Directors Report of Droneacharya Aerial Innovations Ltd.

Mar 31, 2024

The Directors of your company are pleased to present the seventh (7^th) Annual Report on the business and operations of the Company along with the Audited Standalone as well as Consolidated Financial statements for the financial year ended 31.03.2024.

Highlights of the Financial year 2023-24 are as follows:

1. FINANCIAL SUMMARY

(INR in lakhs)

Particulars	Standalone		Consolidated
	FY 2023 -24	FY 2022-23	FY 2023-24	FY 2022-23
Revenue from operations	3519.37	1856.94	3525.28	1856.94
Other income	200.61	56.61	201.18	56.61
Total Income	3719.98	1913.55	3726.46	1913.55
EBITDA	1239.31	557.92	1229.06	557.92
Tax Expenses: Current Tax Expenses Deferred Tax Expenses	240.98 (15.34)	106.35 14.74	240.98 (15.34)	106.35 14.74
Net PAT	620.39	341.97	610.02	341.97
Diluted EPS	2.59	1.77	2.54	1.77

2. STATE OF COMPANY’S AFFAIRS

The company registered a stellar growth in standalone revenue at INR 3519.37 Lakhs during the Financial Year 2023-24 as compared to INR 1856.94 Lakhs in the Financial Year 202223. The Profits after Tax (“PAT”) stood at INR 620.39 Lakhs in Financial Year 2023-24 as compared to INR 341.97 Lakhs in the previous financial year.

The consolidated revenue stood at INR 3525.28 Lakhs and the PAT was INR 610.02 Lakhs during the Financial Year 2023-24. The Company has consolidated its accounts with M/s PYI Technologies Private Limited pursuant to the acquisition of 51% in the later on January 02, 2024.

The meteoric performance is due to the company’s steady and consistent growth as a Drone Solution Provider and Drone Centric Training Organization. Currently, DroneAcharya is India’s leading and pioneering DGCA-certified Drone pilot training in the private segment. The company has also made significant strides in bagging multiple International Drone service projects and valuable industrial connections with Drone manufacturers,

investment in drone-centric companies and acquisitions of value-addingfirms in India and globally.

3. TRANSFER TO RESERVES

During the year under review, the Company has not transferred any amount to Reserves.

4. DIVIDEND

Your directors have not recommended any dividend on equity shares for the year under review to conserve the resources for the future growth of the Company.

5. CHANGE IN THE NATURE OF BUSINESS

During the year under review, there was no change in the nature of the business of the Company.

6. FINANCIAL STATEMENTS

Your Company has consistently applied applicable accounting policies during the year under review. Management evaluates all recently issued or revised accounting standards on an ongoing basis. The Company has published standalone financial results on a halfyearly basis which were subjected to limited review and published the audited consolidated and standalone audited financial results on an annual basis along with the auditor’s report. There were no revisions made to the financial statements during the year under review.

The Financial Statements of the Company are prepared in accordance with the applicable Indian Accounting Standards (“Ind-AS”) as issued by the Institute of Chartered Accountants of India and form an integral part of this Report.

7. MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY

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 the report.

8. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENT UNDER SECTION 186 OF THE COMPANIES Act, 2013.

Particulars of loans given, security provided, investments made and guarantees given during the year as covered under section 186 of the Companies Act, 2013 (“the Act”) form part of the notes to the standalone financial statements of the Company as attached to this annual report.

9. DEPOSITS

Your Company has not accepted any deposits from the public during the year under review, falling within the ambit of Section 73 of the Act, read with the Companies (Acceptance of Deposits) Rules, 2014.

Further, Form DPT-3 has been filed with the Registrar of Companies, Pune (“ROC”) within the prescribed timeline.

10. DETAILS OF SUBSIDIARY, ASSOCIATES AND JOINT VENTURES

i) Subsidiaries

During the year under review, the Company acquired 5,100 equity shares i.e 51% stake in M/s PYI Technologies Private Limited on January 02, 2024. This strategic acquisition was considered a pivotal move in DroneAcharya''s expansion plan, aimed at broadening its service spectrum and enhancing its value-added offerings within the drone industry.

Pursuant to Section 129(3) of the Act, read with Rule 5 of the Companies (Accounts) Rules, 2014, a statement containing salient features of the financial statements of Subsidiaries/Associate Companies/Joint Ventures is given in Form AOC-1 and forms an integral part of this Report.

As of March 31, 2024, we do not have any material subsidiary as per the threshold requirements given in the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”).

11. SHARE CAPITAL

Authorized Equity Share Capital :

As on March 31, 2024, the Authorized Share Capital of the Company is Rs. 30,00,00,000/-(Rupees Thirty Crores) divided into 2,99,50,000 (Two Crores Ninety Nine Lakhs and Fifty Thousand) Equity Shares of Rs. 10/- (Rupees Ten) each and 50,000 (Fifty Thousand) Preference Shares of Rs. 10/- (Rupees Ten) each.

There were no changes made to the Authorized Share Capital of the Company during the year under review.

Paid-up Equity Share Capital:

As on March 31, 2024, the Paid-up Equity Share Capital of the Company is Rs. 23,98,86,000/- (Rupees Twenty-Three Crores Ninety-Eight Lakhs and Eighty-Six Thousand) divided into 2,39,88,600 (Two Crores Thirty-Nine Lakhs Eighty-Eight Thousand and Six Hundred) Equity Shares of Rs. 10/- (Rupees Ten) each.

Further, during the year under review, the Company did not issue any shares or grant stock options or equity shares to the employees.

Issue of Debentures, Bonds and any other non-convertible securities/warrants:

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

12. PARTICULARS OF CONTRACT OR ARRANGEMENT WITH RELATED PARTY TRANSACTION

The Company has not entered into any material Related Party Transaction (“RPT”) during the financial year 2023-24. All Related Party Transactions are placed before the Audit Committee for prior approval. Prior omnibus approval of the Audit Committee is obtained for the RPTs which are repetitive or when the need for these transactions cannot be foreseen in advance. The company has adopted a Related Party Transaction Policy in line with the requirements of the Companies Act, 2013 and the Listing Regulations, as amended from time to time, which is available on the website at www.droneacharya.com. The policy intends to ensure proper reporting, approval and disclosure processes are in place for all the transactions between the company and its related parties.

All RPTs entered during the year were in the ordinary course of business and on an arm’s length basis and not material in nature in terms of Section 188 of the Act. Thus, disclosure in Form AOC-2 in terms of Section 134 is not required. There were no material related party transactions during the year under review with the Promoters, Directors or Key Managerial Personnel of the Company.

Details of all related party transactions are mentioned in the notes to financial statements forming part of the Annual Report.

13. INTERNAL FINANCIAL CONTROL AND THEIR ADEQUACY

The Company has in place adequate internal financial controls with reference to the Financial Statements. The Board routinely assesses internal control systems, the effectiveness of the internal audit function, and important internal audit discoveries in collaboration with management.

14. DECLARATIONS GIVEN BY INDEPENDENT DIRECTORS

The Company has obtained the required declarations and disclosures from the Independent Directors in accordance with Section 149(7) and Section 184(1) of the Act, confirming their compliance with the independence criteria outlined in Section 149(6) of the Act and under the applicable provisions of the Listing Regulations by disclosing their interest in form MBP-1. All the Directors have certified that the disqualifications mentioned under sections 164, 167 and 169 of the Act do not apply to them.

The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV 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, fulfill the conditions of independence as specified in the Act and the 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. The Directors and the senior management personnel have affirmed compliance with the Code of Conduct for Directors and Senior Management Personnel.

15. DETAILS OF THE DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP)

Board Composition and Size

An enlightened Board sets the tone for a positive leadership culture which is essential for the long-term success of the company. By prioritizing strategic decision-making and fostering a collaborative environment, our Board members play a crucial role in achieving the organization’s growth while maintaining sustainable growth. Their vision and guidance empower the management and employees at all levels to contribute effectively ultimately leading to a thriving company.

Our Board brings together a blend of unique skills, qualities, viewpoints, and expert knowledge in key and technical areas concerning the field of business and are from a range of diverse backgrounds. The Board as part of its succession planning exercise, periodically reviews its composition to ensure that the same is closely aligned with the strategy and long-term needs of the Company.

The Board of Directors of the company has an optimum combination of Executive and NonExecutive Independent Directors with rich professional experience and background. As on March 31,2024, the Company’s Board Consists of 6 Directors as follows:

NAME OF THE DIRECTOR	DIN	CATEGORY
Mr. Prateek Srivastava	07709137	Chairman and Managing Director
Mrs. Nikita Srivastava	08082593	CFO & Executive Director
Mrs. Bhanupriya Thakur	08276607	Non-Executive Independent Woman Director
Mr. Utsav Jasapara	09711346	Non-Executive Independent Director
Mr. Mangina Srinivas Rao	08095079	Non-Executive Independent Director
Mr. Raj Kumar Srivastava*	07289955	Additional Director - Independent

*During the year under review, Mr. Raj Kumar Srivastava (DIN: 07289955) was appointed as an Additional Director - Independent with effect from February 06, 2024 for a term of 5 years. His appointment is subject to approval from the Members of the Company through Special Resolution as per the provisions of Regulation 17 of the Listing Regulations.

Independent Directors fulfil the criteria as specified in section 149(6) of the Companies Act, 2013. The Board is Chaired by the Managing Director who is also a promoter of the Company.

Key Managerial Personnel (KMP)

As on the date of this report, the following are the Key Managerial Personnel (KMPs) of the Company as per section 2(51 )read with Section 203 of the Act:

NAME OF THEKMP	DESIGNATION
Mr. Prateek Srivastava	Managing Director
Mrs. Nikita Srivastava	Chief Financial Officer
Mr. Harshal Kher*	Company Secretary and Compliance Of icer

During the year under review, Ms. Mukula Jayant Joshi, former Company Secretary and Compliance officer of the Company tendered her resignation on October 10, 2023 from the said position and consequently, the Board of Directors appointed Mr. Harshal Kher as the Company Secretary and Compliance Officer of the Company with effect from December 22, 2023.

16. BOARD OF DIRECTORS AND ITS MEETINGS Number of Board Meetings

During the financial year 2023-24, 5 (Five) Board meetings were held and the details of the number of directors present along with the dates are mentioned below in the table:

Sr. No	Date of the Board Meetings	Board strength as on the date of the Board Meeting	No. of Directors Present
1.	April 29, 2023	5	5
2.	August 24, 2023	5	5
3.	October 27, 2023	5	4
4.	December 22, 2023	5	5
5.	February 06, 2024	5	5

The time gap between two consecutive Board meetings was less than 120 days and a necessary quorum as per the Act and the Listing Regulations was also present in all the meetings.

17. COMMITTEES OF THE BOARD

The Board committees play a crucial role in corporate governance. These committees are responsible for conducting detailed reviews of items under their purview before presenting them to the Board. Generally, committee meetings are held before the Board meetings and the chairperson of each of the committees reports to the Board about the decisions taken at the committee meetings. At times, committees also provide recommendations to the Board on matters under their purview. The Board has established several statutory committees in accordance with the Act and the Listing Regulations, which include:

• Audit Committee

• Nominations and Remuneration Committee

• Stakeholder’s Relationship Committee

Details of each of the committees are mentioned below:

• Audit Committee

In accordance with the requirements of section 177 of the Act, the Board has established a qualified and independent Audit Committee. The committee comprises of 5 (Five) members and the majority of members are Independent Directors. The members of the Audit Committee have relevant experience in financial matters as well as have accounting or related financial management expertise and all of them are financially literate. The Chairman of the Audit Committee is an Independent Director and has expert knowledge in accounts & finance, banking, corporate laws, and governance matters.

The composition of the Audit Committee as on March 31,2024 including the changes made in the committee during the year is as under:

Name of the Director	Designation	Category
Mr. Utsav Jasapara	Chairman	Non-Executive Independent Director
Mr. Mangina Srinivas Rao	Member	Non-Executive Independent Director
Mrs. Bhanupriya Thakur	Member	Non-Executive Independent Director
Mr. Raj Kumar Srivastava1	Member	Non-Executive Independent Director
Mrs. Nikita Srivastava	Member	CFO & Director

*Mr. Raj Kumar Srivastava was appointed as a member of the Audit Committee with effect from February 06, 2024.

During the year under review, the audit committee met 4 (Four) times on April 29, 2023, August 24, 2023, October 27, 2023 and February 06, 2024.

The Company Secretary acts as the Secretary of the Audit Committee.

• Nominations and Remuneration Committee (NRC)

The Nomination and Remuneration Committee is responsible for evaluating the balance of skills, experience, independence, diversity and knowledge on the Board and for drawing up selection criteria, ongoing succession planning and appointment procedures for both internal and external appointments, including Managing Director and Management Committee.

In accordance with the provisions of Section 179 of the Act, the Company has constituted Nomination and Remuneration Committee (NRC), composition, terms of reference of which are in conformity with the said provisions.

The committee comprises of 5 (Five) members and majority members are Independent Directors.

The composition of NRC as on March 31, 2024 including the changes made in the committee during the year is as under:

Name of the Director	Designation	Category
Mr. Mangina Srinivas Rao	Chairman	Non-Executive Independent Director
Mr. Utsav Jasapara	Member	Non-Executive Independent Director
Mrs. Bhanupriya Thakur	Member	Non-Executive Independent Director
Mr. Raj Kumar Srivastava1	Member	Non-Executive Independent Director
Mr. Prateek Srivastava	Member	Chairman & Managing Director

During the year under review, the Nomination and Remuneration Committee met 4 (Four) times on April 29, 2023, August 24, 2023, December 22, 2023 and February 06, 2024.

The Company Secretary acts as the Secretary of the Nomination and Remuneration Committee.

Company’s policy on Directors’ Appointment and Remuneration

The Nomination and Remuneration Committee of the Company follows defined criteria for identifying, screening, recruiting and recommending candidates for election as a Director on the Board To operate effectively and efficiently, the Board has identified key skills, expertise, and competencies that are relevant to the Company’s business and sector.

The detailed policy on terms and conditions for the appointment of Independent Directors the policy of making payment to Non-Independent Directors is available on the website of the Company at www.droneacharya.com.

• Stakeholder’s Relationship Committee (SRC)

In accordance with the provisions of section 178 of the Act, the Company has framed a Stakeholder’s Relationship Committee (SRC) that is responsible for handling investor grievances.

The committee is comprised of 5 (Five) members, the majority of which are Independent Directors.

The composition of SRC as on March 31, 2024 including the changes made in the committee during the year is as under:

Name of the Director	Designation	Category
Mrs. Bhanupriya Thakur	Chairman	Non-Executive Independent Director
Mr. Utsav Jasapara	Member	Non-Executive Independent Director
Mr. Mangina Srinivas Rao	Member	Non-Executive Independent Director
Mr. Raj Kumar Srivastava*	Member	Non-Executive Independent Director
Mrs. Nikita Srivastava	Member	CFO & Director

*Mr. Raj Kumar Srivastava was appointed as a member of the SRC with effect from February 06, 2024.

As on March 31,2024, no complaints are pending on the SEBI SCORES portal.

During the year under review, the Stakeholder’s Relationship Committee met 3 (Three) times on April 29, 2023, August 24, 2023 and February 06, 2024.

The Company Secretary acts as the Secretary of the Stakeholder’s Relationship Committee.

18. COMPLIANCE WITH SECRETARIAL STANDARD

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

19. POLICY ON CORPORATE SOCIAL RESPONSIBILITY

As of the financial year ending on March 31, 2024, the Company was not subject to the Corporate Social Responsibility (CSR) as per the provisions of section 135 of the Act.

20. PARTICULARS OF REMUNERATION OF DIRECTORS, KEY MANAGERIAL PERSONNEL (KMP) AND EMPLOYEES

The information required to be disclosed in the Board’s Report pursuant to Section 197 of the Act read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, is attached to this report as Annexure - A.

21. DIRECTOR’S 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 Annual Accounts, the applicable accounting standards had been followed along with a proper explanation of material departures;

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

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

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

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 a proper system to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

22. BOARD EVALUATION

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

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

The particulars with respect to the conservation of energy, technology absorption and foreign exchange earnings and outgo are stipulated in Annexure - B which is enclosed to this report.

24. RISK MANAGEMENT POLICY

In line with this requirement, the Company has framed and implemented a risk management policy to identify and assess 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 the business risks. The Board periodically review the risks and suggests steps to be taken to control and mitigate the same through a properly defined framework.

25. ANNUAL RETURN

In compliance with section 92(3) read with section 134(3) of the Act, the annual returns of the Company as on March 31, 2024 is available on the website of the Company at www.droneacharya.com

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

The Company is committed to providing a healthy environment to all employees and thus does not tolerate any sexual harassment at the workplace. The Company has in place, a “Policy on Prevention, Prohibition and Redressal of Sexual Harassment" The policy aims to protect employees at the workplace and prevent and redress 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 complaints of sexual harassment.

27. HUMAN RESOURCES / INDUSTRIAL RELATIONS

Your Company believes that Human resources is the principal driver of change. The Company focuses on providing individual development and growth in a professional work culture that enables innovation, ensures high performance and remains empowering. The HR management systems and processes are designed to enhance organizational effectiveness and employee alignment. Your company has put in place a performance appraisal system that covers all employees.

28. MANAGEMENT DISCUSSION AND ANALYSIS REPORT

In compliance with Regulation 34 of the SEBI Listing Regulations, a separate section on Management Discussion and Analysis, as approved by the Board, which includes details on the state of affairs of the Company, forms part of this Annual Report.

29. WHISTLE BLOWER POLICY / VIGIL MECHANISM

The company has established a vigil mechanism for directors and employees to report concerns about unethical behavior. The mechanism provides adequate safeguard against victimization of employees raising any such concern and it allows direct access to the Chairperson of the Audit Committee in exceptional cases. During the financial year under review, no person was denied access to the Audit Committee. The whistle-blower policy is available on the website of the company at www.droneacharya.com

30. FRAUDS REPORTED BY AUDITORS

During the year under review, no frauds were reported by the auditors to the Audit Committee or the Board under Section 143(12) of the Act read with Rule 13 of the Companies (Audit and Auditors) Rules, 2014.

31. AUDITORS

a. Statutory Auditors

Members of the Company have approved the appointment of M/s K P R K & Associates, Chartered Accountants, Nagpur (FRN: 103051W), as the statutory auditors of the company for a consecutive term of five years at the Annual General Meeting held on September 30, 2022 till the conclusion of Annual General Meeting for the financial year 2026-27.

b. Secretarial Auditors

During the year under review, the Board of Directors had appointed M/s More Daliya and Associates, Practicing Company Secretaries, Nagpur, as the Secretarial Auditors of the Company for the financial year 2023-24.

c. Internal Auditors

M/s Veena Agrawal and Associates, Chartered accountants, Nagpur were as Internal Auditors of the Company for conducting Internal Audit functions for the financial year 2023-24.

32. STATUTORY AUDITORS’ REPORT

The Auditor’s Report for the FY 2023-24 on the standalone as well consolidated financial statements of the Company is attached to this Annual Report. The notes on Financial Statements referred to in the Annual Report are self-explanatory and do not call for any further comments. The Auditor’s Report does not contain any qualification, reservation or adverse remark.

33. 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. 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.

34. ACKNOWLEDGEMENT

Your Board expresses gratitude to all employees for their dedicated service and unwavering commitment to the Company''s goals. We also extend our sincere appreciation for the wholehearted support received from members, clients, bankers, and all other stakeholders

For DroneAcharya Aerial Innovations Limited

Prateek Srivastava Nikita Srivastava

Managing Director Director and CFO

DIN:07709137 DIN:08082593

1

Mr. Raj Kumar Srivastava was appointed as a member of the NRC with effect from February 06, 2024.

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Mar 31, 2023

Your Directors have pleasure in presenting the 06^th Annual Report together with the Audited Statement of Accounts of our Company for the Year ended 31^st March, 2023.

1. FINANCIAL PERFORMANCE:

The Company’s Financial Performance for the year ended 31^st March, 2023 is summarized as under:

Particulars	FY 2022 - 23	FY 2021 - 22
Revenue from Operations	18,56,95,000.00	3,58,73,000.00
Other Income	56,61,000.00	1,000.00
Total Income	19,13,56,000.00	3,58,74,000.00
Total Expenses	14,49,05,000.00	3,03,18,000.00
Profit Before Tax	4,64,51,000.00	55,56,000.00
(Less): Current Tax	1,06,35,000.00	14,59,000.00
Deferred Tax	14,74,000.00	32,000.00
Income Tax earlier years	0.00	0.00
Profit for the Year	3,43,42,000.00	40,65,000.00

2. DIVIDEND:

Considering future growth prospects for the company, the Board of Directors decided to retain the profits earned and therefore does not recommend any dividend for the financial year 2022-2023.

3. STATE OF COMPANY''S AFFAIRS AND FUTURE OUTLOOK:

The Company understands the importance of adapting to changing market conditions and evolving customer needs and believe that continuous improvement is key to staying ahead of the competition. Our focus is on streamlining processes, improving efficiency, and leveraging technology to drive growth and improve client satisfaction. Our aim is to create a more agile and innovative organization that is better equipped to respond to market changes and capitalize on new opportunities. The management is confident that the transformation will position the company for long-term success and growth.

4. THE AMOUNTS TRANSFERRED TO RESERVES, IF ANY:

Pursuant to provisions of section 134(1)(j) of the Companies Act, 2013, the Company has transferred an amount of Rs. 42,28,35,000/- (Securities Premium and profit during the year) to reserve account during the year under review.

5. THE CHANGE IN THE NATURE OF BUSINESS IF ANY:

During the year, there is no change in the nature of business of the Company.

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

No material changes and commitments affecting the financial position of the company have occurred from the closure of the financial year till the date of this report.

7. LISTING OF SHARES:

The Shares of the Company were listed on Bombay Stock Exchange SME platform, Mumbai on 23^rd of December 2022. The Company has paid the annual listing fee for the financial year 2022-2023.

The Equity Shares of the Company has the electronic connectivity under ISIN No. INE0MQD01015. To provide service to the Shareholders, the Company has appointed M/s. Bigshare Services Private Limited, Pinnacle Business Park, Office No S6-2, 6th, Mahakali Caves Rd, Next to Ahura Centre, Andheri East, Mumbai, Maharashtra 400093 as Registrar and Transfer Agent of the Company for existing physical based and allied Secretarial Services for its Members / Investors and for Electronic Connectivity with NSDL and CDSL.

8. SHARE CAPITAL:A. Authorized Capital and Changes thereon, if any:

The Authorized Share Capital of the Company is Rs. 30,00,00,000/- (Rupees Thirty Crore Only) divided into 2,99,50,000 (Two Crore Ninety - Nine Lakh and Fifty Thousand) Equity Shares of Rs.10/- (Rupees Ten) each and 50,000 (Fifty Thousand) Preference Shares Rs.10/-(Rupees Ten) each.

During the year authorized capital of the Company was increased from Rs. 50,00,000/-(Rupees Fifty Lakh only) to Rs. 30,00,00,000/- (Rupees Thirty Crore Only) in the Extra -Ordinary General Meeting of the Company held on 27^th April, 2022 at the Corporate of the Company.

B. Paid up Capital and Changes thereon, if any:

The Paid-up Share Capital of the Company is Rs. 23,98,86,000/- (Rupees Twenty - Three Crore Ninety - Eight Lakh and Eighty - Six Thousand Only) divided into 2,39,88,600 (Two Crore Thirty - Nine Lakh Eighty - Eight Thousand and Six Hundred) Equity Shares of Rs. 10/- (Rupees Ten Only) each.

During the year, the Company had issued Shares by way of following Allotments:

Sr. No	Type of Issue	Type of Shares	Number of Shares Issued	Face Value (in Rs.)	Total Amount (in Rs.)
1	Issue of 9% Compulsorily Convertible Preference Shares	Preference Shares	23,688	Rs.10/-	Rs. 2,36,880/-
2	Issue of 9% Compulsorily Convertible Preference Shares	Preference Shares	12,348	Rs. 10/-	Rs. 1,23,480/-
3	Bonus Shares	Equity Shares	1,75,21,614	N.A.	N.A.
4	Initial Public Offer (IPO)	Equity Shares	62,90,000	Rs.10/-	Rs. 6,29,00,000/-

*Note - All the preference shares have been converted into Equity Shares bearing face value of Rs. 10/- each.

9. DETAILS OF UTILIZATION OF FUNDS RAISED THROUGH INITIAL PUBLIC OFFER (IPO):

During the year under review, the Company raised funds aggregating to Rs. 33.96 Crores through public issue. The Company has utilized the funds raised through issue for the purpose as stated in the Letter of Offer. Details of utilization of fund as on 31st March, 2023 are as under:

Sr. No.	Original Object	Original Allocation	Funds Utilized	Amount of Deviation
1	Purchase of Drones and Other accessories	Rs. 27,98,66,000.00	Rs. 6,62,64,307.58	NIL
2	General Corporate Expenses	Rs. 5,97,94,000.00	Rs. 5,97,94,000.00	NIL

10. DEPOSITS:

The Company has not accepted nor renewed any deposits falling within the purview of section 73 of Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 as amended from time to time, during the year under the review and therefore details mentioned in Rule 8(5)(v) & (vi) of Companies (Accounts) Rules, 2014 relating to deposits covered under chapter V is not required to be given.

11. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186:

The Company has not entered in to any transaction viz. loan, guarantees or investments in any other company or person as specified under section 186 therefore other requirement under this section are Not Applicable to the Company.

Particulars	CIN of Company	Name of other Company	Amount Involved (in INR)
Loan Given	NA	NA	NA
Investment Made	NA	NA	NA
Guarantee Provided	NA	NA	NA

12. PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SUB-SECTION (1) OF SECTION 188 IN THE FORM AOC-2:

There are five (5) related party transactions as referred under Section 188(1) of the Companies Act, 2013 for the Financial Year 2022 - 23. All the related party transactions were carried out at arm’s length. Form AOC - 2 has been annexed to this Report as “Annexure A”.

13. DETAILS OF SUBSIDIARY, JOINT VENTURE AND ASSOCIATE COMPANIES:

During the year no company has become or ceased to become subsidiary or joint venture or associate of the company.

14. DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUBSECTION (12) OF SECTION 143 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT:

The auditor has not reported any frauds pursuant to provisions of section 143 (12) of the Companies Act, 2013 in his report.

15. EXPLANATIONS OR COMMENTS BY THE BOARD ON EVERY QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE BY THE AUDITOR IN HIS REPORT:

The Auditors have not given any qualification, reservation, Adverse remark or Disclaimer in his Auditor Report for the financial year ended 31^st March, 2023. The Observations made by the Auditors are self-explanatory and have been dealt with an Independent Auditor’s Report and its Annexures forming part of this Annual Report and hence do not require any further clarification.

16. SECRETARIAL AUDITOR:

The Board of Directors of the Company has appointed M/s. More Daliya & Associates, Practicing Company Secretaries, Nagpur, to conduct Secretarial Audit for the Financial Year 2022-23. The Secretarial Audit Report for the Financial Year ended on March 31, 2023 is annexed to this Report as “Annexure B”.

The auditor has given following qualifications in his report:

Auditor’s Qualifications	Management’s Response
The Company has not complied with the Secretarial Standards issued by ICSI for conducting Board Meetings and General Meetings.	The Management is striving to comply with all the applicable rules, regulations and standards. There shall be an endeavour to avoid non - compliance in the future.

The Company has failed to update its CIN from unlisted to Listed till date.

The Company has filed a e - form GNL - 2 with the Registrar of Companies (ROC), Bangalore and also couriered physical copies of required documents to ROC for change in CIN. But the form has not been processed and approved by the ROC yet.

17. INTERNAL AUDITOR:

The Board has appointed M/s. Veena Agrawal & Associates, Chartered Accountants, Firm Reg. No.145240W as Internal Auditors for the Financial Year 2022-23 under Section 138 of the Companies Act, 2013.

18. THE CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO, IN SUCH MANNER AS MAY BE PRESCRIBED:1) Conservation of energy:

Your Directors are of the opinion that with respect to conservation of energy and technology absorption as prescribed under Section 134(3)(m) of the Companies Act 2013 read with the Companies (Accounts) Rules, 2014 are not relevant in view of the nature of business activities of the Company and hence, are not required to be given.

2) Technology absorption:

The company is using latest technology and indigenization, which keeps on absorbing latest technology for the betterment of society at large.

3) Foreign exchange earnings and Outgo:

Your company has the following Foreign Exchange Earning and Outgo (after converting into INR) during the year:

Foreign Exchange Earnings - Rs. 3,10.57,084/-Foreign Exchange Outgo - Rs. 63, 97, 064/-

19. BOARD OF DIRECTORS AND KEY MANAGERIAL PERSONNEL:A. Present Composition of Board of Directors:

As on the date of the report, the Board of Directors of the Company comprises of total Five (5) directors. The Composition of the Board of Directors is as under:

Sr. No.	Name of the Director	DIN	Designation
1	Mr. Prateek Srivastava	07709137	Managing Director
2	Mrs. Nikita Srivastava	08082593	Director
3	Mrs. Bhanupriya Nikhil Thakur	08276607	Additional Director (Women Independent Director)
4	Mr. Mangina Srinivas Rao	08095079	Additional Director (Independent)
5	Mr. Utsav Jasapara	09711346	Additional Director (Independent)

B. Appointment/Cessation/ change in designation of directors:

During the year under review, there is no Appointment / Cessation or Change in designation of any Director.

However, the following appointments were made:

Name of the Director	DIN/ PAN	Designation	Date of Appointment/ Change in Designation	Nature of Change
Mrs. Bhanupriya Nikhil Thakur	08276607	Additional Director (Women Independent Director)	25/06/2022	Appointment
Mr. Mangina Srinivas Rao	08095079	Additional Director (Independent)	22/08/2022	Appointment
Mr. Utsav Jasapara	09711346	Additional Director (Independent)	22/08/2022	Appointment
Appointment of Key Managerial Personnel (KMP): During the year the following appointments were made:
Name of the KMP	PAN	Designation	Date of Appointment/ Change in Designation	Nature of Change
Mrs. Nikita Srivastava	BAZPM2614N	Chief Financial Officer (CFO)	02/07/2022	Appointment

Ms. Mukula	AZHPJ1038K	Company Secretary	27/06/2022	Appointment
Joshi		(CS)

20. NUMBER OF MEETINGS OF THE BOARD:

The Board of Directors met at Regular Intervals to transact business and the gap between two meetings was less than one hundred and twenty days. During the Financial Year 2022-23, Twenty - Three (23) meetings of the Board of Directors of the Company were held i.e., on the following dates: 01.04.2022, 05.04.2022, 16.05.2022, 21.05.2022, 09.06.2022, 10.06.2022,

17.06.2022, 25.06.2022, 27.06.2022, 30.06.2022, 02.07.2022, 05.07.2022, 11.07.2022 at 11:00 A.M, 11.07.2022 at 03:00 P.M., 06.08.2022, 12.08.2022, 22.08.2022, 25.08.2022,

27.08.2022, 20.10.2022, 27.10.2022, 08.11.2022, 20.12.2022 at 02:30 P.M., 20.12.2022 at 07:00 P.M., 20.12.2022 at 09:00 P.M. and 06.01.2023.

21. SEPARATE MEETING OF INDEPENDENT DIRECTORS:

During the year under review, a separate meeting of Independent Directors without the attendance of Non-Independent Directors and members of the Management, was held on 06^th Day of January, 2023, as required under Schedule IV of the Companies Act, 2013 (Code for Independent Directors) read with Regulations 25(3) of the SEBI (Listing Obligation & Disclosure Requirements) Regulations, 2015.

The Independent Directors inter-alia reviewed the performance of the Non-Independent Directors, Chairman of the Company and the Board as a whole

22. DIRECTOR RESPONSIBILITY STATEMENT:

Pursuant to Section 134(3) (c) of the Companies Act, 2013 the Board of Directors of the Company confirms that-

a) In the preparation of the annual accounts for the year ended March 31, 2023, 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 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 as at March 31, 2023 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, which are adequate and are operating effectively.

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.

23. A STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB-SECTION (6) OF SECTION 149:

The Company has received necessary declarations from all the Independent Directors of the Company Under Section 149(7) of the Companies Act, 2013, confirming that they meet the criteria of Independence laid down in Section 149(6) of the Companies Act, 2013.

24. STATUTORY DISCLOSURES:

None of the Directors of your Company are disqualified as per 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 and SEBI LODR.

25. BOARD EVALUATION:

The Companies Act 2013 states that a formal annual evaluation needs to be made by the Board and Schedule IV of the Companies Act 2013 states that the performance evaluation of Independent Directors shall be done by the entire Board of Directors, excluding the Director being evaluated. The performance of the Board was evaluated by the Board and after seeking inputs from all the Directors on the basis of the criteria such as the Board composition and structure, effectiveness of Board processes, information flow, frequency of meetings and functioning etc. The performance of the Committees was evaluated by the Board and after seeking inputs from the Committee Members. The Board and the Nomination and Remuneration Committee reviewed the performance of the individual Directors on the basis of the criteria such as the contribution of the individual Director to the Board and Committee Meetings. The Chairman was also evaluated on the key aspects of his role. In a separate Meeting of Independent Directors, performance of the Board as a whole and performance of the Chairman was evaluated

26. AUDIT COMMITTEE:

In terms of Section 177 of the Companies Act, 2013 read with Rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014, the Audit Committee of the Board of Directors consisting of below mentioned Independent Directors as a practice of good governance:

(i) Mr. Utsav Jasapara (DIN: 09711346) - Chairman (Independent Director)

(ii) Mrs. Bhanupriya Thakur (DIN: 08276607) - Member (Independent Director)

(iii) Mr. Mangina Srinivas Rao (DIN: 08095079) - Member (Independent Director)

All the recommendations made by the Audit Committee were accepted by the Board.

27. NOMINATION & REMUNERATION COMMITTEE:

In terms of Section 178 of the Companies Act, 2013 read with Rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014, the Company has constituted Nomination & Remuneration Committee of the Board of Directors consisting of below mentioned Independent Directors as a practice of good governance:

(i) Mr. Mangina Srinivas Rao (DIN: 08095079) - Chairman (Independent Director)

(ii) Mrs. Bhanupriya Thakur (DIN: 08276607) - Member (Independent Director)

(iii) Mr. Utsav Jasapara (DIN: 09711346) - Member (Independent Director)

28. STAKEHOLDERS RELATIONSHIP COMMITTEE:

In terms of section 178 of the Companies Act, 2013 read with Rule 6 of the Companies (Meetings of Board and its Powers) Rules, 2014 and Regulation 20 (1) of the SEBI (Listing Obligations and Disclosure Requirement), 2015, the Company has constituted Stakeholders Relationship Committee of the Board of Directors consisting of below mentioned Independent Directors as a practice of good governance:

(i) Mrs. Bhanupriya Thakur (DIN: 08276607) - Chairperson (Independent Director)

(ii) Mr. Utsav Jasapara (DIN: 09711346) - Member (Independent Director)

(iii) Mr. Mangina Srinivas Rao (DIN: 08095079) - Member (Independent Director)

29. VIGIL MECHANISM:

The Vigil Mechanism of the Company, which also incorporates a whistle blower policy in terms of Section 177(9) of the Companies Act, 2013 and Regulation 22 of SEBI (Listing Obligation & Disclosure Requirement) Regulations, 2015, includes an Ethics comprising senior Executives of the Company. Protected disclosures can be made by a whistle blower through an e-mail or letter. The policy on vigil mechanism may be accessed on the Company’s website at https://droneacharya.com/.

30. CODE OF CONDUCT:

Your Directors informed that pursuant to provisions of Regulation 17(5) of SEBI (Listing Obligation & Disclosure requirement) Regulations, 2015 every Listed Company is under an obligation to adopt a policy on Code of Conduct for all the Members of the Board of Directors and Senior Management. As per the said Regulation, the Board of Directors adopted the Policy on code of conduct for all the Members of Board of Directors and Senior management of the Company.

31. CORPORATE SOCIAL RESPONSIBILITY:

The provisions of section 135 of Companies Act, 2013 read with Companies (Corporate Social Responsibility) Rules, 2014, regarding Corporate Social Responsibility is not applicable to the company.

32. RISK MANAGEMENT POLICY:

The Company has well laid out risk management policy, which periodically assess the threats and opportunities that will impact the objectives set for the Company as a whole. The policy is designed to provide the categorization of risks into threats and its causes, impact, treatment and control measures. As a part of the Risk Management Policy, the relevant parameters for protection of environment, safety of operations and health of people at work especially those working in food value chain are monitored regularly.

33. DISCLOSURE UNDER SEXUAL HARASSEMENT OF WOMAN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESAL) ACT, 2013:

The company has formed Internal Complaint Committee to address issues pertaining to sexual harassment at work place, during the period under the review no complaint has been received to Internal Complaint Committee.

Following is the constitution of the Internal Committee:

Sr. No.	Designation	Name of Officer/ Member
1	Presiding Officer	Mrs. Sapna Sharma (Admin Executive)
2	Member	Ms. Purva Dhuri (Asst. Manager, HR & Culture)
3	Member	Ms. Mukula Joshi (Manager, Legal & Compliance)
4	Member	Col. Sunil Sharma (President, Business & Strategy)

5

Member

Adv. Sadanand Sonar (External Member)

34. IN CASE OF A COMPANY COVERED UNDER SUB-SECTION (1) OF SECTION 178, COMPANY’S POLICY ON DIRECTORS’ APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATIONS, POSITIVE ATTRIBUTES, INDEPENDENCE OF A DIRECTOR AND OTHER MATTERS PROVIDED UNDER SUB-SECTION (3) OF SECTION 178:

The Company has well laid out the policy for Directors’ appointment and remuneration, which determines the terms of appointment, qualification, independence of directors along with remuneration payable. The policy is designed to provide such terms for appointment and levels of remuneration such that they attract, retain and motivate directors of the quality and ability required to run the Company successfully.

35. STATUTORY AUDITORS:

The tenure of appointment of M/s KPRK & Associates, Chartered Accountants, Nagpur (Firm Reg. No. 108051W), the existing Statutory Auditors will expire at the conclusion of the 10th Annual General Meeting as per the provisions of Section 139(2) of the Act and Rules framed thereunder.

The Board of Directors and Members of the Company at its previous Annual General Meeting held on 30.09.2022 has, approved the appointment of M/s KPRK & Associates, Chartered Accountants, Nagpur having Firm Reg. No. 108051W as the Statutory Auditors of the Company for a term of 5 (five) years commencing from the conclusion of the 05th AGM till the conclusion of the 10th AGM.

36. COST RECORDS AND AUDIT:

The provisions of section 148 of Companies Act, 2013 about maintenance of cost records and audit are not applicable to the Company.

37. DETAILS OF ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO THE FINANCIAL STATEMENTS:

The Board of Directors, had laid down internal financial controls with reference to the financial statements to be followed by the company and that such internal financial controls are adequate and operating effectively. During the year, such controls were tested and no reportable material weakness in the design or operation was observed.

37. EXTRACT OF ANNUAL RETURNS:

In terms of provisions of section 92, 134(3)(a) of the Companies Act, 2013, read with Rule 12 of the Companies (Management and Administration) Rules, 2014, the details forming part of extract of the Annual Return are hosted on https://droneacharya.com/investors-relations/annual-returns/. By virtue of amendment to Section 92(3) of the Companies Act, 2013, the Company is not required to provide extract of Annual Return (Form MGT-9) as part of the Board’s report

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

There has been no significant and material order passed by any regulators or courts or tribunals, impacting the going concern status of the Company and its future operations.

39. ACKNOWLEDGEMENTS:

Your directors take this opportunity to place on record their sincere appreciation of all stakeholders, bankers, dealers, auditors, vendors and other business partners which have contributed to the successful management of the Company’s affairs. Your Directors recognize and appreciate the efforts and hard work of all the employees of the Company and their continued contribution to its progress.

For and on behalf of Board of Directors of DRONEACHARYA AERIAL INNOVATIONS LIMITEDMr. Prateek Srivastava Mrs. Nikita Srivastava

(Managing Director, DIN: 07709137) (Director, DIN: 08082593)

Date: 29.04.2023 Place: Pune