March, 2025 will be placed on the website of the Company and can be accessed at https://www.aeroflexindia.com/.

22. STATUTORY AUDITORS

In line with the requirements of the Companies Act 2013, at the 27th Annual General Meeting M/s. Shweta Jain & Co., Chartered Accountants (FRN: 127673W) were appointed as the Statutory Auditors of the Company to hold the office for a period of 5 consecutive years., from the conclusion of 27th Annual General Meeting till the conclusion of 32nd Annual General Meeting of the Company.

M/s. Shweta Jain & Co., Chartered Accountants have furnished written confirmation to the effect that they are not disqualified from acting as the Statutory Auditors of the Company in terms of the provisions of Sections 139 and 141 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules 2014.

The Auditor''s Reports on the Standalone and the Consolidated Financial Statements for the financial year ended 31st March 2025 do not contain any qualification, reservation or adverse remark requiring any explanations / comments by the Board of Directors.

23. REMARKS ON QUALIFICATIONS BY STATUTORY AUDITORS AND SECRETARIAL AUDITORS

The Statutory Auditors and the Secretarial Auditors have not made any qualifications, observations or adverse remark in their Reports.

Further, none of the Auditors of the Company have reported any fraud as specified under the second proviso of Section 143 (12) of the Act.

24. CORPORATE GOVERNANCE

Our corporate governance practices are a reflection of our value system encompassing our culture, policies, and relationships with our stakeholders. Integrity and transparency are key to our corporate governance practices to ensure that we gain and retain the trust of our stakeholders at all times. Corporate governance is about maximising shareholder value legally, ethically and sustainably.

The Company has taken adequate steps to adhere to all the stipulations laid down in Regulation 17 to 27 and 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate report on Corporate Governance along with the certificate from Dr. S.K. Jain from M/s. S. K Jain & Co., Practicing Company Secretaries confirming the compliance of Corporate Governance requirements is annexed as Annexure - E to the Board report.

Your Company has also been enlisted in the new SEBI compliant redressal system (SCORES), enabling investors to register their complaints, if any, for speedy redressal.

25. COMPOSITION OF AUDIT COMMITTEE

As on 31st March, 2025, the Audit Committee comprised of Mr. Ramesh Chandra Soni, Mr. Arpit Khandelwal, Independent Directors and Mr. Asad Daud, Managing Director of the Company.

Mr. Ramesh Chandra Soni is the Chairman of Audit Committee of the Company. The Company Secretary and Compliance Officer of the Company acts as Secretary of the Audit Committee. All the recommendations made by the Audit Committee were accepted by the Board of Directors of the Company. Other details with respect to Audit Committee are given in Report of Corporate Governance, forming part of this Report.

The Audit Committee of the Company reviews the reports to be submitted with the Board of Directors with respect to auditing and accounting matters. It also supervises the Company''s internal control and financial reporting process and vigil mechanism.

26. COMMITTEES OF THE BOARD

In accordance with the provisions of the Companies Act, 2013, the Company has constituted Five committees of the Board, namely:

1. Audit Committee

2. Stakeholders'' Relationship Committee;

3. Nomination & Remuneration Committee

4. Corporate Social Responsibility Committee and

5. Banking & Finance Committee

A detailed note on the composition of the Board and its committees, including its terms of reference, is provided in the Corporate Governance Report. The composition and terms of reference of all the Statutory & other Committee(s) of the Board of Directors of the Company is in line with the provisions of the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

27. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

I n terms of the provisions of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management''s Discussion and Analysis Report is set out in this Annual Report.

28. SHARE CAPITAL

As on 31st March 2025, the Authorised Share Capital of the Company was INR 56,00,00,000 /- (Rupees Fifty-Six Crores only) divided into 17,50,00,000 (Seventeen Crore Fifty Lakhs) Equity Shares of INR 2/- each (Rupees Ten Only),10,00,000 (Ten Lakhs) Series "A" Compulsorily Convertible Preference Shares of INR 10/-each (Rupees Ten) and 10,00,000 (Ten Lakhs) Series "A" Compulsorily Convertible Preference Shares of INR 200/- each (Rupees Two Hundred) respectively.

The issued, subscribed and paid-up equity share capital of your Company as on 31st March, 2025, is INR 25,86,40,740/- divided into 12,93,20,370 Equity shares of INR 2/- each.

29. INTERNAL AUDITORS

Pursuant to the provisions of Section 138 of the Act read with Companies (Accounts) Rules, 2014, the Board, on recommendation of the Audit Committee, appointed M/s. D M Jain & Co., Chartered Accountants, Mumbai, as Internal Auditors of the Company for the financial year 2024-25. The Internal Auditors monitor and evaluate the effectiveness and adequacy of internal control systems in the Company, its compliances with the operating systems, accounting procedure and polices at all locations of the Company and reports to the Audit Committee on a quarterly basis.

30. RISK MANAGEMENT

The Company has laid down a well-defined Risk Management Policy covering the risk mapping, trend analysis, risk exposure, potential impact and risk mitigation process. A detailed exercise is carried out to identify, evaluate, manage and monitor both business and non-business risks. The Board periodically reviews the risks and suggests the steps to be taken to control and mitigate the same through a properly defined framework.

The Policy is displayed on the website of the Company at https://www.aeroflexindia.com/wp-content/uploads/ Risk-Management-Plan-28-06-2024.pdf.

31. INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has in place proper and adequate internal control systems commensurate with the nature of its business, size and complexity of its operations. Internal control systems comprising of policies and procedures are designed to ensure reliability of financial reporting, compliance with policies, procedures, applicable laws and regulations and that all assets and resources are acquired economically, used efficiently and adequately protected.

32. NAME OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE SUBSIDIARIES, JOINT VENTURE OR ASSOCIATE COMPANIES DURING THE YEAR

During the year under review, Aeroflex Industries Limited, U.K, ceased to be a subsidiary of your Company.

33. COST AUDITORS

Pursuant to Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Amendment Rules, 2014, appointment of cost auditor is not applicable to the Company.

34. COMPLIANCE WITH THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

It is stated that the Company has constituted Internal Complaints Committee and complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Your directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

35. VIGIL MECHANISM/WHITSLE BLOWER POLICY

The Company has adopted Vigil Mechanism / Whistle Blower Policy, which was approved and adopted by the Board of Directors of the Company as per the provisions of Section 177(9) and (10) of the Act, Regulation 22 of the SEBI Listing Regulations and Regulation 9A of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015.

The said policy provides a formal mechanism for all Directors and employees of the Company to approach Chairperson of the Audit Committee of the Company and make protective disclosures about the unethical behaviour, actual or suspected fraud and violation of the Company''s Code of Conduct and Business Ethics. Under the Policy, each Director / employee of the Company has an assured access to the Chairperson of the Audit Committee.

The Policy is displayed on the website of the Company at https://www.aeroflexindia.com/wp-content/uploads/ Vigil-Mechanism-policy.pdf.

36. SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204(1) of the Companies Act, 2013 and the Companies (Appointment

and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. S. K Jain & Co., Practicing Company Secretaries to undertake Secretarial Audit of the Company for the financial year 2024-25. The Secretarial Audit Report is appended as Annexure — F and forms part of this Report.

37. 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 your directors confirm compliance of the same during the financial year under review.

38. VALUATION OF ASSETS

During the financial year under review, there was no instance of one-time settlement of loans / financial assistance taken from Banks or Financial Institutions, hence the Company was not required to carry out valuation of its assets for the said purpose.

39. AEROFLEX INDUSTRIES LIMITED - EMPLOYEE STOCK OPTION PLAN 2024 ("ESOP 2024")

The company has approved the "Aeroflex Industries Limited - Employee Stock Option Plan 2024 ("ESOP 2022")" in its 30th Annual General Meeting held in the year 2024.

During the financial year under review, no options were granted.

40. GENERAL

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

(a) Issue of equity shares with differential rights as to dividend, voting or otherwise.

(b) I ssue of shares (including sweat equity shares) to employees of the Company under any scheme.

(c) None of the Whole-time Director or Managing director of the Company received any remuneration or commission from any of its holding or subsidiary.

(d) No application was filed under the Insolvency and Bankruptcy Code, 2016.

41. ACKNOWLEDGEMENTS

The Board of Directors wishes to place on record its heartfelt appreciation for the unwavering commitment, hard work, and dedication demonstrated by all employees of the Company, who have been instrumental in driving its continued growth and success.

The Board also conveys its sincere gratitude for the steadfast support and cooperation extended by the Government and regulatory authorities, stock exchanges, depositories, banks, valued customers,

vendors, and esteemed members. Their trust and collaboration have played a vital role in enabling the Company to navigate challenges and achieve its strategic objectives during the year under review.

For and on behalf of the Board of Directors of AEROFLEX INDUSTRIES LIMITED

Asad Daud Mustafa Abid Kachwala

Managing Director Whole-time Director & CFO

DIN: 02491539 DIN: 03124453

Place: Mumbai

Dated: July 08, 2025

---

Mar 31, 2024

The Directors have immense pleasure in presenting the 30^th (Thirtieth) Annual Report on the business and operations of the Company together with the Audited Standalone and Consolidated Financial Statements for the financial year ended March 31, 2024.

1. FINANCIAL HIGHLIGHTS

Your Company''s performance during the financial year as compared to the previous financial year is summarized as below:

(Rs. in Lakhs)
Particulars	Standalone		Consolidated
	2023-24	2022-2023	2023-2024	2022-2023
Sales and other income	32,168.72	26,941.78	32,175.05	26,950.00
Profit before tax, depreciation, exceptional items and interest	6,566.83	5,295.94	6,565.08	5,295.55
Interest	213.86	343.39	213.86	343.39
Depreciation	626.19	521.93	626.19	521.93
Profit before tax and exceptional items	5,726.78	4,430.62	5,725.03	4,430.23
Less: Exceptional items	-	307.71	-	307.71
Less: Provisions for tax
Current tax	1,415.70	1,018.50	1,415.70	1,018.50
Deferred tax (assets)/liability	43.93	22.21	43.93	22.21
Taxation of Earlier Year	91.99	66.59	92.00	66.59
Profit after tax	4,175.15	3,015.60	4,173.40	3,015.21
Earnings per equity share	3.39	2.64	3.39	2.64

2. STATE OF COMPANY''S AFFAIRS

Your Company is engaged in the business of manufacturing Stainless-Steel Corrugated Flexible Hoses and Hose assemblies.

During the financial year, the Company recorded revenue from operations of '' 31,784.40 Lakhs (previous financial year '' 26,937.88 Lakhs) and earned a net profit of '' 4,175.15 Lakhs (previous year '' 3,015.60 Lakhs) on Standalone basis.

The Company has earned consolidated revenue of '' 31,790.73 Lakhs (previous year '' 26,946.10 Lakhs) and consolidated net profit of '' 4,173.40 Lakhs (previous year '' 3,015.21 Lakhs), during the financial year under review.

The Company''s strong product portfolio along with superior consumer insights and a strategy of continuous innovation and value creation has, once again, helped in delivery of superior competitive performance during the financial year, notwithstanding the extremely challenging operating environment. It is a matter of deep satisfaction that the Company consolidated its leadership position in the industry during the financial year and continues to improve its standing in key competitive markets across the country.

3. DIVIDEND

Your Directors have pleasure in recommending payment of final dividend '' 0.25/- (Twenty-five paisa Only) being

12.5% per share on Equity Share of '' 2/- for the financial year ended March 31, 2024. This will absorb total cash outflow of '' 3,23,30,093/-. The final dividend, if approved by shareholders in the ensuing Annual General meeting, will be paid to those members whose names shall appear on the Register of Members/List of Beneficiaries.

The Board of Directors of the Company has approved a Dividend Distribution Policy in line with Regulation 43A of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. This has been uploaded on the Company''s website at https://www.aeroflexindia.com/wp-content/uploads/Dividend-Distribution-Policy.pdf.

4. MATERIAL CHANGES AND COMMITMENTS

There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statement relates and the date of report except:

The Company on April 04, 2024 acquired 2,924 (Two Thousand Nine Hundred and Twenty Four) equity shares equivalent to 100% of the issued and paid-up share capital of Hyd-Air Engineering Private Limited.

Consequently, Hyd-Air Engineering Private Limited has now become Wholly owned Subsidiary of the Company.

5. CHANGES IN THE NATURE OF BUSINESS

During the year under review there is no change in the business of the Company.

6. INITIAL PUBLIC OFFER AND LISTING

During the year under review, the Company successfully completed its Initial Public Offer (IPO) of 3,25,00,000 equity shares of face value of '' 2/- each for cash at a price of '' 108/- per equity share (including share premium of '' 106/- per equity share) aggregating to '' 3,51,00,00,000 ("the offer"), comprising of an offer for sale of 1,75,00,000 equity shares aggregating to '' 1,89,00,00,000/- by SAT Industries Limited ("Promoter Selling Shareholder")

The offer was open to the public from August 22, 2023 and closed on August 24, 2023 and received overwhelming response, was over-subscribed by 97.11 times. The Anchor Investors Bid/Offer period was one Working Day prior to the Bid/Offer Opening Date. The allotment for Aeroflex Industries IPO was finalized on August 29, 2023. The equity shares of the Company were listed on BSE Limited ("BSE") and National Stock Exchange of India Limited ("NSE") effective from August 31, 2023.

Link Intime India Private Limited (LIIPL) is the Registrar and Share Transfer Agent of the Company.

Description of Securities	No. of Securities	BSE Limited (Scrip Code)	National Stock Exchange of India Limited (Symbol)
Equity shares of '' 2/- each fully paid up	12,93,20,370	543972	AEROFLEX
The annual listing fees for the financial year 2023-24 have been paid to the Stock Exchanges.

7. TRANSFER TO RESERVE

During the year no amount was transferred to any Reserves.

8. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION 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 Act, read along with Rule 8 of the Companies (Accounts) Rules, 2014, is annexed herewith as Annexure-A.

9. PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other details as required under Section 197(12) of the Act, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 (''Rules'') are annexed to this report as Annexure-B.

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Rules, a statement showing the names and other particulars of employees drawing remuneration in excess of the limits set out in the said Rules forms part of this report. Further, the report and the annual accounts are being sent to the Members excluding the aforesaid statement. In terms of Section 136 of the Act, the said statement will be open for inspection upon request by the Members. Any Member interested in obtaining such particulars may write to the Company Secretary and Compliance officer at [email protected] .

10. DIRECTORS'' RESPONSIBILITY STATEMENT

Based on the framework of internal financial controls and compliance system established and maintained by the Company, work performed by the internal, statutory, cost, and secretarial auditors and external agencies including audit of internal financial controls over financial reporting

by the statutory auditors and the reviews performed by Management and the relevant Board Committees, including the Audit Committee, the Board is of the opinion that the Company''s internal financial controls were adequate and effective during financial year 2023-24.

Accordingly, pursuant to Section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of its knowledge and ability confirms that:

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

ii) they have selected such accounting policies and applied them consistently and made judgment and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit and loss of the Company for that period;

iii) they have taken proper and sufficient care for the maintenance of adequate accounting records, and the adequate steps have been taken to make it afresh, in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) they have prepared the annual accounts on a going concern basis;

v) they have had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

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

11. DIRECTORS & KEY MANAGERIAL PERSONNEL

As on March 31, 2024, the Board comprised of 7 (Seven) Directors including 4(Four) Independent Directors. The Board has an appropriate mix of Executive, Non-Executive and Independent Directors, which is in compliance with the requirements of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and is also aligned with the best practices of Corporate Governance.

I. Retirement by Rotation

In accordance with the provisions of Section 152 of the Companies Act, 2013 read with Companies (Management & Administration) Rules, 2014 and Articles of Association of the Company, Mr. Mustafa Abid Kachwala (DIN: 03124453) Director of the Company, retires by rotation at the ensuing Annual General Meeting of the Company and being eligible, has offered himself for re-appointment and your Board recommends his re-appointment.

II. Appointment and Re-appointment

During the year under review, Mr. Mustafa Abid Kachwala (DIN: 03124453) was re-appointed as the Whole-Time Director of the Company for a period of 3 years w.e.f April 01, 2023. The appointment was approved by Members at their Extra Ordinary General Meeting held on February 15, 2023.

Ms. Shilpa Bhatia (DIN: 08695595) was re-appointed as a Women Independent Director of the Company to hold office for a second term of five consecutive years commencing from July 08, 2023 upto the date of 34^th Annual General Meeting to be held in the year 2028. Aforesaid appointment was approved by the Members at the 29^th AGM held on July 08, 2023.

Moreover, the first term of Mr. Ramesh Chandra Soni as Independent Director of the Company expires on October 14, 2024.The Board placed on record its appreciation for the valuable services rendered by Mr. Ramesh Chandra Soni with his association as an independent director of the Company and proposes to re-appoint him as an Independent Director for the second term of 5 (five) consecutive years commencing from October 15, 2024 to October 14, 2029 subject to approval of the shareholders.

Brief details of directors proposed to be reappointed/ remuneration to be approved as stipulated under Regulation 36(3) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 and Secretarial Standard-2 (SS-2) issued by the Institute of Company Secretaries of India (ICSI), are provided in Notice of Annual General Meeting of the Company.

III. Cessation

During the year under review, there has been no cessation or resignation of any Director.

IV. Key Managerial Personnel ("KMP")

During the financial year ended March 31, 2024, the following persons were acting as Key Managerial Personnel of the

Company in compliance with the provisions of Section 203 of the Companies Act, 2013:

Sr. No.	Name of the KMP	Designation
1.	Mr. Asad Daud	Managing Director
2.	Mr. Mustafa Abid	Whole-Time Director &
	Kachwala	Chief Financial Officer
3.	Ms. Kinjal Shah	Company Secretary & Compliance officer

V. Declaration from Independent Directors

All Independent Directors of the Company have given declarations under Section 149(7) of the Act, that they meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16(1)(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. In terms of Regulation 25(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Independent Directors have confirmed that they are not aware of any circumstance or situation, which exists or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence. The Independent Directors of the Company have undertaken requisite steps towards the inclusion of their names in the data bank of Independent Directors maintained with the Indian Institute of Corporate Affairs, in terms of Section 150 read with Rule 6 of the Companies (Appointment and Qualification of Directors) Rules, 2014.

In the opinion of the Board, the Independent Directors possess the requisite expertise and experience and are persons of high integrity and repute. They fulfill the conditions specified in the Act as well as the Rules made thereunder and are independent of the management.

The Company had sought a certificate from the M/s. S.K. Jain & Co, Secretarial Auditor of the Company confirming that none of the Directors on the Board of the Company have been debarred or disqualified from being appointed and/or continuing as Directors by the SEBI/MCA or any other such statutory authority.

VI. Annual performance evaluation by the Board

The annual evaluation process of the Board of Directors, individual Directors and Committees was conducted in accordance with the provision of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The Board evaluated its performance after seeking inputs from all the Directors on the basis of criteria such as the Board composition and structure, effectiveness of Board processes, information and functioning, etc. The performance of the Committees was evaluated by the Board after seeking inputs from the committee members on the basis of criteria such as the composition of committees, effectiveness of committee meetings, etc. The above criteria are broadly based on the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India.

The Board and the NRC reviewed the performance of individual Directors on the basis of criteria such as the contribution of the individual Director to the Board and Committee Meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in meetings, etc.

In a separate meeting of Independent Directors, performance of Non-Independent Directors and the Board as a whole was evaluated. Additionally, they also evaluated the Chairman of the Board, taking into account the views of Executive and Non-Executive Directors in the aforesaid Meeting. The Board also assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties. The above evaluations were then discussed in the Board Meeting and performance evaluation of Independent directors was done by the entire Board, excluding the Independent Director being evaluated.

VII. Familiarization Programme for Independent Directors

The Company has adopted a framework, duly approved by the Board of Directors for Familiarization Programmes for Independent Directors. The objective of the framework is to ensure that the Independent Directors have a greater insight into the business of the Company, enabling them to contribute more effectively to decision making.

During the year under review, the Company has conducted a Familiarization Programme for Independent Directors.

The details of Familiarization Programme have been uploaded on the website of the Company at www.aeroflexindia.com.

12. SUBSIDIARY & ASSOCIATE COMPANIES

Subsidiary Company:

Aeroflex Industries Limited, U.K is a wholly owned subsidiary of the Company.

Pursuant to the provisions of Section 129(3) of the Companies Act, 2013, a statement containing salient features of the financial statements of Aeroflex Industries Limited, U.K. in Form AOC-1, is annexed as Annexure-C.

Moreover, after the end of the financial year under review till the date of this report, the Company acquired 100% equity shares of Hyd-Air Engineering Private Limited vide Share Purchase Agreement dated April 02, 2024, consequent to this, Hyd-Air Engineering Private Limited has become a wholly owned subsidiary of the Company.

Holding Company:

Your Company is a subsidiary of SAT Industries Limited with a holding of 61.23%.

Joint Ventures and Associates:

The Company had no Joint Venture or Associate Company during the financial year under review.

13. CONSOLIDATED FINANCIAL STATEMENT

The Consolidated Financial Statements required pursuant to Section 129(3) of the Companies Act, 2013 read with Rule 6 of the Companies (Accounts) Rule, 2014 have been prepared in accordance with the relevant accounting standards as per the Companies (Indian Accounting Standard) Rules, 2015. The audited consolidated financial statement is provided along with the Standalone Financial Statement.

14. DEPOSITS

The Company has not accepted any Deposit within the meaning of Section 73 of the Companies Act, 2013 and rules made there under. As such, no amount of principal or interest was outstanding as of the Balance Sheet date, nor is there any deposit in non-compliance of Chapter V of the Companies Act, 2013.

15. MEETINGS OF THE BOARD

Seven meetings of the Board of Directors were held during the year. The particulars of meetings held and attended by each Director are detailed in the Corporate Governance Report forming part of the Annual Report.

16. INDEPENDENT DIRECTORS MEETING

During the year under review a separate meeting of the Independent Directors of the Company was held on March 12, 2024, without the presence of other Directors and members of Management. The Independent Directors reviewed the performance of Non-Independent Directors and the Board as a whole, performance of Chairperson of the Company and assessed the quality, quantity and timeliness of flow of information between the Company management and the Board.

17. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The Company has not given any loan or guarantee or provided any security during the year under review. Particulars of investments made are provided in the Standalone Financial Statement. Members may refer to Note 5 to the Standalone Financial Statement.

18. PARTICULARS OF CONTRACTS AND ARRANGEMENTS WITHRELATED PARTIES

All the transactions with related parties entered into during the financial year were in ordinary course of business and on arm''s length basis. No Material Related Party Transactions were entered into during the financial year under review by the Company. Accordingly, the disclosure on Related Party Transactions, as required under Section 134(3) of the Companies Act, 2013, in Form AOC-2 is not applicable.

The Company has formulated a policy on dealing with Related Party Transactions. The same is available on the Company''s website at https://www.aeroflexindia. com/wp-content/uploads/Policy-on-Related-Party-Transaction.pdf.

The details of all the transactions with Related Parties are provided in the accompanying financial statements. Members may refer to Note 38 to the Standalone Financial Statement which sets out related party disclosures pursuant to Ind AS-24.

19. POLICY ON APPOINTMENT AND REMUNERATION FOR DIRECTORS, KEY MANAGERIAL PERSONNEL AND SENIOR MANAGEMENT EMPLOYEES

Pursuant to the provisions of Section 178 of the Companies Act, 2013 and Regulation 19 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and on recommendation of the Nomination & Remuneration Committee, the Board of Directors have adopted a policy for selection and appointment of Directors, Key Managerial Personnel (''KMPs''), Senior Management Personnel (''SMPs'') and their remuneration including criteria for determining qualifications, positive attributes, independence of a director and other related matters, the key features of which is as follows:

The Committee shall identify and ascertain the integrity, qualification, expertise and experience of the person proposed to be appointed as Director, KMP or Senior Managerial Personnel and recommend to the Board his/her appointment.

A person should possess adequate qualification, expertise and experience for the position for which appointment is considered. The Committee has discretion to decide whether qualification, expertise and experience possessed by the person is sufficient as per the requirement of the concerned position.

The Company shall not appoint or continue employment of any person as Managing Director, Whole-Time Director or Manager who has attained the age of seventy years provided that the term of person holding this position may be extended beyond the age of seventy years with the approval of the shareholders by passing a special resolution based on the justification stating reasons/ clarification for extension of appointment beyond seventy years. Additionally in compliance with Regulation 17(1A) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015; the Company shall not appoint or continue the appointment of a Non-Executive Director who has attained the age of seventy-five years, unless a special resolution is passed by the shareholders, to that effect, in which case the explanatory statement annexed to such motion shall indicate the justification appointing such person.

The Nomination and Remuneration Policy has been placed on the website of the Company viz. https://www. aeroflexindia.com/wp-content/uploads/Nomination-and-Remuneration-Policy.pdf.

20. CORPORATE SOCIAL RESPONSIBILITY

Pursuant of the provisions of Section 135 read with Companies (Corporate Social Responsibility) Rules, 2014, the Company has formed Corporate Social Responsibility

committee and Corporate Social Responsibility (CSR) Policy.

The brief outline of the Corporate Social Responsibility (CSR) Policy of your Company along with the initiative taken by it are set out in Annexure-D of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The policy is available on the website of the Company, https://www.aeroflexindia. com/wp-content/uploads/Policy-on-Corporate-Social-Responsibility.pdf

During the financial year under review, the Company was required to spend '' 57,46,929/- towards claiming CSR activity. The Company has made a contribution amounting to '' 57,50,000/- to SAT FOUNDATION (formerly known as TAHA Charitable Trust) (CSR Registration No: CSR00011731) Udaipur, Rajasthan which is permissible CSR activity.

As on the year ended March 31, 2024, the composition of the CSR Committee is as follows:

Sr. No.	Name of the Committee Members	Designation
1.	Mr. Asad Daud	Chairperson
2.	Mr. Ramesh Chandra Soni	Member
3.	Mr. Mustafa Abid Kachwala	Member
4.	Mr. Arpit Khandelwal	Member

21. THE 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

During the year under review there has been no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company''s operations in future.

22. COPY OF ANNUAL RETURN

As required under Section 92(3) read with the Section 134(3)(a) of the Companies Act, 2013 and the Companies (Management and Administration) Rules, 2014, the copy of Annual Return in Form MGT-7 as on March 31, 2024 will be placed on the website of the Company and can be accessed at www.aeroflexindia.com.

23. STATUTORY AUDITORS

In line with the requirements of the Companies Act 2013, at the 27^th Annual General Meeting M/s. Shweta Jain & Co., Chartered Accountants (FRN: 127673W) were appointed as the Statutory Auditors of the Company to hold the office for a period of 5 consecutive years., from the conclusion of 27^th Annual General Meeting till the conclusion of 32^nd Annual General Meeting of the Company.

M/s. Shweta Jain & Co., Chartered Accountants have furnished written confirmation to the effect that they are not disqualified from acting as the Statutory Auditors of the Company in terms of the provisions of Sections 139 and 141 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules, 2014.

The Auditor''s Reports on the Standalone and the Consolidated Financial Statements for the financial year ended March 31, 2024 do not contain any qualification, reservation or adverse remark requiring any explanations/ comments by the Board of Directors.

24. REMARKS ON QUALIFICATIONS BY STATUTORY AUDITORS AND SECRETARIAL AUDITORS

The Statutory Auditors and the Secretarial Auditors have not made any qualifications, observation or adverse remark in their Reports.

Further, none of the Auditors of the Company have reported any fraud as specified under the second proviso of Section 143(12) of the Act.

25. CORPORATE GOVERNANCE

Our corporate governance practices are a reflection of our value system encompassing our culture, policies, and relationships with our stakeholders. Integrity and transparency are key to our corporate governance practices to ensure that we gain and retain the trust of our stakeholders at all times. Corporate governance is about maximizing shareholder value legally, ethically and sustainably.

The Company has taken adequate steps to adhere to all the stipulations laid down in Regulation 17 to 27 and 34(3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. A separate report on Corporate Governance along with the certificate from Dr. S.K. Jain from M/s. S.K. Jain & Co., Practicing Company Secretaries confirming the compliance of Corporate Governance requirements is annexed as Annexure-E to the Board report.

Your Company has also been enlisted in the new SEBI compliant redressal system (SCORES) enabling the investors to register their complaints, if any, for speedy redressal.

26. COMPOSITION OF AUDIT COMMITTEE

As on March 31, 2024, the Audit Committee comprised of Mr. Ramesh Chandra Soni, Mr. Arpit Khandelwal, Independent Directors and Mr. Asad Daud, Managing Director of the Company.

Mr. Ramesh Chandra Soni is the Chairman of Audit Committee of the Company. The Company Secretary and Compliance Officer of the Company acts as Secretary of the Audit Committee. All the recommendations made by the Audit Committee were accepted by the Board of Directors of the Company. Other details with respect to Audit Committee are given in Report of Corporate Governance, forming part of this Report.

The Audit Committee of the Company reviews the reports to be submitted with the Board of Directors with respect to auditing and accounting matters. It also supervises the Company''s internal control and financial reporting process and vigil mechanism.

27. COMMITTEES OF THE BOARD

In accordance with the provisions of the Companies Act, 2013, the Company has constituted Five committees of the Board, namely:

1. Audit Committee;

2. Stakeholders'' Relationship Committee;

3. Nomination and Remuneration Committee;

4. Corporate Social Responsibility Committee; and

5. *IPO Committee.

A detailed note on the composition of the Board and its committees, including its terms of reference, is provided in the Corporate Governance Report. The composition and terms of reference of all the Statutory Committee(s) of the Board of Directors of the Company is in line with the provisions of the Act and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

*Pursuant to the completion of the IPO of the Company, and subsequent listing of its equity shares on National Stock Exchange of India Limited and BSE Limited with effect from August 31, 2023, the purpose of the constitution of the IPO Committee was fulfilled; accordingly, the Committee was subsequently dissolved by the Board.

28. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In terms of the provisions of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management''s Discussion and Analysis Report is set out in this Annual Report.

29. SHARE CAPITAL

As on March 31, 2024, the Authorized Share Capital of the Company was '' 56,00,00,000 /- (Rupees Fifty Six Crores only) divided into 17,50,00,000 (Seventeen Crore Fifty Lakhs only) Equity Shares of '' 2/- each (Rupees Two only),

10.00. 000 (Ten Lakhs) Series "A" Compulsorily Convertible Preference Shares of '' 10/- each (Rupees Ten only) and

10.00. 000 (Ten Lakhs) Series "A" Compulsorily Convertible Preference Shares of '' 200/- each (Rupees Two Hundred only) respectively.

During the year under review, the Company raised capital by way of issue of 15,000,000 equity shares of face value '' 2/-each through initial public offer.

Upon the initial public offer, the issued, subscribed and paid-up equity share capital of your Company as on March 31, 2024, stands increased to '' 25,86,40,740/- divided into 12,93,20,370 Equity shares of '' 2/- each.

The Equity Shares issued during the year rank pari passu with the existing Equity Shares of your Company.

30. INTERNAL AUDITORS

Pursuant to the provisions of Section 138 of the Act read with Companies (Accounts) Rules, 2014, the Board, on recommendation of the Audit Committee, appointed M/s. D.M. Jain & Co., Chartered Accountants, Mumbai, as

Internal Auditors of the Company for the financial year 2023-24. The Internal Auditors monitor and evaluate the effectiveness and adequacy of internal control systems in the Company, its compliances with the operating systems, accounting procedure and polices at all locations of the Company and reports to the Audit Committee on the quarterly basis.

31. RISK MANAGEMENT

The Company has laid down a well-defined Risk Management Policy covering the risk mapping, trend analysis, risk exposure, potential impact and risk mitigation process. A detailed exercise is carried out to identify, evaluate, manage and monitor both business and non-business risks. The Board periodically reviews the risks and suggests the steps to be taken to control and mitigate the same through a properly defined framework.

The Policy is displayed on the website of the Company at https://www.aeroflexindia.com/wp-content/uploads/Risk-Management-Plan.pdf

32. INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS

The Company has in place proper and adequate internal control systems commensurate with the nature of its business, size and complexity of its operations. Internal control systems comprising of policies and procedures are designed to ensure reliability of financial reporting, compliance with policies, procedures, applicable laws and regulations and that all assets and resources are acquired economically, used efficiently and adequately protected.

33. NAME OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE SUBSIDIARIES, JOINT VENTURE OR ASSOCIATE COMPANIES DURING THE YEAR

During the year under review none of the companies became or ceased to be subsidiaries, joint venture or associate companies of your Company.

34. COST AUDITORS

Pursuant to Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Amendment Rules, 2014, appointment of cost auditor is not applicable to the Company.

35. COMPLIANCE WITH THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

It is stated that the Company has constituted Internal Complaints Committee and complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual

Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

36. VIGIL MECHANISM/WHITSLE BLOWER POLICY

The Company has adopted Vigil Mechanism/Whistle Blower Policy, which was approved and adopted by the Board of Directors of the Company as per the provisions of Section 177(9) and (10) of the Act, Regulation 22 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and Regulation 9A of Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015.

The said policy provides a formal mechanism for all Directors and employees of the Company to approach Chairperson of the Audit Committee of the Company and make protective disclosures about the unethical behaviour, actual or suspected fraud and violation of the Company''s Code of Conduct and Business Ethics. Under the Policy, each Director/employee of the Company has an assured access to the Chairperson of the Audit Committee.

The Policy is displayed on the website of the Company at https://www.aeroflexindia.com/wp-content/uploads/Vigil-Mechanism-policy.pdf.

37. SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204(1) of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. S.K. Jain & Co., Practicing Company Secretaries to undertake Secretarial Audit of the Company for the financial year 2023-24. The Secretarial Audit Report is appended as Annexure-F and forms part of this Report.

38. 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 your directors confirm compliance of the same during the financial year under review.

39. VALUATION OF ASSETS

During the financial year under review, there was no instance of one-time settlement of loans/financial assistance taken from Banks or Financial Institutions, hence the Company was not required to carry out valuation of its assets for the said purpose.

40. AEROFLEX INDUSTRIES LIMITED -EMPLOYEE STOCK OPTION PLAN 2022 ("ESOP 2022")

The Company has approved the "Aeroflex Industries Limited-Employee Stock Option Plan 2022 ("ESOP 2022")" in its 28^th Annual General Meeting held in the year 2022. Under this Plan no options are granted.

41. GENERAL

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

(a) Issue of equity shares with differential rights as to dividend, voting or otherwise;

(b) Issue of shares (including sweat equity shares) to employees of the Company under any scheme;

(c) None of the Whole-Time Director or Managing Director of the Company received any remuneration or commission from any of its holding or subsidiary;

(d) No application was filed under the Insolvency and Bankruptcy Code, 2016.

42. ACKNOWLEDGEMENTS

The Board of Directors wish to place on record its deep sense of appreciation for the committed services by all the employees of the Company. The Board of Directors would also like to express their sincere appreciation for the assistance and co-operation received from the government and regulatory authorities, stock exchanges, depositories, banks, customers, vendors and members during the year under review.

---

Mar 31, 2023

Your Directors have pleasure in presenting the 29^th (Twenty-Ninth) Annual Report of the Company.

1. FINANCIAL HIGHLIGHTS:

Your Company''s performance during the financial year as compared to the previous financial year is summarized as below:

(Rs. in Lakhs, except EPS data)

Particulars	Standalone		Consolidated
	2022-2023	1021-2022	2022-2023	2021-2022
Sales and other income	26,941.78	24,099.07	26,950.00	24,099.54
Profit before tax, depreciation, exceptional items and Interest	5,237.10	4,694.38	5,236.71	4,688.73
Interest	284.55	625.08	284.55	625.08
Depreciation	521.93	418.44	521.93	418.44
Profit before Tax and Exceptional Items	4,430.62	3,650.86	4,430.23	3,645.21
Less: Exceptional Items	307.71	41.30	307.71	41.30
Less: Provisions for tax:
Current Tax	1,018.50	833.00	1,018.50	833.00
Deferred Tax (Assets)/ Liability	22.21	102.13	22.21	102.93
Taxation of Earlier Year	66.59	-	66.59	-
Profit after tax	3,015.60	2,757.03	3,015.21	2,750.59
Earnings per equity share	2.64	12.06	2.64	12.03

2. STATE OF COMPANY’S AFFAIRS:

Your Company is engaged in the business of manufacture of Stainless-Steel Corrugated Flexible Hoses and Hose assemblies. During the financial year, the Company recorded revenue of ? 26,941.78 Lakhs as compared to the corresponding figure of revenues in the previous financial year of ? 24,099.07 Lakhs. The Company’s strong product portfolio along with superior consumer insights and a strategy of continuous innovation and value creation has, once again, helped in delivery of superior competitive performance during the financial year, notwithstanding the extremely challenging operating environment. It is a matter of deep satisfaction that the Company consolidated its leadership position in the industry during the financial year and continues to improve its standing in key competitive markets across the country.

3. DIVIDEND:

Your Directors have pleasure in recommending payment of final dividend Re. 0.20/- (Twenty Paisa Only) being 10% per share on Equity Share of Rs. 2/- for the financial year ended 31st March, 2023. This will absorb total cash outflow of Rs. 2,28,64,074 /-. The final dividend, if approved, will be paid to those members whose names shall appear on the Register of Members / List of Beneficiaries as on Monday, 3^rd July, 2023.

During the financial year, the Company has not transferred any amount to the General Reserve.

4. MATERIAL CHANGES AND COMMITMENTS:

There are no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Company to which the financial statement relate and the date of report.

5. CHANGES IN THE NATURE OF BUSINESS:

During the year under review there is no change in the business of the Company.

6. TRANSFER TO RESERVE:

During the year no amount was transferred to any Reserves.

7. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION FOREIGN EXCHANGE EARNINGS AND OUT GO:

• Conservation of Energy

Pursuant to section 134(3)(m) of the Companies Act, 2013, read with rule 8(3) of the Companies (Accounts) Rules, 2014, it is stated that the Company is taking every possible steps to conserve the energy wherever possible by stream lining the production process. Its impact will be visible in the time to come. The Company is exploring avenues for alternate sources of energy.

• Technology Absorption

The Company has endeavored to adapt and absorb any development in Technology for improvement in Quality of its Products. The benefit derived by the Company through Technological upgradation are reflected in the increased volume of Turnover achieved by the Company during the Year under the Report.

• Foreign Exchange Earnings and Outgo

During the year under review earnings in foreign exchange was Rs. 21,404.67 Lakhs. Outgo in foreign exchange was Rs. 195.64 Lakhs.

8. PARTICULARS OF EMPLOYEES:

During the year under review, no employee of the Company was in receipt of remuneration in excess of the limits prescribed under rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

9. DIRECTORS’ RESPONSIBILITY STATEMENT:

Pursuant to section 134 sub-section (3) clause (c) of the Companies Act, 2013, it is stated that:

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

ii) the directors had 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 and loss of the Company for that period;

iii) the directors had taken proper and sufficient care for the maintenance of adequate accounting records, and the adequate steps have been taken to make it afresh, in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv) the directors had prepared the annual accounts on a “going concern” basis.

v) 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.

10. DIRECTORS & KEY MANAGERIAL PERSONNEL:

As on 31st March, 2023, the Board comprised of 7(Seven) directors including 4 (Four) independent director. The Board has an appropriate mix of Executive, Non-Executive and Independent Directors, which is in compliance with the requirements of the Companies Act, 2013.

I. Retirement by Rotation

In accordance with the provisions of Section 152 of the Companies Act, 2013 read with Companies (Management & Administration) Rules, 2014 and Articles of Association of the Company, Mr. Asad Daud (DIN: 02491539), and Mr. Harikant Turgalia (DIN: 00049544) Directors of the Company, retires by rotation at the ensuing Annual General Meeting of the Company and being eligible, has offered themselves for reappointment and your Board recommends their re-appointment.

II. Appointment and Re- appointment

Pursuant to the provisions of Section 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 the Board of Directors of the Company appointed/ reappointed the following Key Managerial Personnel:

1. Mr. Deepak Kalera as the Chief Financial Officer of the Company w.e.f. May 2, 2022

2. Mr. Asad Daud as the Managing Director of the Company w.e.f. October 15, 2022

3. Mr. Mustafa Abid Kachwala as the Chief Financial Officer of the Company w.e.f. November 28, 2022

Pursuant to the provisions of Section 149 of the Act read with the Companies (Appointment and Qualification of Directors) Rules, 2014, the shareholders of the company in their meeting appointed the following Independent Directors:

1. Mr. Partha Sarathi Sarkar & Ms. Shilpa Bhatia as the Independent Directors of the Company w.e.f. September 3, 2022

2. Mr. Arpit Khandelwal as the Independent Directors of the Company w.e.f. February 15, 2023

III. Cessation

Mr. Mahendra Bhatnagar Singh, Independent Director of the Company resigned from the post of directorship of the Company w.e.f. closing working hours of August 1, 2022. The Board places on record its sincere appreciation for his hard work during his stint in the Company.

Mr. Deepak Kalera, Chief Financial Officer of the Company resigned w.e.f. closing working hours of June 4, 2022. The Board places on record its sincere appreciation towards the valuable contribution made by him during his tenure as Chief Financial Officer of the Company.

IV. Key Managerial Personnel (“KMP”)

During the financial year ended 31st March, 2023, the following persons were acting as Key Managerial Personnel of the Company in compliance with the provisions of Section 203 of the Companies Act, 2013:

Sr. No.	Name of the KMP	Designation
1.	Mr. Asad Daud	Managing Director
2.	Mr. Mustafa Kachwala	Whole Time Director & Chief Financial Officer
3.	Ms. Kinjal Shah	Company Secretary & Compliance officer

V. Declaration from Independent Directors

The Company has received declaration from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Companies Act, 2013 and that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgment and without any external influence.

The Independent Directors have also confirmed that they have complied with Schedule IV of the Act and the Company’s Code of Conduct.

Further, the Independent Directors have also submitted their declaration in compliance with the provisions of Rule 6(3) of Companies (Appointment and Qualification of Directors) Rules, 2014, which mandated the inclusion of Independent Director’s name in the data bank of Indian Institute of Corporate Affairs (“IICA”) till they continue to hold the office of an independent director.

None of the directors of your Company are disqualified under the provisions of Section 164(2) of the Companies Act, 2013. Your directors have made necessary disclosures as required under various provisions of the Companies Act, 2013.

In the opinion of the Board, all the independent directors are persons of integrity and possess relevant expertise and experience.

VI. Annual performance evaluation by the Board

The Board has devised a policy pursuant to the provisions of the Companies Act, 2013 for performance evaluation of the chairman, board, individual directors (including independent directors) and committees which includes criteria for performance evaluation of non-executive directors and executive directors.

The Nomination and Remuneration Committee of the Company has specified the manner of effective evaluation of the performance of Board, its committees and individual directors of the Company and has authorized the Board to carry out their evaluation, Based on the manner specified by the Nomination and Remuneration Committee, the Board has devised questionnaire to evaluate the performances of each of

executive and non-executive and Independent Directors. Such questions are prepared considering the business of the Company and the expectations that the Board has from each of the Directors.

The evaluation framework for assessing the performance of directors comprises of the following key areas:

i. Attendance at Board Meetings and Committee Meetings;

ii. Quality of contribution to Board deliberations;

iii. Strategic perspectives or inputs regarding future growth of Company and its performance;

iv. Providing perspectives and feedback going beyond information provided by the management.

11. SUBSIDIARY & ASSOCIATE COMPANIES:

Subsidiary Company:

The Company has 1(one) wholly owned subsidiary company namely Aeroflex Industries Limited (holding 100%). The document Statement of performance & financial position in Form AOC-1 to be annexed to this report in “Annexure A” pursuance of section 129 of the Companies act, 2013 read with rule 5 of the Companies (Accounts) Rules, 2014, is annexed herewith.

Holding Company:

Your Company is a subsidiary of Sat Industries Limited with a holding of 92.18 %.

Joint Ventures and Associates:

Your Company does not have any Associates or Joint Ventures as on 31.03.2023.

12. CONSOLIDATED FINANCIAL STATEMENT:

The Consolidated Financial Statements required pursuant to section 129(3) of the Companies Act, 2013 read with rule 6 of the Companies (Accounts) Rule, 2014 have been prepared in accordance with the relevant accounting standards as per the Companies (Indian Accounting Standard) Rules, 2015. The audited consolidated financial statement is provided along with the Standalone Financial Statement.

13. DEPOSITS:

The Company has not accepted any Deposit within the meaning of Section 73 of the Companies Act, 2013 and rules made there under. As such, no amount of principal or interest was outstanding as of the Balance Sheet date, nor is there any deposit in non-compliance of Chapter V of the Companies Act, 2013.

14. NUMBER OF MEETINGS OF THE BOARD:

During the year, 12 (Twelve) Board Meetings were held (i.e. 21.04.2022, 30.04.2022, 02.05.2022, 20.05.2022, 05.08.2022, 29.08.2022, 28.11.2022, 09.02.2023, 13.02.2023, 17.03.2023, 30.03.2023 and 31.03.2023)

15. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

The particulars of loans, guarantees and investments have been disclosed in the financial statements.

16. PARTICULARS OF CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES:

All the transactions with related parties entered into during the financial year were in ordinary course of business and on arm’s length basis. No Material Related Party Transactions were entered into during the financial year under review by the Company. Accordingly, the disclosure on Related Party Transactions, as required under Section 134(3) of the Companies Act, 2013, in Form AOC-2 is not applicable

17. COMPANY’S POLICY RELATING TO DIRECTORS’ APPOINTMENT AND REMUNERATION:

The provisions of Section 178(1) relating to constitution of Nomination and Remuneration Committee are applicable to the Company. Hence, the Board of Director on recommendation of the said committee framed the policy relating to appointment of Directors, Remuneration, Director’s qualifications, positive attributes, independence of Directors and other related matters as provided under Section 178(3) of the Companies Act, 2013.

18. CORPORATE SOCIAL RESPONSIBILITY:

Pursuant of the provisions of Section 135 read with Companies (Corporate Social Responsibility) Rules, 2014, the

Company has formed Corporate Social Responsibility committee and Corporate Social Responsibility (CSR) Policy.

The brief outline of the Corporate Social Responsibility (CSR) Policy of your company along with the initiative taken by it are set out in “Annexure- B” of this report in the format prescribed in the Companies (Corporate Social Responsibility Policy) Rules, 2014. The policy is available on the website of the company, https: //www.aeroflexindia.com/investor-relation/

During the financial year under review, the Company was required to spend Rs. 31,04,767.15 /- towards claiming CSR activity. The Company has made a contribution amounting to Rs. 30,50,000/- to TAHA Charitable Trust & Rs. 1,00,000/- to Terna Public Charitable Trust which is permissible CSR activity.

Further the Company had unspent CSR amount of Rs. 6,74,853/- for FY 2021-22 which was required to be spent before 30th September 2022. The company before 30th September 2022 has made contribution amounting to Rs. 6,75,000/- to Taha Charitable Trust.

19. THE 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:

During the year under review there has been no significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and the Company’s operations in future.

20. COPY OF ANNUAL RETURN:

As required under Section 92(3) read with the Section 134(3)(a) of the Companies Act, 2013 and the Companies (Management and Administration) Rules, 2014, the copy of Annual Return as on 31st March, 2023 will be placed on the website of the Company and can be accessed at https://www.aeroflexindia.com/.

21. STATUTORY AUDITORS:

In line with the requirements of the Companies Act 2013, at the 27^th Annual General Meeting M/s. Shweta Jain & Co., Chartered Accountants (FRN: 127673W) and M/s. S S N & Co., Chartered Accountants (FRN: 024352N) were appointed as the Joint Statutory Auditors of the Company to hold the office for a period of 5 consecutive years., from the conclusion of 27th Annual General Meeting till the conclusion of 32nd Annual General Meeting of the Company.

Further M/s. S S N & Co., Chartered Accountants has submitted their resignation with effect from 02^nd May, 2022 due to pre - occupancy in other assignments.

M/s. Shweta Jain & Co., Chartered Accountants have furnished written confirmation to the effect that they are not disqualified from acting as the Statutory Auditors of the Company in terms of the provisions of Sections 139 and 141 of the Companies Act, 2013 and the Companies (Audit and Auditors) Rules 2014.

The Auditor’s Reports on the Standalone and the Consolidated Financial Statements for the financial year ended March 31, 2023 do not contain any qualification, reservation or adverse remark requiring any explanations / comments by the Board of Directors.

22. REMARKS ON QUALIFICATIONS BY STATUTORY AUDITORS AND SECRETARIAL AUDITORS

The Statutory Auditors and the Secretarial Auditors have not made any qualifications, observation or adverse remark in their Reports.

Further, none of the Auditors of the Company have reported any fraud as specified under the second proviso of Section 143 (12) of the Act.

23. COMPOSITION OF AUDIT COMMITTEE

The Company Audit Committee is constituted under the chairmanship of Mr. Ramesh Chandra Soni, Independent Director and its members Mr. Arpit Khandelwal, Independent Director and Mr. Asad Daud, Managing Director. The committee recorded no such recommendations that were not accepted by the Board in the period under review.

24. COMMITTEES OF THE BOARD

In accordance with the provisions of the Companies Act, 2013, the Company has constituted four committees of the Board, namely: 1. Audit Committee; 2. Stakeholders’ Relationship Committee; 3. Nomination and Remuneration Committee; and 4. Corporate Social Responsibility Committee.

25. SHARE CAPITAL

During the financial year under review, the Authorized Share Capital of the Company is Rs. 56,00,00,000/-(Rupees Fifty-Six Crores Only) divided into 17,50,00,000 (Seventeen Crore Fifty Lakhs) Equity Shares of Rs. 2/- each (Rupees Two Only); 10,00,000 (Ten Lakhs) Series “A” Compulsorily Convertible Preference Shares of Rs. 10/- each (Rs. Ten); and 10,00,000 (Ten Lakhs) Series “A” Compulsorily Convertible Preference Shares of Rs. 200/- each (Rs. Two Hundred) respectively with power to increase or to reduce the Capital.

As on 31st March, 2023, the issued, subscribed and paid-up Equity Share capital of the Company stood at Rs. 22,86,40,740/- comprising of 11,43,20,370 Equity Shares of Rs. 2/- each

Pursuant to the shareholders’ approval obtained at the Extra Ordinary General Meeting held on 15th February, 2023, the Authorized, Issued, Subscribed and Paid-up Equity Share Capital of face value of Rs.10/-(Rupees ten only) each is sub-divided into 5 (five) equity shares of face value of Rs. 2/- (Rupees two only) each fully paid.

26. INTERNAL AUDITORS:

Pursuant to the provisions of Section 138 of the Act, read with Companies (Accounts) Rules, 2014, the Board, on recommendation of the Audit Committee, appointed M/s. D M Jain & Co., Chartered Accountants, as Internal Auditors of the Company. The Internal Auditors monitor and evaluates the effectiveness and adequacy of internal control systems in the Company, its compliances with the operating systems, accounting procedure and polices at all locations of the Company and reports to the Audit Committee.

27. RISK MANAGEMENT:

The component of risk in the activities of your Company is very minimal. In the opinion of the Board there is no element of risk that may threaten the existence of the Company.

The Company manages monitors and reports on the principal risks and uncertainties that can impact its ability to achieve its strategic objectives.

28. INTERNAL FINANCIAL CONTROLS:

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

29. NAME OF COMPANIES WHICH HAVE BECOME OR CEASED TO BE SUBSIDIARIES. JOINT VENTURE OR ASSOCIATE COMPANIES DURING THE YEAR

During the year under report none of the companies became or ceased to be subsidiaries, joint venture or associate companies of your Company.

30. COST AUDITORS:

Pursuant to Section 148 of the Companies Act, 2013 read with Companies (Cost Records and Audit) Amendment Rules, 2014, appointment of cost auditor is not applicable to the company.

31. COMPLIANCE WITH THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION. PROHIBITION AND REDRESSAL) ACT. 2013

It is stated that the Company has constituted Internal Complaints Committee and complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

Your Directors further state that during the year under review, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

32. APPLICATION OR PENDENCY UNDER THE INSOLVENCY AND BANKRUPTCY CODE. 2016

No application was filed under the Insolvency and Bankruptcy Code, 2016.

33. GENERAL:

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

(a) Issue of equity shares with differential rights as to dividend, voting or otherwise.

(b) Issue of shares (including sweat equity shares) to employees of the Company under any scheme.

(c) None of the Whole-time Director or Managing director of the Company received any remuneration or commission from any of its holding or subsidiary.

34. SECRETARIAL AUDITORS

Pursuant to the provisions of Section 204(1) of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed M/s. S. K Jain & Co.,

Practicing Company Secretaries, to undertake Secretarial Audit of the Company for the financial year 202223.

35. COMPLIANCE WITH SECRETARIAL STANDARDS ON BOARD AND ANNUAL GENERAL MEETINGS

The Company has complied with Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and Annual General Meetings.

36. VALUATION OF ASSETS

During the financial year under review, there was no instance of one-time settlement of loans / financial assistance taken from Banks or Financial Institutions, hence the Company was not required to carry out valuation of its assets for the said purpose.

37. ACKNOWLEDGEMENTS:

Your Directors place on record their sincere thanks to bankers, business associates, consultants, and various Government Authorities for their continued support extended to your Company during the year under review. Your Directors are grateful to the shareholders for their support and confidence reposed on your Company

For and on behalf of the Board of Directors

Sd/- Sd/-

Place: Mumbai Asad Daud Mustafa Abid Kachwala

Dated: 15.06.2023 Managing Director Whole-time Director

DIN: 02491539 DIN: 03124453