H.M. Electro Mech Ltd Directors Report

DIVIDEND AND TRANSFER TO RESERVES:

An amount of Rs. 974.93 Lakhs (previous year Rs. 835.07 Lakhs) is proposed to be held as retained earnings.

The Company does not propose to transfer any amount to reserves during the year.

The company has not declared any dividend for the financial year ended March 31, 2026. There was no amount liable or due to be transferred to Investor Education andProtection fund (IEPF) during the financial year ended March 31, 2026.

STATE OF THE AFFAIRS OF THE COMPANY & FUTURE PROSPECTS:

With the consistent performance and dedication, the Company has achieved incremental growth in profit as well as shareholders wealth during Financial Year 2025-26. Not only the Company was able to continue the momentum of earning profit but has shown outstanding performance by reaching the hike in profits of Rs. 974.93 Lakhs as compared to Rs. 835.07 Lakhs in the previous financial year.

Total revenue from Operations of the Company for fiscal year 2025-26 increased to Rs.13,221.01 Lakhs as against Rs. 12,166.69 Lakhs for Financial Year 2024-25, showing a increase of 8.67% and also Companys Net profit after Tax (PAT) is Rs. 974.93 lakhs for Financial year 2025-26 against Profit of Rs. 835.07 lakhs for Financial year 2024-25 i.e. increase by16.74%

Company is planning to expand its current business by entering into incidental activities. As result of good potential in the field of fabrication work, company wants to try expertise in new area of manufacturing of engineering goods/Products used in any kind ofs fabrication work.

Our Promoters are the guiding force behind the success of our company. We believe the stability of our management team and the industry experience brought on by our individual Promoters will enable us to continue to take advantage of future market opportunities and expand into newer markets.

For further details on Companys performance, operation and strategies for growth, please refer to Management Discussion and Analysis Report which forms part of Annual report.

MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY FROM THE CONCLUSION OF THE FINANCIAL YEAR TILLTHE END OF THIS REPORT:

There were no other material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year of the Compasny and the date of this report. The company will continue to monitor anymaterial changes to future economic conditions.

SUBSIDIARIES, JOINT VENTURE AND ASSOCIATE COMPANIES:

As on March 31, 2026, the Company has no subsidiary company. The Company did not have any Associate Companies or Joint Ventures at the end of this Financial Year. Statement in Form AOC-1 pursuant to the first proviso to Section 129 of the Act read with rule 5 of the Companies (Accounts) Rules,2014 shall not be thus applicable in view of above sexplanation.

ALTERATION IN MAIN OBJECT CLAUSE OF MEMORANDUM OF ASSOCIATION:

The board in their meeting held on 06^th March, 2026 approved addition in main object clause of the company relating to manufacturing of all type of manufacturing of Engineering goods and electronic goods used in any kind of fabrication work.The company also planning to expand its business via working in all type of fabrication work.

The same addition has been approved by members of the company via Extra Ordinary General Meeting held on 30^th March, 2026.

SHARECAPITAL

The Authorised Share capitalof the company is Rs.15,00,00,000/-(Rupees Fifteen Crore Only) divided into 1,50,00,000 (One Crore Fifity Lacs) Equity Shares of Rs. 10/-(Rupees Ten only) each.

The Paid up capital of the Company is Rs. 13,69,92,000/- divided into 1,36,99,200 equity shares of Rs. 10/- each, as on 31st March, 2026.

UTILIZATION OF FUND:

During Financial Year 2024-25 , Company had completed its Initial Public Offering("IPO") 36,99,200 new equity share of face value of Rs.10/- each at premium of Rs.65/- per equity share aggregating to Rs. 27,74,40,000/-.

Pursuant to the IPO, the equity shares of company have to get listed on the SME platform of BSE on 31^st January, 2025. The Company has utilised the money raised byway of Initial Public offer during the year for the purpose for which they were raised as under:

MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT:

A report on Management Discussion and Analysis (MDA) is annexed to this report as Annexure I, inter-alia deals adequately with the operations and also current and futureoutlook of the Company.

DEPOSITS:

The Company has not accepted or renewed any deposits from public falling within the purview of Section 73 of Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

LOAN FROM DIRECTOR:

The company has taken loan from directors as mentioned as per financial statements.

CORPORATE SOCIAL RESPONSIBILITY:

According to provision of Section135 of CompaniesAct, 2013 the details of Corporate Social Responsibility is provided in Annexure II which forms part of Directors Report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

The Composition of Board is in compliance with requirement of the provisions of the Companies Act, 2013.

Mr. MahendraRamabhai Patel (DIN: 02190228), Whole Time Director of the Company is liable to retire by rotation at the forth coming Annual General Meeting and he being eligible offers himself for re-appointment.

Mr. Harshal Mahendra Patel (DIN: 10350341), Whole Time Director of the Company is liable to retire by rotation at the forth coming Annual GeneralMeeting and He being eligible offers himself for re-appointment.

Details of Director seeking re-appointment as required are provided in the Notice forming part of this Annual Report. Their re-appointments are appropriate and in the best interest of the Company.

During the Financial year 2025-26 following changes have been occurred in Directorship and KMP.

Pursuant to the provisions of Section 152 and other applicable provisions if any, of the Companies Act, 2013.

Your Directors recommends passing above stated resolutions.

The Key Managerial Personnel (KMP) in the Company as per Section 2(51) and 203 of the Companies Act, 2013 are as follows:

None of the Directors of the Company is disqualified for being appointed as Director as specified in Section 164 (2) of the Companies Act, 2013.

Disclosure about receipt of any commission by MD/WTD from a company and also receiving commission/remuneration from its Holding or Subsidiary pursuant to section 197(14) of the Act: Not Applicable

Disclosure on Reappointment of Independent director pursuant to section 149(10): Not Applicable as term of appointment of none of the independent directors is expiring during financial year 2025-26 and up to the date of the report.

ANNUAL RETURN:

Pursuant to Section 92 of the Act read with the applicable Rules, the Annual Return for theyear ended 31^st March 2026 will be accessed on the Companys website at www.hmelectromech.com.

CORPORATE GOVERNANCE REPORT:

As per regulation 15(2) of the Listing Regulation, the Compliance with the Corporate Governance provisions shall not apply in respect of the following class of the Companies:

a) Listed entity having paid up equity share capital not exceeding Rs.10 Crore and Net worth not exceeding Rs.25 Crore, as on the last day of the previous financial year;

b) Listed entity which has listed its specified securities on the SME Exchange.

Since, our Company falls within the ambit of aforesaid exemption i.e in point number(b); hence compliance with the provision of Corporate Governance shall not apply tothe Company and it does not form the part of the Annual Report for the financial year 2025-26.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013 with respect tothe Directors responsibility Statement, the Directors confirms that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any;

ii. they have selected such appropriate accounting policies and applied them consistently and made judgments and estimates that we rereasonable and prudent as to give a true and fair view of the state of affairs of the Company at the end of the financial year on 31^st March, 2026 and of the profit of the Company for the year under review;

iii. they have 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;

iv. they have prepared the accounts for the period ended on 31^st March, 2026 on a going concern basis.

v. they have laid down internal financial controls to be followed by the Companyand that such internal financial controls are adequate and operating effectively;and

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

NUMBER OF BOARD MEETINGS:

During the year18 (Eighteen) Board Meetings were held on 23.05.2025, 28.05.2025, 10.06.2025, 22.06.2025, 27.06.2025, 01.08.2025, 28.08.2025, 01.11.2025, 13.11.2025, 18.12.2025, 26.12.2025, 30.12.2025, 31.12.2025, 01.01.2026, 03.01.2026, 06.03.2026, 30.03.2026, 31.03.2026.

The Company has observed the meeting of Board of Directors and that the time gap between two consecutive board meetings was not more than one hundred and twenty days.

The necessary quorum was present for all the meetings.

The composition of the Board, category,the attendance of Directors at the Board Meetings during the year are given below:

The Company did not have any pecuniary relationship or transactions with the non-executive directors during the year under review except to the extent of their shareholding in the Company and sitting fees if any.

The Annual General Meeting of the Company held on 26^th September, 2025 for the financial year 2024-25.

COMMITTEES OF BOARD

The company have following committee.

The Company Secretary of our Company shall act as a secretary of the Audit Committee.

During the year the Audit Committee duly met Five (5) times i.e.28.05.2025, 28.08.2025,13-11-2025,03.01.2026, 06.03.2026.

Role of Audit Committee:

The scope of audit committee shall include,but shall not be restricted to,the following:

1. Oversight of the companys financial reporting process and the disclosure of its financial information to ensure that the financial statement is correct, sufficient and credible;

4. Approval of payment to statutory auditors for any other services rendered by the statutory auditors; 5. Reviewing, with the management, the annual financial statements before submission to the board for approval, with particular reference to: a. Matters required to be included in the DirectorsResponsibility Statement to be included in the Boards report in terms of clause (c) of sub section 3 of section 134 of theCompanies Act, 2013. b. Changes,if any, in accounting policies and practices and reasons for the same. c. Major accounting entries involving estimates based on the exercise of judgment by management. d. Significant adjustments made in the financial statements arising out of audit findings. e. Compliance with listing and other legal requirements relating financial statements. f. Disclosure of any related party transactions. g. Qualifications in the draft audit report.

6. Reviewing, with the management, the quarterly financial statements before submission tothe board for approval;

the finance function or discharging that function) after assessing the qualifications, experience & background, etc. of the candidate; 16. Carrying out any other function as is mentioned in the terms of reference of the Audit Committee. 17. Valuation of undertakings or assets of the company,wherever it is necessary.

18. Evaluation of internal financial controls and risk management systems; 19. Monitoring the end use of funds raised through public offers and related matters.

The Company Secretary of our Company shall act as a Secretary to the Stakeholder Relationship Committee.

During the year the Stakeholder Relationship Committee duly met One(1) time on 29/03/2026.

Terms of Reference:

The status of the Investors Complaints during the Financial Year2025-26 are as under:

During the year the Nomination and Remuneration Committee duly met Three (3) times on 01.08.2025, 13.11.2025 and 01.01.2026.

REMUNERATION POLICY:

In accordance with the provisions of Section 178 of the Companies Act, 2013 the Nomination and Remuneration Committee recommended the remuneration policy relating to the remuneration of the Directors, Key Managerial Personnel and other employees which was approved by the Board and is annexed with the Directors Report.

There was not any performance linked incentives paid to Whole-time Directors. The Company has not formulated any scheme for giving any stock options to the employees. Hence no stock options have been granted to the Executive Directors during the year ended on31-03-2026.

Details of remuneration paid for the year ended on 31-03-2026:

FAMILIARIZATION PROGRAME OF INDEPENDENT DIRECTOR:

All new independent directors inducted into the Board attend an orientation program known as Familiarization Programme, which is for every new independent director of the Board to familiarize the new inductee(s) with the strategy, operations and functions of our Company. The Executive Directors/Senior Managerial Personnel make presentations to the inductees about the Companys strategy operations, product and service offerings, markets, organization structure, finance, human resources, technology, quality, facilities and riskmanagement. In addition, the Company also keeps the Independent Directors, updated onthe events and developments in the industry and business environment.

INSURANCE:

The properties and assets of the Company are adequately insured.

DECLARATION BY INDEPENDENT DIRECTORS:

The Independent Directors have submitted their declaration of independence, stating that:

i) They continue to fulfill the criteria of independence provided in Section 149 (6) of the Act along with Rules framed there under and Regulation 16(1)(b) ; and

ii) There has been no change in the circumstances affecting his/her/their status as Independent Directors of the Company.

The Independent Directors have also confirmed that they have complied with the Companys Code of Conduct. In terms of Section 150 of the Act and Rules framed there under,the Independent Directors have also confirmed their registration (including renewal of applicable tenure) and compliance of the online proficiency self-assessment test (unless exempted) with the Indian Institute of Corporate Affairs(IICA).

The Board opined and confirm, in terms of Rule 8 of the Companies (Accounts) Rules, 2014 that the Independent Directors are persons of high repute, integrity and possess the relevant expertise and experience in their respective fields.

PERFORMANCE EVALUATION OF THE BOARD COMMITTEES AND INDEPENDENT DIRECTORS:

Pursuant to the provisions of the Companies Act, 2013 and Rules framed there under read with the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 formal annual evaluation is to be made by the Board of its own performance and that of its Committees and Individual Directors. The Board after taking into consideration the criteria of evaluation laid down by the Nomination and Remuneration Committee in its policy such as Board Composition, level of involvement, performance of duties,attendance etc. had evaluated its own performance, the performance of its committees and Independent Directors (excluding the Director being evaluated).

The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors at their separate meeting.The Directors expressed their satisfaction with the evaluation process.

Independent Directors at their meeting held on 16^th March, 2026 interalia, to discuss evaluation of Board, Committee(s) and Individual Directors.

POLICY ON DIRECTORS APPOINTMENT AND POLICY ON REMUNERATION:

Pursuant to the requirements of the Companies Act, 2013, the policy on appointment of Board Members and policy on remuneration of the Directors, KMPs and other employees is as attached as Annexure III to this report.

SECRETARIAL AUDIT REPORT:

M/s. Kinkhabwala & Associates, Practicing Company Secretaries, was appointed as Secretarial Auditor of the Company to conduct secretarial audit for the consecutive period of Five Year in 7^th Annual GeneralMeeting held on 26^th September, 2025. pursuant to the provisions of Section 204 of the Companies Act, 2013. The Annual Secretarial Audit Report submitted by them is attached as Annexure IV to this report.

CONTRACTS OR AGREEMENTS WITH RELATED PARTIES:

Pursuant to the provisions of the Companies Act, 2013 all the contracts and arrangements with related as details of the transactions are as mentioned in Annexure V.

DISCLOSURE UNDER RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014:

Details pertaining to remuneration and other details as required under Section197(12) of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014is attached as Annexure-VI to this report.

INTERNAL FINANCIAL CONTROL AND THEIR ADEQUACY:

The Company has adopted internal control system considering the nature of its business and the size and complexity of operations. The Board has adopted the policies and proceduresfor ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of fraudsand errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures etc. The management is taking further steps to strengthen the internal control system.

RISK MANAGEMENT POLICY:

The Company has formulated the Risk Management Policy in order to safeguard the organization from various risks through timely actions.It is designed to mitigate the risk inorder to minimize the impact of the risk on the Business. The Management is regularly reviewing the risk and is taking appropriate steps to mitigate the risk.

In the opinion of the Board there has been no identification of element of risk that may threaten the existence of the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OFTHE COMPANIES ACT, 2013:

The details of loan provided and investments made,if any are as mentioned in the notes to accounts. The Company has not provided any guarantee or security falling under purview of Section 186 of the Companies Act, 2013 during the financial year under review.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS MADE WITH RELATED PARTIES MADE PURSUANT TO SECTION 188 OF THE COMPANIES ACT, 2013:

The company have not related parties transaction during the period except for salary to directors as per mentioned in note No: 27 of Financial Statement.

STATUTORY AUDITORS:

In terms of the provisions of section 139 of the Companies Act, 2013, the Company had appointed M/S S V J K And Associates Chartered Accountants, Ahmedabad (RegistrationNo. 135282W), for the term of 5 years in the 06^th Annual General Meeting.

In the Statutory Auditors Report on the financial statements of the Company for the financial year ended on 31^st March, 2026, there is no Qualified/Adverse Opinion from Statutory Auditor during the financial year under review.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS:

The Statutory Auditors of the Company have not reported any frauds to the Audit Committee or to the Board of Directors as prescribed under Section 143(12) of theCompanies Act, 2013, including rules made thereunder.

INTERNAL AUDITOR

M/S J K Hingu& Co., Chartered Accountant, Ahmedabad has been appointed as Internal Auditors of the Company for the financial year 2025-2026 in meeting of board of directors as on 28.05.2025. Internal Auditors are appointed by the Board of Directors of the Company on a yearly basis, based on the recommendation of the Audit Committee. The Internal Auditor reports their findings on the Internal Audit of the Company,to the Audit Committee on a yearly basis. The scope of internal audit is approved by the Audit Committee.

EXPLANATIONS / COMMENTS ON QUALIFICATION, RESERVATION OR ADVERSE REMARK OR DISCLAIMER MADE BY THE AUDITOR AND COMPANY SECRETARY IN THE AUDIT REPORTS:

There is no qualifications, reservations, adverse remark or disclaimer in Auditors Report.

MAINTENANCE OF COST RECORDS:

Company is not required to maintain cost records pursuant to section 148 (1) of theCompanies Act, 2013.

VIGIL MECHANISM:

Pursuant to provisions of Section 177(9) of the Companies Act, 2013 and Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 read with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors had approved the Policy on Vigil Mechanism/ Whistle Blower Policy. Through this policy Directors, Employees or business associates may report the unethical behavior, malpractices, wrongful conduct, frauds, violations of the Companys code etc. to the Chairman of the Audit Committee.

COMPOSITION OF INTERNAL COMPLAINTS COMMITTEE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION ANDREDRESSAL) ACT, 2013:

The Company has complied with the provision relating to constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Further, no case has been received under the said act during the year.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The information pertaining to conservation of energy, technology absorption, Foreign exchange Earnings and outgo as required under Section 134 (3)(m) of the Companies Act,2013 read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is furnished in Annexure VII which is attached to this report.

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

The Company has not received any significant or material orders passed by any regulatory authority, court or tribunal which shall affect the going concern status of the Companys operations as on date of this report.

INDUSTRIAL RELATIONS:

The Company has maintained cordial relations with the employees of the Company throughout the year. The Directors wishes to place on record sincere appreciation for theservices rendered by the employees of the Company during the year.

COMPLAINCE OF SECRETARIAL STANDARAD:

The Company has complied with the applicable secretarial standards.

PROCEEDINGS PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016:

During the year under review, there are no application made under the Insolvency and Bankruptcy Code, 2016, during the year under Report, and therefore no such details are required to be given.

CFO CERTIFICATE:

The CFO of the Company has given certification on the financial reporting and internal controls to the Board in terms of SEBI (Listing Obligations and disclosure Requirements)Regulations, 2015.

ACKNOWLEDGEMENT:

The Board is thankful to its bankers for their continued support and assistance, which hasplayed important role in progress of the Company.

Your Directors places on records the contribution of employees of the Company at all levels and other business associates for their commitment,dedication and respective contribution to the Companys operations during the year under review.