Highness Microelectronics Ltd Directors Report

TO,

THE MEMBERS,

HIGHNESS MICROELECTRONICS LIMITED MUMBAI

Your Directors have pleasure in presenting the 19th Annual Report of your Company along with the Audited Financial Statement for the year ended March 31,2026.

FINANCIAL PERFORMANCE

In terms of the provisions of the Companies Act, 2013 ("Act"), and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), the Company has prepared its Standalone Financial Statements for the FY 2025-26. The financial highlights of the Company for FY2025-26, are as follows:

Particulars	Financial Year Ended March 31,2026	Financial Year Ended March 31,2025
Total Income	1,69,174.98	1,41,738.10
Less: Total Expenses	(1,15,717.64)	(1,09,077.99)
Profit/ (Loss) Before Tax	53,457.34	32,660.11
Less: Exceptional & Extraordinary Items	Nil	Nil
Profit / (Loss) Before Tax	53,457.34	32,660.11
Less: Provision for Tax
Current Tax	13,611.90	8,436.36
Deferred Tax	(1,193.75)	(358,34)
Profit after Tax	41,039.19	24,582.08

BRIEF DESCRIPTION OF COMPANY

The Company operates through two principal business segments — "Off-the-Shelf Products" and "Market- Specific Solutions/Projects" — offering a diversified portfolio comprising flat panel displays (TFT and LCD modules), display controllers, touch screens, electroluminescent and vacuum fluorescent displays, cable assemblies, and display enhancement solutions.

The Companys customised display systems, including open-frame, panel-mount, industrial-grade, and medical-grade monitors, cater to mission-critical applications across diverse end-user industries such as industrial automation, healthcare, railways, automobile, and defence and aerospace. The Company has built a specialised niche in mobility and transportation displays for the railway sector and medical-grade surgical monitors for healthcare applications, supported by indigenous design and manufacturing capabilities aligned with the "Make in India" initiative.

As a vertically integrated player in the digital imaging space, the Company focuses on customised, ruggedised, and certified display solutions, enabling it to serve both standard product requirements and complex, project-specific specifications of its customers.

REVIEW OF BUSINESS OPERATIONS

During the financial year 2025-2026, your Company earned a total income of Rs. 16,91,38,103.81, compared to R Rs. 16,91,38,103.81 in the corresponding previous year. The Company reported a net profit of Rs. 4,10,39,191.48 showing a significant increase from the net profit of Rs. 2,45,82,080.80 earned in the previous year.

These figures reflect the Companys continued efforts to strengthen its market position, improve operational efficiency, and deliver value to its stakeholders.

DIVIDEND

In order to conserve the Companys reserves and maintain financial flexibility to support ongoing and future business operations, the Board of Directors has decided notto recommend any dividend forthefinancial year 2025-2026. This decision has been taken in the longterm interest of the Company, with a focus on strengthening the financial position, supporting growth initiatives, and ensuring adequate liquidity to meet operational and strategic requirements.

TRANSFER TO RESERVE

The Company has not transferred any amount to its reserves for the Financial Year under review and the entire amount of profit/loss is maintained in the profit and loss of the Company.

CHANCE IN BUSINESS

There is no change in the nature of business of your Company during the Financial Year 2025-26.

MATERIAL CHANCES AFFECTING THE FINANCIAL POSITION BETWEEN THE END OF THE FINANCIAL YEAR AND THE DATE OF THE REPORT

There have been 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.

EVENT SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:

INITIAL PUBLIC OFFERING AND LISTING

The shares of the Company were listed on the Small and Medium Enterprises (SME) Platform of the Bombay Stock Exchange of India Limited w.e.f. April 02,2026.

Your Company completed its IPO successfully. The Offer was subscribe bed 193.9 times.

The Board is gratified and humbled by the faith shown in the Company by its members. The Board also places on record its appreciation for the support provided by various Authorities, Book Running Lead Managers, Stock Exchanges, Depositories, Counsels, Consultants, Auditors, other intermediaries and employees of the Company for making the IPO of the Company a grand success.

SUBSIDIARY COMPANY, JOINT VENTURES AND ASSOCIATE COMPANY

As of 31st March, 2026 the Company does not have any Subsidiary Company, Joint Venture or Associate Company.

DEPOSITS

Your Company has not accepted any fixed deposits from the public under Chapter V (Acceptance of Deposits by Companies) of the Companies Act, 2013 and is therefore not required to furnish information in respect of outstanding deposits under Companies (Acceptance of Deposits) Rules,2014.

However, the company has accepted loans from directors/relatives of directors during the financial year, as mentioned below:

Name of Director	Opening Balance at the start of the year	Opening Balance at the start of the year	Advances during the year
Mr. Caurav Kejriwal	3,452.44	1529.72	4,982.17
Mrs. Shruti Kejriwal	940.78	85.85	1,026.63

SHARE CAPITAL

A. Authorized Share Capital:

During the Financial Year under review, the Authorized Share Capital of the Company is Rs. 7,00,00,000/- (Seven Crores) divided into 70,00,000 Equity Shares of Rs.10/- each.

B. Issued, Subscribed and Paid-Up Share Capital:

During the Financial Year under review, the Issued, Subscribed and Paid-up Share Capital of the Company is Rs. 3,51,00,000/- (Three Crore Fifty-One Lakh only) divided into35,10,000 Equity Shares of Rs.10/-.

EVENT SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:

The Issued, Subscribed and Paid-up Share Capital of the Company increased from Rs. 3,51,00,000/- (Three Crore Fifty-One Lakh only) divided into35,10,000 EquityShares of Rs. 10/- to Rs. 5,16,36,000/- (Five Crore Sixteen Lakh Thirty-six thousand only) divided into 51,63,600 Equity Shares of Rs.lO/w.e.f. 01.04.2026

C. Issue of EquityShares with Differential Rights:

The Company does not have Equity Shares with differential rights and has not issued any shares with differential rightsduring the Financial Year 2025-26.

D. Issue of Sweat Equity Shares and Employee Stock Options:

During the Financial Year under review, the Company has not issued sweat equity shares/ Employee Stock Option to its directors and its permanent employees.

E. Provision of Money by Company for Purchase of its Own Shares by Employees or by Trustees for the Benefit of Employees:

During the Financial year under review, no such provision was made by the Company.

F. Transfer/Transmission Of Shares:

During the Financial Year under review, there is no transfer / transmission of shares/securities as per the provisions of the Act and rules made thereof as amended time to time.

BOARD OF DIRECTORS

COMPOSITION

The Board comprises of 7 (Seven) Directors, out of which 4 (Four) are Independent Directors. As on March 31, 2026, the composition of the Board of Directors of the Company are as follows:

Name Of The Director	Designation
1. Mr. Gaurav Kejriwal	Managing Director
2. Mr. Manjul Kumar Kejriwal	Non-executive Non-independent Director
3. Mrs. Shruti Guarav Kejriwal	Whole-time Director
4. Mr. Keval Mahendra Shah	Independent Director
5. Mr. Jaya Ankur Singhania	Independent Director
6. Mr. Sanjiv Swarup	Independent Director
7. Ms. Kavita Kailash Bohra	Independent Director
8. Mr. Mayurkumar Laxmidas Gori	Chief Financial Officer
9. Mrs. Preeti Paresh Rathi	Company Secretary

CHANCES IN DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Act and the Articles of Association of the Company, Mrs. Shruti Gaurav Kejriwal, Whole-time Director of the Company (DIN:10593550) is liable to retire by rotation at the ensuing 19th Annual General Meeting of the Company and being eligible, has offered herself for reappointment. The said re-appointment is subject to the approval of members at the ensuing AG M.

Further details including date of appointment/ retirement/resignation, directorship/ committee membership etc. can be found in the Explanatory Statement forming a part of the Notice of the ensuing Annual General Meeting. In the opinion of the Board, all directors including the directors appointed/re- appointed during the year possess requisite qualifications, experience and expertise and hold high standards of integrity.

During the year, the following changes were made in the Board of Directors and Key Managerial Personnel of the Company:

a. Mr. Mopuri Krishniah Sateesh (DIN: 10098764) was remove from the position of Independent Director of the Company w.e.f. August 07,2025.

b. Mr. Anil Kumar Venkata Gopala Santosh Mallavarapu resigned from the position of Chief Financial Officer of the Com pany w.e.f. Aug ust 06,2025.

c. Mr. Mayurkumar Gori was appointed as the Chief Financial Officer of the Com pany w.e.f. Aug ust 11,2025.

STATEMENT OF DECLARATION BY INDEPENDENT DIRECTOR

The Company has received declarations from all the Independent Directors under Section 149(7) of the Companies Act, 2013, confirming that they meet the criteria of independence as prescribed thereunder. The Independent Directors have complied with the Code for Independent Directors prescribed under Schedule IVtothe Companies Act,2013.

PERFORMANCE EVALUATION OF BOARD

The annual evaluation of the performance of the Board, its committees and of individual directors is conducted on the basis of the input received from all the Directors of the Company with respect to the effectiveness of Board processes, information flow, frequency of meetings and functioning etc. Further, a meeting of the Independent Directors was conducted to review the performance of the Board as a whole and that of Non-Independent Directors.

The Board also noted that the terms of reference and composition of the Committees were clearly defined. The Committee performed their duties diligently and contributed effectively to the decisions of the Board.

The evaluation results were discussed at the meeting of Board of Directors. The Directors were satisfied with the overall Board performance and effectiveness.

NUMBER OF MEETINGS OF BOARD:

The Board of Directors of the Company met at regular intervals during the year to discuss the past and prospective business of the Company. The Board met 11 (Eleven) times during the financial year on the following dates:

Date of the Meeting	No. of Directors eligible to attend the meeting	No. of Directors attended
1 29.04.2025	8	6
2 06.08.2025	8	7
3 09.09.2025	7	5
4 20.09.2025	7	5
5 30.09.2025	7	5
6 30.10.2025	7	5
7 12.02.2026	7	5
8 17.02.2026	7	5
9 18.03.2026	7	7
10 23.03.2026	7	6
11 30.03.2026	7	5

DETAILS OF THE COMMITTEES AND THEIR MEETINGS

AUDIT COMMITTEE

The Audit Committee of Directors was constituted pursuant to the provisions of Section 177 of the Companies Act, 2013. The composition of the Audit Committee is in conformity with the provisions of the said section and Regulation 18 of the Listing Regulations. The following Directors are members of the Audit Committee.

Name of the Director	DIN	Category
1 Mr. Keval Mahendra Shah	07649694	Chairman
2 Ms. Kavita Kailash Bohra	11003259	Member
3 Mr. Gaurav Manjul Kejriwal	01506981	Member
4 Mr. M. K. Sateesh*	10098764	Member

Note

Mr. M. K. Sateesh was removed from the Board of the Company w.e.f. August 07,2025

All the members of the Audit Committee are financially literate. During the year under review, all the recommendations made by the Audit Committee were accepted by the Board.

The following Meetings of the Audit Committee were held during the Financial Year 2025-26:

Date of the Meeting	Committee Strength	No. of Member Present
1 29.04.2025	4	4
2 06.08.2025	4	4
3 09.09.2025	3	3
4 20.09.2025	3	3
5 30.10.2025	3	3
6 12.02.2026	3	3
7 17.02.2026	3	3

VIGIL MECHANISM/WHISTLE BLOWER POLICY

The Company has established a vigil mechanism and accordingly framed a Whistle Blower Policy in accordance with the provisions of the Companies Act, 2013 and Rule 7 of the Companies (Meeting of the Board and its Power) Rules 2014.

Under the vigil mechanism, all directors, employees, business associates have direct access to the Chairman of the Audit Committee. The whistle blower policy can be accessed at https://highnessmicro.com/.

NOMINATION AND REMUNERATION COMMITTEE :

The Nomination and Remuneration Committee (NRC) of Directors was constituted by the Board of the Company in accordance with the requirements of Section 178 of the Companies Act, 2013 and Regulation 19 of the Listing Regulations..

The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of Board Members. The Nomination and Remuneration Policy of the Company is available on the website of the Company https://highnessmicro.com/.

The following Directors are members of the Nomination and remuneration Committee:

Name ofthe Director	DIN	Category
1 Ms. Jaya Ankur Singhania	01990322	Chairman
2 Mr. Keval Mahendra Shah	07649694	Member
3 Mr. Manjul Kumar Kejriwal	01507039	Member
4 Mr. M. K. Sateesh*	10098764	Member

Note

Mr. M. K. Sateesh was removed from the Board of the Company w.e.f. August 07,2025

The following Meetings of the Nomination and Remuneration Committee were held during the Financial Year 2025-26:

Date of Meeting	Committee Strength	No. of Member Present
1 06.08.2025	4	4
2 19.03.2025	3	3

STAKEHOLDER RELATIONSHIP COMMITTEE

Pursuant to Section 178 of the Companies Act, 2013 and the Regulation 20 of the Listing Regulations, the Board of Directors of the Company has re-constituted the Stakeholders Relationship Committee.

The following Directors are members of the Stakeholder Relationship Committee:

Name of the Director	DIN	Category
1 Mr. Keval Mahendra Shah	07649694	Chairman
2 Mr. Gaurav Manjul Kejriwal	01506981	Member
3 Mrs. Shruti Gaurav Kejriwal	10593550	Member

IPO COMMITTEE

The Company had constituted an IPO Committee to undertake and oversee various activities relating to the Initial Public Offer of the Company. The Committee carried out its duties in accordance with the powers delegated by the Board of Directors and necessary a pprovals/actions in relation to the IPO were taken by the Committee from time to time.

The following Directors are members of the IPO Committee:

Name of the Director	DIN	Category
1 Mr. Gaurav Manjul Kejriwal	01506981	Chairman
2 Mr. Keval Mahendra Shah	07649694	Member
3 Mrs. Shruti Gaurav Kejriwal	10593550	Member

GENERAL MEETINGS

The Annual General Meeting of the Company for adopting the Financial Statements for the period ended March 31, 2025, was held on September 09,2025. Proper Notice was given, and the proceedings were duly recorded in the form of minutes. The minutes have been signed and maintained accordingly in compliances with the provisions of the Act 2013 and rules made thereof as amended time to time.

During the Financial Year under review, there were 02 (Two) Extra-Ordinary General Meeting (EOGM) of the Company viz, 07.08.2025 and 23.03.2026. Proper notice was given, and the proceedings were duly recorded in the form of minutes. The minutes have been signed and maintained accordingly in compliance with the provisions of the Companies Act, 2013 and rules made thereof as amended from time to time

CORPORATE SOCIAL RESPONSIBILITY

The Company is not required to constitute a Corporate Social Responsibility Committee as it does not fall within purview of Section 135(1) of the Act and hence it is not required to formulate policy on corporate social responsibility.

RISK MANAGEMENT

The Board of Directors is overall responsible for identifying, evaluating, mitigating and managing all significant kinds of risks faced by the Company. The Board itself monitors and reviews the risks which have potential bearing on the performance of the Company and in the opinion of the Board there is no risk faced by the Company which threatens its existence.

CONSERVATION OF ENERGY

In terms of Section 134 (3) (m) of the Companies Act, 2013 read with Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988, the Directors furnish the information as below: a. Conservation of energy

Particulars	Explanations
1. The step taken or impact on conservation of energy	The Company has adopted such technology to ensure maximum conservation of energy.
2. The steps taken by the company for utilizing alternate source of energy	It makes timely maintenance of accessories used in providing services to make optimum utilisation of electricity.
3. The capital investment on energy conservation equipment	No capital investment been made of conservation of equipment

b. Technology absorption

Particulars	Explanations
1 The effort made towards absorption	The Company continues to use the absorption latest technologies for improving the productivity
2 The benefits derived like product improvement, cost reduction, product development or import substitution	Nil
3 In case of imported technology (important during the last three years reckoned from the beginning of	Nil
(a)The details of technology imported	N.A.
(b)The year of import	N.A.
(c)Whether the technology has been fully absorbed	N.A.
(d)If not fully absorbed areas where absorption has not taken place and the reasons thereof	N.A.
4 The expenditure incurred on Research and Development	Nil

c. Foreign Exchange earnings and outgo:

Particulars	Financial Year Ended March 31,2026	Financial Year Ended March 31,2025
Foreign Exchange Earnings
Export Sale	70.579	43,132.639
Foreign Exchange Outgo
Purchases	49.478	48,946.458
Tooling & Designing Charges	Nil	25,971.620

AUDITORS AND THEIR REPORTS

1. STATUTORY AUDITOR

M/s. Jain Vinay & Associates, Chartered Accountants, (Firm Registration No. 006649W) the Statutory Auditors of the Company, were appointed at 18th Annual General Meeting until the conclusion of 23rd Annual General Meeting of Company in terms of the provisions of Section 139 of the Companies Act, 2013. There is no audit qualification or observation on the financial statements of Company, by the statutory auditors for the year under review.

2. SECRETARIAL AUDITOR

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the rules made thereunder, secretarial audit is applicable to the Company from financial year 2026-27. Accordingly, the Company is not required to obtain a Secretarial Audit Report for the financial year under review.

3. INTERNALAUDITOR

Pursuant to the provisions of Section 138 of the Companies Act, 2013 and the rules made thereunder, Internal audit is applicable to the Company from financial year 2026-27. Accordingly, the Company is not required to obtain a Internal Audit Report for the financialyear under review.

DIRECTORS RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors state that:

i. In the preparation of the annual accounts for the Financial Year ended March 31, 2026, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any.

ii. They 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 Financial Year and of the loss of the Company for the Financial Year ended March31,2026.

iii. They 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;

iv. The annual financial statements have been prepared

v. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively. Company is in the process of filing extension for FEMA with AD Bank.

FRAUD REPORTING

There was no instance of fraud during the year under review, which is required by the Statutory Auditors to report to the Audit Committee and / or Board under Section 143(12) of the Companies Act, 2013 and the rules made there under.

PARTICULARS OF EMPLOYEE

During the Financial Year under review, there are no employees whose remuneration was in excess of the limits prescribed in the Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended time to time.

PARTICULARS OF LOAN, GUARANTEE OR INVESTMENTS UNDER SECTION 186 OF ACT

During the financial year under review, the Company has not granted any loans or provided any guarantees falling under the provisions of Section 186 of the Companies Act, 2013. All investments made by the Company during the year were within the limits prescribed under the said Section.

PARTICULARS OF CONTRACT AND ARRANGEMENT WITH RELATED PARTIES

All related party transactions entered into during the financial year were on an arms length basis, in the ordinary course of business and were in compliance with the applicable provisions of the Companies Act, 2013.

The disclosure of related party transactions in Form AOC-2 is given in Annexure I, which provide the details transaction, contract or arrangement with related parties.

Details of the related party transactions as per the applicable accounting standards form a part of the Notes to the Standalone Financial Statements.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

During the Financial year under review, your Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore, there were no funds which were required to be transferred to Investor Education and Protection Fund (I EPF).

CORPORATE GOVERNANCE REPORT

The Equity Shares of the Company are listed on the SME platform (BSE SME) of Bombay Stock Exchange. Pursuant to Regulation 15(2) SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015 the compliance with the Corporate Governance provision as specified in Regulation 17 to 27 and clause (b) to (i) of sub regulations (2) of regulation 46 and par as C, D and E of Schedule V of SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015 shall not apply.

Hence, Corporate Governance Report does not form a part of this Board Report, though we are committed for the best corporate governance practices

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

Management Discussion and Analysis Report for the year under review, as stipulated under the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("Listing Regulations"), is presented in a separate section, forming part of the Annual Report.

MATERIAL ORDERS OF JUDICIAL BODIES / REGULATORS

No significant or material order has been passed by any Regulator, Court or Tribunal during the financial year ended March 31, 2026 which could impact the going concern status and companys operations in future.

THE DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR:

There is no proceeding pending against the company under the Insolvency and Bankruptcy code, 2016 (IBC Code).

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT,2013:

Companys commitment towards creating a respectful workplace that is free from any form of harassment and discrimination is exemplified by its zero-tolerance approach towards any act of sexual harassment. The Company has a comprehensive policy which is in compliance with the provisions of the Sexual

Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 which is available at the website of the Company https://hiahnessmicro.com/. A group level Internal Complaints Committee ("ICC") has been constituted as per procedure prescribed in the law. All such investigations are conducted as per the tenets of the law and the Companys policy. The list of ICC members has been prominently displayed in the office. Following are the details of sexual harassment cases for financial year 2025-26:

Number of complaints filed during the Financial Year	NIL
Number of complaints disposed off during the Financial Year	NIL
Number of complaints pending as at the end of the Financial Year	NIL

We also hereby confirm that during the year under review the Company has duly complied with the provisions of the Maternity Benefit Act, 1961.

THE DETAILS OF DIFFERENCE BETWEEN AMOUNT OF THE VALUATION DONE ATTHE TIME OF ONE-TIME SETTLEMENT AND THE VALUATION DONE WHILE TAKING LOAN FROM THE BANKS OR FINANCIAL INSTITUTIONS ALONG WITH THE REASONS THEREOF:

During the Financial Year under review, there has not been any instance of one-time settlement of the company with any bank or financial institution.

ADEQUACY OF INTERNAL FINANCIAL CONTROL

The Internal Financial Controls with reference to financial statements as designed and implemented by the Company are adequate as per the nature of the business and the size of its operation.

During the year under review, no material or serious observation has been received from the Internal Auditors of the Company for inefficiency or inadequacy of such controls.

COMPLIANCE WITH SECRETARIAL STANDARDS

The Company has Compiled with the applicable requirements as prescribed under the Secretarial Standards on Meetings of the Board of Directors (SS-1) and General Meetings (SS-2) read with the relevant provisions of the Companies Act, 2013 and Circulars/Notifications issued by Ministry of Corporate Affairs in this regard.

MATERNITY BENEFIT

The Company affirms that it has duly complied with all provisions of the Maternity Benefit Act, 1961, and has extended all statutory benefits to eligible women employees during the year. The Company is committed to the health and well-being of employees and believes in providing essential support during this important life event.

PARTICULARS OF EMPLOYEES OF THE COMPANY

During the financial year under review the details of no of employees are as under:

1. MALE- 24

2. FEMALE-22

3.Transgender-0

ACKNOWLEDGEMENT

Your Directors take this opportunity to express and place on record their appreciation for the continued support, cooperation, trust and assistance extended by shareholders, employees, customers, principals, vendors, agents, bankers, financial institutions, suppliers, distributors and other stakeholders of the Company.