The directors have the pleasure of presenting the thirty-second annual report of your Company together with the audited financial statements for the financial year ended 31^st March 2024.

1. a. FINANCIAL SUMMARY OR HIGHLIGHTS OR PERFORMANCE OF THE COMPANY

b. DIVIDEND

Your directors do not recommend payment of dividends on equity shares.

c. TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

The provisions of Section 125(2) of The Companies Act, 2013 do not apply as there was no dividend declared and paid last year.

d. MATERIAL CHANGES AND COMMITMENT IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY OCCURRED BETWEEN THE ENDS OF THE FINANCIAL YEAR TO WHICH THIS FINANCIAL STATEMENT RELATE AND THE DATE OF THE REPORT

No such material changes occurred which affected the financial position of the company.

e. SHARE CAPITAL

The paid-up capital of the company as of 31st March 2024 was INR 8 Crore. During the year under review the Company has not altered its share capital, consequently, there has been no change in the capital structure since previous year.

f. DETAILS OF POLICY DEVELOPED AND IMPLEMENTED BY THE COMPANY ON ITS CORPORATE SOCIAL RESPONSIBILITY INITIATIVES

As per the rule of the Companies Act, 2013 CSR is applicable on our company, and the Company has made an annual CSR contribution of Rs. 20 Lakhs to Shree Shraddha Educational & Charitable trust and Shree shiv Shakti Seva trust for promotion of Education in the country and Rural Construction at Ganga Sagar and to Hari Om Trust respectively.

2. MANAGEMENT DISCUSSION AND ANALYSIS

Management Discussion and Analysis of financial condition and of operations of the Company for the year under review as required under Regulation 34 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the Stock Exchanges is given in the part on Corporate Governance elsewhere in the Annual Report marked as “Annexure A”.

3. FINANCE

3.1. PUBLIC DEPOSIT

The Company has not accepted any deposit falling within the ambit of Section 73 of the Companies Act, 2013 read with The Companies (Acceptance of Deposits) Rules, 2014.

3.2. PARTICULARS OF LOAN AND INVESTMENT AND GUARANTEE SECURITY

The company has not given any loan under this section except making investments in, giving loans and guarantees to and providing securities in connection with loans to its wholly owned subsidiaries from time to time, in compliance with the applicable provisions of the Act.

4. INTERNAL FINANCIAL CONTROL

The Company has laid down guidelines which enable the implementation of appropriate internal financial controls. These include controls in manual or automated IT applications including the ERP applications wherein the transactions are approved and recorded. These systems are designed keeping in view the nature of activities carried out at each location and various business operations. The Company has also incorporated an Internal Financial Control Reporting system for proper financial control.

The evaluations of these internal financial controls were done by the Statutory Auditors.

5. SUBSIDIARY COMPANY, JOINT VENTURE & ASSOCIATE COMPANY

As on 31^st March, 2024 your Company has 7 Wholly owned Subsidiary Companies: -

a) Yocnex Chemicals Private Limited

b) Suksess Chemicals Private Limited

c) Nocnex Chemicals Private Limited

d) Ocilim Advisory Services Private Limited

e) Wide Range Merchants Private Limited

f) Allied Maritime & Infra Engineering Private Limited

g) ARCL Petrochemicals Limited

In Compliance with IND AS-110, your Company has prepared its consolidated financial statements which forms part of its Annual Report. Pursuant to the provisions of Section 129(3) of Companies Act, 2013, the salient features of the subsidiary Company in the prescribed form AOC-1 are a part of the consolidated financial statements.

Your Company does not have any associates, holding or joint ventures as on 31st March, 2024.

6. LISTING OF THE SECURITIES OF THE COMPANY

Equity shares of the Company got listed on 29^th September 2023 on Bombay Stock Exchange and the listing Fees for the Financial year 2023 - 2024 have been paid on 29.04.2024 and 72.09% of the Equity Share Capital of the Company is in Dematerialization form.

7. DIRECTORS RESPONSBILITY STATEMENT

Pursuant to the requirement under section 134(3)(c) of the Companies Act, 2013 with respect to Directors’ Responsibility Statement, it is hereby confirmed that:

(a) in the preparation of the Annual Accounts the applicable accounting standards have been followed along with proper explanation relating to material departures.

(b) the directors have selected such accounting policies and applied them consistently and made judgment 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 the profit and loss of the company for that period.

(c) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provision of this 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 control to be followed by the company and that such internal financial control are adequate and were operating effectively, and

(f) the directors have devised proper systems to ensure compliance with the provision of all applicable laws and that such system were adequate and operating effectively.

8. RELATED PARTY TRANSACTIONS

The related party transactions that were entered into during the financial year were on an arm’s length basis and were in the ordinary course of business.

The details of the transaction are as follows:

a. Type, material terms and particulars of the proposed transaction: Sponsorship of higher education (MBA) of the daughter of the Whole Time Director.

b. Name of the related party and its relationship with the listed entity or its subsidiary, including nature of its concern or interest (financial or otherwise): Ms. Vaishnavi Mundhra who is the daughter of Director (Mr. Rajesh Mundhra), concern of interest is Financial.

c. Tenure of the proposed transaction (particular tenure shall be specified): 1 year from the date of approval.

d. Value of the proposed transaction: Rs. 50,00,000.

e. The percentage of the listed entity’s annual consolidated turnover, for the immediately preceding financial year, that is represented by the value of the proposed transaction (and for a RPT involving a subsidiary, such percentage calculated on the basis of the subsidiary’s annual turnover on a standalone basis shall be additionally provided): 0.30%

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.

All Related Party Transactions are placed before the Audit Committee as also the Board for approval. Prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are foreseen and are of repetitive nature. The transactions entered into pursuant to the omnibus approval so granted are audited and a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval on a yearly basis. The policy on Related Party Transactions as approved by the Board is uploaded on the Company’s website www.arclorganics.com.

9. VIGIL MECHANISM FOR DIRECTORS AND EMPLOYEES

The Company has a Vigil Mechanism to deal with instances of fraud and mismanagement, if any. The details of the Vigil Mechanism are explained in the Corporate Governance Report and also posted on the website of the Company www.arclorganics.com.

10. CORPORATE GOVERNANCE

The Company adheres to good governance practices. Corporate Governance at ARCL Organics Ltd extends to all stakeholders and is embodied in every business decision. The Company places prime importance on reliable financial information, integrity, transparency, empowerment and compliance with the law in letter and spirit.

While Management Discussion and Analysis Report appears in the Section titled 'the Year in Review' in the Annual Report, the Corporate Governance Report and the Certificate from the Secretarial Auditors of the Company confirming compliance of the conditions of Corporate Governance are annexed hereto and forming a part of the Directors’ Report.

There is a conscious effort to ensure that the values enshrined in the Codes of Conduct for the Directors and Senior Management Personnel and the Employees respectively, are followed in true spirit across all levels of the Company.

11. ANNUAL RETURN

Pursuant to section 92(3) read with section 134(3)(a) of the Act, the Annual Return as on 31^st March 2024 may be accessed on the Company's website at the www.arclorganics.com.

12. DISCLOSURE OF SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION, REDRESSAL) ACT, 2013

In accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 to provide for the effective enforcement of the basic human right of gender equality and guarantee against sexual harassment and abuse, more particularly against sexual harassment at work place, your Company has a Policy on Prevention of Sexual Harassment at the Workplace duly approved by the Board of Directors and posted on the website of the Company www .arclorganics. com.

During the year, no complaint was reported under The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

13. DIRECTORS

Composition of the Board of Directors of your Company fulfills the criteria fixed by Regulation 17 (1) (a) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with fifty per cent of the Directors being Non-Executive Director with at least one-women independent director. Your Board comprises of (Eight) directors out of which 4 (Four) are independent directors and it includes one-woman independent director. Mr. Mukesh Mundhra is Executive Director, retires by rotation in accordance with the requirements of Companies Act, 2013 and Articles of Association of the Company. He being eligible offers himself for re-appointment.

Brief resume of Mr. Mukesh Mundhra, nature of his expertise in specific functional areas, names of companies in which he holds directorships and/or memberships/chairmanships of committees of Board, his shareholdings are furnished in section on “Corporate Governance” elsewhere in the Annual Report.

Further, as declared by them, none ofthe Directors ofthe Company is disqualified from being appointed as a Director, as specified in section 164(2) of the Companies Act, 2013 and rule 14(1) of the Companies (Appointment and Qualification of Directors) Rules 2014 or is debarred or disqualified from being appointed or continuing as Director of companies by the SEBI/Ministry of Corporate Affairs or any such statutory authority.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

14. 1. ANNUAL PERFORMANCE EVALUATION OF THE BOARD

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board has carried out an annual performance evaluation of its own performance, the directors individually, Key Managerial Personnel (KMP), Senior Management as well as the evaluation of the working of its Audit Committee, Nomination & Remuneration Committee and Stakeholders Relationship Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

14.2. NOMINATION & REMUNERATION POLICY

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration the contents of which are placed on the website of the Company at www.arclorganics .com.

14.3. MEETINGS

During the year four (04) Board Meetings and two (02) Audit Committee Meetings were convened and held, the details of which are given in the “Corporate Governance Report”. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

15. AUDITORS

15.1. STATUTORY AUDITORS

The Member had appointed M/s L. B. Jha & Co, Chartered Accountants (Firm Registration No 301088E) as the statutory auditor of the Company at the 31^st Annual General Meeting, to hold office as such, for a term of 5 years till the conclusion of 36^th Annual General Meeting. M/s L.B. Jha & Co. continues to be the auditor of the Company for the financial year 2023 -2024.

The observations made in the Auditor’s Report are self-explanatory and therefore, do not call for any further comments under Section 134(3)(f) of the Act.

15.2. SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company had appointed M/s. KSN & Co, Company Secretary in Practice to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed herewith as “Annexure B”.

AUDITORS’ QUALIFICATION

(i) STATUTORY AUDITORS’ QUALIFICATIONS

Qualifications contained in the Auditors’ Report if any have been dealt with in the Notes to financial statements and are self-explanatory.

(ii) SECRETARIAL AUDITORS’ QUALIFICATIONS

Qualifications contained in the Secretarial Auditors’ Report if any have been dealt with in the Notes to Form MR-3 and are self-explanatory.

16. FRAUD REPORTING

During the year under review, the Auditors have not reported any matter under Section 143 (12) of the Act, therefore no detail is required to be disclosed under Section 134 (3) (ca) of the Act.

17. COST AUDITORS

Pursuant to section 148 of the Act, the Board has appointed M/s. Amit Khetan & Co (Firm Registration No. - 102559), to conduct the audit of cost records of the Company for the Financial Year 2023 - 2024.

18. SECRETARIAL AUDITOR & SECRETARIAL AUDIT REPORT

Pursuant to Section 204 of the Act and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board had appointed M/s KSN & Co., Practicing Company Secretaries, to conduct Secretarial Audit of the Company for the Financial year 2023 - 2024.

The Secretarial Audit Report for the Financial year 2023 - 2024 is provided as an Annexure to this Report. The Report does not contain any qualification, reservation or adverse remark.

19. SECRETARIAL COMPLIANCE REPORT

The Company has undertaken an audit for the Financial Year ended March 31, 2024 for all applicable compliances as per the Securities and Exchange Board of India Regulations and Circulars/Guidelines issued thereunder. The Annual Secretarial Compliance Report issued by M/s KSN & Co., Practicing Company Secretaries, has been submitted to the Stock Exchanges within 60 days from the end of the Financial Year.

20. INTERNAL AUDITOR

The Board of Directors of the Company has appointed M/s. MIB & Co. as Internal Auditors to carry-out extensive Internal Audit of the Company for the Financial Year ended March 31, 2024.

21. REPORTING OF FRAUD BY AUDITORS

During the year under the review the Statutory Auditor, Secretarial Auditor, Cost Auditor and Internal Auditor has not reported any instances of fraud committed in the company by its directors or officers or employees to the Audit Committee under the section 143(12) of the Companies Act, 2013.

22. PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, is given in “Annexure C”.

23. TAXES AND DUTIES

Your Company has contributed Rs.23,94,09,050/-to the Central and State Exchequer by way of Taxes and duties.

24. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNING AND OUTGO

Conservation of Energy

a. Energy Conservation Measures Taken:

• Improvisation and continuous monitoring of Power Factor and replacement of weak capacitors by conducting periodical checking of capacitors.

• Installation of isolating valve in main airline for preventing air loss.

• The Company has relentlessly aimed at optimising the use of energy resources and taken adequate measures to avoid wastage and use latest technology and equipments.

b. Impact of the above Measures:

• Opportunity to compete in International Markets

• Technology up-gradation

• Development of new designs in products

• Attaining accreditation of our products from Internationally recognized Organizations

c. Total Energy Consumption and Energy Consumption per Unit of Production:

• Power & Fuel Consumption*__

FO Consumption from April 2023 to March 2024 = 559.66 KL

Total amount = 309.79 Lacs

Monthly Average (Rs in Lacs) = 25.75 L

Rate (Rs/Litre) = 55.35

Technology Absorption:

Research and Development (R & D):

The current success, and our future success, is largely dependent on our ability to develop new products and processes and to improve the features of existing products. The research activity includes-

a) Low emission formaldehyde E0/E1 in plywood application.

b) Slow Release Nitrogen crude protein in cattle field application, M PRO.

c) Import Substitution cross linker HMMM. Expenditure on R & D:

Government recognition of our R & D

It’s a matter of great pride that company got recognition by Government of India approving our inhouse laboratory as DSIR certified. There are many funds received from all over the world with Government of India for R&D works. They gave these funds to DSIR recognized laboratory only. This will give us an opportunity to get such fund and do real great R&D, helping world and society with innovations. We are pretty sure under the leadership of our talented R& D chief, ARCL will achieve lot of recognition & do real innovative research benefiting the industry & society.

Foreign Exchange Earnings and Outgo:

a) Expenditure in Foreign Currency - Rs. 36,70,16,712 /-

b) Earnings in Foreign Currency- Rs. 56,72,47,724 /-

25. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

There are no significant material orders passed by the Regulators/Courts which would impact the going concern status of the Company and its future operation.

26. ACKNOWLEDGEMENTS

Your Directors express their sincere appreciation of the co-operation and assistance received from the shareholders, bankers, regulatory bodies and other business constituents during the year under review.