Aaron Industries Ltd

To,

The Directors are pleased to present the 11^th Annual Report of the Company together with the Audited Financial Statements for the year ended on March 31, 2024.

1. FINANCIAL HIGHLIGHTS & STATE OF AFFAIRS:

The financial performance of the Company for the Financial Year ended March 31, 2024, is summarized below: ( in Lakhs)

During the Financial Year 2023-24, the Company achieved the highest ever Operating

Income of 6322.67 Lakhs as compared to 5584.97 Lakhs in the Financial Year 2022-23. The Profit before tax for the Financial Year 2023-24 stood at 849.92 Lakhs as compared to 743.46 Lakhs achieved in the Financial Year 2022-23. The Profit after tax stood at 633.09 Lakhs for the Financial Year 2023-24 as compared to 540.44 Lakhs for the Previous Year.

2. DIVIDEND:

For the Financial Year 2023-24, the Company has declared a Final Dividend of 1/- (One Rupee Only) per Equity Share of 10/- each with a total outlay of 104.73 Lakhs.

The Board of Directors at their Meeting held on May 20, 2024, has recommended the payment of 1/- (One Rupee Only) per Equity Share being 10% on the face value of 10/- each as the Final Dividend for the Financial Year ended March 31, 2024. The payment of the Dividend is subject to the approval of the Shareholders at the 11^th Annual General Meeting

("AGM") of the Company.

The Dividend, if approved by the Members would involve a cash outflow of 104.73 Lakhs. In view of the changes made under the Income Tax Act, 1961, by the Finance Act, 2020, the Dividend paid or distributed by the Company shall be taxable in the hands of the Shareholders. Your Company shall, accordingly, make the payment of the Dividend after deduction of tax at source at appropriate rates applicable to resident and non-resident shareholders as the case may be.

3. TRANSFER OF UNCLAIMED DIVIDEND TO THE INVESTOR EDUCATION AND PROTECTION FUND (IEPF):

In accordance with the provisions of Sections 124 and 125 of the Companies Act, 2013 and Investor Education and Protection Fund Authority (Accounting, Audit, Transfer, and Refund)

Rules, 2016 ("IEPF Rules"), Dividends of a Company which remain unpaid or unclaimed for a period of seven years from the date of transfer to the Unpaid Dividend Account shall be transferred by the Company to the Investor Education and Protection Fund ("IEPF").

In terms of the foregoing provisions of the Act, no Dividend remains unpaid or unclaimed for

7 (seven) consecutive years; Hence not required to be transferred to the IEPF by the Company during the year ended March 31, 2024.

4. SHARE CAPITAL:

During the year under review, the Company has issued and allotted 429300 (Four Lakhs Twenty-Nine Thousand Three Hundred) Equity Shares of the face value of 10/- (Rupees Ten) each at an issue price of 235/- (Rupees Two Hundred Thirty-Five) per Equity Shares, [including a premium of 225/-(Rupees Two Hundred Twenty-Five) per Equity Share] aggregating to 10,08,85,500/- (Rupees Ten Crores Eight Lakh Eighty Five Thousand Five Hundred Only) for cash consideration on a preferential issue basis to the Promoter, Promoter Group and Public category. The Equity Shares issued ranked pari-passu with the existing fully paid-up equity shares in all respects as to dividend etc.

The entire proceeds of the issue aggregating to 10,08,85,500/- (Rupees Ten Crores Eight Lakh Eighty Five Thousand Five Hundred Only) had been utilised for the purpose for which it was raised. There was no deviation(s) or variation(s) in the use of proceeds of the preferential issue from the specified objects of the issue.

Consequent to the above issue and allotment of Equity Shares, the Paid-up Equity Share

Capital of the Company as on March 31, 2024, was 10,47,32,390/- (Rupees Ten Crore Forty-Seven Lakhs Thirty-Two Thousand Three Hundred Ninety Only) divided into 1,04,73,239 (One

Crore Four Lakhs Seventy Three Thousand Two Hundred Thirty Nine) Equity Shares of 10/- (Rupees Ten) each fully paid up.

During the year under review, there was no change in the Authorised Share Capital of the

Company which as on March 31, 2024, was 11,00,00,000/- (Rupees Eleven Crores Only) divided into 1,10,00,000 (One Crore Ten Lakhs) Equity Shares of 10 (Rupees Ten) each.

Apart from this, the Company has not issued any shares with different rights, sweat equity shares or employee stock options during the year under review.

The Company has paid Listing Fees for the Financial Year 2023-24 to the Stock Exchange, where its Equity Shares are listed.

5. TRANSFER TO RESERVES:

The Company has not transferred any amount to the Reserves for the Financial Year ended March 31, 2024.

6. MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

Pursuant to Regulation 34(2)(e) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Management Discussion and Analysis Report is presented in a separate section forming part of this Annual Report.

7. CORPORATE GOVERNANCE:

Pursuant to Regulation 34(3) read with Schedule V of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements), Regulations, 2015, a report on Corporate Governance, forms an integral part of this Annual Report is given in Annexure 1.

8. CERTIFICATE ON CORPORATE GOVERNANCE:

A certificate received from Practicing Company Secretaries regarding the compliance of conditions of Corporate Governance, as required under Schedule V of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is attached in Annexure 2.

9. CORPORATE SOCIAL RESPONSIBILITY (CSR):

In accordance with the requirements of Section 135 of the Companies Act, 2013, and the Rules made there under, the Company has constituted a Corporate Social Responsibility (CSR) Committee and also formulated a Corporate Social Responsibility Policy (CSR Policy) which is available on the website of the Company at https://www.aaronindustries.net/wp-content/uploads/2023/05/CSR_Policy.pdf.

An Annual Report on CSR activities of the Company during the Financial Year 2023-24 as required to be given under Section 135 of the Companies Act, 2013 read with Rule 8 of the Companies (Corporate Social Responsibility Policy) Rules, 2014 has been provided as an Annexure - 3 to this Report.

During the year under review, the Company has issued and allotted 429300 Equity Shares on a preferential basis to the persons covered under the Promoter and Non-Promoter group category at the rate of 235/- per Equity Share, which included a premium of 225/- per Equity Share. Apart from this, there are no material changes and commitments affecting the financial position of the Company which has occurred between the end of the Financial Year of the Company to which the Financial Statements relate and the date of signing of this report.

The Company has been exempted under Regulation 21 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 from reporting risk management.

A well-defined risk management mechanism covering risk mapping and trend analysis, risk exposure, potential impact, and risk mitigation process is in place. The Board is fully aware of Risk Factors and is taking preventive measures wherever required.

The Company has adopted a Whistle Blower Policy to provide a formal mechanism for the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud, or violation of the Company's Code of Conduct or Ethics Policy. The Policy provides for adequate safeguards against victimization of employees, who avail of the mechanism and provides employees' direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee. The Whistle Blower Policy has been posted on the Website of Company at https://aaronindustries.net/wp-content/uploads/2022/08/Whistle-Blower-Policy-Vigil-Mechanism.pdf.

The Company has in place a policy on prevention, prohibition, and redressal of Sexual Harassment at the workplace in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. The Internal Complaints Committee has been set up to redress the complaints received on sexual harassment. All employees of the Company are covered under this policy. No complaints about sexual harassment were received during the year 2023-24.

During Financial Year 2023-24, all contracts/ arrangements/ transactions entered into by the

Company with related parties were in the ordinary course of business and on an arm's length basis. All the Related Party Transactions are placed before the Audit Committee for prior approval, as required under the Act and Listing Regulations. A statement of all Related Party Transactions is placed before the Audit Committee for its review on a quarterly basis.

The Company has not entered into material contracts or arrangements or transactions with related parties in accordance with Section 188 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014. There were no materially significant Related Party

Transactions made by the Company during the year that would have required shareholders' approval under the Listing Regulations.

Accordingly, the disclosure of Related Party Transactions as required under Section 134(3)(h) of the Companies Act, 2013, in Form AOC-2 is not applicable. Members may refer to Note No.37 to the Standalone Financial Statements which sets out related party disclosures pursuant to IND AS-24.

The Company has adopted a Policy on Related Party Transactions which can be accessed on the Company's website at https://aaronindustries.net/wp-content/uploads/2022/11/Policy-on-Materiality-of-RPTs.pdf.

15. PARTICULARS OF LOANS, GUARANTEES, AND INVESTMENTS UNDER SECTION 186

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

No application was made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the Financial Year 2023-24.

Not applicable during the Financial Year 2023-24.

There were no significant or material orders passed by the Regulators or Courts or Tribunals during the Financial Year 2023-24 impacting the going concern status and the Company's operations in the future.

Pursuant to Section 92(3) and 134(3)(a) of the Act the Annual Return of the Company prepared in accordance with Section 92(1) of the Act read with Rule 11 of the Companies (Management and Administration) Rules, 2014 (as amended), is placed on the website of the Company and is accessible at the www.aaronindustries.net.

During the year under review, your Company has neither invited nor accepted any Public Deposits within the meaning of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposit) Rules, 2014.

As on March 31, 2024, your Company does not have any Subsidiaries, Joint Ventures, or associate Companies.

During the year under review, there has been no change in the Company's nature of business.

The Board of the Company comprises Six (6) Directors; one Managing Director, one Whole-Time Director, One Executive Director, and the remaining three (3) Independent Directors. As on the date of this report, the composition of the Board of the Company is as follows:

The Shareholders of the Company had approved the re-appointment of Mr. Amar Chinubhai Doshi (DIN: 00856635), as a Chairman & Managing Director and Mr. Karan Amar Doshi (DIN: 06690242), as a Whole-Time Director of the Company for a further period of 3 (Three) Year w.e.f. February 01, 2024 to January 01, 2027.

In accordance with the provisions of Section 152 of the Act, 2013 and the Articles of Association of the Company, Mr. Amar Doshi (DIN: 00856635), Chairman & Managing Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment. His appointment is placed for approval of the members and forms part of the notice of the 11^th AGM. The information about the Director seeking his reappointment as per Secretarial Standards on General Meetings and Regulation 36(3) of the Listing Regulations has been given in the notice convening the 11^th AGM.

24. KEY MANAGERIAL PERSONNEL:

Pursuant to Section 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following are the Key Managerial Personnel of the Company:

i. Amar Chinubhai Doshi, Chairman & Managing Director ii. Karan Amar Doshi, Whole-Time Director iii. Monish Amar Doshi, Director & Chief Financial Officer iv. Nitinkumar Maniya, Company Secretary

The remuneration and other details of these Key Managerial Personnel for Financial Year 2023-24 are provided in the Annual Return which is available on the website of the Company.

The Company has a well-placed, proper, and adequate internal financial control system which ensures that all the assets are safeguarded and protected and that the transactions are authorized recorded, and reported correctly. The internal audit covers a wide variety of operational matters and ensures compliance with specific standards with regard to the availability and suitability of policies and procedures. During the year, no reportable material weaknesses in the design or operation were observed.

26. AUDITORS:

The Shareholders at their meeting held on September 04, 2023, had appointed D C Jariwala & Co., Chartered Accountants, as the Statutory Auditors of the Company for a period of 5 years from the conclusion of the 10^th Annual General Meeting (2023) till the conclusion of 15^th Annual General Meeting (2028).

M/s. D C Jariwala & Co., have issued their report on the Financial Statements for the Financial Year ended March 31, 2024, with an unmodified opinion and do not contain any qualification, observation, or adverse remarks or disclaimer that may call for any explanation from the Board of Directors. The Auditors have not reported any matter under Section 143(12) of the Companies Act, 2013, and therefore no detail is required to be disclosed under Section 134(3)(ca) of the Companies Act, 2013.

M/s. VCAS & Co. Chartered Accountants, Surat, who are the Internal Auditor has carried out Internal Audits for the Financial Year 2023-24. Their reports were reviewed by the Audit Committee.

During the Financial Year 2023-24, the Company has maintained and prepared the cost records as specified by the Central Government under sub-section (1) of section 148 of the Companies Act, 2013. Further, the requirement of Cost Audit does not apply to the Company for the Financial Year 2023-24.

Pursuant to the provisions of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed M/s. Dhirren R. Dave & Co., Practicing Company Secretaries, Surat as the Secretarial Auditor to undertake the Secretarial Audit of the Company for the Financial Year 2023-24. The Secretarial Audit Report issued in this regard is annexed as Annexure - 4.

The Auditors' Report and the Secretarial Audit Report for the Financial Year ended March 31, 2024, do not contain any qualifications or reservations, or adverse remarks.

The Company has undertaken an audit for the Financial Year ended March 31, 2024, for all applicable compliances as per Regulation 24A of the Listing Regulations and Circulars/Guidelines issued thereunder. The Annual Secretarial Compliance Report issued by M/s. Dhirren R. Dave & Co., Practicing Company Secretaries, has been submitted to the Stock Exchange within 60 days of the end of the Financial Year.

During the year under review, the Statutory Auditors, Internal Auditors, Cost Auditors, and Secretarial Auditors have not reported any instance of fraud committed in the Company by its Officers or Employees to the Audit Committee under Section 143(12) of the Act and the Rules made thereunder.

During the Financial Year 2023-24, the Board of Directors met Ten (10) times, and the details of the Meetings of the Board and its Committees are given in the Corporate Governance Report (Annexure-1).

The gap intervening between the two Meetings was within the time prescribed under the Act and LODR Regulations.

Details of attendance at Meetings of the Board, its committees, and the Annual General Meeting are included in the Report on Corporate Governance, which forms part of this Annual Report.

In terms of requirements under Schedule IV of the Companies Act, 2013 and Regulation 25(3) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Separate Meeting of the Independent Directors was held on May 15, 2023, and February 12, 2024.

The Independent Directors at the Meeting, inter alia, reviewed the following:

Performance of Non-Independent Directors and Board as a whole.

Performance of the Chairman of the Company, taking into account the views of Executive Directors and Non-Executive Directors. Assessed the quality, quantity, and timeliness of the flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

The Company has received declarations from each Independent Director of the Company under Section 149(7) of the Act and Regulation 25(8) of the Listing Regulations confirming compliance with the criteria of independence as stipulated under Section 149(6) of the Act and Regulation 16(1)(b) of the Listing Regulations and there has been no change in the circumstances which may affect their status as Independent Directors during the Financial Year 2023-24.

All Independent Directors of the Company have affirmed compliance with Schedule IV of the

Act and the Company's Code of Conduct for Directors and Employees for the Financial Year

2023-24.

All the Independent Directors of the Company have registered themselves with the Indian

Institute of Corporate Affairs (‘IICA') towards the inclusion of their names in the data bank maintained with it and they meet the requirements of the proficiency self-assessment test.

None of the Independent / Non-Executive Directors has any pecuniary relationship or transactions with the Company which in the Judgment of the Board may affect the independence of the Directors.

The Company has adopted a familiarization program for Independent Directors with the objective of making the Independent Directors of the Company accustomed to the business and operations of the Company through various structured orientation programs. The familiarization program also intends to update the Directors on a regular basis on any significant changes therein so as to be in a position to make well-informed and timely decisions.

The details of the Familiarization program undertaken have been uploaded on the Company's website at www.aaronindustries.net.

The performance evaluation of the Board, its Committees and the Independent Directors of the Company were evaluated by the Board after obtaining inputs from all the Directors on the fixed benchmark for the performance evaluation such as participation in strategy formulation and decision making; participation in Board and Committee Meetings; Directions, views and recommendations given to the Company, etc.

The Board reviewed the performance of the individual directors on the basis of the criteria such as the contribution of the individual director to the Board and Committee Meetings like preparedness on the issues to be discussed, meaningful and constructive contribution and inputs in Meetings, etc. In addition, the Chairman was also evaluated on the key aspects of his role. In a separate meeting of Independent Directors, performance of Non-Independent Directors, performance of the Board as a whole and performance of the Chairman was evaluated, taking into account the views of Executive Directors and Non-Executive Directors. The Performance evaluations of the Independent directors were done by the entire Board, excluding the Independent Directors who were being evaluated did not participate in the same.

Pursuant to the provision of Section 178(3) of the Companies Act, 2013, the Company has, on the recommendation of the Nomination and Remuneration Committee, framed and adopted a Policy for the selection, appointment, cessation, remuneration, and evaluation of Directors, Key Managerial Personnel and senior management personnel including criteria for determining qualifications, positive attributes and independence of Directors.

The Nomination and Remuneration Policy of the Company is available on the website of the Company at https://aaronindustries.net/wp-content/uploads/2022/08/Nomination-Remuneration-Policy.pdf.

The details as required under Section 197(12) of the Companies Act, 2013 read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 are given in Annexure 5 of this Report.

In terms of the first proviso to Section 136 of the Act, the Reports and Accounts are being sent to the shareholders excluding the information required under Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. Any shareholder interested in obtaining the same may write to the Company Secretary at the Registered Office of the Company. The said information is available for inspection by the Members at the Registered Office of the Company on any working day of the Company up to the date of the 11^th Annual General Meeting.

During the year, the Company had no employee who was employed throughout the financial year or part thereof and was in receipt of remuneration, 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 and holds by himself or along with his spouse and dependent children, not less than 2% of the Equity Shares of the Company.

The details of conservation of energy, technology absorption, and foreign exchange earnings and outgo as stipulated under Section 134(3)(m) of the Companies Act, 2013, read with Rule 8(3) of the Companies (Accounts) Rules, 2014 is annexed as Annexure - 6 and forms part of this Report.

The Directors' Responsibility Statement referred to in Section 134(3)(c) 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) the directors had 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) the directors had 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) the directors had prepared the annual accounts on a going concern basis; (e) the directors had laid down internal financial controls to be followed by the company and that such internal financial controls are adequate and were operating effectively. (f) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

The Company complies with all applicable mandatory Secretarial Standards issued by the Institute of Company Secretaries of India (ICSI).

In terms of the provisions of the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015, as amended (PIT Regulations), the Company has adopted revised "Code of Conduct to Regulate, Monitor and Report Trading by Designated Persons and Immediate Relatives of Designated Persons" ("the Code"). The Code is applicable to all

Designated persons, Immediate Relatives of Designated Persons, Connected Persons, Promoters and Promoter Group of the Company, who have access to Unpublished Price Sensitive Information relating to the Company.

The Company has also formulated a "Code of Practices and Procedures for Fair Disclosure of

Unpublished Price Sensitive Information (UPSI)" in compliance with the PIT Regulations.

The aforesaid Codes are posted on the Company's website and can be accessed by using the web link at https://aaronindustries.net/wp-content/uploads/2023/03/Code-of-Conduct-to-Regulate-Monitor-and-Report-Trading-by-DP.pdf and https://aaronindustries. net/wp-content/uploads/2022/11/Code-of-Practices-and-Procedures-for-Fair-Disclosure-of-UPSI.pdf.

In the opinion of the Board of Directors of the Company, Independent Directors on the Board of Company hold the highest standards of integrity and are highly qualified, recognized and respected individuals in their respective fields. It's an optimum mix of expertise (including financial expertise), leadership and professionalism.

In terms of Regulation 17(8) of the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015; the CFO has certified to the Board of Directors of the Company with regard to the Financial Statements and other matters specified in the said Regulation for the Financial Year 2023-24. The certificate received from the CFO is attached herewith as per

Annexure - 7.

The Board of Directors has formulated and adopted the Code of Conduct for all Board Members and Senior Management Personnel of the Company. All the Board Members and Senior Management Personnel have affirmed compliance with the Code on an annual basis.

In this regard certificate from Managing Directors, as required under Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been received by the Board, and the same is attached herewith as per Annexure - 8.

Code of Conduct for Board of Directors and Senior Management Personnel is available on the website of the Company at the web link https://aaronindustries.net/wp-content/uploads/2022/08/Code-of-Conduct-for-Board-Members-and-Senior-Management-Personnel.pdf.

Your Company has taken the required insurance coverage for its assets against possible risks like fire, flood, burglary etc.

43. GREEN INITIATIVES:

In commitment to keeping in line with the Green Initiative and going beyond it to create new green initiatives, an electronic copy of the Notice of the 11^th Annual General Meeting of the Company including the Annual Report for the Financial Year 2023-24 is being sent to all Members whose e-mail addresses are registered with the Company/Depository Participant(s).

The Annual Report including those which relate to the Directors' Report, Management Discussion and Analysis Report may contain certain statements on the Company's intent expectations or forecasts that appear to be forward-looking within the meaning of applicable securities laws and regulations while actual outcomes may differ materially from what is expressed herein. The Company bears no obligations to update any such forward-looking statement. Some of the factors that could affect the Company's performance could be the demand and supply for the Company's products and services, changes in Government regulations, tax laws, forex volatility, etc.

The Directors take this opportunity to thank the shareholders and bankers for their cooperation and support to the operations and look forward for their continued support in future. The Directors also thank all the customers, vendor partners, and other business associates for their continued support during the year. The Directors place on record their appreciation for the hard work put in by all employees of the Company.