Your Directors are pleased to present you the 28^th Annual Report of Apollo Micro Systems Limited ("the Company” or
"AMS”) along with the audited financial statements, for the financial year ended 31^st March, 2025.

1. FINANCIAL RESULTS

The audited financial statements of the Company as on 31^st March, 2025 are prepared in accordance with the relevant
applicable Ind AS and Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015
("SEBI Listing Regulations") and provisions of the Companies Act, 2013 ("Act").

The summary of financial performance (standalone & consolidated) for the Financial Year ended
31^st March, 2025 and the corresponding figures for the Financial Year ended 31^st March, 2024 are as under:

(Previous year figures have been regrouped wherever necessary to confirm to the current year's presentation)

The financial statements for the year ended 31^st March,
2025 and 31^st March, 2024 have been prepared as per
the Ind AS (Indian Accounting Standards). There are
no material changes and commitments affecting the
financial position of the Company between the end of
the financial year and the date of this report.

2. COMPANY'S PERFORMANCE

During the year under review FY 2024-25, the
standalone performance of your company was
reported as under:

The revenue from operations is ?56,206.92 lakhs
against ? 37,163.42 lakhs in the previous year.

The Earnings Before Interest, Tax, Depreciation
& Amortization ("EBITDA”) has been increased by
54.07% to ? 13,326.72 lakhs against ? 8,649.63 lakhs
in the previous year. The Profit before Tax ("PBT”) for
the year under review is ? 8,380.43 lakhs as against
? 4,489.91 lakhs in the previous year. The Net profit
after tax of the Company for the year under review has
been increased by 80.75% to ? 5,724.16 lakhs against
? 3,166.90 lakhs in the previous year. The Earning
per Share ("EPS”) of the Company for the year under
review is ?1.89 (basic) and ?1.89/- (diluted) per share.

The key aspect of your Company's consolidated
performance during the FY 2024-25 are as follows:

The revenue from operations is ?56,206.92 against
? 37,163.42 lakhs in the previous year. The Earnings
Before Interest, Tax, Depreciation & Amortization
("EBITDA”) has been increased by ? 54.15% to
? 13,209.51 lakhs against ? 8,569.16 lakhs in the
previous year. The Profit before Tax ("PBT”) for the
year under review is ? 8,254.64 as against ? 4,409.40
lakhs in the previous year. The Net profit after tax
of the Company for the year under review has been
increased by 66.01% to ? 5,635.77 against ? 3,110.66
lakhs in the previous year. The Earning per Share
("EPS”) of the Company for the year under review is
? 1.86/- (basic) and ?1.86 /- (diluted) per share.

3. BUSINESS OUTLOOK

India's defence sector is entering a transformative
era, driven by increasing strategic autonomy, regional
security imperatives, and a global recalibration of
defence supply chains. As international conflicts
intensify and the unpredictability of geopolitical
alliances becomes more evident, countries around
the world are accelerating their military preparedness
and local production capabilities. Amidst this global
churn, India has emerged as a resilient, neutral
and technology-capable partner, well-positioned
to lead the defence industrial evolution across
the Global South.

India's push for defence self-reliance is now deeply
institutionalised through major policy initiatives such
as Aatmanirbhar Bharat, the Defence Acquisition
Procedure (DAP 2020), positive indigenisation lists,
and robust financial incentives through schemes like
iDEX, TDF, and Make-I/II. This has translated into
unprecedented opportunities for Indian private sector
firms to play a decisive role not only in catering to

domestic defence forces, but also in becoming part
of global defence supply chains.

The surge in defence capital procurement budget
and the Government's target to achieve over ?1.75
lakh crore in defence production with ?35,000 crore
in exports by 2030 has created a highly enabling
environment for companies like Apollo Micro
Systems Limited.

At the same time, India's strategic positioning
balancing regional security interests while maintaining
positive relationships with both the West and the East
has amplified its credibility as a reliable partner in the
global defence landscape. Partner nations are now
actively exploring co-development and co-production
opportunities with Indian firms, particularly in
advanced systems such as missile guidance, C4ISR,
UAVs, and smart munitions.

Within this dynamic landscape, Apollo Micro Systems
Limited (AMS) is strategically aligning itself to
leverage the shift from prototype and development¬
centric work to full-scale platform production. With
strong legacy capabilities, focused R&D investments,
recent backward-integrated acquisitions (e.g., IDL
Explosives), and new infrastructure capacity in the
pipeline, AMS is well positioned to become a system-
of-systems integrator and a strategic partner for both
Indian and global defence needs.

The current fiscal and the next few years offer a
compelling opportunity to transition from niche
subsystem supplier to a prime contractor role in
select verticals like precision munitions, embedded
guidance, and smart explosives. Moreover, the
increasing digitization of battlefield systems and the
convergence of electronics, AI, and edge computing
in military applications further reinforces AMS's
technological advantage.

In summary, the global environment has made
self-reliant defence capability not just an option
but a strategic necessity. With strong execution,
partnerships, and policy alignment, AMS is well
positioned to lead the next wave of India's defence
industrial growth.

4. CREDIT RATING

During the year under review, your Company has
obtained the Credit Rating from Acuite Rating &
Research Limited ("credit rating agency") to its

? 393.50 Crores Line of Credit (short term 85.00
Crores & long term 308.50 Crores) of the Company
which is as follows:

The outlook on the long-term rating has been
assigned as "Stable” by the credit rating agency.

5. SHARE CAPITAL

(a) Capital structure of the Company:

• Authorised Share Capital of the Company

As on 1^st April, 2024, the Authorised Share Capital
of the Company stood at ? 36,00,00,000/-
(Rupees Thirty-Six Crores Only) comprising of
36,00,00,000 (Thirty-Six Crores Only) Equity
Shares of ? 1/- (Rupee One Only).

During the year, the members of the company
in their Extra-ordinary General Meeting held
on 04^th February, 2025 approved the increase
of authorised Share Capital from the existing
? 36,00,00,000/- (Rupees Thirty-Six Crores Only)
divided into 36,00,00,000 (Thirty Six Crores
Only) Equity Shares of ? 1 /- (Rupees One Only)
each to ? 45,00,00,000/- (Rupees Forty Five
Crores Only) divided into 45,00,00,000 (Forty
Five Crores Only) Equity Shares of ? 1/- (Rupee
One Only) each by the addition there to a sum
of ? 9,00,00,000/- (Rupees Nine Crores Only)
divided into 9,00,00,000 (Nine Crores) Equity
Shares of ? 1/- (Rupee One Only) each ranking
pari-passu in all respects with the existing shares
of the Company.

Consequently, the Authorised Share Capital
of the company as on 31^st March, 2025 stood
at ? 45,00,00,000/- (Rupees Forty Five Crores
Only) comprising of 45,00,00,000 (Forty Five
Crores Only) Equity Shares of ? 1/- (Rupee
One Only) each.

• Issued, Subscribed, and Paid-Up
Capital of the Company

During the year under review, the Company
allotted 2,41,30,700 equity shares of Re. 1/-
(Rupee one) each pursuant to the conversion
of warrants into equity. Consequently, as on

31^st March 2025, the issued, subscribed, and
paid-up capital of the Company stood at Rs.

30.64.89.560 /- comprising 30,64,89,560 equity
shares of Re. 1/- each.

(b) Status of Shares:

As the members are aware, the Company's
shares are compulsorily tradable in electronic
form. Out of the total paid up capital representing

30.64.89.560 equity shares, the following equity
shares of the Company are in dematerialized as
on 31^st March, 2025:

(c) Preferential issue of Share Warrants:

The company had allotted 98,85,070 convertible
warrants on a preferential basis to promoters and
non-promoters, with an option to convert the
same into an equal number of equity shares at a
price of ? 186/- per warrant, including a premium
of ? 176/- per share on the face value of ? 10/-
per share, within a period of 18 months from the
date of allotment of warrants, i.e., 5^th December
2022, as per the terms and conditions approved
in the Extraordinary General Meeting held on
12^th November 2022. The Company had also
received in-principle approval from BSE Limited
and National Stock Exchange of India Limited on
22^nd November 2022 for this matter.

Subsequently, due to the stock split, where one
equity share of ? 10/- each was sub-divided into
10 equity shares of ? 1/- each, each warrant was
convertible into 10 equity shares of ? 1/- each.

As on 31^st March, 2024, 74,72,000 warrants were
converted into 7,47,20,000 equity shares and
the balance 24,13,070 warrants were converted
into 2,41,30,700 equity shares during the year
2024-25. Hence as on 31^st March, 2025, the total
98,85,070 warrants, were converted into equity
shares of ? 1/- each.

(d) Allotment of Equity Shares upon exercise of warrants:

During the year under review, the following allotments of equity shares took place upon the exercise of warrants:

Note: The paid-up share capital of the company prior to the aforesaid allotments i.e., as on 01^st April, 2024 was
? 28,23,58,860 comprising 28,23,58,860 Equity Shares of ? 1 /- each.

6. ANNUAL RETURN [SECTION 134 (3) (a) &
SECTION 92(3)]

Pursuant to Section 92(3) read with Section 134(3)(a)
of the Act, the Annual Return as on March 31, 2025 is
available on the Company's website at https://apollo-
micro.com/wp-content/uploads/2025/08/ANNUAL-
RETURN-2024-25.pdf

7. NUMBER OF MEETINGS OF THE BOARD OF
DIRECTORS [SECTION 134 (3) (b)]:

During the year under review, Nine (9) meetings of
the Board of Directors of the Company were held on
20^th May, 2024, 14^th June, 2024, 23^rd July, 2024, 09^th
August, 2024, 25^th October, 2024, 21^st November,
2024, 09^th January, 2025, 04^th February, 2025 and
21^st March, 2025. The attendance of Directors for the
above meetings is given in the Corporate Governance
Report that forms part of this annual report. The
maximum interval between any two meetings did not
exceed 120 days.

The Detailed information of meetings of board of
directors is given in the Corporate Governance Report
annexed to this annual report.

In terms of requirements of Schedule IV of the Act,
a separate meeting of Independent Directors held on
25^th March, 2025 to review the performance of the
Non-Independent Directors; the Chairperson; the
entire Board and its Committees thereof and; assess
the quality, quantity and timelines of the flow of
information between the Management and the Board.

8. DIRECTOR'S RESPONSIBILITY STATEMENT
[SECTION 134 (3) (c) & 134(5)]

Pursuant to Section 134(5) of the Companies Act,
2013 (the "Act”), the Board of Directors, to the best of
its knowledge and ability, confirm that:

(a) in the preparation of the annual accounts
for the period ended 31^st March, 2025, the

applicable accounting standards had been
followed along with proper explanation relating
to material departures;

(b) the directors have selected such accounting
policies and applied them consistently and made
judgments and estimates that are reasonable and
prudent so as to give a true and fair view of the
state of affairs of the company at the end of the
financial year and of the profit of the company
for that period;

(c) the directors have taken proper and sufficient
care for the maintenance of adequate accounting
records in accordance with the provisions of this
Act for safeguarding the assets of the company
and for preventing and detecting fraud and other
irregularities;

(d) the directors 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
were operating effectively;

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

9. DETAILS OF FRAUDS REPORTED BY
AUDITORS UNDER SECTION 143(12) OTHER
THAN THOSE WHICH ARE REPORTABLE TO
THE CENTRAL GOVERNMENT [SECTION 134
(3) (ca)]:

During the year under review, Statutory Auditor,
Secretarial Auditor and the Cost Auditor have
not reported any incident of fraud under section
143(12) of the Act.

10. STATEMENT ON DECLARATION GIVEN BY
INDEPENDENT DIRECTORS SECTION 134 (3)
(d)]

The Board took on record the declaration and
confirmation submitted by the independent directors
regarding their meeting the prescribed criteria of
independence, after undertaking due assessment of
the veracity of the same as required under Regulation
25 of the SEBI Listing Regulations.

The Company has received and taken on record the
declarations received from the Independent Directors
of the Company as required pursuant to section
149(7) of the Act stating that meet the criteria of
independence as provided in section 149 (6) of the
Act, as amended and Regulation 16(1)(b) of the SEBI
Listing Regulations as amended. There has been no
change in the circumstances affecting their status as
independent directors of the Company.

11. FAMILIARISATION PROGRAMME

The Members of the Board of the Company have been
provided opportunities to familiarise themselves with
the Company, its Management, and its operations.
The Directors are provided with all the documents to
enable them to have a better understanding of the
Company, its various operations, and the industry in
which it operates.

All the Independent Directors of the Company are
made aware of their roles and responsibilities at the
time of their appointment through a formal letter of
appointment, which also stipulates various terms and
conditions of their engagement.

Key management personnel of the Company presents
to the Audit Committee on a periodical basis,
briefing them on the operations of the Company,
plans, strategy, risks involved, new initiatives, etc.,
and seek their opinions and suggestions on the
same. In addition, the Directors are briefed on their
specific responsibilities and duties that may arise
from time to time.

The Statutory Auditors and Internal Auditors of
the Company presents to the Audit Committee and
Board of Directors on Financial Statements and
Internal Controls including presentation on regulatory
changes from time to time. The detail policy on the
familiarisation programme is available on the website
at www.//apollo-micro.com/investors under the
Section "Investors”.

12. COMMITTEES OF THE BOARD

The Board of Directors has constituted various
mandatory and non-mandatory Committees to deal
with specific areas and activities which concern the
Company and requires a closer review. The Committees
are formed with approval of the Board and function
under their respective Charters. These Committees
play an important role in the overall management of
day-to-day affairs and governance of the Company.
The Board Committees meet at regular intervals and
take necessary steps to perform its duties entrusted
by the Board. The Minutes of the Committee Meetings
are placed before the Board for noting. The Board
currently has the following Committees:

(a) Audit Committee

The Audit Committee was constituted by our
Board in accordance with Section 177 of the
Companies Act, 2013 and Regulation 18 of the
SEBI Listing Regulations. The composition,
quorum, terms of reference, function, powers,
roles and scope are in accordance with Section
177 of the Act and the provisions of Regulation
18 of the SEBI Listing Regulations. All the
members of the committee are financially literate
and Mrs. Karunasree Samudrala, Chartered
Accountant the Chairman of the Committee is an
Independent Director and possesses the relevant
financial expertise.

The details regarding composition, terms of
references, powers, functions, scope, meetings
and attendance of members are included in
Corporate Governance Report which forms part
of the Annual Report.

(b) Corporate Social Responsibility (CSR)
Committee

The Company believes in undertaking business
in such a way that it leads to overall development
of all stake holders and society. The Company
considers social responsibility as an integral part
of its business activities and endeavours to utilize
allocable CSR budget for the benefit of society.

The CSR Committee has been constituted as
required under the provisions of section 135
of the Act. The details regarding composition,
objectives, powers, functions, scope, meetings
and attendance of members are included in
Corporate Governance Report which forms part
of the Annual Report.

The Committee formulated and recommended to
theBoardthe CSRPolicy.Onthe recommendations
of the CSR Committee, the Board approved and
adopted the CSR Policy of the Company. The
Corporate Social Responsibility Policy is posted
under the Investors section of the Company's
website at: https://apollo-micro.com/wp-

content/uploads/2017/12/CSR-POLICY.pdf

As per Rule 8 of the Companies (Corporate Social
Responsibility Policy) Rules, 2014, annual report
on CSR is prepared and the same is enclosed as
Annexure-A to this Report.

(c) Stakeholder's Relationship Committee

Stakeholder's Relationship Committee has been
constituted by the Board in accordance with
Section 178 (5) of the Act.

The details regarding composition, terms of
references, powers, functions, scope, meetings,
attendance of members and the status of
complaints received during the year are included
in Corporate Governance Report which forms
part of the Annual Report.

(d) Nomination and Remuneration Committee

The Nomination and Remuneration Committee
has been constituted by the Board in accordance
with section 178 of the Act and Regulation 19 of
SEBI Listing Regulations.

The details regarding composition, terms of
references, powers, functions, scope, meetings
and attendance of members are included in
Corporate Governance Report which forms part
of the Annual Report.

Policy on Remuneration of Directors, KMPs and
other employees

The Policy of the Company on remuneration
of Directors, KMPs, Senior Management
and other employees including criteria for
determining qualifications, positive attributes,
independence of a Director and other matters
provided under sub-section (3) of section 178
is made available on the Company's website
https://apollo-micro.com/investors/ under the
section "Investors”. The website link is http://
apollo-micro.com/wp-content/uploads/2017/09/
REMUNERATION_POLICY.pdf

(e) Risk Management Committee

The Risk Management Committee was
constituted pursuant to resolution of the

Board, which has been entrusted with the
responsibility to assist the Board in overseeing
and approving the Company's enterprise-wide
risk management framework.

The details regarding composition, terms of
references, powers, functions, scope, meetings
and attendance of members are included in
Corporate Governance Report which forms part
of the Annual Report.

(f) Executive Committee of Directors & CFO

The Executive Committee of Directors and Chief
Financial Officer (CFO) ("Executive Committee”)
has been formed by the Board, under the
provisions of Section 179(3) of the Act and rules
made there under in order to have the timely and
expeditious execution of routine financial matters.

The details regarding composition, terms of
references, powers, responsibilities, scope,
meetings and attendance of members are
included in Corporate Governance Report which
forms part of the Annual Report.

(g) Securities Allotment Committee

Securities Allotment Committee was constituted
pursuant to resolution of the Board, which has
been entrusted with the responsibility to assist
the Board in overseeing and considering the
allotment of securities.

The details regarding composition, terms of
references, powers, functions, scope, meetings
and attendance of members are included in
Corporate Governance Report which forms part
of the Annual Report.

13. EXPLANATIONS OR COMMENTS BY
THE BOARD ON EVERY QUALIFICATION,
RESERVATION OR ADVERSE REMARK OR
DISCLAIMER MADE [SECTION 134 (3) (f)]:

By the Statutory Auditor in their Report: has no
qualification or adverse remarks: NIL

By Company Secretary in Practice in Secretarial Audit
Report: has below mentioned observations.

• The Registrar of Companies, Hyderabad
(ROC) had issued a show-cause notice dated
04/06/2024 for non-filing of Cost Audit report in
Form CRA-4 for FY 2022-23. In this connection,
the Company has responded to the show cause
notice on 12/07/2024 stating the non-filing the

said form was due to oversight. The Company
filed the said form on 12/07/2024 and reported
the same in its response to show cause notice.
Further the Company also filed a compounding
application dated 13th September, 2024 before
Regional Director, South East Region, Hyderabad.

• The Registrar of Companies, Hyderabad
(ROC) had issued a show-cause notice dated
26/03/2025 for delayed filing of Cost Audit
report in Form CRA-4 for FY 2023-24. In this
connection, the Company has responded to the
show cause notice on 24/04/2025 stating the
delayed filing the said form was due to oversight.

The Board took note of the above observations of the
auditors at their meeting held on 28^th July, 2025 and
resolved to ensure due compliance henceforth and
make sure that the reporting's are filed on time.

Secretarial Audit Report is attached to this
report as Annexure-B

14. PARTICULARS OF LOANS, GUARANTEES
OR INVESTMENTS UNDER SECTION 186
[SECTION 134 (3) (g)]

During the financial year 2024-25, the Company has
given loans to Ananya SIP RF Technologies Private
Limited and Apollo Defence Industries Private Limited,
subsidiaries of the Company (details provided below).
Further, the Company has provided a corporate
guarantee in favour of Axis Trustee Services Limited,
on behalf of the Debenture Holders, for the issuance
of debentures by Apollo Defence Industries Private
Limited, a subsidiary company. Except for the
above, the Company has not given any other loans
or guarantees, nor has it provided any security or
made any acquisition of securities of any other
body corporate, as referred to in Section 186 of the
Companies Act, 2013 and the Companies (Meetings
of Board and its Powers) Rules, 2014.

Further, during the period under review, the Company's
subsidiary, Apollo Defence Industries Private Limited
invested in M/s. Apollo Strategic Technologies
Private Limited, to the extent of 51% by subscribing
to 5,100 equity shares of Rs. 10 each, amounting to
a total investment of Rs.51,000. Thereby, M/s. Apollo
Strategic Technologies Private Limited became the
Step-down Subsidiary of the Company with effect
from 10th December, 2024.

The details of the Loans, Guarantees and Investments
or security made during the year under review under

section 186 of the Companies Act, 2013 are given in
the Notes forming part of the financial Statements.

SUBSIDIARIES, JOINT VENTURES AND
ASSOCIATES [RULE 8(5)(iv) OF COMPANIES
(ACCOUNTS) RULES, 2014]

"Your Company has two subsidiary companies:
M/s. Ananya SIP RF Technologies Private Limited
(CIN: U74990TG2015PTC097610) and M/s.

Apollo Defence Industries Private Limited (CIN:
U26109TS2023PTC177370) and one step down
subsidiary: M/s.Apollo Strategic Technologies

Private Limited (CIN: U26109TS2024PTC191803).
The Company holds a 51% stake in M/s. Ananya SIP RF
Technologies Private Limited and a 76% stake in M/s.
Apollo Defence Industries Private Limited. Apart from
these, the Company does not have any joint ventures
or associate companies during the year under review.”

Pursuant to the provisions of Section 129, 134 and
136 of the Act read with rules made thereunder
and Regulation 33 of the SEBI Listing Regulations
the Company has prepared consolidated financial
statements of the Company and a separate statement
containing the salient features of financial statement
of subsidiaries in Form AOC-1 forms part of this
Annual Report as Annexure-C.

The annual financial statements and related detailed
information of the subsidiary companies shall be
made available to the members of the holding and
subsidiary company seeking such information on all
working days during business hours. The financial
statements of the subsidiary company shall also be
kept for inspection by any members during working
hours at the Company's registered office and that of
the subsidiary companies concerned.

In accordance with Section 136 of the Act, the audited
financial statements, including consolidated financial
statements and related information of the Company
and audited accounts of its subsidiaries, are available
on website, https://apollo-micro.com/investors/.

Pursuant to Section 134 of the Act read with rules
made thereunder, the details of developments of
subsidiaries of the Company are covered in the
Management Discussion and Analysis Report which
forms part of this Report.

Further, during the period under review, the Company's
subsidiary, Apollo Defence Industries Private Limited
invested in M/s. Apollo Strategic Technologies
Private Limited, to the extent of 51% by subscribing
to 5,100 equity shares of Rs. 10 each, amounting to

a total investment of Rs.51,000. Thereby, M/s. Apollo
Strategic Technologies Private Limited became the
Step-down Subsidiary of the Company with effect
from 10th December, 2024.

15. PARTICULARS OF CONTRACTS OR
ARRANGEMENTS WITH RELATED PARTIES
[SECTION 134 (3) (h)]

All related party transactions entered into by the
Company during the financial year 2024-25 were in
the ordinary course of business and on arm's length
basis and in compliance with the applicable provisions
of the Act and the SEBI Listing Regulations. During the
financial year under review, none of the transactions
entered into with related parties were material as
defined under the Act and SEBI Listing Regulations.

The particulars of contract or arrangements
entered into by the Company, during the financial
year 2024-25, with related parties referred to in
sub-section (1) of section 188 of the Companies
Act, 2013 including certain arm's length transactions
under third proviso thereto has been disclosed in
Form No. AOC -2, attached to the Board's report
as Annexure-D. The Policy on Related Party
Transactions as approved by the Board is uploaded
on the Company's website https://apollo-micro.com/
wp-content/uploads/2017/09/policy_on_related_
party_transactions.pdf under the Section "Investors”.

16. RESERVES [SECTION 134 (3) (j)]

During the financial year 2024-25, the Board of
Directors has not recommended transfer of any
amount of profit to any reserves. Hence, the amount
of profit for the financial year under review has been
carried forward to the Statement of Profit and Loss.

17. DIVIDEND [SECTION 134 (3) (k)]

Your Directors have pleasure in recommending a
dividend of 25% (? 0.25/- per Equity Share of face
value of ?1/- each) on the fully paid up Equity Shares
out of the profits of the Company for the financial
year 2024-25. The said dividend, if approved by the
shareholders, would result into a cash outflow of
approximately ? 8,33,83,113.50/- (The amount may
increase in view of the conversions of Convertible
Equity Warrants).

The dividend pay-out for the year under review
has been finalized in accordance with the dividend
distribution policy of the company.

18. DIVIDEND DISTRIBUTION POLICY

Regulation 43A of the SEBI Listing Regulations
mandates the top 1000 listed companies based on
their market capitalization to formulate a Dividend
Distribution Policy. We are pleased to inform you that
as on 31^st March, 2025, your Company is among the
top 1000 listed entities. The Company has a Dividend
Distribution Policy in place prior to the applicability
under Regulation 43A of the SEBI Listing Regulations
and the same is displayed on the company's website
under the web link https://apollo-micro.com/wp-
content/uploads/2017/12/DIVIDNED-DECLARATION-
POLICY.pdf. The Policy is also annexed herewith as
Annexure-E to the Board's Report.

19. MATERIAL CHANGES AND COMMITMENTS,
IF ANY [SECTION 134 (3) (l)]

There were 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 statements
relate and the date of this report.

20. CONSERVATION OF ENERGY, TECHNICAL
ABSORPTION AND FOREIGN EXCHANGE
EARNINGS AND OUTGO [SECTION 134 (3)
(m)]:

The Company continues its efforts to reduce
and optimize the energy consumption at its
manufacturing facility.

A. Conservation of Energy

The operations of the company are not energy
intensive. Adequate measures are taken to
conserve and reduce the energy consumption
like usage of LED Lights and power saving
centralized air conditioners.

Research & Development

During the year under review, Apollo Micro
Systems Limited has made substantial strides
in strengthening its indigenous technology
capabilities through focused investments in
strategic R&D initiatives. Our R&D efforts were
directed toward the development of critical
defence subsystems that are aligned with
current and emerging requirements of the
Indian Armed Forces.

Key advancements were made in the

following areas:

• Homing Systems for Lightweight Torpedoes:
Our team has achieved significant progress
in the algorithmic and hardware integration
of next-generation acoustic homing systems
for underwater platforms.

• Electromechanical Actuators: We have
completed critical design and validation
phases for actuator systems tailored for
SWARM platforms and missile fin control
applications, reinforcing our precision
guidance portfolio.

• Signal Processing Modules for Moored
Mines: Cutting-edge underwater processing
systems were prototyped and tested for
naval mine warfare applications.

• Avionics Systems: We have furthered our
expertise in ruggedized electronics for
mission-critical avionics packages, with
new designs entering the prototype stage.

• Anti-Submarine Warfare Systems: We have
successfully started our first ASW weapon
design and have made significant progress
in its development right from scratch by
Indigenizing fully and not just any reverse
engineering. This is a classic example of
our abilities build up in developing complete
weapon system platforms.

• Short Range Rockets: We have designed
Rocket Motor and warhead for short Range
Ground to air application and this Rocket
system shall undergo its trials in FY26.

In parallel, our R&D division has actively
contributed to multiple "Make” and "Make-
II” proposals under the Ministry of Defence's
innovation and indigenization frameworks. We
are proud to share that AMS was awarded a
Make-II project by the Indian Army, reflecting
the trust and confidence in our engineering and
product realization capabilities.

Additionally, recognizing the importance of
building modular and scalable technology blocks
for future tri-services requirements, we have
expanded our internal technology roadmap.
Several development initiatives have been

undertaken proactively to align with anticipated
procurement programmes from the Army,
Navy, and Air Force.

Consistent with our philosophy of long-term
investment in indigenous capabilities, AMS
has invested ?3,352.30 Lakhs in R&D during
FY 2024-25. These investments are expected
to start yielding commercial value and order
conversions beginning FY 2025-26 and
FY 2026-27 onwards, positioning AMS as a
key player in next-generation weapon systems,
sub-systems, and electronics for the Indian
defence ecosystem.

B. Technical Absorption

The Company works on in house Technology.

C. Foreign Exchange Earnings and Outgo:

Foreign Exchange outgo and earnings

21. ANNUAL EVALUATION ON PERFORMANCE
[SECTION 134(3) (p)]:

Pursuant to the provisions of the Act and SEBI Listing
Regulations, the Board has carried out an annual
evaluation of performance of its own, the Committees
thereof and the Director

The Board is pleased to report that the result thereof
show that the Company is well-equipped in the
management as well as the governance aspects.

The Independent Directors at their separate meeting
held on 25^th March, 2025 reviewed the performance
of Non-Independent Directors (Executive & Non¬
Executive), Chairperson, performance of the Board
as a whole and its various committees and also
assessed the quality, quantity and timelines of flow
of information between the Company Management
and the Board.

The Independent Directors expressed their satisfaction
on the overall functioning and effectiveness of the
Board, Committees and performance of individual
Non-Independent Board members and the Chairman.

The Board (excluding the Independent Directors
being evaluated) has evaluated the performance of
the Independent Directors on parameters such as
Knowledge, Experience, Integrity, Independence of
judgment, adherence to Code of Conduct, Corporate
Governance, Contribution, attendance & level of
participation and fulfilment of Independence Criteria
etc. in accordance with the Company's "Policy https://
apollo-micro.com/wpcontent/uploads/2017/09/
POLICY_FOR_EVALUATION_OF_DIRECTORS_AND_
KEY_MANAGERIAL_PERSONNEL_AND_OTHER_
EMPLOYEES.pdf for evaluation of Directors and Key
Managerial Personnel and other employees”.

The Board has expressed its satisfaction to
the performance of the Independent Directors
and appreciated the level of participation of
Independent Director

22. EMPLOYEE STOCK OPTIONS SCHEME [RULE
12(9) OF COMPANIES (SHARE CAPITAL AND
DEBENTURES) RULES, 2014]:

The Company has in place the Employee Stock Option
Scheme 2018 (ESOS-2018) to attract, reward, motivate
and retain its employees, who have shown high
levels of individual performance and for the unusual
efforts, put in by them to improve the operational
and financial performance of the Company, which
ultimately contributes to the success of the Company.

During the financial year 2024-25, no grant of options
was made to the employees of the company, under
the ESOS scheme. The disclosures according to the
provisions of the Act and SEBI (Share Based Employee
Benefits and Sweat Equity) Regulations, 2021 as on
31^st March, 2025 with regard to the Apollo Employee
Stock Option Scheme 2018 (ESOS-2018) are annexed
to this Report as Annexure-F.

23. CHANGE IN THE NATURE OF BUSINESS
[RULE 8(5)(ii) OF COMPANIES (ACCOUNTS)
RULES, 2014]

There is no change in the nature of the business of
the Company during the financial year 2024-25.

24. CHANGE IN THE DIRECTORS OR KEY
MANAGERIAL PERSONNEL [RULE 8(5)(iii)&
8(5)(iii)(a) OF COMPANIES (ACCOUNTS)
RULES, 2014]

The composition of the Board is in conformity with
Regulation 17 of the SEBI Listing Regulations and
Section 149 of the Companies Act, 2013 mentioned
in Corporate Governance report attached hereto
as Annexure G. There is an optimum combination
of Executive and Non-Executive Directors. The
Company has 8 (Eight) Directors as on 31^st March,
2025. Out of the 8 (Eight) Directors 3 (Three) are
Executive Directors, 3(Three) Non-Executive-
Independent Directors and 2 (Two) Non- Executive
Non-Independent Director. The Chairman of the
Company is a non-executive independent director.

Pursuant to the provisions of the Section 149 of
the Act, the Independent Directors have submitted
declarations that each of them meets the criteria
of independence as provided in Section 149(6) of
the Act along with the rules framed under the SEBI
Listing Regulations. There has been no change in the
circumstances affecting their status as Independent
Directors of the Company.

Ministry of Corporate Affairs vide its Notification
number G.S.R. 804(E) dated October 22^nd, 2019
had amended the Companies (Appointment and
Qualification of Directors) Rules, 2014 and its
amendment thereof requiring the registration of
Independent Directors in the databank maintained by
the Indian Institute of Corporate Affairs ("IICA”) and
passing the online proficiency self-assessment test
conducted by the IICA within two(2) year from the
date of inclusion of his/her name in the data bank.

• Mr. Raghupathy Goud Theegala, Independent
Director has duly registered his name in the
data bank of IICA w.e.f. 25^th February, 2020 and
passed the online proficiency self-assessment
test on 22^nd February 2022.

• Mrs. Karunasree Samudrala, Independent Director
has duly registered her name in the data bank
of IICA w.e.f. 25^th February, 2020 and passed
the online proficiency self-assessment test on
10^th April, 2020.

• Mr. Chandrashekar Matham, Independent
Director has duly registered his name in the
data bank of IICA w.e.f. 06^th August, 2024 and is
exempted from taking the online proficiency self¬
assessment test.

In opinion of the Board, they fulfill the conditions
specified in the Act and the Rules made there under
for the appointment as Independent Directors and are
independent of the management.

The Independent Director's possess the relevant
integrity, expertise, experience and proficiency.

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, commission, if any.

During the financial year 2024-25, no changes took
place in the Directors or Key Managerial Persons
(KMP's) of the Company.

Mrs. Kavya Gorla (DIN:06407238) retires by rotation
at the ensuing 28^th Annual General Meeting and being
eligible, offers herself for reappointment.

Additional information on reappointment of Mrs.
Kavya Gorla (DIN:06407238 ) as director and as
required under regulation 36(3) of the SEBI Listing
Regulations is given in the Notice convening the
forthcoming AGM.

25. DEPOSITS [RULE 8(5) (v) OF COMPANIES
(ACCOUNTS) RULES, 2014]

The Company has not accepted any deposits within
the meaning of Section 73 of the Act read with the
Companies (Acceptance of Deposits) Rules, 2014.
There are no unpaid or unclaimed deposits as the
Company has never accepted deposits within the
meaning of the Act and the rules made thereunder.

26. DETAILS OF SIGNIFICANT AND MATERIAL
ORDERS PASSED BY THE REGULATORS OR
COURTS OR TRIBUNAL [RULE 8(5) (vii) OF
COMPANIES (ACCOUNTS) RULES, 2014]

During the financial year 2024-25, the Company
hasn't received any significant and material orders
that impact the going concern status and company's
operations in future.

27. INTERNAL FINANCIAL CONTROLS [RULE
8(5)(viii) OF COMPANIES (ACCOUNTS)
RULES, 2014]

The Company has kept in place adequate financial
controls to check and control any defects and frauds
in the Company. Adequate internal control systems
commensurate with the nature of the Company's
business, its size, and complexity of its operations are
in place and have been operating satisfactorily. Internal
control systems comprising policies and procedures
are designed to ensure reliability of financial reporting,
timely feedback on achievement of operational and
strategic goals, compliance with policies, procedure,
applicable laws and regulations and that all assets and
resources are acquired economically, used efficiently
and adequately protected.

The Board of Directors of the Company have adopted
various policies like Related Party Transactions Policy,
Vigil Mechanism Policy and such other procedures
for ensuring the orderly and efficient conduct of its
business for safeguarding of its assets, the prevention
and detection of frauds and errors, the accuracy and
completeness of the accounting records, and the
timely preparation of reliable financial information.

28. PARTICULARS OF EMPLOYEES

The information required under section 197(12) of the
Act read with Rule 5(1) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules,
2014 respectively, are given in Annexure-H, which
forms partof this Report.

The statement containing names of top ten employees
in terms of remuneration drawn and the particulars of
employees as required under Section 197(12) of the
Act read with Rule 5(2) and 5(3) of the Companies
(Appointment and Remuneration of Managerial
Personnel) Rules, 2014, is provided in a separate
annexure (Annexure H) forming part of this report .
Further, the report and the accounts are being sent
to the Members excluding the aforesaid annexure. In
terms of Section 136 of the Act, the said annexure
is open for inspection and any Member interested
in obtaining a copy of the same may write to the
Company Secretary.

29. AUDITORS AND AUDIT REPORT

(a) Statutory Auditors & their Reports

M/s. S T Mohite & Co. (FRN 011410S), Hyderabad

were appointed as Statutory Auditors of the

Company in the Annual General Meeting held
on August 25, 2022 for a period of 5 Years
and holds office until the conclusion of the
30^th Annual General Meeting to be held in the
calendar year 2027.

Further, the remuneration to be paid to Statutory
Auditors for FY 2024-25 is ? 13.00 Lakhs plus
out of pocket expenses and applicable taxes
and the remuneration for the remaining tenure of
their second term as Statutory Auditors shall be
mutually agreed between the Board of Directors
and M/s. S T Mohite & Co, from time to time.

The report of the Statutory Auditor forms part
of this Annual Report and Annual Accounts
2024-25. 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.

Further, M/s. S T Mohite & Co. have confirmed
their eligibility for their appointment as Statutory
Auditors and the same are within the limits as
specified in section 141 of the Companies Act,
2013 and have also confirmed that they are
not disqualified from continuing as Auditors
of the Company.

The Notes on financial statement referred to in
the Auditors' Report are self-explanatory and do
not call for any further comments.

(b) Internal Auditors

As per the provisions of Section 138 of the
Companies Act, 2013 and the rules made
thereunder, the Board of Directors in its
meeting held on 23^rd May, 2025 had appointed
M/s. E Sateesh Reddy & Associates , Chartered
Accountants, Hyderabad (ICAI Firm Registration
No. 014888S), as Internal Auditor to conduct
the internal audit of the Company for the
Financial Year 2025-26 on a remuneration of
Rs.6,00,000/- per annum

The Internal Audit Report for the Financial Year
2024-25 issued by M/s Surya Pavan & Co,
Chartered Accountants, Vijayawada is submitted
which is self-explanatory and do not call for any
further explanation of the Board.

(c) Cost Auditors

In terms of Section 148 of the Act, the Company
is required to maintain cost records and have
the audit of its cost records conducted by a
Cost Accountant. Cost records are prepared and
maintained by the Company as required under
Section 148(1) of the Act.

The Board of Directors of the Company in its
meeting held on 23^rd May, 2025 has, on the
recommendation of the Audit Committee,
approved the appointment of M/s G H Reddy &
Associates, Cost Accountants (Firm Registration
Number - 002110) for the year ending March
31, 2026. M/s G H Reddy & Associates have
experience in the field of cost audit.

The Board, also on the recommendations of the
Audit Committee approved the remuneration of
?1.5 lakh (Rupees One lakh Fifty Thousand only)
(excluding applicable taxes and reimbursement
of out-of-pocket expenses) payable to Cost
Auditors for FY 2025-26. The same is placed for
ratification of Members and forms part of the
Notice of the AGM.

(d) Secretarial Auditors

As per the provisions of Section 204 of the
Companies Act, 2013 and the rules made
thereunder, the Board of Directors in its meeting
held on 20^th May, 2024 had appointed M/s. MNM
& Associates, Company Secretaries in Practice
(Firm Registration No: P2017TL059600),
Hyderabad as Secretarial Auditor of the
Company, to conduct the Secretarial audit for
the Financial Year 2024-25.

The Secretarial Audit Report, pursuant to the
provisions of Section 204 read with Section
134(3) of the Companies Act, 2013, issued by
Ms. Sridevi Madati, Practicing Company
Secretary, in Form MR-3 for the financial year
2024-25 is annexed to the Board's Report
as Annexure-B.

Further, the Board in its meeting held on 23^rd May,
2025, has approved the appointment of M/s. MNM
& Associates, Company Secretaries, Hyderabad
(Firm Registration No: P2017TL059600) as
the Secretarial Auditor of the Company for a
period of five (5) consecutive financial years
commencing from FY 2025-26 to FY 2029-30,
subject to approval of the Shareholders at the
ensuing Annual General Meeting of the Company

30. MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report
("MD&A”) for the year under review as stipulated
under the SEBI Listing Regulations is presented in a
separate section forming part of this Annual Report.

31. REPORT ON CORPORATE GOVERNANCE

The Company has complied with the Corporate
Governance requirements under the Companies
Act, 2013 and as stipulated under the SEBI Listing
Regulations. A separate section titled Corporate
Governance Report as Annexure-G under the SEBI
Listing Regulations along with a Corporate Governance
Certificate from the Practicing Company Secretary in
the Annexure-I and CFO Certification in compliance
with Regulation 17(8) of SEBI Listing Regulations in
the Annexure-J forms the part of this report.

32. INTERNAL CONTROL SYSTEMS AND THEIR
ADEQUACY

The Company has an Internal Control System,
commensurate with the size, scale and complexity
of its operations. To maintain its objectivity and
independence, the Internal Audit Functions reports to
the Board including Audit Committee of the Company.
Based on the report of internal audit function, process
owners undertake corrective action in their respective
areas and thereby strengthen the controls.

33. VIGIL MECHANISM

The Company's Board of Directors, pursuant to the
provisions of Section 177(9) of the Act read with Rule 7
of the Companies (Meetings of Board and its Powers)
Rules, 2014, has framed 'Whistle Blower Policy' for
Directors and employees of the Company. The policy
is to provide a mechanism, which ensures adequate
safeguards to employees and Directors from any
victimisation on raising of concerns of any violations
of legal or regulatory requirements, incorrect or
misrepresentation of any, financial statements and
reports, and so on. The employees of the Company
have the right/option to report their concern/
grievance to the Chairman of the Audit Committee.
The Company is committed to adhere to the highest
standards of ethical, moral and legal conduct of
business operations. The Whistle Blower Policy is
hosted on the Company's website https://apollo-
micro.com/wp-content/uploads/2017/09/WHISTLE-
BLOWER-POLICY.pdf under the section "Investors”.

34. INVESTORS EDUCATION AND PROTECTION
FUND (IEPF)

Pursuant to section 124 of the Act, Dividends that are
unclaimed for a period of seven years are required
to be transferred to the IEPF, established by the
Government of India. During the year under review,
there was no outstanding amount of unclaimed
dividends which was liable to be transfer to the IEPF.

35. HUMAN RELATIONS

The Company continues to have cordial and
harmonious relationship with its employees and
thank all employees for their cooperation and the
contribution towards harmonious relationship and
progress of the company.

36. DISCLOSURE UNDER THE SEXUAL
HARASSMENT OF WOMEN AT WORK
PLACE (PREVENTION, PROHIBITION AND
REDRESSAL) ACT, 2013

Your Company is committed to provide work
environment that ensures every employee is treated
with dignity and respect and afforded equitable
treatment. The Company is also committed to
promoting a work environment that is conducive to the
professional growth of its employees and encourages
equality of opportunity and will not tolerate any form
of sexual harassment and to take all necessary steps
to ensure that its employees are not subjected to any
form of harassment.

Thus, in order to create a safe and conducive work
environment the Company has in place a policy for
prevention of sexual harassment in accordance
with the requirements of the Sexual Harassment
of women at workplace (prevention, Prohibition, &
Redressal) Act, 2013.

Further, the Company has complied with provisions
relating to constitution of Internal Complaints
Committee ("ICC”) under Sexual Harassment of
women at workplace (Prevention, Prohibition, &
Redressal) Act, 2013. The Committee has been set
up to redress complaints received regarding sexual
harassment. The detail of the committee members
is available on the website of the Company https://
apollo-micro.com/wp-content/uploads/2019/09/
REVISED-Workplace-Sexual-Harassment-Policy-
apollo-micro-systems-limited.pdf under the section
"Investors”. All employees (permanent, contractual,
trainees, temporary) are covered under this policy.

During the year under review, there were no cases filed
under the Sexual Harassment of Women at Workplace
(Prevention, Prohibition and Redressal) Act, 2013.

37. DETAILS OF APPLICATION MADE OR
ANY PROCEEDING PENDING UNDER THE
INSOLVENCY AND BANKRUPTCY CODE,
2016 (31 OF 2016) DURING THE YEAR [RULE
8(5)(xi) OF COMPANIES (ACCOUNTS)
RULES, 2014]

During the year under review, the Company did
not make any applications under the Insolvency
and Bankruptcy Code, 2016. Additionally, there
are no ongoing proceedings against the Company
under the said Code.

38. DETAILS OF DIFFERENCE BETWEEN AMOUNT OF
THE VALUATION DONE AT THE TIME OF ONE
TIME SETTLEMENT AND THE VALUATION
DONE WHILE TAKING LOAN FROM THE
BANKS OR FINANCIAL INSTITUTIONS [RULE
8(5)(xii) OF COMPANIES (ACCOUNTS)
RULES, 2014]

During the financial year under review, there has
been no instance of one-time settlement with any
banks or financial institutions. Therefore, no valuation
differences are reported.

39. APPLICABILITY OF BUSINESS RESPONSIBILITY
AND SUSTAINABILITY REPORT (BRSR)

In accordance with Regulation 34(2)(f) of the Securities
and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations, 2015,
as amended, the top 1,000 listed entities based
on market capitalization as on 31^st March of every
financial year are required to include a Business
Responsibility and Sustainability Report (BRSR) as
part of their Annual Report.

As of March 31, 2024, Apollo Micro Systems
Limited is ranked within the top 1,000 listed entities
based on its market capitalization, thereby making
the BRSR applicable to the Company for the
financial year 2024-25.

The BRSR report outlines the Company's initiatives and
performance related to sustainability and responsible

--------------—----, ----- - ---------- zj ............. —

ESG principles.

The BRSR report has been prepared in compliance
with the SEBI (Listing Obligations and Disclosure
Requirements) Regulations, 2015 and is annexed to
the Board's Report as Annexure - K.

40. COMPLIANCE WITH SECRETARIAL STANDARDS

The Directors state that the Company has complied
with the Secretarial Standards issued by the Institute
of Company Secretaries of India on Meetings of the
Board of Directors (SS-1) and General Meetings (SS-2).

41. DIRECTORS AND OFFICERS INSURANCE
(D&O)

As per the requirements of Regulation 25(10) of
the SEBI Listing Regulations, the Company has
taken Directors and Officers Insurance ('D&O') for
all its directors.

42. BOARD OPINION ON THE INDEPENDENT
DIRECTOR APPOINTED:

The Board declares that in their opinion, all the
independent directors are persons of integrity and
possess all the relevant expertise and experience
(including the proficiency).

43. UNCLAIMED DIVIDENDS:

In accordance with the provisions of Sections 124
and 125 of Act and Investor Education and Protection
Fund (Accounting, Audit, Transfer and Refund) Rules,
2016 (IEPF Rules) Unpaid / Unclaimed Dividends and
dividends not encashed / claimed within seven years
from the date of declaration are to be transferred
to the Investor Education and Protection Fund
(IEPF) Authority.

The IEPF Rules mandate companies to transfer
shares of Members whose dividends remain unpaid
/ unclaimed for a continuous period of seven years to
the demat account of IEPF Authority.

The Members whose dividend / shares are transferred
to the IEPF Authority can claim their shares / dividend
from the Authority.

Members are requested to claim dividend(s) which
have remained unclaimed, by sending a request to the
Company at e-mail ID cs@apollo-micro.com or to the
Company's Registrar and Share Transfer Agent (RTA) at
e-mail bsshyd@bigshareonline.com or to their postal
address 306, Right Wing, 3^rd Floor, Amrutha Ville, Opp:
Yashoda Hospital, Rajbhavan Road, Hyderabad - 500
082 (India), Telangana, India. During the financial year
2024-25, the Company declared and paid a dividend,
and the list of shareholders with unclaimed dividends
has been updated on the Company's website at:
https://apollomicro.com/investor-corner/unpaid-
andunclaimed-dividend-and-shares/

During the financial year, the Company did not
transfer any unclaimed or unpaid amounts or shares
to the Investor Education and Protection Fund (IEPF).

44. STATEMENT THAT THAT COMPANY HAS
COMPLIED WITH MATERNITY BENEFIT ACT:

The Company has complied with the provisions of
Maternity Benefit Act.

45. NUMBER OF EMPLOYEES AS ON CLOSE OF
FINANCIAL YEAR

46. ACKNOWLEDGEMENTS

The Directors thank all customers, bankers, investors,
shareholders, vendors and other stakeholders
for their continued support and patronage during
the year under review. The Board appreciates its
employees for their efforts, hard work and dedication,
which enabled the Company to achieve the targets
and recognitions.

For and on benau ot the Board
APOLLO MICRO SYSTEMS LIMITED

Sd/- Sd/-

Place: Hyderabad Karunakar Reddy Baddam Krishna Sai Kumar Addepalli

Date: 28^th July, 2025 Managing Director Whole Time Director (Operations)

DIN:00790139 DIN: 03601692