It is our pleasure in presenting the 36^th Annual Report of Aarvi Encon Limited (“the Company” or “Aarvi”) on business and operations of the Company along with the Audited Standalone and Consolidated Financial Statements and the Auditor’s Report for the year ended March 31,2024.

Corporate Overview: -

The Company, established in 1987, has been a cornerstone in providing exceptional Engineering and Manpower Outsourcing Services both in India and internationally. Known for its innovative problem-solving capabilities, the Company consistently delivers high-quality services punctually, earning trust and satisfaction from clients worldwide. Many of these relationships span decades, underscoring our commitment and reliability.

In 2017, the Company successfully debuted on the SME platform of the National Stock Exchange of India Limited through an Initial Public Offering (IPO). Subsequently, on June 24, 2020, the trading of Equity Shares transitioned from the SME EMERGE platform to the Main Board of NSE, marking a significant milestone in our growth trajectory.

Headquartered in Mumbai, with branch offices strategically located across India and abroad, we maintain a robust presence to cater to diverse client needs. Our dedication to cultivating a positive workplace culture was recognized during the year, as we were honoured with the “Certified Great Place to Work Award” by the Great Place to Work organization.

1. FINANCIAL HIGHLIGHTS/PERFORMANCE OF THE COMPANY

The key highlights of the Standalone and Consolidated Audited Financial Statements of the Company for the financial year ended March 31, 2024 in comparison with the previous financial year ended March 31, 2023 are summarized below:

Standalone And Consolidated Financial Statements

As mandated by the Ministry of Corporate Affairs, the financial statements for the year ended on March 31, 2024 has been prepared in accordance with the Indian Accounting Standards (“Ind AS”) notified under Section 133 of The Companies Act, 2013 (hereinafter referred to as “the Act”) read with the Companies (Accounts) Rules, 2014 as amended from time to time. The estimates and judgments relating to the Financial Statements are made on a prudent basis, to reflect in a true and fair manner, the form and substance of transactions and reasonably

present the Company’s state of affairs, profits and cash flows for the year ended March 31,2024. The Notes to the Financial Statements adequately cover the standalone and consolidated Audited Statements and form an integral part of this Report.

2. REVIEW OF BUSINESS OPERATIONS AND FUTURE PROSPECTS / STATE OF AFFAIRS:

The Board of Directors of the Company wish to present the details of Business Operations carried out during the year under review:

Standalone Performance

The Company has reported a slight decrease in revenue from operations at Rs. 377.65/- Cr. as against Rs. 382.69/-Cr. of previous year and Net profit at Rs. 10.35/- Cr. as against Rs. 14.12/- Cr. of previous year.

Consolidated Performance

In accordance with Section 129 of the Act and the IND AS-27 on Consolidated and Separate Financial Statements, the Audited Consolidated Financial Statements are provided in the Annual Report.

The Company has reported a slight decrease in revenue from operations at Rs. 406.15/- Cr. as against Rs. 436.52/- Cr. of previous year and Net Profit at Rs. 11.34/- Cr. as against Rs. 14.51/- Cr. of previous year.

The reduction in Profit After Tax (PAT) can be attributed to several key factors across different regions where the company operates:

Increase in employee cost:

As a part of its strategy of business expansion, the Company has increased its team size across India, UK, Indonesia, Qatar, leading to high employee cost.

Competitive Pricing

In order to penetrate the market, we have taken up new projects at competitive pricing giving us an opportunity build our brand and trust with our clients. This has led to reduction in margins.

Termination of a few projects

The Company has strategically closed several projects that were contributing to stagnant sales figures and did not offer good margins, with high liability.

This move, although affecting short-term profitability, is likely aimed at improving long-term financial health and sustainability by focusing on more profitable and growth-oriented projects.

3. SHARE CAPITAL

The Total Paid-up Capital of the Company as on March 31, 2024, is Rs. 14,78,40,000/- divided into 1,47,84,000 equity shares of Rs.10/- each. There has not been any new issue of share during the year under review.

4. DIVIDEND

The Board of Directors of the Company at its meeting held on June 3, 2021, voluntarily adopted a Dividend

Distribution Policy (“DDP”) of the Company, which sets out the parameters and circumstances that will be taken into account by the Board in determining the distribution of dividend to its shareholders.

Based on the Company’s performance, DDP and keeping in mind the shareholders’ interest, the Board of Directors of the Company at its meeting held on May 13, 2024, has recommended a Final Dividend of 20 % i.e. Rs. 2/- per fully paid- up Equity Share of the face value of Rs. 10/- each for the year ended March 31,2024, subject to the approval of the Members at the ensuing AGM. The dividend once approved by the Shareholders will be paid within 30 days.

The dividend on Equity Shares, if approved by the Members, would involve a cash outflow of Rs. 2.96 Crores reflecting pay out of 28.6% of the Net Profit and shall be paid out of profits of the Company for previous financial years i.e. FY 2023-24 forming a part of retained earnings pursuant to Section 123 (1) of the Act.

In view of the provisions of the Income Tax Act, 1961, the dividend, if declared at the ensuing AGM will be taxable in the hands of the shareholders of the Company.

5. RESERVES

The Balance in Reserves & Surplus stands at Rs 101.92 /- Crores in comparison with the previous year’s balance of Rs. 93.28/- Crores. As per Consolidated financials, the net movement in the reserves of the Company are as follows:

(Rs. in Crores)

6. DEPOSITS

The Company has not accepted/ hold/ any deposits from public within the ambit of Section 73 of the Act and the Companies (Acceptance of Deposits) Rules, 2014 during the year under review. Hence, the requirement for furnishing the details relating to deposits covered under Chapter V of the Act or the details of deposits that are not in compliance with Chapter V of the Act is not applicable.

7. AARVI ENCON LIMITED EMPLOYEE STOCK OPTION PLAN, 2022

At Aarvi, we believe that the employees are the key pillar of strength to any organizational growth. In order to retain and incentivize key talent, for driving long term objectives of the Company and ensuring that employee payoffs match the long gestation period of certain key initiatives whilst simultaneously fostering ownership behavior and collaboration amongst employees, the members of the Company at the Annual General Meeting held on July 29, 2022, adopted Aarvi Encon Limited Employee Stock Option Plan, 2022 (“Plan”).

The Nomination and Remuneration Committee of the Company, inter alia, administers and monitors this Plan in accordance with the Securities and Exchange Board of India (Share Based Employee Benefits) Regulations, 2021 (“SEBI SBEB Regulations”).

The details of the Plan pursuant to Section 62 of the Act read with Rules made thereunder and SEBI SBEB Regulations are annexed to this report as Annexure 2 and is also available on website of the Company at https://aarviencon.com/investors/shareholders-information-and-announcements.

The Company has also received a certificate from the Secretarial Auditor of the Company confirming that the Plan is implemented in line with the SEBI SBEB Regulations. The certificate of the secretarial auditor can be accessed on the following website https:// aarviencon.com/investors/shareholders-information-and-announcements.

8. CREDIT RATING

Your Company’s Domestic Credit Rating is CRISIL SME 1, for the long-term debt /facilities by CRISIL, CRISIL has reaffirmed its ratings i.e. BBB/ STABLE for long term borrowings and A3 for short term borrowings. The Credit Rating derives strength from the operational track record of the Company, cost competitiveness, flexibility derived from diversified services and the Company’ s effort to reduce cost and to improve cost efficiency.

9. INTERNAL FINANCIAL CONTROL SYSTEM AND ITS ADEQUACY

The Company has put in place an adequate internal financial control system, commensurate with the size, scale and complexity of its operations.

The Company also has in place a mechanism to identify, assess, prioritize, monitor and mitigate/ absorb various risks to key business objectives.

The Internal Audit Team plays crucial role in ensuring the financial control systems and setting up the risk management framework along with the statutory auditors. While the routine controls are validated

by the internal audit team, the crucial audit plan is aligned and approved by the Audit Committee to ensure independence.

The risk management policy and framework are approved by Audit Committee basis the industry, size and complexity of the business. Major risks identified by the business and functions are systematically addressed through mitigation action on a continuing basis.

The Internal Controls and the Risks Framework are routinely tested and certified by Statutory as well as Internal Auditors.

The audit observations on internal financial controls and actions on identified risks are periodically reported to/ reviewed by the Audit Committee.

10. SUBSIDIARY, ASSOCIATES AND JOINT VENTURES COMPANIES

AARVI ENCON LIMITED (Parent Company)

Aarvi Encon FZE - United Arab Emirates - UAE

Wholly Owned Subsidiary

• Bon Accord Employment Services (Owned by Local Emairates, managed by Aarvi Encon FZE)

• Aarvi Encon LLC, Oman (Associates Company)

• PT Aarvi Encon Services (Associate Company)

• MNR Technologies Services LLC, (Subsidiary Company)

Aarvi Engineering and Consultants Private Limited - India

Wholly Owned Subsidiary

Aarvi Encon Resources Limited - United Kingdom;

Wholly Owned Subsidiary

Aarvi Encon Staffing Services W.L.L. - Qatar.

Associate Company

Aarvi Energy Company - Saudi

Wholly Owned Subsidiary Incorporated on April 30, 2024

The group structure showcasing the subsidiaries, partnerships, joint ventures etc is provided below:The Company has formulated a Policy for determining ‘Material’ Subsidiaries pursuant to Regulation 16 of The Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (“Listing Regulations”). This policy is available on the Company’s website https://aarviencon.com/investors/policies

Aarvi Encon FZE, a wholly owned subsidiary, continues to be a material subsidiary of the Company as its net worth exceeds 10% of the total consolidated net worth of the Company.

Aarvi Encon FZE, located in the SAIF Zone, Sharjah, UAE, and incorporated on October 13, 2015, Aarvi Encon FZE is a wholly owned subsidiary that partnered with Bon Accord Employment Services in 2018 to develop manpower and consultancy services in the UAE. The Company has successfully executed valuable projects in Abu Dhabi with the Bon Accord and expects more projects in the upcoming year.

Aarvi Encon FZE acquired MNR Technologies Services LLC on June 14, 2023 which now operates as a wholly owned Subsidiary of Aarvi Encon FZE.

Aarvi Encon LLC-An Associate Company incorporated on January 15, 2021, in the Sultanate of Oman.

PT Aarvi Encon Services - An Associate Company incorporated on June 10, 2021, in Jakarta, Indonesia, through its wholly owned subsidiary Aarvi Encon FZE located in the UAE.

Aarvi Engineering & Consultants Private Limited,

a wholly owned subsidiary engaged in consultancy services, Aarvi Engineering & Consultants Private Limited had no operations during the year under review. Its accounts are consolidated with the Company’s accounts as per the provisions of the Act, the Income Tax Act, 1961, and applicable “Accounting Standards” issued by ICAI.

Aarvi Encon Resources Ltd (AERL) incorporated on March 07, 2018, in the United Kingdom (UK), AERL is a wholly owned subsidiary of the Company. Despite appointing a manager and efforts over the past six months, operations did not yield the expected opportunities, resulting in significant expenditures. Therefore, the decision has been made to temporarily pause operations.

Aarvi Encon staffing Services W.L.L. (Qatar), An

Assocate Company, located at Qatar incorporated on January 24, 2022.

*Aarvi Energy Company, A newly incorporated, wholly owned subsidiary in Saudi Arabia and it is expected to commence operations soon. *

Pursuant to the provisions of Section 129(3) of the Act, a statement containing the details of performance and salient features of financial statements of the Company’s subsidiaries in Form AOC-1 is attached herewith to the financial statements of the Company as Annexure -1.

Further, pursuant to the provisions of Section 136 of the Act, the audited financial statements of the Company, consolidated financial statements along with relevant documents and separate audited financial statements in respect of subsidiaries are available on the website of the Company https:// aarviencon.com/investors/financial-results

11. BOARD OF DIRECTORS, COMMITTEES OF BOARD AND KEY MANAGERIAL PERSONNEL

A. Board of Directors

Your Company’s Board of Directors as on the financial year end March 31,2024, comprises of two Executive Directors, out of which one is a Managing Director and the other is a Whole-time Director and Chief Financial Officer, and four Independent Directors including two Women Directors and the same is disclosed in the Report on Corporate Governance as set out separately in this annual report.

During the year under review, the Non-Executive Directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees or reimbursement of expenses, if any incurred by them for the purpose of attending meetings of the Board/Committee of the Company.

During the year under review, Mr. Sharad S. Sanghi (DIN: 00265977), Non-executive, Independent Director of the Company, had tendered his resignation, vide resignation letter dated November 23, 2023, due to personal commitments and other pre-occupations. He further confirmed there are no material reasons for his resignation.

B. Number of Board Meetings During the Year

During the year, 6 meetings of the Board of Directors were held. The details of the same are mentioned in the Corporate Governance Report.

C. Committees of the Board

The Board has formed four Committees viz.

• Audit Committee.

• Nomination and Remuneration Committee.

• Stakeholders’ Relationship Committee.

• Corporate Social Responsibility Committee (Dissolved by the Board w.e.f. April 08, 2024) and.

The Board decides the terms of reference of these Committees and the appointment of members to various Committees. The recommendations, if any, of these Committees are submitted to the Board for approval.

The details of all the Board, its Committees along with their composition, number of meetings and attendance at the meeting are stated in the Report on Corporate Governance as set out separately in this annual report.

During the year, all recommendations of the Audit Committee were accepted by the Board.

D. Key Managerial Personnel

Pursuant to the provisions of Section 203 of the Act, the Company has the following Whole time Key Managerial Personnel (KMP):

E. Details of Directors or Key Managerial Personnel who were appointed or have resigned during the year:

In accordance with the provisions of Section 152 (6) of the Act and in terms of the Articles of Association of the Company, Mr. Jaydev V. Sanghavi (DIN: 00759042), Executive Director and Chief Financial Officer of the Company, retires by rotation at the forthcoming Annual General Meeting and, being eligible, offers himself for re-appointment. The details of Mr. Jaydev V. Sanghavi are furnished in the Notice of the Annual General Meeting. The Board recommends his re-appointment for the consideration of the Members of the Company at the forthcoming Annual General Meeting.

F. Receipt of any commission by MD / ED from Company or from its holding or subsidiary Company

The Company has paid a Commission of 0.5% of the total turnover of the Company to Mr. Virendra D. Sanghavi, Managing Director and Mr. Jaydev V. Sanghavi, Executive Director during the year.

The overall remuneration payable to them is subject the maximum limit of Rs. 1.68 Crores. Further, Mr. Virendra D. Sanghavi and Mr. Jaydev V. Sanghavi did not draw any remuneration and /or commission from its subsidiaries.

12. DECLARATION BY INDEPENDENT DIRECTORS

The Board took on record all declarations and

confirmations submitted by Independent Directors that they meet the criteria of independence as laid down under Section 149(6) of the Act and Regulation 16 (1) (b) and 25 of the Listing Regulations, and there has been no change in the circumstances which may affect their status as an independent director during the year.

During the year under review, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees or reimbursement of expenses, if any incurred by them for the purpose of attending meetings of the Board/Committee of the Company.

In the opinion of the Board, the Independent director re-appointed during the tenure possesses the requisite expertise and experience, (including proficiency) and is a person of high integrity and fulfils the conditions as specified in the Act and the rules made thereunder and is independent of the management.

The Independent Directors have also confirmed compliance with the provisions of Rule 6 of Companies (Appointment and Qualifications of Directors) Rules, 2014, as amended, relating to inclusion of their name in the databank of independent directors.

13. FAMILIARIZATION PROGRAM FOR

INDEPENDENT DIRECTORS

The Company has in place robust mechanism for familiarization of Directors including Independent Directors. The familiarization programmes generally include update on the business, strategy, general operations of the Company, out- side in perspective, new technology, innovation etc. A detailed note on familiarization is provided in Corporate Governance Section and the details of familiarization programmes conducted for Independent Directors is provided on the website at https://aarviencon.com/investors/ policies

14. NOMINATION AND REMUNERATION POLICY

A structured and diversified Board provides the right direction and supports in organizational growth through structured discussions, deliberations, guidance and strategies at the Board level. Considering its importance, the Board on recommendation of Nomination and Remuneration Committee has formulated “Nomination and Remuneration Policy” containing criteria for determining qualifications, positive attributes, independence of a director and other matters provided under section 178(3) of the Act for selection of any Director, Key Managerial Personnel and Senior Management Employees.

The said policy of the Company is directed towards rewarding performance, based on a review of achievements on a periodic basis. The Board of Directors has approved Nomination and Remuneration policy and available at the Company’s website under the web link https://aarviencon.com/ investors/policies

15. ANNUAL EVALUATION BY THE BOARD

The Nomination and Remuneration Committee (NRC) has approved a framework / policy for performance evaluation of the Board, Committees of the Board and the individual members of the Board (including the Chairperson) that includes criteria for performance evaluation, which is reviewed annually by the Committee. A questionnaire for evaluation of the performance of Board, its Committees and the individual members of the Board (including the Chairperson), is designed in accordance with the said framework and covering various aspects of the performance of the Board and its Committees, including composition and quality, roles and responsibilities, processes and functioning, adherence to Code of Conduct and Ethics and best practices in Corporate Governance as mentioned in the Guidance Note on Board Evaluation issued by the Securities and Exchange Board of India on January 5, 2017 was circulated to the Directors.

Pursuant to the provisions of the Act and Listing Regulations, and based on policy devised by the Committee, the Board has carried out an annual evaluation of its own performance, its committees and individual directors. The Board performance was evaluated on inputs received from all the Directors after considering criteria as mentioned aforesaid.

The performance of the Committees was evaluated by the Board of Directors on input received from all Committee members after considering criteria as mentioned aforesaid.

Pursuant to Listing Regulations, performance evaluation of independent director was done by the entire Board, excluding the independent director being evaluated.

The performance evaluation of non-independent directors and the Board as a whole and Chairman of the Board and assessed the quality, quantity and timeliness of the flow of information between the Management and the Board, which is necessary for the Board to effectively and reasonably perform its duties was also carried out by the Independent Directors of the Company through separate meeting on March 29, 2024.

16. VIGIL MECHANISM

The Company is committed to adhere to the highest standards of ethical, moral and legal conduct of business operations and to maintain these standards, the Company encourages its employees who have genuine concerns about suspected misconduct to come forward and express these concerns without fear of punishment or unfair treatment.

Pursuant to the Regulation 22 of Listing Regulation and the provision of Section 177(9) of the Act read with Rule 7 of the Companies (Meeting of Board and its Powers) Rules, 2014, a “Vigil Mechanism Policy” for Directors and Employees of the Company is in place, to report their genuine concern of any violation of legal or regulatory requirements, incorrect or misrepresentation of any financial statements and reports, unethical behavior, actual or suspected fraud or violation of the Company’s Code of Conduct.

The Code also provides for adequate safeguard against victimization of person who use such mechanism and provision for direct access to the chairperson of the Audit Committee of the Company for redressal. During the year under review, no such complaints were received.

The details of the “Vigil Mechanism Policy” are available on the website of the Company at https:// aarviencon.com/investors/policies

17. DIRECTORS’ RESPONSIBILITY STATEMENT

The Directors’ Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 of the Act, the Directors state that:

(a) In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to 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 this 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) They have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively and

(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.

18. AUDITORS

A. Statutory Auditors

As per the provision of Section 139, 141 of the Act and rules made thereunder, at the 34^th AGM held on July 29, 2022, the Members had approved the appointment of M/s. Jay Shah & Associates, Chartered Accountants (Firm Registration No. 136424W) as the Statutory Auditors of the Company to hold office for a period of five consecutive years from the conclusion of the 34^th AGM till the conclusion of the 39^th AGM.

Auditor’s Report

The Auditor’s Report on the Financial Statements of the Company for the Financial year ended March 31, 2024, is unmodified i.e., it does not contain any qualification, reservation or adverse remark. The Auditors’ Report is enclosed with the Financial Statements forming part of the Annual Report.

Details Of Fraud Reported By Auditors

There were no frauds reported by the Statutory Auditors under provisions of Section 143(12) of the Act and rules made thereunder.

B. Internal Auditor And Internal Audit Systems

Pursuant to the provisions of Section 138 of the act and the Companies (Accounts) Rules, 2014, your Company has appointed M/s. Natwarlal Vepari & Co., Chartered Accountants, to conduct internal audit across the organization. We have strengthened the in-house internal audit and compliance team to supplement and support the efforts of M/s. Natwarlal Vepari & Co.

C. Secretarial Auditor

Section 204 of the Act, inter-alia, requires every listed Company to annex with its Board’s Report, a Secretarial Audit Report given by a Company Secretary in practice, in the prescribed form. The Board of Directors appointed M/s. Bhatt & Associates, Company Secretaries, LLP, Mumbai, as Secretarial Auditor to conduct the Secretarial Audit of the Company for the Financial Year 2023-24 and their Report is annexed to this Board Report (Annexure 4).

D. Secretarial Compliance Report of Aarvi Encon Limited for the Financial year ended March 31, 2024

As per Regulation 24A of Listing Regulations, read with SEBI Circular dated February 08, 2019, the listed entities in addition to the Secretarial Audit Report as required under section 204 of the Act is also required to submit a separate report i.e. Annual Secretarial Compliance Report with the exchange within sixty days of the end of the financial year for compliance of all the applicable SEBI Laws, circulars or guidelines thereunder.

The Secretarial Compliance Certificate has been issued by the M/s. Bhatt & Associates, Company Secretaries, LLP, after independent verification of the records, books, papers and documents as maintained by the Company as per all the applicable SEBI laws, Regulations and circulars/ guidelines issued thereunder. The same was submitted to the Stock Exchange(s) within the stipulated date and a copy of the same is hosted at our website at https:// aarviencon.com/investors/secretarial-compliance-report and annexed also to this Board Report (Annexure 5).

19. CORPORATE SOCIAL RESPONSIBILITY

The Company’s CSR Policy provides guidelines to conduct CSR activities of the Company, which can be accessed on the Company’s website at https://aarviencon.com/investors/policies. All the CSR Activities are aligned to Company’s values for contributing to the community and in line with CSR policy of the Company.

During the year the Company has spent Rs. 20,88,132/- on the CSR expenditure as against the mandated spend of Rs. 19,37,535/-. In terms of the provisions of the Act read with amended Companies (Corporate Social Responsibility Policy) Rules, 2014, the CSR Report for the financial year 2023-24 forms part of the Board’s Report and is annexed as Annexure 3 to this report.

The Board in its meeting held on April 08, 2024, dissolved the Corporate Social Responsibility Committee of the Board in accordance with Section 135 of the Act, as the Company was exempted from the requirement of constituting a CSR Committee. The Annual CSR Expenditure did not exceed Rs. 50 Lakhs in the preceding Financial Year and thus, the Company was exempted from forming the CSR Committee as per CSR (Amendment Rules), 2021. Alternatively, as per the provisions of section 135(9), on dissolution of the CSR Committee, all powers,

duties, and responsibilities formerly assigned to the CSR Committee, were approved to be discharged directly by the Board of Directors of the Company.

The Composition of Committee before dissolution is provided below:

*Resigned from the Committee with effect from November 23, 2023, due to personal commitments and other pre-occupations.

20. RISK MANAGEMENT

The Company has adopted a Risk Management Policy which lays down the framework to define, assess, monitor, prioritize and mitigate/absorb the business, operational, financial and other risks associated with the business of the Company. The Risk Management Policy enables for growth of

Company by helping its business to identify risks, assess, evaluate and monitor risks continuously and undertake effective steps to manage these risks.

21. COMPLIANCE WITH THE PROVISIONS OF SECRETARIAL STANDARD - 1 (SS-1) AND SECRETARIAL STANDARD - 2 (SS-2)

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards issued by the Institute of Company Secretaries of India and that such systems are adequate and operating effectively. The Company has complied with SS-1 and SS-2.

22. PARTICULARS OF EMPLOYEES

In terms of the provisions of Section 197(12) of the Act read with Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has no employee who is in receipt of remuneration of Rs. 8,50,000/- per month and / or Rs. 1,02,00,000 per annum and hence the Company is not required to give information under the said rules. Further, Company has not posted any of the Employees in a country outside India, not being directors or their relatives, drawing more than sixty lakh rupees per financial year or five lakh rupees per month during the year.

Disclosures relating to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report.

Disclosures relating to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of this Report and provided below:

Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014:

(a) Ratio of the remuneration of each Director, Chief Financial Officer and Company Secretary of the Company and b) ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year 2023 - 24:

* Entitled for Sitting fees of 20,000 for attending each Board and Audit Committee and 7,500 for attending all other Committee Meetings for the Financial Year 2023-24.

Revision on sitting fees (w.e.f. April 08, 2024): Board and Audit Committee - Rs. 30,000;

Nomination and Remuneration Committee - Rs. 20,000; Stakeholder Relationship Committee - 15,000 and Independent Director Meeting to Rs. 15,000

(b) Number of Employees on rolls of the Company:

Permanent: 205

Contract: 5253

(c) Average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration: Not Applicable, since there is no change in the remuneration paid to the Executive Directors of the Company.

(d) It is affirmed that the remuneration paid to the Directors, Key Managerial Personnel and other Employees is as per the remuneration policy of the Company.

23. DISCLOSURE OF RELATED PARTY TRANSACTIONS

The Company has formulated Policy on Materiality of Related Party Transactions, which provides for the process to be followed for approval of any transactions with related parties and mandate for directors/KMPs to provide disclosure of interest in any of the transactions amongst the others.

All the related party transactions entered into during the financial year were on an arm’s length basis and in the ordinary course of the Company’s business. All such contracts or arrangements were entered into only with prior approval of the Audit Committee.

Omnibus approval was obtained for the transactions of repetitive nature. In compliance with the requirement of Listing Regulations, names of related parties and details of transactions with them have been included in notes to the financial statements provided in this Annual Report. The Policy on Materiality of Related Party Transactions and dealing with Related Party Transactions as approved by the Board are available on the Company’s website at https://aarviencon.com/ investors/policies .

There are no materially significant related party transactions made by the Company with Promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large and thus, a disclosure in the prescribed Form AOC-2 in terms of Section 134 of the Act is not required.

24. ANNUAL RETURN

As required under Section 92(3) of the Act, the Annual Return as on March 31,2024, is available on the Company’s website on at www.aarviencon.com

25. MANAGEMENT DISCUSSION AND ANALYSIS (MD&A) REPORT

Pursuant to the provisions of Regulation 34(e) read with “Schedule V” of the Listing Regulations, the Management Discussion and Analysis capturing your Company’s performance, industry trends and other material changes with respect to your Companies and its subsidiaries, is presented in a separate section forms part of this Report.

26. CORPORATE GOVERNANCE

Your Company is committed to maintain the highest standards of corporate governance. We believe sound corporate governance is critical to enhance and retain investor trust. Our disclosures seek to attain the best practices in corporate governance. We always strive to implement several best corporate governance practices in the Company to enhance long-term shareholder value and respect minority rights in all our business decisions. Corporate Governance Report in terms of regulation 34(3) read with “Schedule V” of the Listing Regulations, for financial year 2023-24 is presented in separate section forming part of this Annual Report. A Certificate from M/s. Bhatt & Associates, Company Secretaries, LLP, confirming compliance to the conditions of Corporate Governance as stipulated under Para E of Schedule V of the Listing Regulations, is enclosed with this Report.

27. CHANGE IN THE NATURE OF BUSINESS

There has been no change in the nature of business of the Company during the year under review.

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

Your Company is committed and dedicated in providing a healthy and harassment free work environment to every individual of the Company, a work environment that does not tolerate sexual harassment. We highly respect the dignity of everyone involved at our workplace, whether they are employees, suppliers or our customers. We require all employees to strictly maintain mutual respect and a positive attitude towards each other.

In accordance with Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed their under, the Company has formed an Internal Complaints Committee and framed and adopted the policy for Prevention of Sexual Harassment at Workplace.

The following is the summary of Sexual Harassment complaints received and disposed of during the year 2023-24.

Number of complaints pending as on the beginning of the financial year - Nil

Number of complaints filed during the financial year-Nil

Number of complaints pending at the end of the financial year-Nil

The Annual Return under the aforesaid Act has been filed with the Labour Commissioner, Mumbai.

29. THE CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Your Company is committed towards energy conservation. We recognize energy efficiency plays a central role in lowering your Company’s operational Green House Gas emissions. Various improvements and initiatives are implemented to enhance efficiency through technological upgrades and effective monitoring of operational and maintenance activities. Your Company has been able to reduce the electricity consumption and carbon footprint over the years through effective energy management and sustainable initiatives. The information pertaining to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and outgo as required under Section 134 (3) (m) of the Act read with Rule 8(3) of the Companies (Accounts) Rules, 2014 are as stated below:

A) Conservation of Energy

1. The steps taken or impact on conservation of energy:

The Company applied a strict control system to monitor day to day power consumption. The Company ensures optimal use of energy with minimum extent of wastage as far as possible. The day-to-day consumption is monitored to save energy.

2. The steps taken by the Company for utilizing alternate sources of energy:

The Company has not taken any such steps as we are in the service sector and consume only electricity to operate laptop and maintain server.

3. The Capital Investment on Energy Conservation

Equipment:

The Company has not made any capital investment in energy conservation equipment.

B) Technology Absorption

Particulars relating to technology absorption are not applicable.

C) Foreign Exchange Earnings and Outgo

(Amount in Rs.)

30. PARTICULARS OF LOAN, GUARANTEE OR INVESTMENTS

The particular of loans given, guarantees provided and investments made are given in the notes to the Financial Statements.

31. MATERIAL CHANGES AND COMMITMENTS, IF ANY, 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 THE REPORT

There were no material changes or commitments affecting the financial position of the Company which occurred between the end of the financial year of the Company to which the financial statements relate and till the date of this Report.

32. SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS IMPARTING THE GOING CONCERN STATUS AND COMPANY’S OPERATION IN FUTURE

There are no significant and material orders passed by regulators or courts or tribunals imparting the going concern status and Company’ operation in future.

33. INSIDER TRADING REGULATIONS

Based on the requirements under the SEBI (Prohibition of Insider Trading) Regulations, 2015, as amended from time to time, the Insider Trading Policy as approved by the Board is in force in the Company. The Company also adopts the concept of Trading Window Closure, to prevent and regulate its Directors, Officers, designated employees, their relatives, other connected employees and other connected persons from trading in the securities of the Company at the time when there is access to Unpublished Price Sensitive Information (UPSI).

For more details, please refer Corporate Governance Section of the Annual Report.

34. LISTING ON STOCK EXCHANGE

The Equity shares of the Company got listed on The National Stock Exchange of India Ltd (NSE) SME Emerge Platform in the year 2017 and it has migrated the trading of its equity shares to the Main Board of NSE Ltd. (Capital Market Segment) on June 24, 2020.

35. ANNUAL LISTING FEES TO THE STOCK EXCHANGES

Aarvi Encon Limited have listed its equity shares on the Main Board of NSE India Limited. The listing fees have been duly paid to the exchange and annual custodial fees have been paid to CDSL and NSDL for the F.Y. 2023-24.

36. DEPOSITORY SYSTEM

Your Company’s equity shares are in demat form only. The Company has appointed National Securities Depository Limited (NSDL) and Central Depository Services India Limited (CDSL) as depositories to the Company.

37. HUMAN RESOURCES

Your Company treats its “human resources” as one of its most important assets. Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. Several programs that provide attention to focused people are currently underway. Your Company thrusts on the promotion of talent internally through job rotation and job enlargement.

38. COST RECORDS

The maintenance of Cost Records as specified by the Central Government under sub-section (1) of the Section 148 of the Act are not applicable to the Company.

39. STATUTORY DISCLOSURES

None of the Directors of your Company are disqualified as per the provisions of Section 164(2) of the Act. Your Directors have made necessary disclosures, as required under various provisions of the Act and Listing Regulations. The Company has received a Certificate pursuant to Schedule V(10)(i) of SEBI LODR Amendment Regulations 2018 from Bhatt & Associates Company Secretaries LLP, Mumbai, having certificate of practice no. 7023 stating that none of the directors on the Board of the Company have been debarred or disqualified from being appointed or continuing as directors of companies by the Board/Ministry of Corporate Affairs or any such statutory authority during the period under review.

The certificate is attached to this Report as Annexure 6.

40. DECLARATION ON CODE OF CONDUCT

The Company has adopted the Code of Conduct for all its Senior Management Personnel and Directors and the same is affirmed by all the Board Members and Senior Management Personnel as required under Regulation 36 read with Part D of Schedule V of the Listing Regulations . A declaration signed by Mr. Virendra D. Sanghavi, Managing Director of the Company, affirming the compliance with the Code of Conduct of the Company for the financial year 202324 as set separately in this annual report.

41. INTERNATIONAL STANDARDS

The Company successfully completed the annual ISO surveillance audit and retained the enterprisewide ISO certification for ISO 9001:2015, ISO 45001: 2018 and ISO 14001:2015.

42. DISCLOSURE UNDER RULE 8 OF THE COMPANIES (ACCOUNTS) RULES, 2014

During the year under review the Company has not made any application nor are any proceedings pending against the company under the Insolvency and Bankruptcy Code, 2016. Further there were no instances of one-time settlement for any loans taken from the Banks or Financial Institutions.

43. CAUTIONARY STATEMENT

The Statements in this Directors’ Report and Management Discussion and Analysis Report

describing the Company’s objectives, projections, estimates, expectations or predictions may be “forward-looking statements” within the meaning of applicable securities laws and regulations. Actual results could differ materially from those expressed or implied. Important factors that could make difference to the Company’s operations include changes in Government regulations, Tax regimes, economic developments within India and other ancillary factors.

44. ACKNOWLEDGEMENT

Your Directors take this opportunity to thank all Government Authorities, Bankers, Shareholders, Registrar & Transfer Agents, Investors and other Stakeholders for their assistance and co-operation to the Company. Your Directors express their deep sense of appreciation and gratitude towards all employees and staff of the Company and wish the management all the best for further growth and prosperity.

For and on behalf of the Board,

Aarvi Encon Limited.

Sd/- Sd/-

Virendra D. Sanghavi Jaydev V. Sanghavi

Managing Director Executive Director & Chief

Financial Officer

DIN:00759176 DIN:00759042

Date: July 03, 2024

Place: Mumbai