(CIN: L17110GJ1988PLC010504)

To,

The Members,

Your Directors have pleasure in presenting the 34^thAnnual Report on the business and operations of your Company together with the audited accounts for the financial year ended 31^st March, 2023.

Your Company's performance during the year is as below:

(Rs' in Lakhs)

During the year under review, the company has achieved revenue of Rs 26,609.59 Lakh as compared to ' 43955.52 Lakh for the previous financial year. The Net loss for the year stood at ' 6504.90 Lakh against ' 4142.27 Lakh in the previous year.

Your Company looks forward to strengthen its operations by curtailing expenditure, asset monetization and debt reduction, etc. This would help the Company to improve its results and profitability.

Your Directors do not recommend payment of any Dividend for the financial year ended 31^st March, 2023.

The company has adopted Indian Accounting Standards (IND AS) with effect from 1^st April, 2017, pursuant to the notification of Companies (Indian Accounting Standard) Rules, 2015 issued by the Ministry of Corporate Affairs. Hence, previous year's figures have been regrouped and reclassified, wherever considered necessary to confirm the figures represented in the current period.

During the year, the Company has complied with the requirements of the Applicable Secretarial Standards i.e. SS-1 and SS-2 relating to "Meeting of Board of Directors" and "General Meetings" respectively issued by Institute of Company Secretaries of India.

The Company has not transferred any amount to General Reserves for the Financial Year 2022-23.

The paid up Equity Share Capital as at 31^st March, 2023 stood at ' 2345.98 Lakhs. During the year under review, the Company has neither made any issue of equity shares with differential voting rights nor has granted any stock options or sweat equity. The Company has no scheme of provision of money for purchase of its own shares by employees or by trustees for the benefit of employees.

During the financial year under review pursuant to SEBI (Listing Obligations and Disclosure Requirement) Regulations, 2015 your Company has complied with all the applicable provision of Corporate Governance.

Separate report on Corporate Governance and Management Discussion & Analysis, as required under the SEBI Listing Regulations are forming parts of the Annual Report.

The requisite certificate from Practicing Company Secretary confirming the compliance with the condition of Corporate Governance along with the observation is attached to the Report on Corporate Governance.

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which this financial relate and the date of this report except the approval of shareholders was taken by Postal Ballot for Sale Substantial Part of Undertaking (Vijay Farm Unit) i.e. Land and Building & Plant and Machinery of the Company.

The Company is in process of selling its undertaking of Sari Unit and Vijay Farm unit with parts of machineries for which shareholders' approval was taken earlier. Once the bank consent to the sale is received the Company will inform accordingly.

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

During the year under review no Fixed deposit were accepted by the Company. There are no deposits which are not in compliance with the requirements of Chapter V of the Companies Act, 2013.

All properties and insurable interests of the company including building, plant and machinery and stocks wherever necessary and to the extent required have been adequately insured.

Company is not having any Subsidary, associate company and Joint venture as defined under the provisions of Companies Act, 2013 whose accounts are to be consolidated with the accounts of the company.

For all related party transactions prior omnibus approval of the Audit Committee is obtained on a yearly basis for the transactions which are of foreseen and repetitive nature and such approval is in interest of the Company. Transactions entered into, pursuant to the omnibus approval so granted, are audited and

a statement giving details of all related party transactions is placed before the Audit Committee and the Board of Directors for their approval.

A detailed report on material contracts and arrangements made during the financial year 2022-23, being arm's length transactions have been reported and annexed hereto in form AOC-2 as Annexure -A forming part of this report.

There are no materially significant related party transactions made by the company with promoters, key managerial personnel or other designated persons which may have potential conflict with interest of the company at large.

The Company has adopted a Related Party Transactions Policy. The Policy, as approved by the Board is uploaded on the Company's website at the web link http://www.aarveedenims.com/investors/ corporate-governance/

Details pertaining to Composition of Audit Committee are included in Corporate Governance Report. All recommendations made by were accepted by Board.

The Company has adopted a Risk Management Policy for a systematic approach to control risks. The Risk Management Policy of the Company lays down procedures for risk identification, evaluation, monitoring, review and reporting. The Risk Management Policy has been developed and approved by the Senior Management in accordance with the business strategy.

The Company has in place an adequate system of internal controls. It has documented policies and procedures covering all financial and operating functions and processes. These have been designed to provide a reasonable assurance with regard to maintaining of proper accounting controls for ensuring reliability of financial reporting, monitoring of operations, protecting assets from unauthorized use or losses and compliance with regulations.

In accordance with the provision of Section 152 (6) of the Companies Act, 2013 and Articles of Association of the Company, Mr. Nipun V Arora, (DIN: 00989835), Whole time Director shall retire by rotation at the forthcoming Annual General Meeting of the Company and being eligible offer himself for re-appointment. The Board recommends his re-appointment.

Mr. Amol Dalal (DIN: 00458885), Mr. Ashok Gandhi (DIN: 00022507), Mr. Sanjay Majmudar (DIN: 00091305) & Mrs. Aarti Thakkar (DIN: 08603909) being independent directors are not eligible for retire by rotation and hold office for five consecutive years for a term from the date of their appointment by the Board of Directors as per the provisions of Section 149, 152 read with Schedule IV of the Companies Act, 2013 and Regulation 25 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

Information regarding the meeting of directors and remuneration etc. is given in the Corporate Governance report attached with the report.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149 (6) of the Act and Regulation 16 (1) (b) of the Listing Regulations. In the opinion of the Board, they fulfill the conditions of independence as specified in the Act and the Rules made there under and are independent of the management. The detail terms of Independent Directors are disclosed on the Company's website with the following link http://www. aarvee-denims.com/script-code-stock-exchanges.html

Pursuant to the applicable provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 the Board has carried out an annual performance evaluation of its own performance and, the Directors individually and as well as the evaluation of the working of its Committees. The criteria applied in evaluation process are explained in the Corporate Governance Report.

During the year under review, Five board meetings were convened and held, the details of which are given in the corporate governance report. The intervening gap between the meetings was within the period prescribed under the Act and the Listing Regulations.

Your Company has several Committees which have been established as part of best corporate governance practices and are in compliance with the requirements of the relevant provisions of applicable laws and statutes.

The Company has following Committees of the Board:

a. Audit Committee

b. Nomination and Remuneration Committee

c. Stakeholders' Grievances and Relationship Committee

d. Corporate Social Responsibility Committee

e. Share Transfer Committee

f. Risk Management Committee

A detailed note on the committees with respect to composition, meetings, powers, and terms of reference is provided under the corporate governance report section in this Annual Report.

Pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:

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

(ii) 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 as at 31^st March, 2023 and of the Profit of the Company for the year ended on that date;

(iii) they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act, for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

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

(v) they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operating effectively; and

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

In Accordance with section 135 of the Act and Rules framed thereunder, the Company has constituted a Corporate Social Responsibility ("CSR") Committee of Directors. The details of composition of CSR Committee are given in the Corporate Governance Report.

The details of CSR policy and CSR spending by the Company have been provided as Annexure-B to this report, as required under the Companies (Corporate Social Responsibility Policy) Rules, 2014.

The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. The Policy aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure.

The Company has not received any complaint of sexual harassment during the financial year 2022-23.

Pursuant to the provisions of Section 177(9) & (10) of the Companies Act, 2013 and Regulation 22 of SEBI (Listing Obligation and Disclosure Requirement) Regulations, 2015, a Vigil Mechanism or 'Whistle Blower Policy' for Directors, employees and other stakeholders to report genuine concern has been established. The same is uploaded on the website of the Company http://www.aarvee-denims.com/ pdfs/vigil-machanism.pdf. It is affirmed that no personnel of the Company have been denied access to the Audit Committee.

No significant material orders have been passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.

M/s. Pankaj R. Shah Associates, Chartered Accountant, Ahmedabad (Firm registration No.107361W) were appointed in the 33^rd Annual General Meeting of the Company as Statutory Auditors to hold office for five years from the conclusion of the 33^rd Annual General Meeting till the conclusion of 38^th Annual General Meeting of the Company.

M/s. Pankaj R. Shah Associates, Chartered Accountant, Ahmedabad (Firm registration No.107361W) statutory auditors of the Company have submitted the Audit Reports for Audited Standalone Financial Results of the Company for the Financial year ended 31^st March 2023 with unmodified opinion.

The company has received a consent letter from the cost auditors M/s. N. D. Birla and Co., Cost Accountant to the effect that their appointment, if made, would be within the prescribed limits under section 141(3) (g) of the Companies Act, 2013 and that they are not disqualified for appointment. The board of Directors of the company at its meeting held on 30^th May, 2023 appointed M/s. N. D. Birla & Co., Cost Accountants as the cost auditors of the Company to conduct the audit of cost records maintained by the Company as required by the Companies (Cost Records and Audit) Rules 2014 as amended from time to time.

The members are requested to ratify the remuneration to be paid to the cost auditors of the company

Pursuant to Section 204 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Company has appointed Mr. Tapan Shah, Practicing Company Secretary (COP No. 2839) for conducting Secretarial Audit of the Company for the financial year ended on 31^st March, 2023. The Secretarial Audit report of Mr. Tapan Shah. Practicing Company Secretary along with the observations for the financial year ended 31^st March, 2023, is annexed as Annexure - C.

Observation was raised for updating of some of policies and SDD Register which were considered and updated by the Company.

During the year under review, the Statutory Auditors and Secretarial Auditor have not reported any instances of fraud committed in the Company by its officers or Employees to the Audit Committee under Section 143(12) of the Companies Act, 2013

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134 (3) (m) of the Act read with Rule 8 (3) of The Companies (Accounts) Rules, 2014, is annexed as Annexure - D.

The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company is attached as Annexure - E to this report.

The extract of Annual Return is no longer required to be attached with the Director's Report u/s 134(3) (a) of the Companies Act, 2013 read with Rule 12(1) of the Companies (Management & Administratton) Rules, 2014 vide nottficattons issued by Ministry of Corporate Affairs (MCA) dated 28/08/2020 and 05/03/2021.

Pursuant to Sub-sectton 3(a) of Sectton 134 and Sub-sectton (3) of Sectton 92 of the Companies Act, 2013 read with Rule 12 of Companies (Management and Administratton) Rules, 2014, the copy of the Annual Return of the Company for the Financial Year ended on 31.03.2023 in Form MGT-7 is available on website of the Company http://www.aarveedenims.com.

The industrial relattons conttnued to be generally peaceful and cordial.

The amounts which remained unpaid or unclaimed for a period of seven years have been transferred by the company, from ttme to ttme on due dates, to the Investor Educatton and Protectton Fund.

Pursuant to the provisions of Sectton 124(6) of the Companies Act, 2013 read with the Investor Educatton and Protectton Fund Authority (Accounttng, Audit, Transfer and Refund) Rules, 2016 as amended ttll date, transfer of shares held by the shareholders of the Company whose dividends are unpaid for a consecuttve period of 7 years or more to the Demat A/c of the Investor Educatton and protectton fund authority opened by the IEPF Authority in terms of the aforesaid Rules

Pursuant to the provision of Investor Educatton and Protectton Fund (Uploading of informatton regarding unpaid and unclaimed amounts lying with companies) Rules, 2012, there are no unpaid and unclaimed amounts lying with the Company as on 30^th September 2023 (date of last Annual General Meettng).

The Company has Company Secretary as Nodal Officer under the provisions of the Investor Educatton and Protectton Fund.

The Equity shares of your company are listed on the BSE Limited (BSE) and the Nattonal Stock Exchange of India Limited (NSE).

The Company has paid the listtng fees for the year 2022-23 as well as for 2023-24 to above stock exchanges.

Your company keeps in line with the ongoing technological developments taking place in the country and worldwide. The informatton technology adopted by the company serves as an important tool of internal control as well as providing the benefits of modern technology to its esteemed customers. Company is taking utmost precauttons for the security of data and having a dedicated team for this. During the financial year 2022-2023 there was no instance of cyber security breach happened in the company.

Credit rating from Infomerics Valuation and Ratings Private Limited was obtained for bank loan facility and India Rating and Research Private Limited for Deposit. The rating was as under:

Your Directors thank the various Central and State Government Departments, Organizations and Agencies for their continued help and co-operation extended by them. The Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, dealers, vendors, banks and other business partners for the excellent support received from them during the year and look forward to their continued support in future. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company.

Place: Ahmedabad Date: 28.08.2023

191, Shahwadi,

Nr. Old Octroi Naka, Narol - Sarkhej Highway, Narol, Ahmedabad - 382 405 CIN: L17110GJ1988PLC010504

Chairman and Managing Director DIN: 00007065