Pace Digitek Ltd

Dear Members,

Your Directors take pleasure in presenting the Eighteenth (18th) Board's Report on the business and operations of Pace Digitek Limited (formerly known as Pace Digitek Private Limited and Pace Digitek Infra Private Limited) (the "Company"), along with the audited Financial Statements for the Financial Year ("FY") ended March 31, 2025. The Consolidated performance of the Company and its subsidiaries has been referred to, wherever required in the report.

1. FINANCIAL HIGHLIGHTS:

(Amount in Rs. Million, except for EPS data)

2. STATE OF AFFAIRS AND COMPANY'S PERFORMANCE:

Your Company is engaged in the business as manufacturers, designers, buyers, sellers and dealers for all kinds of power electronic equipment and all kinds of electrical and electronic goods instruments, apparatus and appliances and parts and accessories thereof.

There has been no change in the nature of business of the Company during the FY 2025. The summary of your Company's performance is as follows:

(Amount in Rs.Million)

3. DIVIDEND:

The Company intends to employ its' profits for its' operations and performance of the Company for the future years and intends to retain the surplus profits in the statement of Profit and Loss. Accordingly, the Company has not declared any dividend for the FY 2025.

Dividend Distribution Policy:

In terms of regulation 43A of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 as amended, the Company has formulated and uploaded dividend distribution policy on its' corporate website at https://www.pacedigitek.com/pdf/Governance/Policies/01-Dividend-Distribution-Policv.pdf.

4. EARNINGS PER SHARE (EPS):

The Basic EPS of your Company stood at ^14.21 at standalone level and ^16.30 at consolidated level for the FY ended 31 March 2025.

5. TRANSFER TO RESERVES:

The Company has not transferred any amount to reserves during the year under review.

6. PUBLIC DEPOSITS:

Your Company has not accepted any deposits falling within the meaning of Section 73 or 74 of the Companies Act, 2013 (the "Act") during the year under review and as such, no amount on account of principal or interest on deposits from public were outstanding as on the date of the balance sheet.

7. LOANS FROM DIRECTORS OR RELATIVE OF DIRECTORS

The disclosure in relation to loans availed from directors as required under Rule 2(1)(c)(viii) of the Companies (Acceptance of Deposits) Rules, 2014 is applicable. There were no loans taken by the Company from the Director's or relatives of directors, however there are outstanding loans from the Director's as on March 31, 2025.

8. SHARE CAPITAL:

8.1. The Particulars of share capital of the Company are as follows:

8.2. Filing of Draft Red Herring Prospectus (‘DRHP'):

The Company has filed DRHP on March 27, 2025 for fresh issue of shares through Initial Public Offering (‘IPO') up to an amount of Rs. 9000 Million.

8.3. Shares allotted during the FY 2025:

(a) Sub-division of shares:

In terms of the special resolution dated October 16, 2024, the Company has sub-divided Equity Shares of Rs. 10.00 each into Equity Shares of Rs. 2.00 each.

(b) Public issue, rights issue, preferential issue:

There were no public issue or rights issue during the FY 2025.

(c) Details of allotment of Equity Shares under private placement:

(d) Issue of Shares under ESOP:

There were no issuance/allotment of any shares under any extant Stock Option Schemes of the Company during the FY 2025

(e) Issue of Shares with differential rights as to dividend, voting or otherwise:

There were no issuance/allotment of equity shares with differential rights as to dividend, voting or otherwise during the FY 2025.

(f) Issue of Sweat Equity Shares:

There were no issuance/allotment of sweat equity shares during the FY 2025.

(g) Issue of Bonus Shares:

In terms of the shareholders' resolution dated February 01, 2025, the Company has allotted 14,87,01,900 fully-paid Equity Shares of Rs. 2.00 each as bonus shares to all the then existing equity shareholders of the Company.

(h) Buy-back of Shares:

No shares were bought back during the FY 2025.

9. SUBSIDIARIES, ASSOCIATE COMPANIES AND JOINT VENTURES:

Statement containing the salient features of the Financial Statements of the Subsidiary Companies: As per the provisions of Sections 129 of the Act read with Rule 5 of the Companies (Accounts) Rules, 2014, a separate statement containing the salient features of the Financial Statements of the Subsidiary Companies in Form AOC-1 is provided as a part of this Board's Report. Kindly refer to Annexure 1. The Company does not have any associate company or joint venture.

During the year, there has been no material change in the nature of the business of the subsidiaries.

10. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT:

The Company is not required to prepare a Business Responsibility and Sustainability Report for the FY 2025.

11. CORPORATE SOCIAL RESPONSIBILITY (‘CSR'):

The Company has adopted a CSR Policy in accordance with the requirement of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014. The CSR Policy aims to fulfill following objectives:

Establishing a guideline for Compliance with the provisions of Act and Rules and regulations thereon to dedicate a percentage of Companies profits for CSR initiatives. Ensuring the Implementation of CSR initiatives in letter and spirit appropriate procedures and reporting.

During the FY 2025, the Company has spent an amount of Rs. 1.63 million in pursuance of its' CSR Activities. The details of the CSR initiatives of the Company form part of the annual report. The CSR Annual Report is enclosed in this report. Kindly refer to Annexure 6.

The details of the CSR Committee and activities can be accessed at the Company's website at https://www.pacedigitek.com/investor-relations/governance.

12. BOARD OF DIRECTORS, KMP:

12.1. Board of Directors:

The Board of the Company is duly constituted. None of the directors of the Company is disqualified under the provisions of the Act.

12.2. Board Diversity:

Your Company has a truly diverse Board that includes and makes good use of diversity in the skills and industry experience, background and other distinctions among directors.

12.3. Independent Directors:

The following are the Independent Directors of the Company:

• Mr. Prabhakar Reddy Patil;

• Mr. Satishchandra Balkrishna Ogale; and

• Mr. Om Prakash Mishra;

None of the independent directors are related to the promoters and/or promoter group.

12.4. Declaration by Independent Directors:

The Company has received a necessary declaration from each independent director under Section 149(7) of the Act, that he / she meets the criteria of independence laid down in Section 149(6) of the Act.

12.5. Statement regarding opinion of the Board with regard to integrity, expertise and experience (including the proficiency) of the independent directors appointed during the year:

It is hereby declared that in the opinion of the Board, each independent director appointed is a person of integrity and possesses all the relevant expertise and experience (including the proficiency).

12.6. Registration of Independent Directors in Independent Directors Databank:

All the Independent Directors of your Company have been registered and are members of Independent Directors Databank maintained by the Indian Institute of Corporate Affairs (IICA).

12.7. Changes in the composition of Board of Directors:

The changes in the composition of Board of Directors are as follows:

(i) Appointments:

(ii) Change in designation:

(iii) Retirements and re-appointments at the AGM:

Ms. Padma Maddisetty, Whole-time Director who retires by rotation and being eligible, offers herself for re-appointment as a director liable to retire by rotation.

(iv) Re-appointment of Director:

Pursuant to the provisions of SS 2 on General Meetings issued by Institute of Company Secretaries of India, brief particulars of the director proposed to be reappointed are provided as an annexure to the notice convening the AGM.

12.8. Key Managerial Personnel (‘KMP') as at the end of the financial year:

Following are the KMP of the Company in accordance with the provisions of Section 2(51), and 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as at March 31, 2025:

13. POLICY ON DIRECTORS' APPOINTMENT AND REMUNERATION AND OTHER DETAILS:

The Company's policy on directors' appointment and remuneration and other matters provided in section 178(3) of the Act has been uploaded on the website of the Company. The same can be accessed at the web-link at https://www.pacedigitek.com/investor-relations/governance.

14. BOARD MEETINGS DURING THE YEAR:

During the FY 2024- 2025, Twenty-Four (24) meetings of the board were held. The maximum interval between any two meetings did not exceed 120 days, as prescribed by the Act. The details of the same are enclosed in this report as Annexure-3.

15. BOARD EVALUATION AND ASSESSMENT:

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board is required to carry out an annual evaluation of its own performance, that of the Committees and of the Directors individually.

The Company was converted from a Private Limited Company to a Public Limited Company on November 19, 2024. Further, the restructuring of the Board was completed upon the appointment of Independent Directors on January 07, 2025. In view of the recent conversion and restructuring, the performance evaluation of the Board, its committees and individual Directors has not been conducted during the year under review. The Company shall undertake the process of performance evaluation from the next financial year in accordance with the applicable provisions.

The Policy on Board of Directors' Evaluation Framework in compliance with Section 178 can be accessed at https://www.pacedigitek.com/pdf/Governance/Policies/02-Policv-for-evaluation-of- performance-of-board.pdf

16. COMMITTEES OF THE BOARD:

The Company has however, constituted the following committees during the FY 2025:

a) Audit Committee composition as on March 31, 2025:

Audit Committee meetings held during the reporting period as follows:

b) Nomination and Remuneration Committee composition as on March 31, 2025:

There were no meetings of Nomination and Remuneration Committee during the FY 2025.

c) Stakeholders' Relationship Committee composition as on March 31, 2025:

There were no meetings of Stakeholders' Relationship Committee during the FY 2025.

d) CSR committee composition as on March 31, 2025:

CSR Committee meetings held during the reporting period as follows:

e) Risk Management Committee composition as on March 31, 2025:

There were no meetings of Risk Management Committee during the FY 2025.

During the year, all recommendations made by the committees were approved by the Board.

17. ADEQUACY OF INTERNAL FINANCIAL CONTROLS:

Internal Financial Controls are part of risk management process addressing financial and financial reporting risks. They ensure the orderly and efficient conduct of business, including adherence to Company policies, safeguarding of its assets, prevention and detection of fraud, error reporting mechanisms, accuracy and completeness of the accounting records. They aid in the timely preparation of financial statements. The Internal Financial Controls have been documented, digitized and embedded in the business process.

18. AUDITORS:

18.1. Statutory Auditors:

On November 18, 2024 M/s S S Kothari Mehta & Co LLP, Chartered Accountants, (ICAI Firm Registration Number 000756N/N500441) were appointed as the Statutory Auditors of the Company to fill the Casual Vacancy caused by resignation of the M/s. Manish PC Jain & Co., who shall hold office till the conclusion of the upcoming Annual General Meeting to be held in the Financial Year 2025.

Further, the Company in terms of the Section 139 and other applicable provisions of the Act and based on the recommendations of the Audit Committee, the board recommends the appointment of M/s S S Kothari Mehta & Co LLP, Chartered Accountants, (ICAI Firm Registration Number 000756N/N500441) as the Statutory Auditors of the Company, to hold office for a period of five years from the conclusion of this Annual General Meeting till the conclusion of the 23rd Annual General Meeting in the ensuing Annual General Meeting of the Company.

18.2. Secretarial Auditors:

In terms of section 204 of the Act CS Pramod S, Practicing Company Secretary (Membership Number: A36020, CoP Number: 13335, peer review number: 1491/2021) was appointed as the Secretarial Auditors of the Company.

18.3. Cost Auditors:

The Board has appointed Mr. Kamalakara & Co., Cost Accountants, Bangalore as the Cost Auditors of the Company.

In terms of Section 148 and other applicable provisions of the Act, the remuneration payable to the Cost Auditors shall be ratified by the members of the Company in the ensuing Annual General Meeting of the Company.

19. AUDITORS' REPORT AND SECRETARIAL AUDITORS' REPORT:

19.1. Statutory Auditor's Report:

The Notes on financial statements referred to in the Auditors' Report are selfexplanatory and do not call for any further comments. The Report is enclosed to the financial statements in this Annual Report.

Details of the qualification, reservation, adverse remark or disclaimers in the Auditors' Report and the management response to the same are enclosed in this report as Annexure-4.

19.2. Secretarial Auditors' Report:

The Company has undertaken an audit for the FY 2025 as required under the Act and the SEBI Listing Regulations. The Secretarial Auditors' Report for FY 2025 contains certain qualification, reservation or adverse remark. The Secretarial Audit Report for the financial year ended March 31 2025 is enclosed to this report.

Details of the qualification, reservation, adverse remark or disclaimers in the Secretarial Auditors' Report and the management response to the same are enclosed in this report as Annexure-5.

19.3. Instances of fraud reported by the Auditors:

During the year under review, the statutory auditors and the secretarial auditors have not reported any instances of frauds committed in the Company by its Officers or Employees under section 143(12) of the Act to the Central Government or the Audit Committee of the Company.

20. SECRETARIAL STANDARDS:

The Company is in due compliance with all the applicable secretarial standards issued by the Institute of Company Secretaries of India.

21. VIGIL MECHANISM:

The Company has put in place a Whistle Blower Policy and has established the necessary vigil mechanism for employees and others to report concerns about unethical behavior. It also provides for adequate safeguards against the victimization of employees who avail of mechanism. No person has been denied access to the Chairman of the Audit Committee.

The Whistle blower Policy is available on the website of the Company at

https://www.pacedigitek.com/pdf/Governance/Policies/03-Whistleblower-vigil-Mechanism-

Policy.pdf.

22. CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

The particulars relating to conservation of energy, research and development, technology absorption, foreign exchange earnings and outgo, as required to be disclosed under the Act are enclosed to this report. Kindly refer to Annexure 7.

23. DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to Section 134(5) of the Act, the board of directors, to the best of their knowledge and ability, confirm that:

a) in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

b) 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 at the end of the financial year and of the profit and loss of the Company for that period;

c) 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;

d) they have prepared the annual accounts on a going concern basis;

e) Company being unlisted sub clause (e) of section 134(5) is not applicable;

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

24. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS:

Particulars of loans given, investments made, guarantees given and securities provided along with the purpose for which the loan, guarantee, or security is proposed to be utilized by the recipient are provided in the Standalone Financial Statements. (Kindly refer note 9 to the Standalone Financial Statements).

25. RELATED PARTY TRANSACTIONS:

The Company has complied with the provisions of section 188(1) of the Act dealing with related party transactions. The information on transactions with related parties pursuant to section 134(3)

(h) of the Act read with Rule 8 (2) of the Companies (Accounts) Rules, 2014 are given in Form AOC- 2 and is enclosed to this report. Kindly refer to Annexure 2. Reference is also made to Note No. 43 of standalone financial statements.

26. ANNUAL RETURN:

In accordance with the Act, a copy of the annual return in the prescribed form as on 31 March 2025 is available on the Company's website at https://www.pacedigitek.com/investor- relations/governance.

27. PARTICULARS OF EMPLOYEES:

The disclosures in respect of employees under Section 197(12) of the Companies Act, 2013 read with rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is enclosed to this report. Kindly refer to Annexure 8.

28. COMPLIANCE WITH OTHER LAWS:

(i) SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013 (POSH):

The Company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 during the FY 2025.

(a) number of complaints of sexual harassment received in the year: Nil

(b) number of complaints disposed off during the year: Nil; and

(c) number of cases pending for more than ninety days: Nil;

(ii) MATERNITY BENEFITS ACT, 1961:

The Company has complied with the provisions of the Maternity Benefit Act, 1961, including all applicable amendments and rules framed thereunder. The Company is committed to ensuring a safe, inclusive, and supportive workplace for women employees. All eligible women employees are provided with maternity benefits as prescribed under the Maternity

Benefit Act, 1961, including paid maternity leave, nursing breaks, and protection from dismissal during maternity leave.

The Company also ensures that no discrimination is made in recruitment or service conditions on the grounds of maternity. Necessary internal systems and HR policies are in place to uphold the spirit and letter of the legislation.

29. RISK MANAGEMENT:

Risk management is the process of identification, assessment and prioritization of risk followed by coordinated efforts to minimize, monitor and mitigate/ control the profitability and/ or the impact of unfortunate events or to maximize the realization of opportunities. Your Company's risk management process is designed to safeguard the organization from various risks through adequate and timely actions. The potential risks are inventoried and integrated with the management process such that they receive the necessary consideration during decision making.

The Company pursues a comprehensive risk management programme as an essential element of sound corporate governance and is committed to continuously embedding risk management in its daily culture. This process is followed in the following steps:

i) Identification of risks and opportunities;

ii) Assessment of risk and performance for the processes of the Company;

iii) Evaluation of the risk impact across business operations;

iv) Development of a mitigation plan for the risks identified; and

v) Monitoring the risks at regular intervals;

The risks are categorized as under:

i) Financial Risks:

ii) Business Risks:

iii) Operational Risks:

iv) Legal and Regulatory:

v) Projects Delivery related risk

vi) Information Security Risks

Accordingly, your Company's risk management process is designed to safeguard the organization from various risks through adequate and timely actions. The potential risks are inventoried and integrated with the management process such that they receive the necessary consideration during decision making.

30. CORPORATE GOVERNANCE REPORT:

The provisions relating to preparation of corporate governance report is not applicable to the Company.

31. SIGNIFICANT AND MATERIAL ORDERS:

Details of orders passed by the regulators:

1. The Company had filed a compounding application under section 441 of the Act for violation of Section 96(1) of the Act before the Hon'ble Regional Director, South East Region, Hyderabad (the "Hon'ble RD"). The Hon'ble RD, vide its' order dated March 19, 2025 has disposed off the said application on payment of compounding fee levied on the Company and its' Directors.

2. The Company had filed an application for adjudication of penalty under section 454 of the Act for violation of Section 203(5) of the Act before the Registrar of Companies, Bangalore (the "ROC"). The Registrar of Companies, Bangalore has passed an Order dated July 22, 2025 for payment of penalty amounting to Rs. 5,00,000 on the Company and Rs. 5,00,000 each on the Managing Director and Whole-time Director respectively. The Company is in the process of payment of the penalties levied.

3. The Company has filed an application for adjudication of penalty under section 454 of the Act for violation of Section 135 of the Act before the Registrar of Companies, Bangalore (the "ROC"). The application is presently pending before the ROC.

32. MATERIAL CHANGES & COMMITMENTS:

There were no material changes and commitments affecting the financial position of the Company which occurred between the end of financial year to which the financial statement relates on the date of this report. The other changes in commitments are provided in the relevant places of the annual report.

The Company has however, adopted the Ind AS and the financial statements are prepared in accordance with the Ind AS. The financial statements up to the financial year ended March 31, 2025 were prepared in accordance with the Accounting Standards. An explanation of how the transition to Ind AS has affected the previously reported financial position, financial performance and cash flows is provided in financial statements and notes thereon.

33. COST RECORDS AND COST AUDIT:

As per Section 148 of the Act read with the Companies (Cost Records and Audit) Rules, 2014, as amended, the Company is required to prepare and maintain cost records and have the cost records audited by a Cost Accountant and accordingly, it has prepared and maintained such cost accounts and records.

34. APPLICATION UNDER INSOLVENCY AND BANKRUPTCY CODE, 2016:

The Company has not made any application under the Insolvency and Bankruptcy Code, 2016 during the FY 2025.

35. 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:

The Company has not made any such valuation during the FY 2025.

36. GENDER-WISE COMPOSITION OF EMPLOYEES:

In alignment with the principles of diversity, equity, and inclusion (DEI), the Company discloses below the gender composition of its workforce as on March 31, 2025.

• Male Employees: 1056

• Female Employees: 46

• Transgender Employees: Nil

This disclosure reinforces the Company's efforts to promote an inclusive workplace culture and equal opportunity for all individuals, regardless of gender.

37. ACKNOWLEDGMENTS:

The Board of Directors extends its sincere gratitude to the Company's customers, shareholders, vendors, and bankers for their continued support during the year. The Board also places on record its deep appreciation for the dedication and contribution of employees at all levels. The Company's consistent growth has been made possible by their hard work, cooperation, and commitment.

The Directors would like to make a special mention of the valuable support received from various departments of the Central and State Governments, the Direct and Indirect Tax Authorities, the Ministry of Commerce, the Reserve Bank of India, the Ministry of Corporate Affairs/Registrar of Companies and other regulatory authorities. The Board looks forward to their continued support in the Company's future endeavours.

For and on behalf of the Board of Directors of Pace Digitek Limited

(formerly known as Pace Digitek Private Limited and Pace Digitek Infra Private Limited)