Dear Members,

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:

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.

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:

*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:

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.

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:

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.

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/-

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:

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:

Appointment of Key Managerial Personnel (KMP):

During the year the following appointments were made:

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:

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 Rul 12 of the Companies (Management and Administration) Rules, 2014, the details forming pai 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 Ac- 2013, the Company is not required to provide extract of Annual Return (Form MGT-9) a part of the Board's report

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

There has been no significant and material order passed by any regulators or courts o 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 a stakeholders, bankers, dealers, auditors, vendors and other business partners which hav contributed to the successful management of the Company's affairs. Your Directoi recognize and appreciate the efforts and hard work of all the employees of the Company an their continued contribution to its progress.

Date: 29.04.2023 Place: Pune

2. Details of material contracts or arrangement or transactions at arm's length basis: -

[Pursuant to section 204(1) of the Companies Act, 2013 and rule No.9 of the Companies (Appointment and Remuneration Personnel) Rules, 2014]

To,

The Members,

CIN: U29308KA2017PLC101287 Cabin No. - 10, 5th Floor, IndiQube Penta,

New No. 51, (Old No.14) Richmond Road,

Bangalore - 560025, Karnataka, India

We have conducted the Secretarial Audit of the compliance of applicable statutory provisions and the adherence to good corporate practices for the Financial Year 2022-23 of M/s DRONEACHARYA AERIAL INNOVATIONS LIMITED (hereinafter called the "Company"), incorporated on 10^th March, 2017 and having CIN- U29308KA2017PLC101287 and Registered office at Cabin No. - 10, 5th Floor, IndiQube Penta, New No. 51, (Old No.14) Richmond Road, Bangalore Bangalore KA 560025 IN. Secretarial Audit was conducted in a manner that provided us a reasonable basis for evaluating the statutory compliances and expressing our opinion thereon.

Based on our verification of the books, papers, minutes books, forms, and returns filed by the Company and also information provided by the Company, agents, and authorized representative during the course of Secretarial Audit, we hereby report that in our opinion, the Company has, during the audit period covering the financial year ended on 31^st March, 2023 complied with the statutory provisions listed hereunder and also that the Company has proper Board processes and compliances-mechanism in place to the extent, in the manner and subject to the reporting made hereinafter:

We have examined the books, papers, minute books, forms, and returns filed and record maintained by the Company for the financial year ended on 31^st March, 2023 according to the

applicable provisions of the

(i) The Companies Act, 2013 (the Act) and the rules made thereunder;

(ii) The following Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act'): -

(a) The Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015;

(b) The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009; and amended on 2nd of February 2018;

(c) The Securities and Exchange Board of India (Employee Stock Option Scheme and Employee Stock Purchase Scheme) Guidelines, 1999;

(d) The Securities and Exchange Board of India (Issue and Listing of Debt Securities) Regulations, 2008;

(e) The Securities and Exchange Board of India (Registrars to an Issue and Share Transfer Agents) Regulations, 1993 regarding the Companies Act and dealing with client;

(f) The Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations,2011;

(iii) Other laws applicable to the Company as given below, we have relied on the compliance system prevailing in the Company and on the basis of information provided to us;

i) Reserve Bank of India Act, 1934

ii) Prevention of Sexual Harassment Act, 2013

We have also examined compliance with the applicable clauses of the following:

(i) Secretarial Standards issued by The Institute of Company Secretaries of India.

(ii) Listing Agreement entered into by the Company with BSE Limited.

During the period under review the Company has complied with the provisions of the Act,

Rules, Regulations, Guidelines, Standards, etc. mentioned above subject to the following

observations:

• That the Company has not complied with the Secretarial Standards issued by ICSI for conducting Board Meetings and General Meetings.

• That the Company has failed to update its CIN from unlisted to Listed till date.