archit organosys Directors report

To,

The Members,

Your Directors have pleasure in presenting the 30^th Annual Report together with the Audited Standalone and Consolidated Financial Statement for the year ended on 31^st March,2023.

FINANCIAL RESULTS:

The operating results of the Company for the year ended on 31^st March, 2023 are briefly indicated below:

( in lacs)

	Standalone		Consolidated
	2022-23	2021-22	2022-23	2021-22
Total Income	12 970.66	13 982.08	12 964.34	13 982.08
Operating Cost including Depreciation	11 371.13	12471.84	11 372.63	12471.84
Financial Expenses	220.91	244.05	220.91	244.05
Total Expenses	11592.04	12839.55	11 593.54	12839.55
Profit before Taxation and Exceptional Item	1378.62	1142.53	1370.80	1142.53
Exceptional Item	(164.96)	0.00	(164.96)	0.00
Profit before Taxation	1543.58	1142.53	1535.76	1142.53
Provision for taxation - For Current Tax	265.00	145.00	265.00	145.00
Provision for taxation - For Deferred Tax	268.99	312.20	268.99	312.20
MAT credit Entitlement	(133.13)	(137.82)	(133.13)	(137.82)
Profit after Taxation	1 142.72	823.15	1 134.90	823.15

DIVIDEND AND TRANSFER TO RESERVES:

An amount of Standalone net profit of 1,142.72 lakhs (previous year 823.15 lakhs) and Consolidated net profit of 1,134.90 lakhs (previous year 823.15 lakhs) is proposed to be held as Retained Earnings.

Your Directors have recommended a dividend of 0.50 (5%) per share [Previous Year 0.75/- (7.50%) per equity share] of 10/- each for the approval of the Members at the ensuing 30^th Annual General Meeting.

STATE OF THE AFFAIRS OF THE COMPANY & FUTURE PROSPECTS:

With the consistent performance and sheer dedication, the Company was stable in performance. Not only, the Company was able to continue the momentum of earning profit but has shown outstanding performance by reaching the bottom line profits of 1,543.58 Lakhs as compared to 1,142.54 Lakhs in the previous financial year.

Total revenue from Operations of the Company for fiscal year 2023 reduced to 12,970.66 Lakhs as against 13,982.08 Lakhs for fiscal year 2022, showing a reduction of 7.23% however Companys Net profit after Tax (PAT) is 1142.72 lakhs for fiscal year 2023 against Profit of 823.15 lakhs for fiscal year 2022 i.e. increase by 38.82%.

MATERIAL CHANGES AND COMMITMENTS, IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY FROM THE CONCLUSION OF THE FINANCIAL YEAR TILL THE END OF THIS REPORT:

There has been no other material changes and commitments, which affect the financial position of the Company which have occurred between the end of the financial year of the Company and the date of this report.

Archit Life Science Limited (ALSL) ceased to be a wholly owned subsidiary of the company after conclusion of financial year ended on 31/03/2023. The Company is holding 19% of share capital of ALSL.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO:

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 is furnished in Annexure A which is attached to this report.

MANAGEMENT DISCUSSIONS AND ANALYSIS REPORT:

A report on Management Discussion and Analysis (MDA) is annexed to this report as Annexure B, inter-alia deals adequately with the operations and also current and future outlook of the Company.

SHARE CAPITAL

As on March 31, 2023, the paid up capital of the Company was 20,52,07,230/- divided into 2,05,20,723 equity shares of 10/- each. During the year under review there is no issue of equity shares with/ without differential Rights, sweat equity shares, Stock Option etc., hence there was no change in the capital structure of the Company.

DEPOSITS:

The Company has not accepted or renewed any deposits from public falling within the purview of Section 73 of Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.

LOAN FROM DIRECTOR:

The company has taken temporary loan from Smt. Archana K. Amin, Whole Time Director of the Company of 225.00 lakhs which was repaid before closure of financial year under review. Except this the Company has not raised any loan from Directors.

CORPORATE GOVERNANCE REPORT:

In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Report on "Corporate Governance" is attached as an Annexure C and forms part of this report.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

The Composition of Board is in compliance with requirement of the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

In terms of the provision of Section 149 of the Companies Act, 2013 and Regulation 17(1) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a Company shall have at least one woman director on the board of the Company. Your company has Mrs. Archana Amin as Director on the board since 01/04/2009, who is presently the whole-time director of your Company.

Pursuant to the provisions of Section 152 and other applicable provisions if any, of the Companies Act, 2013, Shri Kandarp K. Amin (DIN:00038972), Whole Time Director of the Company is liable to retire by rotation at the forthcoming Annual General Meeting and he being eligible offers himself for re-appointment.

Since the second term of appointment Shri Bhupendra Vishnuprasad Mehta as an Independent Director (DIN: 00133677) will expire on 31/03/2024, he will not be eligible for re-appointment. Thus, it is thought advisable to appoint Independent Director at the forthcoming Annual General Meeting. The Board of Directors has appointed Shri Bhavin Gautamkumar Shah (DIN: 07886304) and Shri Vatsal Shaileshbhai Vora (DIN: 05271169) as Independent Directors for the term of five years w.e.f. 26/06/2023 subject to approval of shareholders.

Necessary resolution for appointment of aforesaid Directors have been proposed at ensuing Annual General Meeting for getting consent of members. Their appointments are appropriate and in the best interest of the Company. Details of Director seeking re-appointment as required under the Listing Regulations are provided in the Notice forming part of this Annual Report.

Your Directors recommends passing of resolutions.

There was no change in the composition of the Board of Directors during the financial year under review however following changes in KMP were taken place during the Year:

1. Shri Gajendra Sigh Rajput has resigned from the office of Chief Financial Officer w.e.f. 10/10/2022

2. Shri Ajay Patel has been appointed as Chief Financial Officer of the Company w.e.f. 10/10/2022

The Key Managerial Personnel (KMP) in the Company as per Section 2(51) and 203 of the Companies Act, 2013 are as follows:

1. Shri Kandarp Amin-Chairman and Whole Time Director

2. Shri Archana Amin - Whole Time Director

3. Shri Archit Amin - Whole Time Director

4. Shri Ajay Patel - Chief Financial Officer

5. Mr. Vijay Boliya–Whole Time Company Secretary

None of the Directors of the Company is disqualified for being appointed as Director as specified in Section 164 (2) of the Companies Act, 2013.

DISCLOSURE ABOUT RECEIPT OF ANY COMMISSION BY MD/WTD FROM A COMPANY AND ALSO RECEIVING COMMISSION / REMUNERATION FROM ITS HOLDING OR SUBSIDIARY PURSUANT TO SECTION 197(14) OF THE ACT.

The Whole time Directors are not receiving any commission/ remuneration from Subsidiary Company. The Company does not have any holding company.

DISCLOSURE ON REAPPOINTMENT OF INDEPENDENT DIRECTOR PURSUANT TO SECTION 149(10):

This clause is not applicable to the company during the financial year under review.

ANNUAL RETURN:

Pursuant to Section 92 of the Act read with the applicable Rules, the Annual Return for the year ended 31^st March, 2023 will be accessed on the Companys website at https://www.architorg.com/investorrelations/invester_comunication/ 2023/Annual%20Return%20MGT-7%20for%20FY%202022-23.pdf

NAME OF THE COMPANIES WHICH HAVE BECOME / CEASED TO BE SUBSIDIARIES, JOINT VENTURES, ASSOCIATE COMPANY:

During the financial year under review, the company has incorporated Archit Life Science Limited as wholly owned subsidiary of the Company. The Company does not have any joint Ventures and Associate Company during the financial year under review.

PERFORMANCE AND FINANCIAL POSITION OF SUBSIDIARIES / JOINT VENTURE / ASSOCIATE COMPANY:

The Wholly owned subsidiary of the Company has not started its business as on closure of financial year under review. Details of Subsidiary in prescribed format of AOC-1 has been attached herewith as Annexure D.

DIRECTORS RESPONSIBILITY STATEMENT :

Pursuant to the provisions of Section 134(5) of the Companies Act, 2013 with respect to the Directors responsibility Statement, the Directors confirms that:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanations relating to material departures, if any;

ii. they have selected such appropriate accounting policies and applied them consistently and made judgments and estimates that were 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 on 31^st March, 2023 and of the profit of the Company for the year under review;

iii. they have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. they have prepared the accounts for the period ended on 31^st March, 2023 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 operating effectively; and

vi. They have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

NUMBER OF BOARD MEETINGS:

During the year the Board of Directors duly met Nine(9) times. The details of the Board Meetings are provided in the Corporate Governance Report which has been annexed as Annexure C to the Report.

INSURANCE:

The properties and assets of the Company are adequately insured.

DECLARATION BY INDEPENDENT DIRECTORS:

Pursuant to the provisions of Section 134 of the Companies Act, 2013 with respect to the declaration given by the Independent Directors of the Company under Section 149 (6) of the Companies Act, 2013, the Board hereby confirms that all the Independent Directors have given declarations and further confirms that they meet the criteria of Independence as per the provisions of Section149(6) and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and they are independent to the Management of the Company.

PERFORMANCE EVALUATION OF THE BOARD COMMITTEES AND INDEPENDENT DIRECTORS:

Pursuant to the provisions of the Companies Act, 2013 and Rules framed thereunder read with Regulation 17 and Regulation 25 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 formal annual evaluation is to be made by the Board of its own performance and that of its Committees and Individual Directors. The Board after taking into consideration the criteria of evaluation laid down by the Nomination and Remuneration Committee in its policy such as Board Composition, level of involvement, performance of duties, attendance etc. had evaluated its own performance, the performance of its committees and Independent Directors (excluding the Director being evaluated).

The performance evaluation of the Chairman and the Non-Independent Directors was carried out by the Independent Directors at their separate meeting held on 14^th June, 2022. The Directors expressed their satisfaction with the evaluation process.

POLICY ON DIRECTORS APPOINTMENT AND POLICY ON REMUNERATION:

Pursuant to the requirements of the Companies Act, 2013, the policy on appointment of Board Members and policy on remuneration of the Directors, KMPs and other employees is attached as Annexure E to this report.

SECRETARIAL AUDIT REPORT:

M/s. Chetan Patel & Associates, Practicing Company Secretaries, was appointed as Secretarial Auditor of the Company to conduct secretarial auditfor the financial year 2022-23 pursuant to the provisions of Section 204 of the Companies Act, 2013. The Secretarial Audit Report submitted by them is attached as Annexure F to this report.

COMMENT OF BOARD ON SECRETARIAL AUDITORS OBSERVATIONS:

With respect to observations of the Secretarial Auditors

1. The Company was maintaining the Structured Digital Database in MS excel format till 15^th November, 2022 thereafter the Company has been maintaining the Structured Digital Database in strict compliance with applicable regulations.

2. Regarding intimation to Stock exchange about the issue of duplicate Share Certificate to shareholders of the Company, Company was intimating Stock Exchange regarding loss of the share certificates, now also started separate intimation to Stock Exchange regarding issue of duplicate share certificate(s).

3. So far content of the Corporate Governance Report, the Board has taken note of the observation and decided to report on item(s) which may not be applicable to the Company for period under review. Board has already placed corrigendum in this regard on the website.

4. So far content of the Directors Report, the Board has taken note of the observation and decided to report on item(s) which may not be applicable to the Company for period under review.

5. Due MCA technical issue few forms which are required to be filed under provisions of Companies Act, 2013 with Ministry of Corporate Affairs have been filed after due date.

6. Due to oversight, reference of the DIN has not been provided with the name of the Director in few of the resolutions.

CONTRACTS OR AGREEMENTS WITH RELATED PARTIES:

Pursuant to the provisions of the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2013 all the contracts and arrangements with related parties entered by the Company during the financial year were in ordinary course of business and on arms length basis. Details of the transactions are as mentioned in

Annexure G.

During the year the Company has not entered into any materially significant related party transactions which may have potential conflict with the interest of the Company at large. Suitable disclosures as required are provided in Ind AS-24 which is forming the part of the notes to financial Statement.

The policy on Related Party Transactions has been uploaded on the website i.e. https://www.architorg.com/ investorrelations/Related%20Party%20transactions.pdf.

The Board of Directors of the Company has proposed the approval for resolution pertaining to Material Related Party Transactions in the 30^th AGM of members of the Company.

DISCLOSURE UNDER RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014:

Details pertaining to remuneration and other details as required under Section 197(12) of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is attached as Annexure H of this report.

The statement containing particulars of employees as required under section 197 of the Companies Act, 2013 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, will be provided upon request. In terms of Section 136 of the Companies Act, 2013, the Report and accounts are being sent to the members and others entitled thereto, excluding the information on employees particulars which is available for inspection by members at the registered office of the Company during business hours on working days of the Company up to the ensuing Annual General Meeting. If any member is interested in obtaining a copy thereof, such member may write to the Company Secretary in thisregard at share@architorg.com.

INTERNAL FINANCIAL CONTROL AND THEIR ADEQUACY:

The Company has adopted internal control system considering the nature of its business and the size and complexity of operations. The Board has adopted the policies and procedures for ensuring the orderly and efficient conduct of its business, including adherence to the Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial disclosures etc. The management is taking further steps to strengthen the internal control system.

CHANGE IN THE NATURE OF BUSINESS

There is no change in the nature of business of the Company during financial year under review.

CORPORATE SOCIAL RESPONSIBILITY:

Your Company has always laid emphasis on progress with social commitment. We believe strongly in our core values of empowerment and betterment of not only the employees but also our communities. Following this principle the Company had laid the foundation of a comprehensive approach towards promoting and facilitating various aspects of our surrounding communities. The Board has approved a policy for Corporate Social Responsibility and same has been uploaded on the website i.e. https://www.architorg.com/investorrelations/policy/2023/CSR%20Policy.pdf.

As required under Section 135 of the Companies Act, 2013 and to demonstrate the responsibilities towards Social upliftment in structured way, the Company has formed a Policy to conduct the task under CSR, during the year.

The Annual Report on Corporate Social Responsibility (CSR) Activities alongwith Annexure as per Rule 8 of Companies (Corporate Social Responsibility Policy) Rules, 2014 and content of CSR policy is annexed as a separate Annexure–I.

The details about the policy developed and implemented by the company on corporate social responsibility initiatives taken during the year has been mentioned in the Annexure I.

RISK MANAGEMENT POLICY:

The Company has formulated the Risk Management Policy in order to safeguard the organization from various risks through timely actions. It is designed to mitigate the risk in order to minimize the impact of the risk on the Business. The Management is regularly reviewing the risk and is taking appropriate steps to mitigate the risk.

In the opinion of the Board there has been no identification of element of risk that may threaten the existence of the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 OF THE COMPANIES ACT,2013:

The details of loan provided and investments made, if any are as mentioned in the notes to accounts. The Company has not provided any guarantee or security falling under purviewof Section 186 of the Companies Act, 2013 during the financial year under review.

STATUTORY AUDITORS:

In terms of the provisions of section 139 of the Companies Act, 2013, the Company had appointed M/s. G. K. Choksi & Co., Chartered Accountants, (Firm Reg. no. 101895W) as statutory auditors of the Company for the period of 5 (five) year in the 29^th Annual general Meeting.

In view of amended provisions of section 139 of the Companies Act, 2013, the appointment of auditors is not required to be ratified every year at the AGM by the members of the company and hence present statutory auditors of the company will continue to act as statutory auditor till the expiry of their present term.

In the Statutory Auditors Report on the financial statements of the Company for the financial year ended on 31^st March, 2023, there is no Qualified/Adverse Opinion from Statutory Auditor during the financial year under review.

During the financial year under review, auditors of the company has not reported any fraud under sub-section (12) of section 143 of the Companies Act, 2013.

INTERNAL AUDITOR

M/s. S. N. Shah & Associates,Chartered Accountants, Ahmedabad has been appointed as Internal Auditors of the Company. Internal Auditors are appointed by the Board of Directors of the Company on a yearly basis, based on the recommendation of the Audit Committee.The Internal Auditor reports their findings on the Internal Audit of the Company, to the Audit Committee on a yearly basis. The scope of internal audit is approved by the Audit Committee.

COST AUDITOR

Your Company has appointed Rajendra Patel & Associates, Cost Accountants, Ahmedabad as Cost Auditor of your Company to audit the cost records for the financial year 2023-24. As per Section 148 read with Companies (Audit and Auditors) Rules, 2014 and other applicable provisions, if any, of the Companies Act, 2013, subject to the ratification by the members at the ensuing Annual General Meeting, at remuneration of 75,000 (Rupees Seventy Five Thousand Only) excluding GST (if applicable) and out of pocket expenses, if any.

MAINTENANCE OF COST RECORDS:

The Directors of the Company to the best of their knowledge and belief state that the Company has maintained adequate Cost records as required to be maintained by the Company under the provisions of Section 148 of the Companies Act, 2013 read with the relevant Rules framed thereunder.

DISCLOSURE OF AUDIT COMMITTEE:

The Audit Committee of the Company as on 31^st March, 2023 consists of following Directors as its members:

1. Shri Bhupendra Mehta -Chairman

2. Shri Sheeraj Desai -Member

3. Shri Nikul Patel - Member

VIGIL MECHANISM :

Pursuant to provisions of Section 177(9) of the Companies Act, 2013 and Rule 7 of the Companies (Meetings of Board and its Powers) Rules, 2014 read with SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Board of Directors had approved the Policy on Vigil Mechanism/ Whistle Blower Policy. Through this policy Directors, Employees or business associates may report the unethical behavior, malpractices, wrongful conduct, frauds, violations of the Companys code etc. to the Chairman of the Audit Committee.

The vigil mechanism / whistle blower policy is also available on the website of the Company www.architorg.com.

COMPOSITION OF INTERNAL COMPLAINTS COMMITTEE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has complied with the provision relating to constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Further, no case has been received under the said act during the year.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS:

The Company has not received any significant or material orders passed by any regulatory authority, court or tribunal which shall affect the going concern status of the Companys operations as on date of this report.

INDUSTRIAL RELATIONS:

The Company has maintained cordial relations with the employees of the Company throughout the year. The Directors wishes to place on record sincere appreciation for the services rendered by the employees of the Company during the year.

COMPLIANCE OF SECRETARIAL STANDARDS:

The Company has complied with the applicable secretarial standards issued by the Institute of Company Secretaries of India.

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

HDFC Bank Ltd. has filed transfer petition under Section 7 of the Insolvency and Bankruptcy Code, 2016 on 20.01.2023 before Honble NCLT, Ahmedabad. The matter is pending before the Honble National Company Law Tribunal, Ahmedabad Bench.

ACKNOWLEDGEMENT:

The Board is thankful to its bankers for their continued support and assistance, which has played important role in progress of the Company.

Your Directors places on records the contribution of employees of the Company at all levels and other business associates for their commitment, dedication and respective contribution to the Companys operations during the year under review.

Place : Ahmedabad	BY ORDER OF THE BOARD
Date: 26th June, 2023	FOR ARCHIT ORGANOSYS LIMITED.
REGISTERED OFFICE
PLOT NO. 25/9-A, PHASE III,	(KANDARP K. AMIN)
G.I.D.C. NARODA,	Chairman & Whole Time Director
AHMEDABAD - 382 330	DIN: 00038972