DIRECTORS' REPORT

The Board of Directors of the Company is pleased to
present the Thirty Eighth (38^th) Board Report together
with the audited standalone and consolidated financial
statements of Aarvi Encon Limited (“the Company/Aarvi”)
for the financial year ended March 31,2026 (“the year/FY
2025-26”).

Corporate Overview:

Aarvi Encon Limited, established in 1987 and
headquartered in Mumbai, is a leading provider of
Technical Manpower Outsourcing and Engineering
Services. Over the years, the Company has built a strong
reputation for delivering skilled manpower and project
support solutions to a diverse range of industries across
India and international markets.

The Company caters to sectors such as Oil & Gas,
Refineries, Petrochemicals, Power, Renewable Energy,
Infrastructure, Fertilizers, Metals & Mining, Railways,
Telecom, and other industrial segments. With its extensive

industry experience and commitment to quality, Aarvi
has developed long-standing relationships with several
renowned public and private sector organizations.

During the FY 2025-26, the Company continued to
strengthen its market position by focusing on operational
excellence, customer satisfaction, and expansion into
new business opportunities. The growing investments
in infrastructure, manufacturing, conventional energy,
and renewable energy sectors provided significant
opportunities for business growth, which the Company
successfully leveraged through its experienced workforce
and strong execution capabilities.

With a presence across India and overseas markets, Aarvi
remains committed to sustainable growth, innovation,
and value creation for all stakeholders. The Company
continues to focus on enhancing service quality,
strengthening client relationships, and expanding its
geographical footprint while maintaining high standards
of corporate governance and business ethics.

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, 2026, in comparison with the previous financial year ended March 31,2025, are
summarized below:

Standalone and Consolidated Financial Statements

Pursuant to the provisions of Section 129 and Section
133 of the Companies Act, 2013 (“the Act”) read with the
Companies (Indian Accounting Standards) Rules, 2015, as
amended from time to time, the Standalone and Consolidated
Financial Statements of the Company for the financial year
ended March 31,2026, have been prepared in accordance
with the Indian Accounting Standards (“Ind AS”).

The financial statements have been prepared using
appropriate accounting policies, consistently applied, and
based on prudent judgments and estimates to present a
true and fair view of the state of affairs of the Company,
its profit, cash flows and changes in equity for the financial
year ended March 31,2026. The accompanying Notes to
the Standalone and Consolidated Financial Statements
form an integral part of the Financial Statements.

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

The Board of Directors is pleased to present
the operational and financial performance of the
Company for the financial year ended March 31,
2026.

Standalone Performance

During the year, the Company recorded revenue from
operations of ?569.92 crore, registering a growth of
22.81% as compared to ?464.08 crore in the previous
financial year.

The Company reported a Profit After Tax (“PAT”) of
?11.40 crore, as against T7.73 crore in the previous
financial year, reflecting a healthy increase in
profitability.

Consolidated Performance

Pursuant to the provisions of Section 129(3) of
the Act read with the applicable Indian Accounting
Standards, the Audited Consolidated Financial
Statements of the Company and its subsidiaries form
part of the Annual Report.

On a consolidated basis, the Company reported
revenue from operations of ?649.85 crore,
representing a growth of 27.33% over ?510.38 crore
reported in the previous financial year.

The Consolidated PAT increased to ?17.62 crore as
compared to ?10.04 crore in the previous financial
year.

The improvement in profitability was driven by higher
business volumes, improved operational efficiencies,
better execution across projects, and sustained
performance across the geographies in which the
Company operates.

3. SHARE CAPITAL

As on March 31, 2026, the authorized share capital
of the Company was ' 20,00,00,000 (Rupees
Twenty-Crores Only) divided into 2,00,00,000 (Two
Crores) Equity Shares of ' 10/- (Rupees Ten Only)
each. During the year, there was no change in the
authorised share capital of the Company.

The issued, subscribed and paid-up share capital
of the Company as on March 31, 2026 was
' 14,81,07,000 (Rupees Fourteen Crore Eighty One
Lakhs Seven Thousand Only) comprising 1,48,10,700
(One Crore Forty Eight Lakh Ten Thousand Seven
Hundred) Equity Shares of ' 10/- (Rupees Ten Only)
each.

Subsequent to the closure of the year till the date

of this report, the Nomination and Remuneration
Committee of the Board of Directors of the Company
has allotted 31,900 equity shares of ' 10/- each of the
Company on April 18, 2026 and 1,500 equity shares
of ' 10/- each of the Company on May 30, 2026,
pursuant to exercise of Employee Stock Options
under Aarvi Encon Limited Employee Stock Option
Plan, 2022 by the eligible employees.

Consequently as on the date of this Report, effective
from April 18, 2026, the issued, subscribed and paid-
up share capital of the Company stands increased
to ' 14,84,41,000/- (Rupees Fourteen Crore Eighty-
Four Lakhs Forty-One Thousand Only) divided into
1,48,44,100 (One Crore Forty-Eight Lakh Forty-Four
Thousand One Hundred) equity shares of face value
of ' 10/- (Rupees Ten Only) each.

During the year, the company has not issued any
Equity Shares with differential rights as to dividend,
voting or otherwise.

4. DIVIDEND

The Board of Directors of the Company at its meeting
held on May 29, 2023, voluntarily adopted a Dividend
Distribution Policy (“DDP”) of the Company, which
sets out the parameters and circumstances that will
be taken into account by the Board in determining
the distribution of dividend to the Shareholders of the
Company.

Based on the Company’s performance, DDP and
keeping in mind the shareholders’ interest, the Board
of Directors of the Company at its meeting held on
May 22, 2026, 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, 2026,
subject to the approval of the Members at the ensuing
38^th Annual General Meeting (“AGM/38^th AGM”). The
dividend once approved by the Shareholders will be
paid within 30 days.

The said dividend, if approved by the Shareholders at
the ensuing AGM will be paid to those Shareholders
whose name appear on the register of Members
(including Beneficial Owners) of the Company as
at the end of Friday, August 7, 2026. The proposed
dividend would result in an outflow of approximately
?297lakhs (excluding applicable taxes), subject to
approval of the Shareholders at the ensuing AGM.

In view of the changes made under the Income-Tax
Act, 2025, by the Finance Act, 2020, the dividend paid
or distributed by the Company shall be taxable in the
hands of the members. Accordingly, the Company
shall make the payment of the Dividend after the
deduction of tax at source to the members.

5. 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 incentives key talent, for driving
long term objectives of the Company and ensuring
that employee payoffs match the long gestation
period of certain key initiative whilst simultaneously
fostering ownership behaviour and collaboration
amongst employees, the members of the Company
at the AGM held on July 29, 2022, adopted Aarvi
Encon Limited Employee Stock Option Plan, 2022
(“ESOP 2022”).

The Nomination and Remuneration Committee of the
Company, inter alia,administers and monitors this
ESOP 2022 in accordance with the Securities and
Exchange Board of India (Share Based Employee
Benefits and Sweat Equity) Regulations, 2021 (“SEBI
SBEB Regulations”).

The Company has also received a certificate from the
Secretarial Auditor of the Company confirming that
the ESOP 2022 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/shareholdersinformation-
and-announcments.

Disclosures required under Regulation 14 of the
SEBI SBEB Regulations, read with the applicable
provisions of the Act, in relation to ESOP 2022
is attached to this report as Annexure 1 and is
available on the Company’s website at https://
aarviencon.com/investors/shareholdersinformation-
and-announcments.

6. 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 Company’s effort to reduce cost and
to improve cost efficiency.

7. INTERNAL FINANCIAL CONTROL SYSTEM AND
ITS ADEQUACY

The Company has established and maintained
adequate internal financial controls commensurate
with the size, scale, and complexity of its operations.
The internal financial control framework is designed
to provide reasonable assurance regarding the
reliability of financial reporting, safeguarding of
assets, prevention and detection of frauds and errors,

compliance with applicable laws and regulations,
and the orderly and efficient conduct of business
operations.

The Company has implemented appropriate
policies, procedures, and controls covering key
business processes, financial reporting, information
systems, statutory compliances, and operational
activities. These controls are periodically reviewed
and strengthened in line with changes in business
requirements, regulatory developments, and industry
best practices.

The Internal Auditors conduct regular audits of various
functions and processes across the organization.
Their observations and recommendations
were reviewed by the Audit Committee and the
management, and necessary corrective actions has
been taken to further enhance the effectiveness of
the internal control environment.

The Audit Committee periodically reviews the
adequacy and effectiveness of the Company’s
internal financial control systems and monitors the
implementation of audit recommendations. Based
on such reviews and the assessments carried out
by the management, the Board is of the opinion that
the Company has adequate internal financial controls
with reference to the Financial Statements and that
such controls were operating effectively during the
year.

No material weakness in the design or operation of
the internal financial controls was observed during
the year.

8. SUBSIDIARY, ASSOCIATES AND JOINT
VENTURES COMPANIES

As on March 31,2026, the Company has a diversified
international presence through its subsidiaries
and associate companies across the Middle East,
Europe and Asia. The Company has Four subsidiary
Companies, two step down subsidiaries and one
Associate Company as on March 31,2026.

During the year, Aarvi Encon FZE, a wholly owned
subsidiary of the Company incorporated in United
Arab Emirates, has incorporated a new wholly owned
subsidiary company Aarvi Energy Services SDN.
BHD in Malaysia with effect from September 23,
2025.

Pursuant to the provisions of Section 129(3) of the
Act, read with Rule 5 of the Companies (Accounts)
Rules, 2014, a statement containing the salient
features of the financial statements of the Company’s
subsidiaries and associates in Form AOC-1 attached

as “Annexure 2” to this Report.

In accordance with the provisions of Section 136 of
the Act, the audited standalone financial statements
of the Company, the consolidated financial
statements together with the relevant documents,
and the separate audited financial statements of the
subsidiaries are available on the Company’s website
at https://aarviencon.com/investors/financial-results.

Aarvi Encon FZE, the Company’s wholly owned
subsidiary incorporated in the SAIF Zone, Sharjah,
UAE, continues to be a Material Subsidiary of the
Company, as its net worth exceeds ten percent
of the consolidated net worth of the Company in
accordance with Regulation 16 of the Securities
and Exchange Board of India (Listing Obligations
and Disclosure Requirements) Regulations, 2015
(“Listing Regulations”).

The Company has formulated a Policy for
determining Material Subsidiaries, which is available
on the Company’s website at https://aarviencon.com/
investors/policies

9. BOARD OF DIRECTORS, COMMITTEES OF
BOARD AND KEY MANAGERIAL PERSONNELA. Board of Directors

The Company’s Board of Directors as on March 31,
2026, comprises of two Executive Directors, out of
which one is a Managing Director and the other is an
Executive Director and Chief Financial Officer, and
four Independent Directors including one Women
Director.

The details of the Board and Committee composition,
areas of expertise are provided in the Corporate
Governance Report, which forms part of this Report.

B. Changes in Directors during the year:

Dr. Padma Devarajan (DIN: 08064987) ceased to
be an Independent Director of the Company with
effect from January 31,2026, upon completion of her
second and final term as an Independent Director.
The Board places on record its sincere appreciation
for her valuable guidance and significant contribution
during her tenure with the Company.

The Board of Directors appointed Mr. Jagat Parikh
(DIN: 06757116) as an Independent Director of
the Company for an initial term of five consecutive
years, effective February 2, 2026 in compliance with
the Act and Listing Regulations. The appointment
was subsequently approved by the members of the
Company through a resolution passed through postal
ballot on March 21,2026.

C. Director liable to Retirement by Rotation

In accordance with the provisions of the Act and the
Articles of Association of the Company, Mr. Jaydev
Sanghavi (DIN: 00759042), Director of the Company,
is liable to retire by rotation at the ensuing 38^th AGM
and being eligible offered himself for re-appointment.
On the recommendation of the NRC, the Board of
Directors recommends his reappointment as a
Director, liable to retire by rotation. The detailed
proposal for re-appointment forms part of Notice of
38^th AGM.

D. Declarations and Confirmations

All Independent Directors have submitted
declarations and confirmations affirming that they
meet the criteria of independence prescribed under
Section 149(6) of the Act and Regulations 16(1)(b)
and 25 of the Listing Regulations. They have also
confirmed compliance with the Code for Independent
Directors as prescribed under Schedule IV of the Act
and with the requirements of Rule 6 of the Companies
(Appointment and Qualification of Directors) Rules,
2014, including registration in the online databank
maintained by the Indian Institute of Corporate
Affairs.

The Board has taken these declarations and
confirmations on record and, after due assessment,
is of the opinion that all Independent Directors
are independent of the management, possess
the requisite integrity, expertise, experience and
proficiency, fulfil the conditions specified under the
Act and the Listing Regulations, and that there has
been no change in circumstances affecting their
independence during the year.

Based on the declarations received, none of the
Directors is disqualified under Section 164 of the Act
or debarred/disqualified from holding the office of
Director by SEBI, the Ministry of Corporate Affairs,
or any other statutory or regulatory authority. In the
opinion of the Board, all Directors, including those
appointed or re-appointed during the year, possess
the requisite qualifications, experience, expertise and
high standards of integrity.

During the year, the Non-Executive Directors had
no pecuniary relationship or transactions with the
Company, other than the payment of sitting fees
and reimbursement of expenses, if any, incurred in
connection with attending meetings of the Board and
its Committees.

E. Number of Board Meetings

The Board met Seven (7) times during the year. The

maximum gap between any two Board Meetings
did not exceed one hundred and twenty days. The
details of the meetings and attendance of directors
are furnished in the Corporate Governance Report,
which forms part of this Report.

F. Familiarization Programme for the 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 are available
on the website at https://aarviencon.com/investors/
policies

G. Board Committees

In compliance with the provisions of the Act, the
Listing Regulations and other applicable laws, the
Board has constituted the following Committees to
facilitate effective governance and discharge of its
responsibilities:

• Audit Committee

• Nomination and Remuneration Committee

• Stakeholders’ Relationship Committee

The Board determines the terms of reference of
these Committees in accordance with the applicable
statutory and regulatory requirements and appoints
their respective members from time to time. The
Committees discharge their functions within the
scope of their respective terms of references and
submit their recommendations, wherever required, to
the Board for its consideration and approval.

The details relating to the composition of the
Committees, terms of reference, the number of
meetings held during the year and the attendance of
the members thereat are provided in the Corporate
Governance Report, which forms part of this Annual
Report.

During the year, all the recommendations made by
the Committees were duly considered and accepted
by the Board.

H. Key Managerial Personnel (“KMP”)

As on March 31,2026, the following person have been
designated as KMP of the Company pursuant to the
provisions of Sections 2(51) and 203 of the Act read

with the Companies (Appointment and Remuneration
of Managerial Personnel) Rules, 2014:

During the year, there was no change in the KMPs of
the Company.

F. Receipt of any remuneration or commission by
Managing Director / Executive Director holding or
subsidiary Company of the Company

During the year, Mr. Virendra D. Sanghavi nor Mr.
Jaydev V. Sanghavi were not paid any remuneration
or commission from any subsidiary of the Company. .

10. NOMINATION AND REMUNERATION POLICY

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

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

11. ANNUAL EVALUATION BY THE BOARD

TheNomination andRemunerationCommittee(“NRC”)
has approved a framework / policy for performance
evaluation of the Board, Committees of the Board and
the Individual members (including the Chairperson)
that includes the 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 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 form 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.

The performance evaluation of non-independent
directors and the Board as a whole and Chairman
of the Board and accessed 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
held on March 23, 2026.

12. VIGIL MECHANISM

The Company is confirmed 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 and express these concerns without fear of
punishment or unfair treatment.

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

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

The Vigil Mechanism Policy is available on the
website of the Company at https://aarviencon.com/
investors/policies

13. DIRECTORS’ RESPONSIBILITY STATEMENT

Pursuant to Section 134(5) read with Section 134(3)

(c) of the Act, concerning the Directors’ Responsibility
Statement, it is hereby confirmed that:

(a) in the preparation of the annual accounts of the
Company for the financial year ended March 31,
2026, the applicable accounting standards had
been followed along with proper explanation
relating to material departures from the same;

(b) the Directors 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 March 31,
2026 and the profit of the Company for the year
ended on that date;

(c) the Directors 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.

(d) the Directors have prepared the annual accounts
on a going concern basis;

(e) the Directors 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) the Directors have devised proper systems to
ensure compliance with the provisions of all
applicable laws and that such systems were
adequate and operating effectively.

14. AUDITORS

A. Statutory Auditors

In accordance with the provision of Section 139,
141 of the Act and rules made thereunder, M/s. Jay
Shah & Associates, Chartered Accountants (Firm
Registration No. 135424W) were appointed as the
Statutory Auditors of the Company at the 34^th AGM
held on July 29, 2022, for a period of five consecutive
years from the conclusion of the 34^th AGM held in the
financial year 2022-23 till the conclusion of the 39^th
AGM to be held in the financial year 2027-28.

The auditors have confirmed their eligibility limits as
prescribed in the Act, and that they are not disqualified
from continuing as Auditors of the Company.

Auditor’s Report

The Auditor’s Report on the Financial Statements
of the Company for the Financial year ended March
31, 2026, is unmodified i.e., it does not contain
any qualification, reservation or adverse remark.
The Auditors’ Report is enclosed with the Financial
Statements forming part of the Annual Report.

Details of Fraud Reported by Auditors

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

B. Internal Auditor and Internal Audit Systems

Pursuant to the provisions of Section 138 of the Act
and the Companies (Accounts) Rules, 2014, the
Board of Directors of the Company has appointed M/s.
N. A. Shah Associates LLP, Chartered Accountants,

to conduct internal audit across the organization.
The Company have strengthened the in-house
internal audit and compliance team to supplement
and support the efforts of M/s. N. A. Shah Associates
LLP, Chartered Accountants.

C. Secretarial Auditor

In accordance with Regulation 24A of the Listing
Regulations and as per the provisions of Section 204
of the Act read with the Companies (Appointment and
Remuneration of Managerial Personnel) Rules, 2014,
ADCN & Company (formerly known as Amrita Nautiyal
& Associates), Practising Company Secretary, (CP
no.: 7989), were appointed as Secretarial Auditors
of the Company at the 37^th Annual General Meeting
held on August 8, 2025, to hold office for a period of 5
(five) consecutive years from the financial year 2025¬
26 till the financial year 2029-30.

The Secretarial Audit Report for the financial year ended March 31, 2026, in the prescribed Form MR-3, forms
part of this Annual Report as Annexure 3. There are no other qualifications, reservations, adverse remarks or
disclaimers made by the Secretarial Auditors, in their Audit Report for the year, except below:

D. Annual Secretarial Compliance Report of Aarvi
Encon Limited

Pursuant to Regulation 24A of the SEBI Listing
Regulations, the Secretarial Compliance Report
issued by the Secretarial Auditor of the Company for
the financial year ended March 31, 2026, has been
submitted to the Stock Exchange and the same is also

available on the website of the Company at https://
aarviencon.com/investors/secretarial-compliance-
report.

Further, in this regard, please note that the Company
does not have any material unlisted Indian subsidiary
during FY 2025-26. Accordingly, the provisions
relating to the secretarial audit of material subsidiaries

and the submission of the Secretarial Audit Report
under Regulation 24A(1) of the Listing Regulations
are not applicable.

E. Cost Auditors

Provisions of Section 148 of the Act, read with
Companies (Audit & Auditors) Rules, 2014, and other
applicable provisions, if any, relating to maintenance
of cost records and cost audit are not applicable to
the Company.

15. CORPORATE SOCIAL RESPONSIBILITY (“CSR”)

The Company’s CSR initiatives and activities
are aligned to the requirements of Section 135
of the Act. The Company’s CSR Policy provides
guidelines to conduct CSR activities of the Company.
All the CSR Activities are aligned to Company’s
values for contributing to the community and in
line with CSR policy of the Company. The said
policy is available on the Company’s website
at https://aarviencon.com/storage/app/uploads/
public/682/370/991/6823709913672988347941.pdf.

The Annual Report on CSR initiatives, salient features
of the CSR policy including changes therein, etc. as
required under Section 135 of the Act is annexed to
this Report as “Annexure 4”.

In accordance with the provisions of Section
135(9) of the Act, the Company was not required
to constitute a CSR Committee during the year, as
its CSR obligation did not exceed ' 50 lakh in the
immediately preceding financial year. Accordingly,
all functions, powers and responsibilities of the CSR
Committee were discharged by the Board of Directors
in compliance with the applicable provisions of the
Act and rules made thereunder.

16. 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.

17. PARTICULARS OF EMPLOYEES

Disclosures pertaining to remuneration and other
particulars required under Section 197(12) of the Act
read with Rule 5(1) of the Companies (Appointment
and Remuneration of Managerial Personnel) Rules,
2014 are as follows:

ii. The percentage increase in the median
remuneration of employees in the financial
year 2025-2026:

The percentage increase in the median
remuneration of employees in the financial year
2025-2026 is -0.08%.

iii. The number of permanent employees on the
rolls of the Company as on March 31,2026:

There were 277 permanent employees on the
rolls of the Company as on March 31,2026.

iv. Average percentile increases already made
in the salaries of employees other than the
managerial personnel in the last financial
year and its comparison with percentile
increase in the managerial remuneration and
justification thereof and point out if there are
any exceptional circumstances for increase
in the managerial remuneration:

During the FY 2025-26, the average percentage
increase in salary of the Company’s employees,
excluding the KMP was 2.95%. whereas the
increase in managerial remuneration for the
FY 2025-26 was 23.41% (excluding any other
perquisite).

v. Affirmation that the remuneration is as per
the Remuneration Policy of the Company:

It is hereby affirmed that the remuneration paid
during the year is as per the Nomination &
Remuneration Policy of the Company.

The statement containing the names of top ten
employees in terms of remuneration drawn and
the particulars of employees as required under
Section 197(12) of the Act read with Rule 5(2)
and 5(3) of the Companies (Appointment and
Remuneration of Managerial Personnel) Rules,
2014, is available for inspection. Shareholders
interested in obtaining a copy of the same may
write to the Company at cs@aarviencon.com

18. PARTICULARS OF CONTRACTS ANDARRANGEMENTS WITH RELATED PARTIES

All the related party transactions entered into during
the year were on an arm’s length basis and in the
ordinary course of the Company’s Business. All such
contracts or arrangements were entered into only
with prior approval of the Audit Committee. Audit
Committee grants omnibus approval for transactions
which are regular and routine in nature as per the
criteria approved by the Board and special or event-
based transactions are approved separately by the

Audit Committee in line with the Company’s Policy on
Related Party Transaction Policy.

A statement detailing all related party transactions
entered into pursuant to the omnibus approval, along
with relevant supporting information, is updated and
placed before the Audit Committee for review on a
quarterly basis. In compliance with the requirements
of Listing Regulations, names of related parties and
details of transactions with them have been included
in notes to the financial statements forms part of the
Annual Report.

During the year, no material related party transactions
were entered into accordance with the Act and
the Listing Regulations and the Company’s Policy
on Related Party Transactions. Accordingly, the
disclosure of related party transactions in “Form
AOC- 2” is not applicable.

The Company has formulated Policy on Related Party
Transactions, which provides for the process to be
followed for approval of any transactions with related
parties. The Related Party Transactions Policy as
approved by the Board is available on the Company’s
website at https://aarviencon.com/investors/policies .

19. ANNUAL RETURN

As required under Section 92(3) of the Act read with
the Companies (Management and Administration)

Rules, 2014, the Annual Return of the Company as
on March 31, 2026 in Form MGT 7, is available on
the Company’s website on at https://aarviencon.com/
investors/general-meeting

20. CORPORATE GOVERNANCE

The 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.

The Corporate Governance Report in terms of
Regulation 34 read with Schedule V of the Listing
Regulations, for FY 2025-26 is presented in
separate section forming part of this Annual Report
(Annexure - 5).

A Certificate obtained from ADCN & Company (formally
known Amrita Nautiyal & Associates) Practicing
Company Secretary, confirming compliance to the
conditions of Corporate Governance as stipulated
under Para E of Schedule V of the Listing Regulations
forms part of the Annual Report.

21. MANAGEMENT DISCUSSION AND ANALYSIS
REPORT

Pursuant to the provisions of Regulation 34 read
with Schedule V of the Listing Regulations, the
Management Discussion and Analysis capturing the
Company’s performance, industry trends and other
material changes with respect to the Company and
its subsidiaries, is presented in a separate section
forms part of the Annual Report (Annexure - 5).

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

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

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

The following is the summary of Sexual Harassment
complaints received and disposed of during the FY
2025-26.

Number of complaints pending as on the beginning of
the year - 0

Number of complaints received during the year - 1

Number of complaints disposed of during the year - 1

Number of complaints pending at the end of the
financial year - 0

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.

23. MATERNITY BENEFITS ACT, 1961

The Company complied with all the applicable
provisions of the Maternity Benefit Act, 1961 along
with the relevant provisions of the Code on Social

Security, 2020 insofar as they relate to maternity
benefit to the extent notified.

24. THE CONSERVATION OF ENERGY,

TECHNOLOGY ABSORPTION, FOREIGN
EXCHANGE EARNINGS AND OUTGO

The Company is committed towards energy
conservation. We recognize energy efficiency plays
a central role in lowering the Company’s operational
Green House Gas emissions. Various improvements
and initiatives are implemented to enhance
efficiency through technological upgrades and
effective monitoring of operational and maintenance
activities. The 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

During the year, the Company neither purchased any
technology nor incurred any expenditure on Research
and Development. Consequently, the disclosures
pertaining to these matters are not applicable.

C) Foreign Exchange Earnings and Outgo

(Amount in ')

25. PARTICULARS OF LOAN, GUARANTEE OR
INVESTMENTS

Particulars of Loans given, Investments made,
Guarantees given and Securities provided under
the Section 186 of the Act read with the Companies
(Meetings of Board and its Powers) Rules, 2014,
as on March 31,2026, as applicable, are set out in
Notes to the Standalone Financial Statements of the
Company.

27. HUMAN RESOURCES

The Company treats its “Human Resources” as
one of its most important assets. The 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. The Company thrusts on the
promotion of talent internally through job rotation and
job enlargement.

28. INTERNATIONAL STANDARDS

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

29. OTHER DISCLOSURES

During the year:

> There was no change in the nature of business
of the Company;

> No amount was proposed to be transferred to
the Reserves;

> No significant or material order was passed by
any regulator or court or tribunal which would
impact the status of the Company as a going
concern and the operations in future;

> There was no instance of the Company failing
to implement any corporate action within the
statutory time limit;

> There were no amounts due and outstanding for
credit to the Investor Education and Protection
Fund as on March 31,2026;

> There was no proceedings made or pending
under the Insolvency and Bankruptcy Code,
2016;and

> There was no instance of one-time settlement
with any Bank or Financial Institution.

> There have been no material changes and
commitments affecting the financial position of
the Company occurred between the end of the
year and the date of this report.

> The Company did not accept any deposits from the
public/members during the year within the meaning
of sections 73 and 74 of the Act, read together with
the Companies (Acceptance of Deposits) Rules,
2014, and accordingly, no amount on account
of principal or interest on public deposits was
outstanding as on March 31,2026.

> The Company complied with the applicable
Secretarial Standards issued by the Institute of
Company Secretaries of India, as amended from
time to time.

30. CAUTIONARY STATEMENT

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

31. ACKNOWLEDGEMENT

The Board of Directors of the Company 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. The
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 of Directors of,

Aarvi Encon Limited

Sd/- Sd/-

Virendra D. Sanghavi Jaydev V. Sanghavi

Managing Director Executive Director & CFO

DIN:00759176 DIN:00759042

Date: July 6, 2026

Place: Mumbai