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Aarvi Encon Ltd. ನಿರ್ದೇಶಕರ ವರದಿ

Mar 31, 2025

It is our pleasure in presenting the 37th Annual Report of Aarvi Encon Limited (âthe Companyâ or âAarviâ) on business and operations of the Company along with the Audited Standalone and Consolidated Financial Statements and the Auditorâs Report for the year ended March 31,2025.

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 âCertified Great Place to Work Awardâ 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, 2025 in comparison with the previous financial year ended March 31, 2024 are summarized below:

Particulars	Consolidated (''in Lakhs)		Standalone (''in Lakhs)
	Year ended 31st March, 2025	Year ended 31st March, 2024	Year ended 31st March, 2025	Year ended 31st March, 2024
Net Revenue from Operations	51,038.90	40,614.66	46,408.10	37,764.92
Other Income	247.59	232.79	304.19	272.44
Total Income	51,286.49	40,847.45	46,712.29	38,037.36
Total Expenses	50,164.55	39,636.74	45,851.11	36,934.34
Profit before tax	1,121.93	1,210.71	861.17	1,103.02
Tax	117.48	76.35	87.69	68.40
Profit after taxes	1,004.45	1,134.36	773.49	1,034.62
EPS - Basic	6.79	7.67	5.23	7.00
- Diluted	6.73	7.60	5.18	6.93

Standalone and Consolidated Financial Statements

As mandated by the Ministry of Corporate Affairs, the financial statements for the year ended on March 31, 2025 has been prepared in accordance with the Indian Accounting Standards (âInd ASâ) notified under Section 133 of the Companies Act, 2013 (hereinafter referred to as âthe Actâ) 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 Companyâs state of affairs, profits and cash flows for the year ended March 31, 2025. 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 22.89% increase in

('' in Crores)
Particulars	As on March 31,2025	As on March 31,2024
Securities Premium	15.31	14.92
General Reserve	6.90	6.90
Retained Earnings	84.50	77.46

revenue from operations, reaching '' 464.08 crore in FY 2024-25, compared to '' 377.65 crore in the previous financial year. However, the Net Profit declined to '' 7.73 crore, as against '' 10.35 crore in the previous year.

Consolidated Performance

I n 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.

On a consolidated basis, the Company has reported a 25.67% increase in revenue from operations at '' 510.38 crore, as compared to '' 406.15 crore in the previous year. However, the Net Profit decreased to '' 10.14 crore, from '' 11.34 crore in the previous year.

The decline in Profit After Tax (PAT) can be attributed to several key factors across the various regions where the Company operates:

> India:

â¢ Increased in interest cost due to purchase of Fixed Assets.

â¢ Execution of certain projects at lower margins.

â¢ Rise in interest costs impacting overall profitability.

> Indonesia:

â¢ Higher managerial salary expenses incurred to strengthen leadership and operations.

> Qatar:

â¢ Higher expenditure on sponsorship fees.

â¢ Addition of a Business Development Manager, resulting in higher salary costs.

> United Kingdom:

â¢ Operations were discontinued due to sustained negative cash flows.

â¢ Administrative and Statutory costs further impacted profitability prior to the closure.

Despite the short-term impact on PAT, these international strategic investments are aligned with the Companyâs long-term vision of enhancing its global footprint. The associated costs are expected to generate positive returns in the current fiscal year through improved operational efficiency and new business opportunities.

3. SHARE CAPITAL

The total paid-up capital of the Company as on March 31,2025, is '' 14,81,07,000/- divided into 1,48,10,700 equity shares of ''10/- each. The Company has

issued 26,700 new equity shares under Aarvi ESOP Scheme 2022 to its employees during the year.

4. DIVIDEND

The Board of Directors of the Company at its meeting held on May 29, 2023, voluntarily adopted a Dividend Distribution Policy (âDDPâ) 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 Companyâs performance, DDP and keeping in mind the shareholdersâ interest, the Board of Directors of the Company at its meeting held on May 29, 2025, has recommended a Final Dividend of '' 2/- per fully paid- up Equity Share of the face value of '' 10/- each for the year ended March 31, 2025, 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 '' 2.96 Crores reflecting pay out of 29% of the Net Profit and shall be paid out of profits of the Company for previous financial years i.e. FY 2024-25 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 '' 110.51/- Crores in comparison with the previous yearâs balance of '' 101.91/- Crores. As per Consolidated financials, the net movement in the reserves of the Company are as follows:

6. DEPOSITS

The Company has not accepted/ held 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 (âPlanâ).

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 (âSEBI SBEB Regulationsâ).

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/ shareholdersinformation-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 link https:// aarviencon.com/investors/shareholders-information-and-announcements.

8. CREDIT RATING

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 Companyâ s effort to reduce cost and to improve cost efficiency.

9. I NTERNAL 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

â¢ Bon Accord Employment Services (Owned by Local Emirates , managed by Aarvi Encon FZE)

â¢ Aarvi Encon LLC, Oman (Associate Company)

â¢ PT Aarvi Encon Services, Indonesia (Associate Company)

â¢ 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

The group structure showcasing the subsidiaries, partnerships, joint ventures etc. is provided below: The Company has formulated a Policy for determining âMaterialâ Subsidiaries pursuant to Regulation 16 of the Securities Exchange Board of India

(Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ). This policy is available on the Companyâs 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 Companyâs accounts as per the provisions of the Act, the Income Tax Act, 1961, and applicable âAccounting Standardsâ 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 Associate 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 Companyâs 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 Companyâs Board of Directors as on the financial year end March 31,2025, 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.

B. Number of Board Meetings During the Year

During the year, 8 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 five Committees viz.

â¢ Audit Committee.

â¢ Nomination and Remuneration Committee.

â¢ Stakeholdersâ Relationship Committee.

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):

Sr. No.	Name of the KMP	Designation
1.	Mr. Virendra D. Sanghavi	Managing Director
2.	Mr. Jaydev V. Sanghavi	Executive Director and Chief Financial Officer
3.	Ms. Leela S. Bisht	Company Secretary & Compliance Officer

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. Virendra D. Sanghavi (DIN: 00759176), Managing Director of the Company, retires by rotation at the forthcoming Annual General Meeting and, being eligible, offers himself for reappointment. The details of Mr. Virendra D. 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 '' 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 FORINDEPENDENT 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 âNomination and Remuneration Policyâ 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 Companyâs 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 28, 2025.

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 âVigil Mechanism Policyâ 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 Companyâs 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 âVigil Mechanism Policyâ are available on the website of the Company at https:// aarviencon.com/investors/policies

17. DIRECTORSâ RESPONSIBILITY STATEMENT

The Directorsâ 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 34th 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 34th AGM till the conclusion of the 39th AGM.

Auditorâs Report

The Auditorâs Report on the Financial Statements of the Company for the Financial year ended March 31, 2025, is unmodified i.e., it does not contain any qualification, reservation or adverse remark. The Auditorsâ 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 Boardâs 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 2024-25 and their Report is annexed to this Board Report (Annexure 4). The said Secretarial Audit Report does contain any qualification, reservations, adverse remarks or disclaimer.

D. Secretarial Compliance Report of Aarvi Encon Limited for the Financial year ended March 31,2025

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

During the year the Company has spent '' 27,82,464/-on the CSR expenditure as against the mandated spend of '' 26,47,790/-. 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 2024-25 forms part of the Boardâs Report and is annexed as Annexure 3 to this report.

In accordance with the CSR (Amendment) Rules, 2021, the Company was exempted from constituting a CSR Committee, as the annual CSR expenditure did not exceed '' 50 lakhs in the preceding financial year. Consequently, all powers, duties, and responsibilities of the CSR Committee were discharged by the Board of Directors.

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

I n 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 '' 8,50,000/- per month and / or '' 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.

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 2024 - 25:

Name of the Directors	Designation	Remuneration % Increase of the in the Directors Remuneration	Ratio of Remuneration of each Director/to median remuneration of employees.	Increase/ (Decrease) in Median Remuneration as compared to Previous Year
Mr. Virendra D. Sanghavi	Managing Director	1,68,00,000 -	29.08	(0.91)
Mr. Jaydev V. Sanghavi	Executive Director & CFO	1,68,00,000 -	29.08	(0.91)
Mr. Devendra J. Shrimanker*	Independent Director	--	NA	-
Mrs. Sonal N. Doshi*	Independent Director	- -	NA	-
Dr. Padma V. Devarajan*	Independent Director	--	NA	-
Ms. Leela S. Bisht	Company Secretary	--	1.58	-
* Entitled for Sitting fees of 30,000 for attending each Board and Audit Committee Meetings, 20,000 for attending Nomination and Remuneration Committee Meetings, 15,000 for attending Stakeholder Relationship Committee Meeting and 15,000 for attending Independent Director''s Meeting for the Financial Year 2024-25.

(b) Number of employees on the rolls of Company: Permanent: 220

Contract Employee: 6218 Contract Professional: 453

(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 armâs length basis and in the ordinary course of the Companyâs 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 Companyâs 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 31,2025, is available on the Companyâs website on at www.aarviencon.com

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

Pursuant to the provisions of Regulation 34(e) read with âSchedule Vâ of the Listing Regulations, the Management Discussion and Analysis capturing your Companyâs 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 âSchedule Vâ of the Listing Regulations, for financial year 2024-25 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 thereunder, 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 2024-25.

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 duly filed with the Labour Commissioner, Mumbai, as well as with the respective authorities at the locations where the Company operates branch offices.

29. MATERNITY BENEFITS ACT, 1961

Your Company has complied with all applicable provisions of the Maternity Benefit Act, 1961. All eligible employees have been extended the prescribed benefits in accordance with the law, and the Company continues to uphold its commitment to the health and well-being of its women employees during and after maternity.

30. DETAILS OF APPLICATION MADE OR ANY PROCEEDING PENDING UNDER THE INSOLVENCY AND BANKRUPTCY CODE, 2016 (31 OF 2016) DURING THE YEAR ALONG WITH THEIR STATUS AS AT THE END OF THE FINANCIAL YEAR.

During the financial year, no application has been made, nor is any proceeding pending, by or against the Company under the Insolvency and Bankruptcy Code, 2016. Hence, no disclosure under this section is applicable.

31. 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 entered into any one-time settlement arrangement with any bank or financial institution during the financial year. Accordingly, the requirement to disclose the difference in valuation, if any, does not arise.

32. 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 Companyâs 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 '')
Particulars	2024-25	2023 - 24
Foreign Exchange Earnings in terms of actual inflows	2,15,21,384	91,11,287.00
Foreign Exchange outgo in terms of actual outflow	18,91,735	13,13,943.00

33. 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.

34. 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.

35. SIGNIFICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS IMPARTING THE GOING CONCERN STATUS AND COMPANYâS OPERATION IN FUTURE

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

36. 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.

37. 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.

38. 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. 2024-25.

39. DEPOSITORY SYSTEM

Your Companyâs 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.

40. HUMAN RESOURCES

Your Company treats its âhuman resourcesâ 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.

41. 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.

42. 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.

43. 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 202425 as set separately in this annual report.

44. 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.

45. 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.

46. CAUTIONARY STATEMENT

Mar 31, 2024

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

Corporate Overview: -

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:

Particulars	Consolidated (Rs.in Lakhs)		Standalone (Rs.in Lakhs)
	Year ended	Year ended	Year ended	Year ended
	31^st March, 2024	31^st March, 2023	31^st March, 2024	31^st March, 2023
Net Revenue from Operations	40,614.66	43,652.19	37,764.92	38,269.49
Other Income	232.79	131.33	272.44	160.98
Total Income	40,847.45	43,783.52	38,037.36	38,430.47
Total Expenses	39,636.74	42,129.85	36,934.34	36,900.71
Profit before tax	1,210.71	1,567.66	1,103.02	1,529.76
Tax	76.35	116.51	68.40	118.09
Profit after taxes	1,134.36	1,451.15	1,034.62	1,411.66
EPS - Basic	7.67	9.82	7.00	9.55
- Diluted	7.65	9.79	6.98	9.52

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 (âInd ASâ) notified under Section 133 of The Companies Act, 2013 (hereinafter referred to as âthe Actâ) 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 Companyâs 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 (âDDPâ) 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 Companyâs performance, DDP and keeping in mind the shareholdersâ 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 yearâs 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)

Particulars	As on March	As on March
	31,2024	31,2023
Securities Premium	14.92	14.92
General Reserve	6.90	6.90
Retained Earnings	77.46	69.21

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

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 Companyâs 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 Companyâ 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.

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

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

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

â¢ Aarvi Encon LLC, Oman (Associates Company)

â¢ PT Aarvi Encon Services (Associate Company)

â¢ 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 âMaterialâ Subsidiaries pursuant to Regulation 16 of The Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 (âListing Regulationsâ). This policy is available on the Companyâs 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 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,

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 Companyâs subsidiaries in Form AOC-1 is attached herewith to the financial statements of the Company as Annexure -1.

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

A. Board of Directors

Your Companyâs 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, 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.

â¢ Audit Committee.

â¢ Nomination and Remuneration Committee.

â¢ Stakeholdersâ Relationship Committee.

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

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):

Sr. No.	Name of the KMP	Designation
1.	Mr. Virendra D. Sanghavi	Managing Director
2.	Mr. Jaydev V.	Executive Director and
	Sanghavi	Chief Financial Officer
3.	Ms. Leela S. Bisht	Company Secretary & Compliance Officer

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.

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

15. ANNUAL EVALUATION BY THE BOARD

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.

16. VIGIL MECHANISM

The details of the âVigil Mechanism Policyâ are available on the website of the Company at https:// aarviencon.com/investors/policies

17. DIRECTORSâ RESPONSIBILITY STATEMENT

The Directorsâ 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.

(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.

Auditorâs Report

The Auditorâs 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 Auditorsâ 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

C. Secretarial Auditor

Section 204 of the Act, inter-alia, requires every listed Company to annex with its Boardâs 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.

19. CORPORATE SOCIAL RESPONSIBILITY

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 Boardâs 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:

Sr. No.	Name of the Member	Designation
1.	Mr. Virendra D. Sanghavi	Chairperson -Managing Director
2.	Mrs. Sonal N. Doshi	Member (Independent Director)
3.	Mrs. Padma V. Devarajan	Member (Independent Director)
4.	Mr. Ramamoorthy Ramachandran (Appointed w.e.f. May 03, 2023)	Member (Independent Director)
5.	Mr. Sharad S. Sanghi*	-

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

20. RISK MANAGEMENT

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)

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.

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

Name of the Directors

Designation

Remuneration of the Directors

% Increase in the

Remuneration

Ratio of Remuneration of each Director/ to median remuneration of employees.

Increase/ (Decrease) in Median Remuneration as compared to Previous Year

Mr. Virendra D. Sanghavi

Managing

Director

1,68,00,000

30.00

(2.85)

Mr. Jaydev V. Sanghavi

Executive Director & CFO

1,68,00,000

30.00

(2.85)

Mr. Devendra J. Shrimanker*	Independent Director	-	-	NA	-
Mrs. Sonal N. Doshi*	Independent Director	-	-	NA	-
Dr. Padma V. Devarajan*	Independent Director	-	-	NA	-
Mr. Sharad S. Sanghi*	Independent Director	-	-	NA	-
Ms. Leela S. Bisht	Company Secretary	-	-	1.01	-

* 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

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 Companyâs website at https://aarviencon.com/ investors/policies .

24. ANNUAL RETURN

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

25. MANAGEMENT DISCUSSION AND ANALYSIS (MD&A) 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 âSchedule Vâ 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

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

A) Conservation of Energy

1. The steps taken or impact on conservation of 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.)

Particulars	2023 - 24	2022 - 23
Foreign Exchange Earnings in terms of actual inflows	91,11,287.00	4,76,483.00
Foreign Exchange outgo in terms of actual outflow	13,13,943.00	21,12,853.00

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

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

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

33. INSIDER TRADING REGULATIONS

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

34. LISTING ON STOCK EXCHANGE

35. ANNUAL LISTING FEES TO THE STOCK EXCHANGES

36. DEPOSITORY SYSTEM

37. HUMAN RESOURCES

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

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

43. CAUTIONARY STATEMENT

The Statements in this Directorsâ Report and Management Discussion and Analysis Report

describing the Companyâs objectives, projections, estimates, expectations or predictions may be âforward-looking statementsâ 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 Companyâs 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

Mar 31, 2023

Your Directors have the pleasure in presenting the 35^th Annual Report of your Company (Aarvi Encon Limited/AARVI)
on business and operations of the Company along with the Audited Standalone and Consolidated Financial Statements
and the Auditorâs Report for the year ended March 31, 2023. Consolidated performances of the Company and its
subsidiaries have been referred to wherever itâs required.

Corporate Overview:-

The Company was incorporated in 1987 and has been creating value for clients in India and abroad by delivering world-
class Engineering and Manpower Outsourcing Services. The Companyâs dynamic approach to problem solving enable
them to deliver quality services on time with consistent performance to the clients across the globe. Aarvi has long
standing with clients and working with most of them for over decades. In the year 2017, the Company got listed on the
SME platform of National Stock Exchange of India Limited after its successful Initial Public Offer (IPO). The Trading in
the Equity Shares of the Company has been migrated from SME EMERGE platform to Main Board of NSE w.e.f. June
24, 2020. It has corporate headquarters at Mumbai and branch offices at various locations in India and abroad.

1. FINANCIAL HIGHLIGHTS/PERFORMANCE OF THE COMPANY

The financial results for the year ended on 31st March, 2023 and the corresponding figures for the previous year
are as under:

Particulars	Consolidated (Rs.in Crores)			Standalone (Rs.in Crores)
Particulars	Year ended 31^st March, 2023	Year ended 31^st March, 2022	Y-o-Y growth(%)	Year ended 31^st March, 2023	Year ended 31^st March, 2022	Y-o-Y growth(%)
Net Revenue from Operations	436.52	288.54	51	382.69	274.51	39
Other Income	1.31	1.17	12	1.61	1.21	34
Total Income	437.84	289.72	51	384.30	275.72	39
Total Expenditure	421.30	277.58	52	369.0	263.33	40
EBITDA	18.66	13.91	34	18.25	14.14	29
Profit before tax	15.68	12.15	29	15.30	12.39	24
Current Tax	1.11	0.11	-	1.11	0.11	-
Deferred Tax	0.05	(0.02)	-	0.07	(0.02)	-
Profit after taxes	14.51	12.06	20	14.12	12.30	15
EPS	9.82	8.16	20	9.55	8.33	15

STANDALONE AND CONSOLIDATED FINANCIAL
STATEMENTS

As mandated by the Ministry of Corporate Affairs,
the financial statements for the year ended on March
31,2023 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 âThe Actâ) 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,
so as to reflect in a true and fair manner, the form
and substance of transactions and reasonably
present the Companyâs state of affairs, profits and

cash flows for the year ended March 31,2023. The
Notes to the Financial Statements adequately cover
the standalone and consolidated Audited Statements
and form an integral part of this Report.

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

Your Directors wish to present details of Business
Operations done during the year under review:

STANDALONE PERFORMANCE

The Company has reported good performance
in revenue during FY 2022-23. Revenue from
operations at Rs. 382.69/- Cr. as against Rs. 274.51/-

Cr. of previous year which has increased drastically
by 39% year on year, reflecting an exceptional
results in key markets and segments. Operating
profit at Rs. 14.12/- Cr. as against Rs. 12.30/- Cr.
of previous year witnessing tremendous increase of
15% year on year.

CONSOLIDATED PERFORMANCE

Your Company has reported growth in revenue
for the year ended on 31st March 2023. Revenue
from operations at Rs. 436.52/- Cr. as against Rs.
288.54/- Cr. of previous year reflecting the increase
in the growth than the previous year performance in
key markets and segments. Operating profit at Rs.
14.51/- Cr. as against Rs. 12.06/- Cr. of previous
year shows the upward growth.

Your Directors express their happiness on the
overall financial performance and the progress made
on different areas by the Company during the year
under review.

In accordance with Section 129 of Companies
Act, 2013 and the IND AS-27 on Consolidated
and Separate Financial Statements, the Audited
Consolidated Financial Statements are provided in
the Annual Report.

2. SHARE CAPITAL

The Total Paid-up Capital of the Company as on
March 31, 2023 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.

In order to enable the employees of the Company to
participate in the future growth and success of the
Company, the Board of Directors in their meeting
held on May 26, 2022 adopted Aarvi Encon Limited
Employee Stock Option Plan, 2022. This ESOP
Scheme was approved by the Shareholders of the
company in the Annual General Meeting held on
July 29, 2022. The Company has also received InÂ¬
principle Approval from the National Stock Exchange
for listing of 7,39,200 equity shares under the Aarvi
Encon Limited Employee Stock Option Plan, 2022.

3. DIVIDEND

Based on the Companyâs performance and keeping
in mind the shareholdersâ interest, the Board of
Directors of the Company at its meeting held on May
29, 2023 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
31,2023, subject to the approval of the Members at
the ensuing Annual General Meeting. The dividend

once approved by the Shareholders will be paid after
September 23, 2023.

The dividend on Equity Shares if approved by the
Members, would involve a cash outflow of Rs. 2.96
Crores reflecting pay out of 20% of the Net Profit
and shall be paid out of profits of the Company for
previous financial years i.e. FY 2022-23 forming a
part of retained earnings pursuant to Section 123 (1)
of the Companies Act, 2013 (âthe Actâ).

In view of the amendment to the Income Tax Act,
1961 through the Finance Act, 2020, imposition
of Dividend Distribution Tax has been abolished.
The dividend, if declared at the ensuing AGM will
be taxable in the hands of the shareholders of the
Company.

DIVIDEND DISTRIBUTION POLICY

As mandated under regulation 43A of SEBI Listing
Regulations, the Board of Directors of the Company
at its meeting held on June 3, 2021 adopted a
Dividend Distribution Policy for 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.

4. RESERVES

The Balance in Reserves & Surplus stands at Rs
93.28/- Cr. in comparison with the previous year
balance of Rs. 79.91/- Cr. As per Consolidated
financials, the net movement in the reserves of the
Company for FY23 and FY22 are as follows:

Particulars	As on March 31, 2023 (Rs. in Cr.)	As on March 31,2022 (Rs. in Cr.)
Securities Premium	14.92	14.92
General Reserve	6.91	6.91
Retained Earnings	69.21	56.90

5. SUBSIDIARY COMPANIES

The Company has three Subsidiary Companies and
One Associate Company as on March 31,2023.

1. Aarvi Encon FZE located at United Arab
Emirates (UAE);

2. Aarvi Engineering and Consultants Private
Limited;

3. Aarvi Encon Resources Limited located at
United Kingdom (UK);

4. Aarvi Encon Staffing Services W.L.L. Located
at Qatar.

Your Company has formulated a Policy for
determining âMaterialâ Subsidiaries pursuant to
the provisions of Regulation 16 of SEBI LODR
Regulations, 2015. The said Policy is available on
the Companyâs website https://aarviencon.com/
investors/policies

Aarvi Encon FZE, a wholly owned Subsidiary
Company continues to be a material subsidiary of
the Company as its net worth stands more than 10%
to the total net worth of the Company.

Aarvi Encon FZE is a Free Zone Establishment at
SAIF Zone, Sharjah, UAE incorporated on October
13, 2015. A Wholly owned Subsidiary of the Company
had partnered with Bon Accord Employment
Services, a proprietary Company at UAE in the year
2018 to develop the business of providing manpower
or consultancy services in UAE.

The Company has successfully executed the
valuable projects along with the Bon Accord in Abu
Dhabi and it expects more projects in the upcoming
year also.

Aarvi Engineering & Consultants Private Limited,

a Wholly Owned Subsidiary of the company
engaged in Consultancy Services had no operation
during the year under review. The accounts of
Aarvi Engineering & Consultants Private Limited
are consolidated with the accounts of the company
according to the provisions of Companies Act, 2013,
Income Tax Act, 1961 and read with the applicable
âAccounting Standardâ issued by ICAI.

Aarvi Encon Resources Ltd (AERL) incorporated
on March 07, 2018 at United Kingdom (UK), a wholly
owned Subsidiary of the Company. The Company
has started its operation in the F.Y. 2022-23. The
accounts of the AERL are also consolidated with the
Company.

Internationally, the Company has its presence
via Aarvi Encon LLC, a Joint Venture Company
incorporated on January 15, 2021 at Sultanate
of Oman and PT Aarvi Encon Services, a Joint
Venture Company incorporated on June 10, 2021
at Jakarta, Indonesia through its wholly owned
Subsidiary Aarvi Encon FZE located in the United
Arab Emirates.

Aarvi Encon staffing Services W.L.L. (Qatar), an
Associate Company, located at Qatar incorporated
on January 24, 2022.

The aforesaid Companies are yet to start their
operations and are expected to start their operations
in the F.Y 2023-24.

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
Companyâs 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

5. AARVI ESOP, 2022

Pursuant to the approval of Members at the AGM
held on July 29, 2022, the Company adopted Aarvi
Encon Limited Employee Stock Option Plan, 2022,
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 Company
received In-Principle Approval from the National
Stock Exchange on March 08, 2023 for listing of
not exceeding 7,39,200 Stock Options under the
Aarvi Encon Limited Employee Stock Option Plan,

2022, but the company has not yet implemented
the policy of granting shares to the employees of
the Company. The Aarvi Encon Limited Employee
Stock Option Plan, 2022 is in compliance of SEBI
(Share Based Employee Benefits) Regulations,
2014 and this has been certified by the secretarial
auditor of the Company. The certificate of the
secretarial auditor can be accessed on the following
link https://aarviencon.com/investors/shareholders-
information-and-announcements.

In line with Regulation 14 of the SEBI (Share
Based Employee Benefits) Regulations, 2014, a
statement giving complete details, as at 31 March

2023, is available on the website of the Company
at https://aarviencon.com/investors/shareholders-
information-and-announcements, which forms part
of the Boardâs Report and is annexed as Annexure 2
to this report.

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

Pursuant to the provisions of Regulation 34(e) read
with âSchedule Vâ of the SEBI LODR Regulations
2015, the Management Discussion and Analysis
capturing your Companyâs 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.

7. 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 âSchedule Vâ of the SEBI LODR Regulations
2015, for financial year 2022-23 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 to this Report.

8. DEPOSITS

The Company has not accepted/ hold/ any
deposits from public within the ambit of Section 73
of the Companies Act, 2013 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 the Chapter V of the
Act is not applicable.

9. Change in the nature of business

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

10. 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.

11. DISCLOSURE OF RELATED PARTY
TRANSACTIONS

All transactions entered into by the Company with
Related Parties for the year under review were
on armâs length basis and in ordinary course of
business and hence not falling under the ambit
of Section 188 of the Companies Act, 2013. No
Related Party Transactions (RPTs) were entered
into by the Company during the financial year,

which attracted the provisions of section 188 of the
Companies Act, 2013. There being no âmaterialâ
related party transactions / contracts / arrangements
as defined under regulation 23 of the SEBI (LODR)
Regulations, 2015. Accordingly, the disclosure of
related party transaction as required under section
134(3)(h) of the Act in Form AOC-2 is not applicable
to the Company for the F.Y. 2022-23 and hence
does not form part of this report.

Details of related party transactions entered into by
the Company, in terms of AS-24 have been disclosed
in the notes to the financial statements forming part
of this report.

The Company has formulated a Policy on âMateriality
of Related Party Transactionsâ, which are in line with
the provisions of Section 188 of the Companies Act,
2013 and Regulation 23 of SEBI LODR Regulations,
2015. The same is also available on the Website of
the Company at https://aarviencon.com/investors/
policies

During the year 2022-23 pursuant to section 1 77
of the Companies Act, 2013 and regulation 23 of
SEBI LODR Regulations, 2015, all RPTs were
placed before the Audit Committee for its approval.
Prior omnibus approval from the Audit Committee
is obtained for transactions which are repetitive
and also normal in nature. During the year under
review, there were no material related party
transactions under Regulation 23 (4) of SEBI LODR
Regulations, 2015 entered into by the Company,
which necessitates approval of Shareholders.

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

A. Board of Directors

Your Companyâs Board of Directors as on the
financial year end March 31,2023 comprises of Two
Executive Directors out of which one is Managing
Director and other is Chief Financial Officer and Five
Independent Directors which includes Two Women
Directors and the same is disclosed in the Report on
Corporate Governance as set out separately in this
annual report.

In compliance with Section 149, 150, 152 of the Act,
Mr. Ramamoorthy Ramachandran was appointed
as a Non-Executive Independent Director of the
Company w.e.f. January 23, 2023.

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.

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
Corporate Governance Report.

B. Committees of the Board

As required under the Companies Act, 2013 and
SEBI LODR Regulations, 2015, the Board has
formed five Committees viz.

â¢ Audit Committee;

â¢ Nomination and Remuneration Committee;

â¢ Stakeholdersâ Relationship Committee;

â¢ Corporate Social Responsibility Committee
And

â¢ Finance and Management Committee.

Keeping in view the requirements of the Companies
Act, 2013 and SEBI LODR Regulations, 2015,
the Board decides the terms of reference of these
Committees and the assignment of members to
various Committees. The recommendations, if any,
of these Committees are submitted to the Board for
approval.

AUDIT COMMITTEE

Pursuant to Section 177(8) of the Companies Act,
2013, the composition of the Audit Committee is
disclosed as under:

Sr. No.	Name of the Member	Designation
1.	Mr. Devendra J. Shrimanker	Chairperson (Independent Director)
2.	Mrs. Sonal N. Doshi	Member (Independent Director)
3.	Mrs. Padma V. Devarajan	Member (Independent Director)
4.	Mr. Jaydev V. Sanghavi	Member (Executive Director and CFO)
5.	Mr. Ramamoorthy Ramachandran* âAppointed w.e.f. May 16, 2023.	Member (Independent Director)

The details of all the Committees along with their
composition, number of meetings and attendance
at the meeting is stated in 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.

NOMINATION AND REMUNERATION COMMITTEE

In accordance with the provisions of the Section
178 of the Companies Act, 2013 read along with
the applicable Rules thereto and Regulation 19 of
the SEBI LODR Regulations, 2015, the Company
has constituted Nomination and Remuneration
Committee and has formulated âNomination
and Remuneration Policyâ containing criteria for
determining qualifications, positive attributes,
independence of a director and other matters
provided under section 178(3) of Companies Act,
2013 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
review of achievements on a periodic basis. The
Board of Directors has approved Nomination and
Remuneration policy and available at the Companyâs
website under the web link https://aarviencon.com/
investors/policies

The details pertaining to composition of the
Nomination and Remuneration Committee are
disclosed as under:

Sr. No.	Name of the KMP	Designation
1.	Mr. Devendra J. Shrimanker	Chairperson (Independent Director)
2.	Mrs. Sonal N. Doshi	Member (Independent Director)
3.	Mrs. Padma V. Devarajan	Member (Independent Director)
4.	Mr. Sharad S. Sanghi	Member (Independent Director)

STAKEHOLDERS RELATIONSHIP COMMITTEE

As per the provisions of section 178 of Companies
Act, 2013, the composition of the Stakeholders
Relationship Committee is as under:

Sr. No.	Name of the KMP	Designation
1.	Mrs. Sonal N. Doshi	Chairperson (Independent Director)
2.	Mr. Devendra J. Shrimanker	Member (Independent Director)
3.	Mr. Jaydev V. Sanghavi	Member (Executive Director and CFO)

During the year under review, the Company received
no complaints from any of its shareholders. The

Company Secretary acts as the Secretary to the
Committee.

CORPORATE SOCIAL RESPONSIBILITY
COMMITTEE

As per the provisions of section 135 of Companies
Act, 2013, the composition of the CSR Committee is
as under:

Sr. No.	Name of the Member	Designation
1.	Mr. Virendra D. Sanghavi	Chairperson - Managing Director
2.	Mrs. Sonal N. Doshi	Member (Independent Director)
3.	Mrs. Padma V. Devarajan	Member (Independent Director)
4.	Mr. Sharad S. Sanghi	Member (Independent Director)
5.	Mr. Ramamoorthy Ramachandran*	Member (Independent Director)

*Appointed w.e.f. May 03, 2023.

The Companyâs CSR Policy provides guidelines
to conduct CSR activities of the Company, which
can be accessed on the Companyâs website at
https://www.aarviencon.com/home/policies_of_the_
company. During the year the Company has spent
Rs. 16,93,824/- on the CSR expenditure as against
the mandated spend of Rs. 10,48,664/- . 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
2022-23 forms part of the Boardâs Report and is
annexed as Annexure 3 to this report.

FINANACE AND MANAGEMENT COMMITTEE

The Board constituted the Finance & Management
Committee, The Committee has been given the
powers in order to have convenience in expediting
day to day matters relating to Companyâs affairs like
finance, management etc. The composition of the
Committee as on 31st March, 2023 is as follows:

Sr.

No.

Name of the
KMP

Designation

Mr. Virendra D.
Sanghavi

Chairperson - Managing
Director

Mr. Jaydev V.
Sanghavi

Member (Executive
Director and CFO)

The decisions of the Finance & Management
Committee are to be ratified in the subsequent Board
Meetings.

C. Key Managerial Personnel

Pursuant to the provisions of Section 203 of the
Companies Act, 2013, the Key Managerial Personnel
(KMP) of the Company as under:

Sr. No.	Name of the KMP	Designation
1.	Mr. Virendra D. Sanghavi	Managing Director
2.	Mr. Jaydev V. Sanghavi	Executive Director and Chief Financial Officer
3.	Ms. Leela S. Bisht	Company Secretary & Compliance Officer

D. 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 Companies Act, 2013 and in terms of the
Articles of Association of the Company, Mr. Virendra
D. Sanghavi (DIN: 00759176), Executive Director of
the Company, retires by rotation at the forthcoming
Annual General Meeting and, being eligible, offers
himself for re-appointment. The details of Mr. Virendra
D. Sanghavi are furnished in the Notice of the Annual
General Meeting. The Board recommends his reÂ¬
appointment for the consideration of the Members
of the Company at the forthcoming Annual General
Meeting.

The Board of Directors on the recommendation of
NRC and in accordance with provisions of the Act
and SEBI Listing Regulations has appointed Mr.
Ramamoorthy Ramachandran as a Non-Executive
Independent Director on the Board for a tenure of 5
years w.e.f. January 23, 2023.

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

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

Director during the year as a part of remuneration
is subject to the maximum limit of Rs. 1.68 Crs.
Further, Mr. Virendra D. Sanghavi and Mr. Jaydev
V. Sanghavi did not draw any remuneration and /or
commission from its subsidiaries.

13. 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 Companies Act,
2013 and Regulation 16(1) (b) and 25 of the SEBI
LODR Regulations, 2015 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 are persons of high integrity. They
fulfil the conditions specified in the Companies
Act, 2013 and the rules made thereunder and
independent of the management.

The Independent Directors have also confirmed
compliance with the provisions of the 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.

The details of programme for familiarization of
Independent Directors with the Company, nature
of industry in which Company operates and related
matters are put on website of the Company at https://
aarviencon.com/investors/policies

14. Annual Evaluation

Performance evaluation of Independent directors
was done by the entire Board, excluding the
Independent Director being evaluated.

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 the evaluation
of the Board, its Committees and the individual
members of the Board (including the Chairperson),
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 SEBI LODR
Regulations, 2015 and based on policy devised
by committee, the board has carried out 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 inputs received from
all committee members after considering criteria as
mentioned aforesaid.

Pursuant to SEBI LODR Regulations, 2015,
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 also 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, 2023

15. Meetings of the Board/Committees

The meetings of the Board are scheduled at
regular intervals to decide and discuss on business
performance, policies, strategies and other matters
of significance. The schedules of the meetings are
circulated in advance, to ensure proper planning
and effective participation in meetings. In certain
exigencies, decisions of the Board are also accorded
through Circular Resolution.

The Board met 6 (six) times during the financial year
2022-23. The maximum interval between any two
meetings did not exceed 120 days, as prescribed
in the Companies Act, 2013. Detailed information
regarding the meetings of the Board/Committee are
included in the report on Corporate Governance, as
set out separately in this Annual Report.

16. AUDITORS

A. STATUTORY AUDITORS

As per the provision of Section 139, 141 of the
Companies act, 2013 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. 135424W) as the Statutory Auditors
of the Company to hold office for a period of five
consecutive years from the conclusion of the 34^thAGM till the conclusion of the 39^th AGM.

AUDITORâS REPORT

The Auditorâs Report on the Financial Statements of
the Company for the year ending March 31,2023 is
unmodified i.e., it does not contain any qualification,
reservation or adverse remark. The Auditorsâ 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
Companies Act, 2013 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 Companies Act, 2013, inter-alia,
requires every listed company to annex with its
Boardâs 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 financial year 2022-23 and his
Report is annexed to this Board Report (Annexure 4).

D. Secretarial Compliance Report of Aarvi Encon
Limited for the year ended March 31,2023

As per Regulation 24A of SEBI LODR Regulations,
2015, 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 Companies Act, 2013 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 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

The observations and comments given by the
Secretarial Auditor in their Report are selfÂ¬
explanatory and hence do not call for any further
comments. Refer Annexure 5 for the Secretarial
Compliance Report and Secretarial Audit Report.

17. INTERNAL FINANCE CONTROL

The Company has adequate internal financial
control system commensurate with the size, scale
and complexity of its operations. The Company
has in place a mechanism to identify, assess,
monitor and mitigate various risks to key business
objectives. Major risks identified by the business
and functions are systematically addressed through
mitigation action on continuing basis. These are
routinely tested and certified by Statutory as well as
Internal Auditors. The audit observations on internal
financial controls are periodically reported to the
Audit Committee.

18. 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 and commitments,
affecting the financial position of the Company which
have occurred between the end of the financial year
of the Company to which the financial statements
relate and till the date of this Report.

19. RISK MANAGEMENT

The Company has adopted a draft Risk
Management Policy which lays down the
framework to define, assess, monitor and mitigate
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.

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

Your Company is committed towards energy
conservation. We recognize energy efficiency plays
central role in lowering your Companyâs 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 135 (3) (m) of the Companies
Act, 2013 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 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 in an effort to save energy.

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

Company has not taken any such steps as we are
into 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
on energy conservation equipment.

B) Technology Absorption

Particulars relating to technology absorption are not
applicable.

C) Foreign Exchange Earnings and Outgo

Particulars	2021 - 22	2022 - 23
Foreign Exchange Earnings in terms of actual inflows	3,00,139.00	4,76,483.00
Foreign Exchange outgo in terms of actual outflow	6,80,086.00	21,12,853.00

21. VIGIL MECHANISM

The Company is committed to adhere to the highest
standards of ethical, moral and legal conduct of
business operations and in order 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 SEBI Listing
Regulation, 2015 and the provision of Section
177(9) of the Companies Act, 2013 read with Rule
7 of the Companies (Meeting of Board and its
Powers) Rules, 2014, a âVigil Mechanism Policyâ
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 Companyâs code of conduct
etc. 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 âVigil Mechanism Policyâ are
available on the website of the Company at https://
aarviencon.com/investors/policies

22. INSIDER TRADING REGULATIONS

Based on the requirements under SEBI (Prohibition
of Insider Trading) Regulations, 1992, 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 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).

23. ANNUAL RETURN:

As required under Section 92(3)of the Act, the
Annual Return as on March 31,2023 is available on
the Companyâs website on at www.aarviencon.com

24. CREDIT RATING

Your Companyâs Domestic Credit Rating is CRISIL
SME Rating 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 derive
strength from the operational track record of the
Company, cost competitiveness, flexibility derived
from diversified services and the Companyâ s effort
to reduce cost and to improve cost efficiency.

25. DIRECTORSâ RESPONSIBILITY STATEMENT

The Directorsâ Responsibility Statement referred to
in clause (c) of sub-section (3) of Section 135 of the
Companies Act, 2013, shall 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.

26. 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.

27. SIGNIFICANT AND MATERIAL ORDERS PASSED
BY REGULATORS OR COURTS OR TRIBUNALS
IMPARTING THE GOING CONCERN STATUS
AND COMPANYâS OPERATION IN FUTURE

There are no significant and material orders passed
by regulators or courts or tribunals imparting the

going concern status and Companyâ operation in
future.

28. 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, a statement
showing the names of top ten employees in terms
of remuneration drawn in the said rules forms part
of this report. Further, there were no employees
drawing remuneration in excess of the limits set out
in the said rules and hence aforesaid disclosure is
not applicable.

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.

Having regard to the provisions of the second
proviso to Section 136(1) of the Act, the Annual
Report excluding the aforesaid information is being
sent to the members of the Company. Any member
interested in obtaining such information may write to
the Company Secretary at [email protected] and
the same will be furnished on request. 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 sub rule 2 and 3 of Rule 5
of the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014. 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.

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
2022 - 23:

Name of the Directors	Designation	Remuneration of the Directors	% Increase in the Remuneration	Ratio of Remuneration of each Director/to median remuneration of employees.	Increase/ (Decrease) in Median Remuneration as compared to Previous Year
Mr. Virendra D. Sanghavi	Managing Director	1,68,00,000	-	32.84	(6.92)
Mr. Jaydev V. Sanghavi	Executive Director & CFO	1,68,00,000	-	32.84	(6.92)
Mr. Devendra J. Shrimanker*	Independent Director	-	-	Independent Director	-
Mrs. Sonal N. Doshi*	Independent Director	-	-	Independent Director	-
Dr. Padma V. Devarajan*	Independent Director	-	-	Independent Director	-
Mr. Sharad S. Sanghi*	Independent Director	-	-	Independent Director	-
Ms. Leela S. Bisht	Company Secretary	-	-	1.05	-

* Entitled for Sitting fees of 20,000 for attending each Board and Audit Committee and 7,500 for attending all other
Committee Meetings.

(b) Number of permanent employees on the rolls of
Company: 5427

(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: NIL

(e) 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.

(f) Names of top 10 employees of Company in terms
of remuneration drawn and name and particulars of
the employees who were employed throughout the
financial year and were in receipt of remuneration for
that year which, in the aggregate, was not less than
One Crore and Two Lakh Rupees per financial year
and name and particulars of employees who were
employed for a part of the year and were in receipt of
remuneration for that period which, in the aggregate,
was not less than Eight Lakh Fifty Thousand Rupees
per month: No employees drew remuneration as per
the limits specified under rule 5(2) and rule 5(3) of
the Companies (Appointment and Remuneration of
Managerial Personnel) Rules, 2014.

(g) Names of employees of Company, who were
employed throughout the financial year or part
thereof and were in receipt of remuneration in that
year which, in the aggregate, or as the case may
be, at a rate which, in the aggregate, is in excess of
that drawn by the managing director or whole time
director or manager, if any, and holds by himself or
along with his spouse and dependent children, not
less than two percent of the equity shares of the
Company: N.A

29. 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 dignity of everyone
involved at our work place, whether they are
employees, suppliers or our customers. We require
all employees to strictly maintain mutual respect and
positive attitude towards each other.

for Prevention of Sexual Harassment at Workplace.
The following is the summary of Sexual Harassment
complaints received and disposed of during the year
2022-23.

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.

30. HUMAN RESOURCES

Your Company treats its âhuman resourcesâ as
one of its most important assets. Your Company
continuously invests in attraction, retention and
development of talent on an ongoing basis. A number
of programs that provide focused people attention
are currently underway. Your Company thrust is on
the promotion of talent internally through job rotation
and job enlargement.

Total Employees and Consultant : 5427

No. of Women Employees during
the F.Y 2022-23 : 215

The Company has all the required policies under
the Indian laws for the time being in force and as
required under the Companies Act, 2013 and SEBI
LODR Regulations, 2015 to protect and safeguard
the interest of the employees. The policies
pertaining the code of conduct for employees, senior
management team and directors, harassment free
policy as required under the provisions of Sexual
Harassment of Women at Workplace (Prevention,
Prohibition and Redressal) Act, 2013. Policy on
Insider Trading as required under SEBI Prohibition
of Insider Trading Regulations, 1992, Whistle
Blower Policy etc. and all the Policies/Codes have
been uploaded in the Website of the Company
https://aarviencon.com/investors/policies. which
forms part of the Boardâs Report and is annexed as
Annexure 6 to this report.

31. 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.

32. DISCLOSURE, AS TO WHETHER MAINTENANCE
OF COST RECORDS AS SPECIFIED BY THE
CENTRAL GOVERNMENT UNDER SUB-SECTION
(1) OF SECTION 148 OF THE COMPANIES
ACT, 2013, IS REQUIRED BY THE COMPANY
AND ACCORDINGLY SUCH ACCOUNTS AND
RECORDS ARE MADE AND MAINTAINED :

The maintenance of Cost Records as specified by
the Central Government under sub-section (1) of
the Section 148 of the Companies Act, 2013 are not
applicable to the Company.

33. 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 Regulations 2015. 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
7.

34. 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 35 read with Part D of Schedule V
of the SEBI LODR Regulations, 2015. 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 2022-23 as set separately in this
annual report.

35. INTERNATIONAL STANDARDS

The Company successfully completed the annual
ISO surveillance audit and retained the enterpriseÂ¬
wide ISO certification for ISO 9001:2015 and ISO
45001: 2018.

36. 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 duly paid to the exchange and annual custodial
fees has been paid to CDSL and NSDL for the F.Y.
2022-23.

37. DEPOSITORY SYSTEM

Your Companyâs 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.

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

During the year under review the Company has
not made any application nor any proceedings are
pending 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.

39. CAUTIONARY STATEMENT

The Statements in this Directorsâ Report and
Management Discussion and Analysis Report
describing the Companyâs objectives, projections,
estimates, expectations or predictions may be
âforward-looking statementsâ 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 Companyâs operations include
changes in Government regulations, Tax regimes,
economic developments within India and other
ancillary factors.

40. ACKNOWLEDGEMENT

Your Directors takes 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

DIN: 00759176 DIN: 00759042

Date: August 14, 2023
Place: Mumbai

Mar 31, 2018

Dear Members,

The Directors have pleasure in presenting the Board''s Report on the affairs of the Company together with the Audited Financial Statements for the year ended on 31st March, 2018.

FINANCIAL HIGHLIGHTS/PERFORMANCE OF THE COMPANY

The financial results for the year ended on 31st March, 2018 and the corresponding figures for the previous year are as under;

1. HIGHLIGHTS

Consolidated Performance

Your Company has reported growth in revenue and significant increase in the net profit for the year ended on 31st March 2018. Revenue from operations at Rs. 173.48 Cr. as against Rs. 153.19 Cr. of previous year increased by 13.24% year on year, reflecting better results than the previous year performance in key markets and segments. Operating profit at Rs. 9.54 Cr. as against Rs. 7.11 Cr. of previous year. The Operating Profit increased by 34.17% of previous year. This was good financial year for the company.

4. STANDALONE PERFORMANCE

The Company has reported growth in revenue and significant increase in the net profit for the year ended on 31st March 2018. Revenue from operations at Rs. 168.87 Cr. as against Rs. 146.22 Cr. of previous year increased by 15.49% year on year, reflecting better results than the previous year performance in key markets and segments. Operating profit at Rs. 8.05 Cr. as against Rs. 5.27 Cr. of previous year. The Operating Profit increased by 52.75% of previous year. This was very good financial year for the company.

	Standalone (Rs. in crores)		Consolidated (Rs. in crores)
Particulars	Year ended 31st March, 2018	Year ended 31st March, 2017	Year ended 31st March, 2018	Year ended 31st March, 2017
Net Revenue from Operations	168.87	146.22	173.48	153.19
Other Income	1.21	0.33	1.52	0.33
Total Income	170.09	146.55	175.01	153.53
Total Expenditure	162.03	141.28	165.47	146.41

Profit before tax	8.05	5.27	9.54	7.11
Provision for taxes
Current Tax	1.89	1.76	1.77	1.76
Profit after taxes	6.16	3.50	7.77	5.35

2. DIVIDEND

The Board of Directors of the Company has recommended a dividend @5% i.e 0.50 per fully paid-up Equity Share of Rs.10/- each of the Company subject to the approval of the Members at the ensuing Annual General Meeting, for the financial year 2017-18

3. RESERVES

The Balance in Reserves & Surplus stands at Rs. 43,74,22,882/- in comparison with the previous year balance of Rs. 30,09,64,624/-.

4. CONVERSION OF COMPANY

During the year, the Company has been converted from Private Limited Company to Public Limited Company and fresh certificate of incorporation dated 05th July, 2017 to that effect, has been issued by the Registrar of Companies, Mumbai. Consequent to the Conversion of th Company, the name of the Company has been changed from Aarvi Encon Private Ltd to Aarvi Encon Ltd.

5. SUCCESSFUL INITIAL PUBLIC ISSUE (IPO) OF THE COMPANY

Your Directors are pleased to inform you that the Initial Public Offering (IPO) of the Company was successfully completed. The company entered the capital market with its maiden initial public offering (IPO) of 39,40,000 equity shares of face value of Rs. 10/- and at a premium of Rs. 44/- per share, aggregating to Rs. 21,24,36,000/-.

The issue opened for subscription on September 21, 2017 and closed on September 26, 2017 and was oversubscribed by 1.43 times. The equity shares have been listed on the SME Emerge Platform of National Stock Exchange of India Ltd (NSE) w.e.f October 05, 2017. Consequently, the Company''s paid up capital has increased from Rs. 10,85,00,000/- to Rs. 14,78,40,000/

6. SHARE CAPITAL

The Paid-up Capital of the Company as on March 31,2017 was Rs. 3,10,00,000 /- comprising of 3,10,000 equity shares of Rs.100/- each. During the year under review, the Company has sub-divided its nominal value of equity shares of Rs. 100 each fully paid up into 10 (Ten) Equity Shares of the nominal face value of Rs. 10/each fully paid up as approved by the members in its meeting held on 28th April, 2017. The Company had also issued 77, 50,000 equity Shares of Rs. 10/- each as Bonus Shares as approved by shareholders in their meeting held on 17th July 2017 in the ratio of 5:2 and allotted to the shareholders at its'' Board Meeting held on 26th July 2017, Further the Company has issued 39,34,000 Equity Shares of Rs. 10/- Each at Premium of Rs. 44/- per share to the general public via IPO. The total paidup Share Capital of the company is 14,78,84,000/divided into 1,47,84,000/- equity shares of Rs.10/- each.

7. DEPOSITORY SYSTEM

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

8. DETAILS OF THE DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the year under review, in view of the listing requirements the Company has appointed three Independent Directors i.e Mr. Devendra J Shrimanker, Mrs. Sonal N. Doshi on 03rd June, 2017 and Mrs. Padma V Devarajan on 01st February, 2018 to the Board to meet the proper composition of the Board of Directors. Apart from the Directors, the Company has appointed Mr. Jaydev V. Sanghavi as Chief financial officer (CFO) on 03rd June, 2017 and Mr. Jay H.Shah as Company Secretary cum Compliance Officer as the Key Managerial Personnel of the Company on 17th July, 2017.

Mr. P N Devarajan, an Independent Director of the Company expired on 02nd November, 2017. He was appointed on the Board of the Company in 2008, Mr. Devarajan had an experience of more than 3 decades in Chemical Industry. He has held senior positions in many organizations such as M/s. Merck Sharp and Dhome of India, Chemicals & Plastics India Limited, Shriram Chemicals & Fertilizers Limited, Reliance Industries Ltd, Essar Group , etc. and the Company immensely benefitted from his contribution, vision and leadership during his tenure. He had a great energy and contributing capacity in every human being with whom he was working. He was associated with many social work organizations in India over the past many years, his guidance and strength will be missed.

The Board has noted his valuable contribution to the Company since his appointment on the board in the year of 2008.

9. DECLARATION BY INDEPENDENT DIRECTORS

The Independent Directors of the Company, Mr. Devendra J Shrimanker, Mrs. Sonal N Doshi and Mrs. Padma V Devarajan, Independent Directors of the Company have confirmed to the board that they meet the criteria of independence as specified under section 149 (6) of the Companies Act, 2013.

The Board took note of the same.

10. BOARD COMMITTEES FORMED DURING THE YEAR

During the year under review, the following committees have been formed by the Company:

a) Audit Committee

b) Nomination and Remuneration Committee

c) Corporate Social Responsibility Committee

d) Stakeholder Relationships Committee

e) Finance and Management Committee

The details of all the Committees of the Board along with their composition and meetings held during the year are provided in the Report on Corporate Governance which forms part of this Annual Report.

11. NO. OF MEETINGS HELD

The details of the meeting of the Board along with their composition and meetings held during the year are provided in the Report on Corporate Governance which forms part of this Annual Report.

12. BOARD EVALUATION

The Companies Act, 2013 states that a formal annual performance evaluation needs to be made by the Board of its own performance, the directors individually as well as the evaluation of its Committees. As per Schedule IV of the Companies Act, 2013, the performance evaluation of independent directors, shall be done by the entire Board of Directors, excluding the director being evaluated. The evaluation of all directors and the Board as a whole was conducted based on the criteria and framework adopted by the Board.

13. RELATED PARTY TRANSACTIONS

All related party transactions have been entered by the Company during the financial year in the ordinary course of business and at the arm''s length price. During the financial year under consideration the Company has entered into contracts / arrangements / transactions with related parties, which could be considered as material in accordance with the provisions of the Act, have been given in ''''Annexure I" in Form No. AOC-2.â

14. STATUTORY AUDITOR

At the 29th AGM of the Company held on 15th July, 2017, M/s. Arvind H. Shah & Co., Chartered Accountants, having registration number (ICAI Firm Registration No. 100577W), were appointed as Statutory auditors of the Company for a term of five years i.e. till the conclusion of 34th Annual General Meeting subject to the ratification at the annual general meeting in each of the subsequent years during the aforementioned term of their appointment.

However, with the Notification dated 07th May, 2018 issued by the Ministry of Corporate Affairs (MCA), the first proviso to section 139(1) of the Companies Act, 2013 pertaining to the requirement of annual ratification of appointment of auditors by members is omitted. Accordingly, as per the Companies (Amendment) Act, 2017, ratification of the appointment of Statutory Auditors during their period of appointment will not be considered.

15. AUDITORS'' REPORT

The report of the statutory auditors on Standalone Financial statements as well as Consolidated Financial Statements forms a part of the Annual Report. There were no adverse remarks/qualified remarks given by the Statutory Auditor on the financials of the company.

16. SECRETARIAL AUDIT REPORT

In terms of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014, the Company has appointed, M/s. Sunil Agarwal & Co., Practicing Company Secretaries, Mumbai (CP No. 3286) as a Secretarial Auditors of the Company. The report of the Secretarial Auditors is enclosed as Annexure II to this report. The report is self-explanatory and do not call for any further comments.

17. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

As per the provision of Section 138 of the Companies Act, 2013, the Company has devised a proper system to check the internal controls and functioning of the activities and recommend ways of improvement. Internal Audit is carried out timely. The internal financial controls with reference to financial statements as designed and implemented by the Company. During the year under review, no material or serious observation is received from the Internal Auditor of the Company for inefficiency and inadequacy of such controls.

18. EXTRACT OF ANNUAL RETURN

As required pursuant to section 92(3) of the Companies Act,2013 and Rule 1 2(1 ) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 as a part of this Annual Report as Annexure - III.

19. 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

1. The Company has purchased office premises no. B2/901 located at 9th Floor, Marathon Innova, Marathon Nextgen Complex, Opp. Peninsula Corporate Park, Lower Parel (West), Mumbai - 400013 admeasuring 1567 Sq. ft. (Carpet Area) for a Consideration of Rs. 5,30,00,000/-.

2. The Company has sold its office premises unit no. 101 owned by Aarvi Engineering & Consultant Private Limited, a Wholly Owned Subsidiary of the Company for a consideration of Rs. 74,25,000/- and Unit No. 102 owned by the Company for a consideration of Rs. 1,18,80,000/- in A - Wing, on the first floor in "Techno city" Building situated on the Plot No. X - 4/1 & X - 4/2 in the Trans Thane Creek Industrial Area, MHAPE Village, Navi Mumbai.

Apart from aforesaid transactions, there is no other material transaction occurred during the year.

20. CORPORATE SOCIAL RESPONSIBILITY

As per Section 135 of the Companies Act, 2013, the Company has formulated a Corporate Social Responsibility (CSR) Committee and recommended to the Board a CSR Policy indicating the activities to be undertaken by the Company and the same was duly approved by the Board. The CSR Policy can be accessed on the Company''s website i.e www.aarviencon.com

During the year the Company has spent Rs. 12,04,700/On CSR Activities. The Report on the CSR Activities is annexed herewith marked as Annexure IV to the _Boards Report.

21. VIGIL MECHANISM

Pursuant to the provision of Section 177(9) of the Companies Act, 2013 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 etc. 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 i .e www.aarviencon.com

22. THE CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO, IN SUCH MANNER AS MAY BE PRESCRIBED;

The information pertaining to Conservation of Energy, Technology Absorption, Foreign Exchange Earnings and outgo as required under Section 134 (3) (m) of the Companies Act, 2013 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 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 in an effort to save energy.

2. The Capital Investment on Energy Conservation Equipment.

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

B) Technology Absorption:-

The Company has no activities relating to technology absorption.

c) Foreign Exchange Earnings and Outgo;

Particulars	2017 - 18	2016 - 17
Foreign Exchange Earnings	Rs. 4,22,927/-	Rs. 1,77,96,974/-
in terms of actual inflows
Foreign Exchange outgo	Rs. 15,36,828/-	Rs. 38,52,783/-
in terms of actual outflow

23. REVIEW OF SUBSIDIARY AND ASSOCIATE COMPANIES:-

As required under Companies Act, 2013, the audited consolidated financial statements of the company incorporating all its subsidiary and associate companies prepared with applicable Accounting Standards are attached.

Aarvi Engineering & Consultants Private Limited, a Wholly Owned Subsidiary of the company engaged in Consultancy Services has not performed well in the financial year 2017-18. The company is unable to acquire projects during the financial year 2017-18. The accounts of Aarvi Engineering & Consultants Private Limited are consolidated with the accounts of the company according to the provisions of Companies Act, 2013, Income Tax Act, 1961 and read with application "Accounting Standard " issued by ICAI.

Aarvi Encon FZE is a Wholly Owned Subsidiary of Aarvi Encon Limited. Aarvi Encon FZE has generated Rs. 4,60,79,026/- as revenue during the Financial Year under consideration. Salient features of subsidiary Companies is annexed as Annexure - V in form no.AOC-3

Apart from these the Company expects and committed to increase its presence on pan India basis. The Company is continuously exploring new avenues of business.

24. SIGNIICANT AND MATERIAL ORDERS PASSED BY REGULATORS OR COURTS OR TRIBUNALS IMPARTING THE GOING CONCERN STATUS AND COMPANY'' 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.

25. DEPOSITS

Your Company did not accept/ hold/ any deposits from public/shareholders during the year under review.

26. PARTICULARS OF LOAN, GUARANTEE OR INVESTMENTS

The Company has not given any loan or guarantee covered under provision of Section 186 of the Companies Act, 2013.

27. OBLIGATION OF COMPANY UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

In accordance with Sexual Harassment of Women at Work place (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed their under, the Company has formed an Internal Complaints Committee and also framed and adopted the policy for Prevention of Sexual Harassment at Workplace. The following is the summary of Sexual Harassment complaints received and disposed off during the year 2017-18.

No. of Complaints received : NIL

No. of Complaints Disposed off : NIL

28. STATEMENT OF DEVIATION AND/OR VARIATION IN UTILIZATION OF PUBLIC ISSUE PROCEEDS PURSUANT TO REGULATION 32 OF SEBI (LISTING OBLIGATION AND DISCLOSURE REQUIREMENTS) REGULATION, 2015

As per Regulation 32 of SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015 the listed entity shall submit to the stock exchange the statement indicating deviation, if any in the use of proceeds from the objects stated in the offer document, indicating category wise variation (capital expenditure, sales and marketing, working capital etc.) between projected utilization of funds made by it in its offer document, as applicable and the actual utilization of funds.

Accordingly the Company has submitted its aforesaid statement as under;

Sr. No.	Particulars	As per the Prospectus dated 14th September, 2017	Actual Utilization of Issue Proceeds till 31/03/2018	Unutilized Issue Proceeds till 31/03/2018	Deviation, if any.
1.	Working Capital Requirements	1078.00	1485.40	-	407.40
2.	Acquisitions and Other Strategic Initiatives	400.00	-	400.00	-
3	General Corporate Purposes	415.00	-	-	(415.00)
4.	Issue Expenses	231.36	238.96	-	7.60
	Total:-	2124.36	1724.36	400.00

29. HUMAN RESOURCES

Your Company treats its "human resources" as one of its most important assets. Your Company continuously invest in attraction, retention and development of talent on an ongoing basis. A number of programs that provide focused people attention are currently underway. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement.

30. PARTICULARS OF EMPLOYEES

The Company has no employee, who is in receipt of remuneration of Rs. 8,50,000/- per month or Rs.1,02,00,000 per annum and hence the Company is not required to give information under sub rule 2 and 3 of Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

31. CREDIT RATING

Your Company''s Domestic Credit Rating is CRISIL SME Rating 1 for the long-term debt /facilities/NCDs by CRISIL. CRISIL has assigned the BBB/STABLE upgraded from BBB -/STABLE for long term borrowings and A3 upgraded from A3 for short term borrowings. The Credit Rating derive 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.

32. DIRECTORS'' RESPONSIBILITY STATEMENT

The Directors'' Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, shall 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.

33. LISTING WITH STOCK EXCHANGES

Aarvi Encon Limited listed its shares on the SME Emerge Platform of NSE Limited on October 05, 2017.The listing fees duly paid to the exchange and annual custodial fees has been paid to CDSL and NSDL for the F.Y. 2018 -19.

34. ACKNOWLEDGEMENT

Your Directors takes 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

DIN: 00759176 DIN:- 00759042

Date: 19/05/2018

Place: Mumbai

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