ARCL Organics Auditors Report


TO THE MEMBERS OF ARCL ORGANICS LIMITED

Report on the Audit of the Standalo ne Financial Statements Opinion

1. We have audited h t e accompanying standalone financial statements of ARCL Organics Limit ed ("the Company"), which compris e the Balance Sheet as at 31st March 2024, the Statement of Profit and Loss (in cluding Other Comprehensiv e Income), h t e Statement of Cash Flows , the Statement of Changes in Equity and notes o t the financial statements for h t e year ended on h t at date i n cludin g a summary of material accounting policies and oth er explanatory i n formation (herein after referred to as "Standalone Financial Statements ").

In our opinion and o t the best of our n i formation and accordin g o t the explanations giv en o t us, the aforesaid standalone financial statements giv e h t e i n formation required by h t e Companies Act, 2013 ("the Act") n i h t e manner so requir ed and giv e a true and fair view n i conformity with h t e accountin g principles generally accepted n i India, of h t e state of affairs of the Company as at March 31, 2024, its profit (including Other Comprehensiv e in come), changes n i equity and its cash flows for h t e year ended on that date.

Basis for Opinion

2. We conducted our audit i n accordance with t h e Standards on Auditing (SAs) specif ied under section 143(10) of h t e Act. Our responsib ilities under h t ose Standards are further describ ed i n h t e Auditor?s Responsibilities for h t e Audit of h t e standalone Financial Statements section of our report. We are independent of h t e Company in accordance with h t e Code of Eth ics s i sued by t h e Institute of Chartered Accountants of India together with t h e ethical requir ements that are relevant o t our audit of the standalone fin ancial statements under the provisio ns of h t e Act and the Rules t h ereunder, and we have fulf illed our other ethical responsib ilities in accordance with h t ese requirements and h t e Code of Eth c i s. We believe that h t e audit evidence we have obtained s i sufficient and appropriate to provid e a basis for our opin ion.

Other Informatio n

3. The Company?s Board of Directo rs s i responsible for the oth er information. The oth er n i formation compris es the information included n i the Management Discussion and Analysis ; Board?s Report n i cludin g Annexures to Board Report, Corporate Governance and Sharehold ers? Information but does not n i clude t h e standalone financial statements and our auditor?s report t h ereon. The aforesaid documents are expected to be made available to us after h t e date of this auditor?s report.

4. Our opinio n on the standalone fin ancial statements does not cover h t e oth er information and we do not express any form of assurance or conclusio n h t ereon.

5. In connection with our audit of h t e standalone fin ancial statements , our responsib ility is t o read h t e other i n formation when it becomes available and, i n doing so, consid er whether t h e oth er i n formation is materially n i consis tent with h t e standalone financial statements or our knowledge obtained i n h t e audit, or oth erwise appears t o be materially mis stated.

6. When we read t h e aforesaid documents , if we conclude t h at h t ere i s a material mis statement therein, we are required to communicate h t e matters o t h t ose charged with governance.

Management?s Responsib ility for the Standalo ne Financial Statements

7. The Company?s Board of Directors s i responsib le for the matters stated in section 134(5) of the Companies Act, 2013 ("the Act") with respect t o h t e preparation of h t ese standalone fin ancial statements t h at giv e a t r ue and fair view of t h e fin ancial position, financial performance, changes n i equity and cash flo ws of h t e Company in accordance with the accounting prin ciples generally accepted i n India, n i cluding h t e accounting Standards specif ied under section 133 of the Act. This responsib ility also includes maintenance of adequate accounting records i n accordance with t h e provisio ns of t h e Act for safeguardin g of the assets of the Company and for preventing and detecting frauds and other r i regularities; selection and application of appropriate accounting policies; makin g u j dgments and estimates h t at are reasonable and prudent; and design, m i plementation and maintenance of adequate n i ternal fin ancial controls, h t at were operating effectively for ensurin g h t e accuracy and completeness of t h e accounting records, relevant o t h t e preparation and presentation of the fin ancial statement that giv e a r t ue and fair view and are free from material mis statement, whether due t o fraud or error.

8. In preparing h t e fin ancial statements, management is responsib le for assessin g t h e Company?s ability t o continue as a goin g concern, dis closin g, as applicable, matters related o t going concern and using h t e goin g concern basis of accounting unless management either n i tends o t liquid ate the Company or o t cease operations, or has no realistic alternative but to do so.

9. The Board of Directo rs are also responsib le for overseein g the company?s fin ancial reporting process.

Auditor?s Responsib ility for the Audit of the Financial Statements

10. Our objectives are t o obtain reasonable assurance about wheth er the financial statements as a whole are free from material mis statement, whether due t o fraud or error, and t o s i sue an auditor?s report h t at n i cludes our opin ion. Reasonable assurance s i a hig h level of assurance, but is not a guarantee that an audit conducted n i accordance with SAs will always detect a material mis statement when it exis ts.

Misstatements can arise from fraud or error and are considered material f i , indiv idually or n i the aggregate, h t ey could reasonably be expected o t influ ence the economic decis o i ns of users taken on h t e basis of these fin ancial statements .

11. As part of an audit n i accordance with SAs, we exercise professional judgment and maintain professio nal skepticism h t roughout the audit. We also:

_ Identify and assess t h e ris ks of material mis statement of h t e financial statements, whether due o t fraud or error, design and perform audit procedures responsive o t those ris ks, and obtain audit evidence h t at i s sufficient and appropriate o t provide a basis for our opinion. The ris k of not detecting a material misstatement resulting from fraud i s higher than for one resulting from error, as fraud may n i volve collusio n, forgery, intentional omis sions, mis representations, or the overrid e of inte rnal contr ol.

_ Obtained an understanding of internal contr ol relevant to the audit n i order to design audit procedures t h at are appropriate n i h t e circumstances. Under Section 143(3) (i) of h t e Companies Act, 2013, we are also responsible for expressin g our opinion on whether the company has adequate internal financial contr ols system n i place and h t e operating effectiveness of such controls .

_ Evaluate h t e appropriateness of accounting policies used and h t e reasonableness of accounting estimates and related disclosures made by management.

_ Conclude on h t e appropriateness of management? s use of h t e going concern basis of accountin g and, based on the audit evid ence obtained, whether a material uncertainty exis s t related to events or conditions h t at may cast signif icant doubt on the Company?s ability t o continue as a going concern. If we conclude t h at a material uncertainty exis t s , we are requir ed to draw attention in our auditor?s report o t the related dis closures n i t h e fin ancial statements or, f i such disclosures are inadequate, t o modif y our opinio n. Our conclusions are based on h t e audit evid ence obtained up o t the date of our auditor?s report. However, futu re events or conditions may cause the Company to cease o t continue as a going concern.

_ Evaluate h t e overall presentation, str ucture and content of the fin ancial statements , n i cludin g h t e dis closures, and whether the fin ancial statements represent h t e underly ing r t ansactions and events i n a manner h t at achieves fair presentation.

12. We communicate with h t ose charged with governance regarding, among oth er matters, the planned scope and timin g of t h e audit and significant audit fin din gs, i n cludin g any sig nif icant deficiencies i n n i ternal control that we identify durin g our audit. 13. We also provide those charged with governance with a statement h t at we have complied with relevant ethical requirements regarding n i dependence, and to communicate with t h em all relationship s and oth er matters h t at may reasonably be h t ought t o bear on our n i dependence, and where applicable, related safeguards.

14. From the matters communicated with h t ose charged with governance, we determin e t h ose matters that were of most sig nif icance i n the audit of h t e fin ancial statements of h t e current perio d and are therefore h t e key audit matters. We describe h t ese matters in our auditor?s report unless law or regulatio n preclu des public dis closure about h t e matters or when we determine that a matter should not be communicated n i our report because the adverse consequences of doin g so would reasonably be expected t o outweigh the public interest benefits of such communication.

15. Materiality s i h t e magnitude of misstatements in t h e standalone fin ancial statements t h at, indiv idually or n i aggregate, makes it probable h t at h t e economic decis ions of a reasonably knowledgeable user of the financial statements may be influ enced. We consider quantitative materiality and qualitativ e facto rs in (i) plannin g h t e scope of our audit work and i n evaluating h t e results of our work; a nd (ii) to evaluate th e effect of any d i entified misstatements n i the fin ancial statements.

Report on Other Legal and Regulatory Requirements

16. As requir ed by t h e Companies (Auditor?s Report) Order, 2020 ("the Order") s i sued by the Centr al Government of India in terms of sub –section (11) of section 143 of the Act, we giv e i n h t e Annexure-A, a statement on the matters specif ied in paragraphs 3 and 4 of h t e Order, to h t e extent applicable. 17. As required by Section 143 (3) of h t e Act, we report that: (a) We have sought and obtained all h t e i n formation and explanations which t o the best of our knowledge and belief were necessary for th e purposes of our audit.

(b) In our opinio n, proper books of account as required by law have been kept by t h e Company so far as it appears from our examin ation of th ose books.

(c) The Balance Sheet, t h e Statement of Profit and Loss (in cludin g other comprehensiv e n i come), the Cash Flow Statement and h t e Statement of Changes n i Equity dealt with by h t i s report are n i agreement with the books of account.

(d) In our opinio n, the aforesaid Standalone financial statements comply with the Accounting Standards specif ied under Section 133 of the Act, read with Rule 7 of the Companies (Accounts ) Rules, 2014. (e) On the basis of the written representations received from the dir ecto rs as on 31st March, 2024 taken on record by h t e Board of Directors, none of the dir ecto rs s i disqualified as on 31st March, 2024 from being appoin ted as a dir ecto r in terms of Section 164 (2) of the Act; (f) With respect o t the adequacy of h t e internal fin ancial contr ols over financial reporti ng of the Company and the operating effectiveness of such contr ols , refer o t our separate Report n i "Annexure B".

(g) With respect to t h e oth er matters t o be i n cluded i n the Auditor?s Report n i accordance with h t e requir ements of section 197(16) of the Act, as amended: In our opinio n and o t the best of our n i formation and accordin g o t h t e explanations giv en to us, h t e remuneration paid by h t e Company to its dir ecto rs during h t e year i s in accordance with the provisio ns of section 197 of h t e Act.

(h) With respect to the oth er matters o t be i n cluded n i the Auditor?s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, n i our opin i o n and o t t h e best of our information and accordin g to h t e explanations giv en to us: a. The Company has dis closed t h e m i pact of pending litigations on its fin ancial position in its fin ancial statements – Refer Note 35 of h t e standalone fin ancial statements. b. The Company did not have any long-te rm contracts i n cludin g deriv ative contr acts for whic h t h ere were any material foreseeable losses. c. There were no amounts which were required o t be transferred, to the Investor Education and Protection Fund by h t e Company. d. (i) The Management has represented h t at, t o the best of its knowledge and belief, no funds (which are material either i n divid ually or n i t h e aggregate) have been advanced or o l aned or i n vested (either from borrowed funds or share premium or any oth er sources or kind of funds) by h t e Company o t or in any oth er person or entity, i n cludin g foreign entity ("Intermedia ries"), with h t e understanding, whether recorded n i writing or otherwise, that h t e Intermediary shall, whether, directly or n i dir ectly lend or n i vest i n other persons or entities d i entified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the lik e on behalf of h t e Ultimate Beneficiaries; (ii) The Management has represented, that, o t t h e best of its knowledge and belief, no funds (which are material either i n divid ually or in h t e aggregate) have been received by the Company from any person or entity, n i cluding foreign entity ("Funding Parties"), with the understanding, whether recorded n i writing or otherwise, h t at the Company shall, whether, dir ectly or n i dir ectly, lend or n i vest i n oth er persons or enti ties i d entified n i any manner whatsoever by or on behalf of t h e Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or h t e like on behalf of the Ultimate Beneficiaries; (iii) Based on h t e audit procedures t h at have been consid ered reasonable and appropriate in t h e circumstances, noth i n g has come to our notice t h at has caused us t o believe h t at the representations under sub-clause (i) and (ii) of Rule 11(e), as provid ed under (i) and (ii) above, contain any material misstatement. e. The Company has neither proposed any divid end in t h e Previous year or in the current year nor paid any interim dividend during the year. f. Based on our examination which included test checks, h t e company has used accounting software for maintainin g its books of account for t h e financial year ended March 31, 2024 which has a featu re of recordin g audit r t ail (edit o l g) facility and t h e same has operated h t roughout t h e year for all relevant t r ansactions recorded n i h t e software. Furth er, durin g h t e course of our audit we did not come across any n i stance of audit r t ail feature being tampered with.

As provis o to Rule 3(1) of h t e Companies (Accounts ) Rules, 2014 s i applicable from April

1, 2023, reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014 on preservation of audit trail as per the statuto ry requir ements for record retention s i not applicable for h t e fin ancial year ended March 31, 2024.

For L. B. Jha & Co.
Chartered Accountants
Firm Regis tration No: 301088E
(Ranjan Singh)
Place: Kolkata Partn er
Date: 26.04.24 Membership Number: 305423
UDIN: 24305423BKEHUC9427

ANNEXURE- A: TO THE INDEPENDENT AUDITOR?S REPORT To the Members of ARCL ORGANICS LIMITED

[Referred o t n i paragraph 16 of h t e Auditors? Report of even date]

(i) (a) The Company has maintained proper records showing full particulars i n cludin g quantitative details (A) and situation of Property , pla nt and Equip ment. (a) The Company has maintained proper records showing full particulars of intangib le assets. (B) (b) As explained o t us, the company has a system of verif ying all its major Property , Plant & Equipment over a perio d of h t ree years. The Property , Plant & Equip ment so scheduled for verif ication durin g t h s i year have been physically verif ied. The dis crepancies noticed on such verif ication were not material and have been properly dealt with n i h t e books of accounts .

(c) Accordin g to the information and explanations giv en t o us and h t e records of h t e Company examined by us, h t e title deeds of h t e i m movable properties produced o t us, the m i movable properties are held n i the name of the Company.

(d) Accordin g o t t h e n i formation and explanations giv en to us and h t e records of h t e company examined by us, the Company has not revalued any of its Property , Plant and Equip ment or Intangible assets durin g h t e year.

(e) Accordin g to the information and explanations giv en t o us no proceedin g has been initiated durin g h t e year or are pendin g against h t e Company as at March 31,2024 for hold ing any benami property under the Benami Transactions (Prohib ition) Act, 1988 (as amended n i 2016) and rule s made t h ereunder.

(ii) (a) The n i vento ry has been physically verif i e d by the management during h t e year. The discrepancies noticed on physical verif ication of invento ry as compared o t book records were not material and have been properly dealt with in the books of account. In our opinio n, the frequency of verif ication i s reasonable.

(b) Accordin g o t t h e n i formation and explanations given o t us and t h e records of the company examined by us, quarterly statement of current assets i n respect of its workin g capital borrowing are in agreement with h t e books of accounts of h t e company.

(iii) (a) Accordin g t o the information and explanations giv en t o us and based on h t e audit procedures conducted by us, t h e company has not granted l o ans to subsidiaries companies durin g the year (A) hence reporting under h t i s clause s i not applicable.

(b) The Company has grante d unsecured l o ans to parties oth er h t an subsid iary companies, and the summarized detail of t h e same has been depicted i n t h e following table. (B) (Rs n i lakhs)

Particulars Loans

Aggregate amount granted/ provided durin g h t e year

105.00

Balance outstanding as at balance sheet date n i respect of above cases.

250.00

(b) The Company i s charging interest against loans and the terms and conditions of these loans n i our opinio n are not prim a-facie prejudicial o t t h e n i terests of h t e Company.

(c) There s i no stipulation regarding recovery of lo ans as these o l ans are repayable on demand.

(d ) The aforesaid o l ans being repayable on demand, t h ere s i no amount overdue for more h t an nin ety days n i respect of recovery of prin cipal and n i terest of the above loans.

(e) Since all h t e above loans are repayable on demand, reporting under th i s clause s i not applicable. (f) Accordin g o t i n formation and explanation giv en t o us and records of t h e Company examined by us, h t e details of l o ans given durin g the year t h at are repayable on demand are as per details

All Parties Promoters Related Parties

Aggregate amount of o l ans/ advances in nature of o l ans

105.00

Repayable on demand (A)

Agreement does not specify any terms or period of repayment (B)

Total (A+B) 105.00 Nil Nil
Percentage of Loans 100%

(iv ) Accordin g to the n i formation and explanations given o t us and the records of h t e Company examined by us, h t e provisions of section 185 and 186 of h t e Companies Act, 2013, have been complied with n i respect of lo ans, n i vestments guarantees and securities given by h t e Company. (v) The Company has not accepted any deposits or amounts which are deemed to be deposits within h t e meaning of Sections 73 to 76 of h t e Act and h t e rules framed there under. Furth er, no orders have been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other r t b i unal which could m i pact h t e Company.

(vi) We have broadly reviewed t h e books of accounts maintained by h t e Company pursuant t o h t e order made by h t e Centr al Government for h t e mainte nance of cost records under section 148(1) of h t e Act and are of t h e opin ion h t at prima facie, the prescrib ed accounts and records have been made and maintained. We have not, however, carried out any detailed examin ation of such records and accounts.

(vii) (a) Accordin g to the n i formation and explanations given o t us and the records of the Company examined by us, n i our opin ion, h t e Company s i generally regular i n depositing the undisputed statuto ry dues includin g provident fund, i n come-tax, goods and service tax, duty of custo ms, cess and any oth er statutory dues, as applicable, with the appropriate autho rities.

(b) Accordin g to the i n formation and explanations given t o us and the records of h t e Company examined by us, the particula rs of dues of n i come tax, value added tax and sales tax as at 31st March, 2024 whic h has not been deposited on account of a dis pute are as follows-

Name of the statute

Nature Amount (Rs. in lakhs) Perio d to which the amount rela tes Forum where the dispute is pending

Income tax Act, 1961

Income Tax 640.78 01.04.1988 t o 25.08.1998 High Court Kolk ata

Municipal Act 1993

Property Tax 423.73 2000-01 to 31.03.23 High Court Kolk ata

Income tax Act, 1961

Income Tax 316.97 2008-09 to 2014- 15 Commissio ner (Appeal)

Central Excise Act,1944 and Finance Act,1994

Excise Duty , Service Tax* 17.685 Vario us years from 2003-04 Commissio ner (Appeal)

 

Central Excise Act,1944 and Finance Act,1994

Excise Duty , Service Tax* 315.34 2007-08 Centr al Excise and Service Tax Appellate Tribunal
115.42 Vario us years from 1995-96 to 1999-2000 Taxation Revis i o nal Board/Deputy Commissioner of Commercial Tax

West Bengal Sales Tax Act,1941

Sales Tax 137.04 Vario us years from 2005-06 to 2011-12 Joint Commissio ner/Sr. Joint Commissioner/Assis t ance Commissioner of Sales Tax

(viii) There were no transactions relating to previo usly unrecorded n i come that have been surrendered or disclosed as n i come durin g h t e year i n the a t x assessments under the Income Tax Act, 1961 (43 of 1961).

(ix ) (a) Accordin g to the n i formation and explanations giv en to us and h t e records of h t e Company examined by us, the Company has not defaulted in repayment of o l ans or i n the payment of interest t o lenders durin g the year.

(b) The Company has not been declared wilful defaulter by any bank or fin ancial n i stitution or government or any government authority.

(c) Accordin g to h t e information and explanations giv en t o us h t e Company has applied the term o l ans for h t e purpose for which h t e loans were obtained.

(d) On an overall examination of the fin ancial statements of the Company, funds raised on short-term basis have, prima facie, not been used durin g the year for o l ng-term purposes by h t e Company. (e) Accordin g o t t h e n i formation and explanation given to us, the company has not taken any funds from any entity or person on account of or to meet h t e obligations of its subsid iaries, hence reporting under h t i s clause is not applicable.

(f) Accordin g to h t e n i formation and explanation given t o us the company has not raised o l ans durin g h t e year on the pledge of securities held in its subsid iaries, hence reporting under this clause s i not applicable.

.

(x) (a) The Company has not raised moneys by way of initial public offer or further public offer (including debt instr uments) durin g the year and hence reporting under h t is clause s i not applicable.

(b) During the year, the Company has not made any preferential allotm ent or priv ate placement of shares or convertible debentu res (fully or partly or optionally) and hence reporting under h t is clause i s not applicable.

(xi) (a) During the course of our examin ation of the books and records of h t e Company, carried out in accordance with h t e generally accepted auditing practices i n India, and according o t h t e i n formation and explanations giv en to us, we have neither come across any n i stance of fraud on or by the Company, noticed or reported during h t e year, nor have we been n i formed of such case by t h e management. (b) No report under sub-section (12) of section 143 of the Companies Act, 2013 has been filed in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with h t e Centr al Government, durin g the year and up to h t e date of this report.

(c) Accordin g to the i n formation and explanations given t o us and the records of h t e Company examined by us, t h e Company has not received any complaints from any whis tle-blo wer durin g h t e year (and up t o the date of t h s i report) and hence reporting under this clause s i not applicable.

(xii) The Company s i not a Nidhi Company and hence reporting under h t s i clause s i not applicable.

(xiii) Accordin g to the i n formation and explanations given t o us and the records of h t e Company examined by us, the Company has complied with h t e requirements of sections 177 and 188 of h t e Act with respect to its t r ansactions with h t e related parties. Pursuant to t h e requir ement of the applicable Accounting Standard, details of h t e related party r t ansactions have been dis closed n i Note 29(b) of h t e standalone fin ancial statements for h t e year under audit.

(xiv) (a) In our opinion the Company has an adequate i n ternal audit system commensurate with t h e size and t h e nature of its business.

(b) We have consid ered t h e inte rnal audit reports for the year under audit, s i sued t o h t e Company durin g the year and till date, i n determin i n g h t e nature, timing and extent of our audit procedures

(xv) In our opinio n durin g h t e year h t e Company has not ente red into any non-cash r t ansactions with its dir ecto rs or persons connected with its dir ecto rs and hence provisio ns of section 192 of h t e Companies Act, 2013 are not applicable o t h t e Company.

(xvi) (a) In our opinion, the Company is not required t o be regis tered under section 45-IA of the Reserve

& Bank of India Act, 1934. Hence, reporting under clause 3 (xvi) (a) & (b) is not applicable.

(b)

(c) In our opinion, there i s no core n i vestment company within h t e Group (as defin ed in h t e Core Investment Companies (Reserve Bank) Directions, 2016) and hence reporting under h t is clause is not applicable.

(xvii) The Company has not incurred cash losses durin g the current and the i m mediately precedin g fin ancial year.

(xviii) There has been no resignation of th e statutory auditors of the Company durin g h t e year.

(xix) On the basis of the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, oth er n i formation accompanying the fin ancial statements and our knowledge of h t e Board of Directo rs and Management plans and based on our examin ation of h t e evid ence supporting h t e assumptions, nothin g has come t o our attention, whic h causes us o t believe h t at any material uncertainty exists as on the date of t h e audit report n i dicating h t at Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a perio d of one year from the balance sheet date. We, however, state h t at this is not an assurance as o t h t e futu re viability of h t e Company. We further state h t at our reporting s i based on t h e facts up to t h e date of h t e audit report and we neither giv e any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get dis charged by the Company as and when they fall due.

(xx) (a) & Accordin g t o i n formation and explanation giv en t o us and records of the Company examined by (b) us, th ere i s no fund lying unspent, hence reporting under clause 3(XX)(a) & (b) i s not applicable. (xxi) Accordin g to the explanation and n i formation giv en o t us, and based on reports of components auditor, th ere has been no qualif ication or adverse report in CARO 2020 n i any subsid iaries.

For L. B. Jha & Co.
Chartered Accountants
Firm Regis r t ation No: 301088E
(Ranjan Singh)
Place: Kolkata Partn er
Date: 26.04.2024 Membership Number: 305423
UDIN: 24305423BKEHUC9427

ANNEXURE- B TO THE INDEPENDENT AUDITOR?S REPORT To the Members of ARCL ORGANICS LIMITED

[Referred o t n i paragraph 17 (f) of the Independent Auditor?s Report of even date]

Report on the Internal Financial Control under Clause (i) of Sub-sections 3 of Section 143 of the Companies Act, 2013 ("the Act")

1. We have audited t h e internal fin ancial contr ols over financial reporting of ARCL ORGANICS LIMITED ("the Company") as of 31st March, 2024 n i conju nction with our audit of the standalone financial statements of h t e Company for h t e year ended on h t at date.

Management?s Responsib ility for Internal Financial Control

2. The Company?s management i s responsib le for establishing and maintainin g internal fin ancial contr ol based on h t e n i ternal control over financial reporting criteria establi shed by the Company consid erin g h t e essential components of internal control stated n i the Guid ance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Note") s i sued by the Institute of Chartered Accountants of India (ICAI). These responsib ilities i n clude the design, implementation and maintenance of adequate n i ternal fin ancial contr ols t h at were operating effectively for ensurin g h t e orderly and efficient conduct of its busin ess, i n cludin g adherence to company?s policies, t h e safeguarding of its assets, h t e prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditors? Responsib ility

3. Our responsib ility s i to express an opinio n on h t e Company?s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with t h e "Guidance Note" and t h e Standard on Auditing, issued by ICAI and deemed to be prescrib ed under section 143(10) of h t e Act, t o h t e extent applicable. Those Standards and the Guidance Note requir e t h at we comply with ethical requir ements and pla n and perform the audit o t obtain reasonable assurance about whether adequate n i ternal financial contr ols over financial reporting was establis hed and maintained and f i such controls operated effectively in all material respects .

4. Our audit involves performing procedures t o obtain audit evid ence about the adequacy of h t e i n ternal fin ancial controls system over financial reporting and h t eir operating effectiveness. Our audit of i n ternal fin ancial controls over fin ancial reporting includes obtaining an understandin g of n i ternal fin ancial control over financial reporting, assessing t h e ris k that a material Weakness exists, and testing and evaluating h t e design and operating effectiveness of i n ternal controls based on t h e assessed risk. The procedure selected depends on h t e auditor?s u j dgment, n i cluding the assessment of t h e ris k of material mis statement of h t e financial statement, whether due o t fraud or error.

5. We believe that the audit evid ence we have obtained i s sufficient and appropriate o t provide a basis for our audit opinion on h t e Company?s n i ternal fin ancial controls system over financial reporting.

Meaning of Internal Financial Control over Financial Reporting

6. A Company?s n i ternal fin ancial contr ol over fin ancial reporting s i a process designed to provide reasonable assurance regarding h t e reliability of fin ancial reporting and the preparation of financial statements for external purposes n i accordance with generally accepted accounting principles. A Company?s n i ternal fin ancial contr ol over financial reporting includes those policies and procedures that:

1) pertain o t t h e maintenance of t h e records h t at, in reasonable detail, accurately and fairly

reflect h t e t r ansactions and dis positions of h t e assets of h t e company;

2) provide reasonable assurance t h at h t e t r ansactions are recorded as necessary to permit preparation of fin ancial statements n i accordance with generally accepted accounting prin ciples, and h t at receipts and expenditure of t h e Company are being made only in accordance with auth orization of management and dir ecto rs of company; and

3) provide reasonable assurance regardin g prevention or timely detection of unauth orized acquisition, use, or dis position of the Company?s assets h t at could have a material effect on t h e fin ancial statements .

Inherent Lim t i atio ns of Internal Financial Control over Financial Reporting

7. Because of nh i erent limitation of n i ternal fin ancial control over fin ancial reporting, n i cluding h t e possibility of collusio n or improper management override of controls, material misstatements due to errors or fraud may occur and not be detected. Also, projections of any evaluations of h t e i n e t rnal fin ancial contr ol over financial reporting o t futu re perio ds are subject o t h t e risk t h at h t e n i ternal financial control over fin ancial reporting may become inadequate because of changes i n conditions, or that the degree of compliance with t h e policies or procedures may deterio rate.

Opinion

8. In our opinio n, t h e Company has, in all material respect, an adequate n i ternal financial contr ols system over fin ancial reporting and such internal fin ancial controls over financial reporting were operating effectively as at 31st March 2024, based on t h e n i ternal control over fin ancial reporting criteria established by t h e company consid erin g, the essential components of internal contr ol stated i n h t e Guid ance Note on Audit of Internal Financial Control Over Financial Reporting, s i sued by ICAI.

For L. B. Jha & Co.
Chartered Accountants
Firm Regis r t ation No: 301088E
(Ranjan Singh)
Partner
Place: Kolk ata Membership Number: 305423
Date: 26.04.24 UDIN: 24305423BKEHUC9427