BOARD’S REPORT

TO

THE MEMBERS OF

PARAS DEFENCE AND SPACE TECHNOLOGIES LIMITED

The Directors of your Company are pleased to present fourteenth Annual Report on the business and operations of the Company along with the
Audited Financial Statements for the financial year ended on March 31, 2023.

1. FINANCIAL SUMMARY AND HIGHLIGHTS

On standalone basis, the total income for the financial year
ended March 31, 2023 was ' 22,261.26 Lakhs, which is 21.64 %
more than the previous year's income of ' 18,300.87 Lakhs. Our
total income on consolidated basis for the financial year ended
March 31, 2023 was ' 23,065.02 Lakhs as against ' 18,553.41
Lakhs for the financial year ended March 31, 2022.

On standalone basis, the net profit after tax (PAT) for the financial
year ended March 31, 2023 stood at ' 3,592.82 Lakhs as against
previous year's net profit of ' 2,690.86 Lakhs thereby recording a
growth of 33.52%. Our net profit after tax (PAT) on consolidated basis
for the financial year ended March 31, 2023 amounted for '3,594.04
Lakhs as compared to ' 2,707.73 Lakhs in the previous year.

2. TRANSFER TO RESERVES

The Company has not transferred any amount out of the current
year profits of the Company for the financial year 2022-23 to
General Reserve Account.

3. DIVIDEND AND TRANSFER TO IEPF

The Board of Directors has not recommended any dividend on
equity shares for the financial year 2022-23. The Company was
not required to transfer any unpaid / unclaimed amount of
dividend to IEPF during the financial year ended March 31, 2023.

The Company has in place a Dividend Distribution Policy in
accordance with Regulation 43A of the SEBI (Listing Obligations
and Disclosure Requirements) Regulations, 2015 and the

same is available on the Company's website at https://www.
parasdefence.com/policies/.

4. STATE OF THE COMPANY’S AFFAIRS

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

5. CHANGE IN THE NATURE OF BUSINESS

There were no changes in the nature of business during the
financial year ended March 31, 2023.

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

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

7. PARTICULARS OF LOANS, GUARANTEES AND
INVESTMENTS

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

8. DEPOSITS

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

9. DETAILS OF SUBSIDIARY, ASSOCIATE AND JOINT
VENTURE COMPANIES

A. SUBSIDIARIES

As on March 31, 2023, the Company has 5 (five) subsidiaries out
of which 4 (four) are Indian subsidiaries and 1 (one) Foreign
subsidiary.

The details of the Subsidiaries are as follows:

B. ASSOCIATE COMPANIES

As on March 31, 2023, there is 1 (One) Associate company within
the meaning of Section 2(6) of the Companies Act, 2013.

The details of the Associate Company are as follows:

C. JOINT VENTURE

As on March 31, 2023, there are no Joint Ventures within the
meaning of Section 2(6) of the Companies Act, 2013.

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

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

11. SHARE CAPITAL

A. Authorized share capital

B. Issued, Subscribed and Paid-up Share Capital

During the period under review, no allotment of securities have
been made by the Company.

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

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

As on March 31, 2023, none of the Directors of the Company hold
instruments convertible into equity shares of the Company.

13. ISSUE OF DEBENTURES, BONDS AND ANY OTHER
NON-COVERTIBLE SECURITIES/WARRANTS

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

15. INTERNAL FINANCIAL CONTROL AND THEIR
ADEQUACY

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

16. DETAILS OF DIRECTORS AND KEY MANAGERIAL
PERSONNEL

Composition of Board of Directors

The composition of Board of Directors of the Company as on
March 31, 2023 is as follows:

Re-appointment

Pursuant to the provisions of Regulation 17(1)A of SEBI (Listing
Obligation and Disclosure Requirements), Regulations 2015, Mr.
Sharad Virji Shah (DIN:00622001), Chairman and Non- Executive
Director of the Company, who attained the age of 75 years on
December 18, 2022 was reappointed by the Board of Directors of
the Company at their meeting held on September 02, 2022 and
by the shareholders of the Company on September 27, 2022 to
continue and to hold his office of Chairman and Non-Executive
Director of the Company, even after attaining the age of 75 years.

In accordance with the provisions of Section 152 of the Companies
Act, 2013 and the Company's Articles of Association, Mrs. Shilpa
Amit Mahajan (DIN: 01087912), Whole-Time Director, retires by
rotation at the forthcoming fourteenth Annual General Meeting
and being eligible has offered herself for re-appointment.

Resignation

Pursuant to the provisions of Section 168 of the Companies Act,
2013 read with applicable regulations of SEBI (Listing Obligation
and Disclosure Requirements), Regulations 2015, Mr. Sunil Kumar

Sharma (DIN: 03614952) has resigned from the position of Non¬
Executive Independent-Director of the Company w.e.f. December
10, 2022.

Apart from the above, there was no other change in the
composition of the Board of Directors during the period under
review.

KEY MANAGERIAL PERSONNEL (KMP)

DECLARATIONS GIVEN BY INDEPENDENT DIRECTORS

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

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

of Independent Directors as required under the provisions of the
Companies Act, 2013.

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

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

BOARD AND COMMITTEE MEETINGS

Board Meetings

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

Committees of the Board

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

I. AUDIT COMMITTEE

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

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

II. OTHER COMMITTEES

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

17. COMPLIANCE WITH SECRETARIAL STANDARD

During the period from April 01, 2022 to March 31, 2023, the
Company complied with the Secretarial Standard - 1 and
Secretarial Standard - 2, issued by the Institute of Company
Secretaries of India.

18. SUSTAINABILITY AND CORPORATE SOCIAL
RESPONSIBILITY (CSR)

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

The brief outline of the Company's CSR initiatives undertaken
during the year under review is furnished in Annexure-3 in

the format as prescribed in the Companies (Corporate Social
Responsibility Policy) Rules, 2014, as amended from time to
time. The Company's CSR Policy is placed on the website of the
Company https://www.parasdefence.com/policies/

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

19. PARTICULARS OF CONTRACTS OR ARRANGEMENTS
WITH RELATED PARTIES

All the related party transactions are placed before the Audit
Committee for their review and approval. Prior Omnibus approval
is obtained before the commencement of the new financial year,
for the transactions which are repetitive in nature and also for the
transactions which are not foreseen (subject to financial limit).
A statement of all related party transactions is presented before
the Audit Committee on a quarterly basis specifying the nature,
value and terms & conditions of the transactions. All transactions
entered with related parties were in compliance with the
applicable provisions of the Companies Act, 2013 read with the
relevant rules made thereunder and the Listing Regulations

All the transactions with related parties are in the ordinary
course of business and on arm's length basis. The details of the
transactions entered into between the Company and the related
parties under Section 188 of the Companies Act, 2013 are given in
AOC - 2 is enclosed as Annexure - 4 to this report.

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

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

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

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

21. MANAGEMENT DISCUSSION AND ANALYSIS

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

22. BOARD EVALUATION

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

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

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

24. AUDITORS

I. Statutory Auditors

Members of the Company at the AGM held on September
28, 2018, approved the appointment of M/s. Chaturvedi
& Shah LLP, Chartered Accountants (FRN: 101720W/
W1003555) (‘C&S'), as the statutory auditors of the
Company for a period of five years commencing from the
conclusion of the 9^th AGM held on September 28, 2019 until
the conclusion of 14^th AGM of the Company to be held in the
year 2023.

In terms of the provisions of the Companies Act, 2013, an
audit firm acting as the statutory auditor of a company is
eligible to be appointed as statutory auditors for two terms
of five years each. The first term of C&S as statutory auditors
of the Company expires at the conclusion of the 14^th AGM
of the Company scheduled to be held on September 29,
2023. Considering their performance as auditors of the
Company during their present tenure, the Audit Committee
of the Company, after due deliberation and discussion,
recommended the re-appointment of C&S as statutory
auditors of the Company for a second term of five years
to hold office from the conclusion of the 14^th AGM to be
held on September 29, 2023 till the conclusion of the 19^th
AGM of the Company to be held in the year 2028. Further
the remuneration for the tenure of their second term as
Statutory Auditors shall be mutually agreed between the
Board of Directors and C&S, from time to time.

The above proposal forms part of the Notice of the AGM for
your approval. The report of the Statutory Auditor forms
part of this Annual Report 2022-23.

The said report does not contain any qualification,
reservation, adverse remark or disclaimer. During the year
under review, the Auditors did not report any matter under
Section 143(12) of the Act, therefore no detail is required to
be disclosed under Section 134(3)(ca) of the Act.

II. Cost Auditor

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

Accordingly, the Company is maintaining the Cost Records
as specified by the Central Government under the Rules
made there under section 148 of the Companies Act, 2013.
Pursuant to the provisions of section 148(3) of the Companies
Act, 2013, the Board of Directors had appointed M/s. Dinesh
Jain & Company, Cost Accountant, Mumbai (FRN: 100583),
as Cost Auditors of the Company, for conducting the audit
of cost records for the financial year ended March 31, 2023. A
proposal for ratification of remuneration of the Cost Auditors
is placed before the shareholders.

III. Secretarial Auditors

During the year under review, the Board of Directors had
appointed M/s. DM & Associates, Company Secretaries LLP
(RN: L2017MH003500), Practicing Company Secretaries in
place of M/s. Sawant & Associates, Practicing Company
Secretary, as the secretarial auditors to conduct secretarial
audit of the Company for the financial year 2022-23. The
secretarial audit report in form MR-3 as issued by them is
enclosed as Annexure - 8 to this Report. The comments
provided by them are self-explanatory and hence does not
require comments from the Board.

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

IV. Internal Auditor

M/s. Shaparia Mehta & Associates LLP, Independent Chartered
Accountant Firm, has been re-appointed as its Internal
Auditor for conducting the internal audit functions of the
Company and submitted their report thereon for the financial
year 2022-23 to the Board and committee for its review.

25. STATUTORY AUDITORS’ REPORT

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

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

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

27. ANNUAL RETURN

In compliance with Section 92(3) of the Companies Act, 2013
read with section 134(3) of the Companies Act, 2013 the Annual
Return of the Company as on March 31, 2023 will be available on
the website of the Company at https://www.parasdefence.com/
annual-returns/.

28. DIRECTORS’ RESPONSIBILITY STATEMENT

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

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

b) they had selected such accounting policies and applied
them consistently and made judgments and estimates
that are reasonable and prudent so as to give a true and
fair view of the state of affairs of the Company at the end
of the financial year March 31, 2023 and of the profit of the
Company for that period;

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

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

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

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

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

Your Company provides regular training to employees to improve
skills. Your company has put in place a performance appraisal
system that covers all employees. Your Company had 404
permanent employees as on March 31, 2023 while the count was
182 as on March 31, 2022.

30. CORPORATE GOVERNANCE

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

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

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

32. RISK MANAGEMENT POLICY

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

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

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

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

34. WHISTLE BLOWER POLICY / VIGIL MECHANISM

Pursuant to Section 177(9) read with Regulation 22 of the SEBI
Listing Regulations, your Company has duly established Whistle
Blower Policy /Vigil Mechanism Policy (“Policy”) to report to
the management instances of unethical behavior, actual or
suspected, fraud or violation of the Company's code of conduct.
functioning of the Policy is reviewed by the Audit Committee /
Board on periodical basis. During the financial year ended March
31, 2023, the Company has not received any complaint under the
Whistle Blower Policy of the Company.

35. CODE OF CONDUCT

The Board of Director has approved a Code of Conduct which is
applicable to the members of the Board of Directors and Senior
Management Personnel. It is confirmed that all Directors and
Senior Management Personnel have affirmed their adherence
to the provisions of the Code of Conduct during the financial
year 2022-23.

36. POLICIES AND DISCLOSURE REQUIREMENTS

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

37. BUSINESS RESPONSIBILITY AND SUSTAINABILITY
REPORT (BRSR)

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

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

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

39. ACKNOWLEDGEMENTS

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

For and on behalf of the Board of Directors
Paras Defence and Space Technologies Limited

Sharad Virji Shah Munjal Sharad Shah

Chairman & Non- Executive Director Managing Director

DIN:00622001 DIN:01080863

Date: September 04, 2023
Place: Navi Mumbai

Registered Office Address:

D-112, TTC Industrial Area, MIDC, Nerul, Navi Mumbai - 400706

Tel. No. 91-22-6919 9999

Fax No. 91-22-6919 9990

E-mail: business@parasdefence.com

Website: www.parasdefence.com

CIN:L29253MH2009PLC193352