Highness Microelectronics Ltd Directors Report

TO,

THE MEMBERS,

HIGHNESS MICROELECTRONICS LIMITED MUMBAI

Your Directors are presenting their 18^th Annual Report of your Company together with the Audited Statement of Accounts and the Auditors Report for the year ended 31st March, 2025.

1. FINANCIAL PERFORMANCE OF THE COMPANY:

(AMOUNT IN INR)

Particulars	FINANCIAL YEAR ENDED TO 31st MARCH 2025	FINANCIAL YEAR ENDED TO 31ST MARCH 2024
Total income	14,12,83,954	10,99,33,675
Less: Total Expenses	(10,86,23,845)	(8,49,83,045)
Profit/ (Loss) before tax	3,26,60,109	2,49,50,630
Less: Exceptional & Extraordinary Items	Nil	Nil
Profit/(Loss) Before Tax	3,20,56,791	2,49,50,630
Less: Provision For Tax Current Tax	84,36,365	7 5,00,000
Deferred Tax	(3,58,336)	(2,68,166)
Profit after tax	2,45,82,080	1,77,18,796

2. NATURE OF BUSINESS:

The Company is principally engaged in the business of designing, developing of various kinds of displays.

3. REVIEW OF BUSINESS OPERATIONS:

The Company has reported Rs. 14,12,83,954/- total income for the current year as compared to total income of Rs. 10,99,33,675/- in the previous year. The net profit for the Financial Year under review amounted to Rs. 2,45,82,080/- as compared to the profit of Rs. 1,77,18,796/- of the previous year.

4. TRANSFER TO RESERVES:

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.

5. DIVIDEND:

During the Financial Year under review, , no dividend has been recommended by the Board of Directors of the Company.

6. CHAGE IN THE NATURE OF BUSINESS.:

There is no change in the nature of the business activities that the Company is engaged in.

7. MATERIAL CHANGE BETWEEN THE END OF THE FINANCIAL YEAR AND DATE OF THIS 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 except, Company has passed resolution for Initial Public Offer (IPO) as on 07.02.2025, the same will supersede in forthcoming AGM

8. EVENTS HELD DURING THE YEAR UNDER REVIEW AND UPTO THE DATE OF THIS REPORT

a) The Company got converted from Highness Microelectronics Private Limited to Highness Microelectronics Limited as on 11.11.2024 and resolution was passed as on 31.08.2024 for the same.

b) MOA was altered as on 05.08.2024,31.08.2024 and 07.02.2025 and AOA was altered as on 31.08.2024, 07.02.2025 AND 28.03.2025

c) Company has obtained Demat connectivity from depositories vide ISIN Letter dated 03.02.2025

9. SIGNIFICANT AND MATERIAL, ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANYS OPERATION IN FUTURE:

During the Financial Year under review, there has been no significant and material orders passed by the regulators or court or tribunals impacting the going concern status and companys operation in future.

10. SUBSIDIARIES. JOINT VENTURES AND ASSOCIATE COMPANIES:

The Company does not have a subsidiary/joint-venture or an associate company in India.

11. PERFORMANCE AND FINANCIAL POSITION OF EACH OF THE SUBSIDIARIES. ASSOCIATES AND JOINT VENTURE COMPANIES INCLUDED IN THE CONSOLIDATED FINANCIAL STATEMENT:

The Company does not have any subsidiaries, associates, or joint venture companies as per Companies Act, 2013 (Act) hence Consolidation of Financial Statements is not applicable.

12. DEPOSITS:

During the Financial Year under review, trhe Company has not invited/ accepted any deposits from the public

13. SHARE CAPITAL STRUCTURE OF THE COMPANY:

AUTHORIZED SHARE CAPITAL (ASC):

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

*Authorised Share capital increased form INR 100,000/- (one Lakh) divided into 10,000 shares of INR 10/- each to INR

7.00. 00.000/- (Seven Crores) divided into 70,00,000 Equity Shares of INR 10/- each. w.e.f.05.08.2024

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 INR

3,51,00,000/- (Three Crore Fifty One Lakh only) divided into 35,10,000 Equity Shares of Rs. 10/-.

Issued, Subscribed and Paid-up Share Capital of the Company increased from INR 1,00,000/- (One Lakh) divided into 10,000 Equity Shares of Rs. 10/- each to INR 3,51,00,000/- (Three Crore Fifty One Lakh only) divided into 35,10,000 Equity Shares of Rs. 10/- w.e.f. 31.08.2024

ISSUE OF EQUITY SHARES WITH OR WITHOUT DIFFERENTIAL RIGHTS:

During the Financial Year under review, the Company has issued Bonus Equity Shares with or without the differential rights.

?Company has approved and allotted 35,00,000 Bonus Equity Shares of Rs 10/- as on 31.08.2024.

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.

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.

TRANSFER /TRANSMISSION OF SHARES:

During the Financial Year under review, there is transfer */transmission of shares/securities as per the provisions of the Act and rules made thereof as amended time to time.

*On Board Meeting dated 05.08.2024 there is transfer of 6100 (Six Thousand One Hundred) Equity Shares of Rs. 10 /- each (Rupees Ten only) at par as per the details given below:

TRANSFER NO.	NAME OF TRANSFEROR	NAME OF TRANSFEREE	NO. OF SHARES	DISTINCTIVE NO(S)
				TO	FROM
T-l	Mr. Manjul Kumar Kejriwal	Mr. Gaurav Kejriwal	2300	3201	5500
T-l	Mrs. Manju Devi Kejriwal	Mr. Gaurav Kejriwal	3090	6201	9290
T-2	Mrs. Manju Devi Kejriwal	Mrs. Shruti Gaurav Kejriwal	400	9291	9690
T-3	Mrs. Manju Devi Kejriwal	Mrs. Chhavi Nirav Shah	300	9691	9990
T-4	Mrs. Manju Devi Kejriwal	Mr. Inder Singh	5	9991	9995
T-5	Mrs. Manju Devi Kejriwal	Mrs. Pooja Singh	5	9996	10000

14. RETIREMENT BY ROTATION OF DIRECTORS:

As per Section 152(6), Retirement by Rotation of Directors shall be in accordance with the applicable provisions of the Act and the Rules thereunder.

15. DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMPs):

During the Financial Year under review, the Board of Directors of the Company comprises of the following:

Sr. NAME OF THE DIRECTOR No.	DESIGNATION
1. MR. GAURAV KEJRIWAL	DIRECTOR
2. MR. MANJUL KUMAR KEJRIWAL*	DIRECTOR
3. MRS. SHRUTI GUARAV KEJRIWAL**	DIRECTOR
4. MR. KEVAL MAHENDRA SHAH***	INDEPENDENT DIRECTOR
5. MR. MOPURI KRISHNIAH SATEESH****	INDEPENDENT DIRECTOR
6. MR. JAYAANKURSINGHANIA*****	INDEPENDENT DIRECTOR
7. MR. SANJIV SWARUP#	INDEPENDENT DIRECTOR
8. MS. KAVITA KAILASH BOHRA##	INDEPENDENT DIRECTOR
9. MR. ANIL KUMAR VENKATA GOPALA SANTOi MALLAVARAPU###	CFO
10. MRS. PREETI PARESH RATHI ####	COMPANY SECRETARY

* resigned w.e.f 25/11/2024 and appointed w.e.f 28/03/2025

**appointed w.e.f. 05/08/2024

***appointed w.e.f.25/11/2024

****appointed w.e.f. 25/11/2024

*****appointed w.e.f. 25/11/2024

#appointed w.e.f. 28/03/2025

##appointed w.e.f. 28/03/2025

### appointed w.e.f. 01/12/2024

####appointed w.e.f.04/01/2025

EVENT SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS:

On 6^th August, 2025, Mr. Mopuri Krishniah Sateesh (DIN: 10098764) was removed as an Independent Director in compliances with the provisions of the Companies Act, 2013 and rules made thereunder as amended time to time.

Mr. Mayur Gori was appointed as Chief Financial Officer (CFO) w.e.f 11^th August, 2025 and. Anil Kumar Venkata Gopala Santosh Mallavarapu resigned as Chief Financial Officer (CFO) w.e.f 06^th August, 2025, in compliances with the provisions of the Companies Act, 2013 and rules made thereunder as amended time to time.

16. DECLARATION OF INDEPENDENT DIRECTORS:

The provisions of Section 149 for appointment of Independent Directors does apply to the Company as on 31.03.2025. The Company has received declaration from all Independent Directors of the Company.

17. COMPANYS POLICY ON DIRECTORS APPOINTMENT AND REMUNERATION INCLUDING CRITERIA FOR DETERMINING QUALIFICATION. POSITIVE ATTRIBUTES. INDEPENDENCE OF DIRECTOR AND OTHER MATTERS PROVIDED UNDER SUB-SECTION (3) OF SECTION 178:

The Company, being an unlisted Limited Company was not required to constitute a Nomination and Remuneration Committee under Section 178(1) of the Act and Rule 6 or the Companies (Meetings of Board and its Power) Rules, 2014 and Shareholders Relationship Committee under Section 178(5) of the Act., However, the Company has constituted Nomination and Remuneration Committee and Shareholders Relationship Committee in compliances with the provisions of the Companies Act, 2013 and rules made thereunder as amended time to time.

COMPOSITION OF NOMINATION 6 REMUNERATION COMMITTEE OF THE COMPANY

Name	Designation
Mrs. Jaya Ankur Singhania	Chairperson
Mr. Keval Mahendra Shah	Member
Mr. M. K. Sateesh	Member
Mr. Manjul Kumar Kejriwal	Member

COMPOSITION OF STAKEHOLDERS AND RELATIONSHIP COMMITTEE OF THE COMPANY

Name	Designation
Mr. Keval Shah	Chairperson
Mr. Gaurav Kejriwal	Member
Mrs. Shruti Gaurav Kejriwal	Member

Additionally Company has also formed IPO Committee: COMPOSITION OF IPO COMMITTEE

Name	Designation
Mr. Gaurav Kejriwal	Chairperson
Mrs. Shruti Gaurav Kejriwal	Member
Mr. Keval Mahendra Shah	Member

18. ADEQUACY OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS:

The Company has in place adequate internal financial controls with reference to financial statements. During the year under review, such controls were tested and no reportable material weakness in the design or operation were observed.

19. DISCLOSURE OF COMPOSITION OF AUDIT COMMITTEE AND PROVIDING VIGIL MECHANISM:

The Company being an unlisted Limited Company, the provisions of Section 177 of the Act read with Rule 6 and 7 of the Companies (Meetings of the Board and its Powers) Rules, 2013 is not applicable. However, the Company has constituted Audit Committee in compliances with the provisions of the Companies Act, 2013 and rules made thereunder as amended time to time.

Composition of Audit Committee:

Name	Designation
Mr. Keval Mahendra Shah	Chairperson
Ms. Kavita Bohra	Member
Mr. Gaurav Kejriwal	Member
Mr. M. K. Sateesh	Member

20. STATUTORY AUDITORS:

Satya Gandhi & Co. Chartered Accountants Mumbai (Firm Registration No. 132044W) was reappointed as Statutory Auditor of the Company in 17^th AGM held as on 12^th August 2024 of the Company for 5 years i.e till the conclusion of AGM of the Company to be held in the Financial year 2029 , bu* Satya Gandhi & Co. Chartered Accountants resigned as on 03.03.2025 due to some preoccupation was not able to devote time.

V N Purohit & Co, Chartered Accountants, Mumbai, (Firm Registration No: 304040E) is appointed as the Statutory Auditors of the Company due to casual vacany caused due to the resignation of Satya Gandhi & Co. Chartered Accountants Mumbai (Firm Registration No. 1E2044W) and they shall hold the office of the Statutory Auditor of the Company from the conclusion of Board Meeting (dated 28.03.2025) till ensuing Annual General Meeting to adopt Financial Statements for Financial Year ending 31^st March 2025, but V N Purohit & Co resigned as on 14.07.2025 as their location is not Mumbai based and hence can cause inconvenience

M/s Jain Vinay & Associates (FRN: 006649W) is appointed as the Statutory Auditors of the Company due to casual vacancy caused due to the resignation of V N Purohit & Co, Chartered Accountants, Mumbai, (Firm Registration No: 304040E) and they shall hold the office of the Statutory Auditor of the Company from the conclusion of Board Meeting (dated 06.08.2025) and EOGM dated (07.08.2025) till ensuing Annual General Meeting to adopt Financial Statements for Financial Year ending 31^st March 2025. M/s Jain Vinay & Associates (FRN: 006649W) is appointed as statutory auditors of the Company for a period of 5 (five) years in ensuing Annual General Meeting to hold the office from the conclusion of this Annual General Meeting till the conclusion of Annual General Meeting of the Company to be held in the Financial Year 2028-2029 to adopt Financial Statements for Financial Year ending 31st March 2029.

In this regard, the Company has obtained a written consent under Section 139 of the Act from the Auditors to such continued appointment and also a certificate from them to the effect that their appointment, if ratified, would be in accordance with the conditions prescribed under the Act and the rules made thereunder, as may be applicable.

21. AUDITORS REPORT:

There are no qualifications or observation, or remark made by the Auditors in their Report.

22. NUMBER OF MEETINGS:

A. BOARD MEETINGS:

During the financial year under review, the Board of Directors met 07 (seven) times viz. 13/06/2024, 29/07/2024, 05/08/2024 , 31/08/2024, 25/11/2024, 07/02/2025 and 28/03/2025. Proper notices were 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 and rules made thereof as amended from time to time.

Name of Director	Number of meetings entitled to attend	Number meetings attended
MR. GAURAV KEJRIWAL	07	07
MR. MANJUL KUMAR KEJRIWAL	05	05
MRS. MANJU DEVI KEJRIWAL*	03	03
MRS. SHRUTI GUARAV KEJRIWAL**	04	03
MR. KEVAL MAHENDRA SHAH***	02	02
MR. MOPURI KRISHNI/ SATEESH****	02	02
MR. JAYA ANKUR SINGHANIA*****	02	02
MR. SANJIV SWARUP#	01	01
MS. KAVITA KAILASH BO HR Aft#	01	01

*resigned w.e.f.05/08/2024

** appointed w.e.f. 05/08/2024

***appointed w.e.f.25/11/2024

****appointed w.e.f. 25/11/2024

*****appointed w.e.f. 25/11/2024

#appointed w.e.f. 28/03/2025

##appointed w.e.f. 28/03/2025

AUDIT COMMITTEE MEETING:

During the financial year under review, members of Audit Committee met 01 (one ) time i.e. 18.03.2025. Proper notices were 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 and rules made thereof as amended from time to time.

SR. NAME NO.	Number of meetings entitled to attend	Number meetings attended
1. MR. KEVAL M. SHAH	01	01
2. MR. MOPURI KRISHNIAH SATEESH	01	01
3. MR. GAURAV KEJRIWAL	01	01

C. NOMINATION AND REMUNERATION COMMITTEE MEETING:

During the financial year under review, members of Audit Committee met 01 (one ) time i.e. 18.03.2025. Proper notices were 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 and rules made thereof as amended from time to time.

SR. NAME NO.	Number of meetings entitled to attend	Number meetings attended
1. MS. JAYA SINGHANIA	01	01
2. MR. MOPURI KRISHNIAH SATEESH	01	01
3. MR. KEVAL M. SHAH	01	01

D. GENERAL MEETINGS INCLUDING ANNUAL GENERAL MEETING IAGM):

During the Financial Year under review, there were 04 (four) Extra-Ordinary General Meeting (EOGM) of the Company viz, 31/08/2024, 25/11/2024, 07/02/2025 and 28/03/2025

The Annual General Meeting of the Company for adopting the Financial Statements for the period ended 31^st March, 2024, was held on 12^th August, 2024. 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.

23. CORPORATE SOCIAL RESPONSIBILITY:

The Company in 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.

24. RISK MANAGEMENT POLICY:

The Board is of the opinion that, there are no elements of risk which may threaten the existence of the Company hence it was not required to implement a Risk Management Policy.

25. CONSERVATION OF ENERGY. TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNING AND OUTGO:

The details of conservation of energy, technology absorption, foreign exchange earnings and outgo are as follows:

(a) Conservation of energy:

Sr. No Particulars.	Explanations
(i) The step taken or impact on conservation of energy	The Company has adopted such technology ensure maximum conservation of energy.
(ii) 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.
(iii) The capital investment on energy conservation equipment	No capital investment been made conservation of equipment

(b) Technology absorption:

Sr. Particulars No.	Explanations
(i) The effort made towards absorption	The Company continues to use the absorption latest technologies for improving the productivity
(ii) The benefits derived like product improvement, cost reduction, product development or import substitution	Nil
(iii) In case of imported technology (important during the last three years reckoned from the beginning of the financial year)	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.
(iv) The expenditure incurred on Research and Development	Nil

(c) Foreign Exchange earnings and outgo:

(Amount in INR Lakhs)

Particulars	FINANCIAL YEAR ENDED TO 31st MARCH 2025	FINANCIAL YEAR ENDED TO 31st MARCH 2024
FOREIGN EXCHANGE EARNINGS
EXPORT SALE	4,31,32,639	11,83,111
FOREIGN EXCHANGE OUTGO
Purchases	4,89,46,458	2,70,77,775
Tooling & Designing Charges	2,59,71,620	2,92,88,040

26. TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND:

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 (IEPF).

27. SECRETARIAL AUDIT:

The provisions relating to appointment of Secretarial Auditor is not applicable to the Company.

28. DISCLOSURE ABOUT COST RECORDS & AUDIT:

Since the Company does not meet the criteria for the applicability of Section 148(1) of the Act read with the Companies (cost records and audit) Rules, 2014, this clause is not applicable.

29. 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, 2025, 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 31" March, 2025.

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 on a going concern basis; and

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.

vi. Company is in the process of filing extension for -FEMA with AD Bank

30. DETAIL OF FRAUD REPORT BY AUDITOR:

As per Auditor Report, no fraud U/S143 (12) of the Act reported by auditor.

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

During the Financial Year under review, the Company has not made investment in other securities but has given advanced /given any Loan, guarantee to Director, requisite forms as required is being filed with Ministry of Corporate Affairs for the same. Hence, Company is in compliance.

32. 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.

33. PARTICULARS OF CONTRACTS OR AGREEMENTS WITH RELATED PARTIES:

Pursuant to the provisions of Section 134 (3) (h) of the Companies Act, 2013, the particulars of contracts or arrangements with related parties referred to in Section 188(1) of the Companies Act, 2013 and prescribed in Form AOC - 2 of Companies (Accounts) Rules, 2014, are appended as Annexure I to this report.

34. EXTRACT OF ANNUAL RETURN:

As required pursuant to section 92(3) of the Act and rule 12(1) of the Companies (Management and Administration) Rules 2014 an extract of annual return in MGT 9 as a part of this Annual Report as Annexure -II.

35. WEB LINK OF ANNUAL RETURN:

The Company does not have web link.

36. COMPLIANCE WITH SECRETARIAL STANDARD (SS):

The Directors state that the applicable Secretarial Standards i.e., SS-1 and SS-2, issued by the Institute of Company Secretaries of India, relating to Meeting of Board of Directors and General Meetings respectively have been duly complied with.

37. 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:

During the Financial Year under review, there were no application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016.

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

There was no complaint filed against the Company or any of its employees under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 during the financial year under review.

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

During the Financial Year under review, there has been no time settlement of loans taken from the Banks or Financial Institutions.

40. ACKNOWLEDGEMENTS:

The Directors place on record their sincere appreciation for the assistance and co-ordination extended by Bank, its employees, its Auditors and all other associated and look forward to continuing fruitful association with all business partners of the Company.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS HIGHNESS MICROELECTRONICS LIMITED

GAURAV KEJRIWAL	MANJUL KUMAR KEJRIWAL
DIRECTOR	DIRECTOR
(DIN: 01506981)	(DIN: 01507039)
PLACE: MUMBAI
DATED: 09th SEPTEMBER 2025