Arex Industries Ltd Directors Report.

Dear Members,

Your Directors are pleased to present this Thirty Third Annual Report together with the Audited Statement of Accounts of the Company for the year ended

on 31st March, 2022.

FINANCIAL RESULTS

As per the notification issued by the Ministry of Corporate Affairs dated 16th February, 2015 relating to the Companies {Indian Accounting Standards) Rules, 2015, the Company has adopted "Ind AS" with effect from 1st April, 2017. Accordingly, the Financial Statement for the year 2021 -22 has been prepared in compliance with the Companies {Indian Accounting Standard) Rules, 2015.

Financial Performance

{Amount in Rupees in Lakhs)
31.03.2022 31.03.2021
Revenue from operations 5375.32 4087.78
Profit before Depreciation 1125.13 694.06
Less: Finance Cost 210.62 298.48
Depreciation & Amortisation Expenses 449.42 476.38
Profit before Tax 465.09 {80.80)
Tax Expenses- Current Taxation 77.76 0.00
Deferred Tax 17.52 19.67
Add/{Less):
{Excess)/Short Provision of tax of earlier years
Profit/{Loss) for the year 369.79 (100.47)
Other comprehensive Income
Items that will not be reclassified to profit or loss
Gain/{Loss) on measurement of Equity Share instruments at fair value 1.48 0.90
Income tax impact on above 0.00 0.00
Other comprehensive Income for the year 0.00 0.00
Total comprehensive lncome/{Loss) for the year 371.27 {99.56)

OPERATIONS

The revenue from operations {net) stood at Rs.5375.32 lakhs, i.e. an increase of 31.50% over the previous years revenue. The Company continued to explore overseas market opportunities but due to the worldwide pandemic the exports amounted to Rs. 215.82 lakhs, i.e. decrease of 25.08% over the previous years exports. There was heavy fluctuation in foreign exchange rates resulting into a gain of Rs.3.07 lakhs. The loss on sale of assets amounted to 1.52 lakhs. The bad debts amounting to Rs.3.58 lakhs were written off during the year as against bad debts of Rs. 3.65 lakhs written off during the previous year. The raw material prices, fuel charges, finance cost and other overheads were continued to increase during the year.

The Company has made a profit of Rs.369.79 lakhs as against loss of Rs.100.47 lakhs made after taxes during the previous year. Your Directors continue to explore further growth opportunities.

DIVIDEND

Your Directors do not recommend dividend for the year under review in view to conserve resources and financing activities on hand. Your Directors also do not propose any amount to carry to the general reserves.

FINANCE

Your Company continued to avail financial assistance from its Bankers to finance its present and/or proposed projects on hand.

PUBLIC DEPOSITS

The Company has not accepted any deposit within the meaning of the provisions of Section 2(31) and 73 to 76 of the Companies Act, 2013, read with the Companies {Acceptance of Deposits) Rules, 2014.

INSURANCE

All the assets of the Company including buildings, plant and machineries and stocks are adequately insured.

DIRECTORS/REAPPOINTMENTOF KMPs

{1) Shri Pragnesh Kantilal Shah {DIN00228223), Director and {2) Shri Laxman Chetandas Tilani {DIN00532516), Directors of the Company are due to retire at the ensuing Annual General Meeting and being eligible, offer themselves for re-appointments. The Board hereby re-commends their re-appointments.

Tenure of Shri Dinesh Apparao Bilgi (DIN00096099), Managing Director cum Chief Financial Officer ofthe Company, Shri Neel Dinesh Bilgi (DIN00096180) and Shri Chirag Dinesh Bilgi (DIN02094970) is to expire on 31 July, 2023. The Nomination & Remuneration Committee and the Board of Directors, in their meetings held on 12th August, 2022, considered the contribution and devotion of time with valuable and effective participation by all the key managerial personnel in their respective areas for the growth of the Company and; recommended/approved their re-appointments, respectively, subject however, to the approvals by the members ofthe Company in their ensuing Annual General Meeting. The Board hereby re-commends their re-appointments.

Shri Aviv Joseph Divekar {DIN00689884) was appointed as an Independent Director w.e.f. 1st September, 2021 for a period of five years which was duly approved by the members in the Annual General Meeting held on 27th September, 2021.

Shri Pragnesh Kantilal Shah {DIN00228223) resigned as an Whole-time Director of the Company w.e.f. 27th June, 2022. He continues to be Non-executive Non-Independent Director of the Company.

BOARD AND COMMITTEE MEETINGS

During the year under review, six meetings ofthe Board were held. The details of the Board and Committee meetings are provided in the Corporate Governance Report forming part of this report.

NOMINATION AND REMUNERATION COMMITTEE

The Nomination and Remuneration Committee of the Company review the composition of the Board, to ensure that there is an approximate mix of abilities, expertise, experience and diversity to serve the interest of the shareholders of the Company. The Policy ensures that {1) the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate directors ofthe quality required to run the Company, {2) relationship of remuneration to performance is clear and meets appropriate performance benchmarks and {3) remuneration to directors, key managerial personnel and senior management involves a balance between fixed and incentive pay reflecting short and long term performance objectives appropriate to the working ofthe company.

INDEPENDENT DIRECTORS

As per the provisions of Section 149 of the Companies Act, 2013, the Independent Directors have confirmed and declared that they are not disqualified to act as independent directors and the Board is also of the opinion that the Independent Directors fulfill all the conditions specified in the Companies Act, 2013 making them eligible to act as Independent Directors.

One separate meeting of the Independent Directors was held on 8th January, 2022. The Independent Directors actively participated and provided guidance to the Company. The Independent Directors reviewed the performance of the non-independent Directors and the Board as a whole.

MATERIAL CHANGES AND COMMITMENTS, IF ANY, AFFECTING THE FINANCIAL POSITION OF THE COMPANY

No material changes and commitments affecting the financial position of the Company occurred between the end of the financial year to which the financial statements relate and the date of this Report, except impact of COVID-19 pandemic conditions followed by lockdowns/restrictions even during the year under review. The impact of COVID-19 continues till the date of the report and the Company complies with the various restrictions as are being implemented by various statutory authorities from time to time.

BOARD EVALUATION

Pursuant to the provisions of Section 134 of the Companies Act, 201 3, a structured questionnaire was prepared after taking into account various aspects like-company performance, contribution of individual directors, composition of Board and committees, performance of duties, culture, obligations, corporate ethics, risk management etc. for evaluation process. The Board noted that all directors have understood the opportunities and risks to the Companys strategy with good balance between the core values of the Company and the interest of the stakeholders. The Board also evaluated performance of the various committees and concluded with satisfaction. The Board expressed their satisfaction for the above evaluation process.

PARTICULARS OF EMPLOYEES

There was no employee covered under the purview of Section 134{3){q) of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

Information required under the provisions of Section 197(12) of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is given by way of an Annexure *F to this Report.

CHANGES IN NATURE OF BUSINESS

There is no change in the nature of business of the Company.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to the requirements of Section 1 34{3){c) of the Companies Act, 2013, the Directors hereby state that:

(i) in the preparation of annual accounts for the financial year ended 31st March, 2022, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) 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 the 31st March, 2022 and of the profits of the Company for the year ended on that date;

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

(iv) the directors have prepared the annual accounts on a going concern basis.

(v) the directors had laid down internal controls to be followed and such internal controls are adequate and were operating effectively.

(vi) the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

ORDERS BY REGULATORS, COURTS OR TRIBUNALS

No significant and/or material orders were passed by any Regulator, Court or Tribunal impacting the going concern status and the Companys operations in future.

COMPANYS POLICIES Code of Conduct

All Directors, Key Managerial Personnel and Senior Management of the Company have confirmed compliance with the code of conduct applicable to the Directors and employees of the Company. The Directors have confirmed compliance with the provisions of Section 164 of the Companies Act, 2013.

Risk Management Policy

The Company has already formulated risk management policy so as to identify, evaluate, monitor and minimize identifiable business risks in the organization. Vigil Mechanism/Whistle Blower Policy

The Company has already adopted Whistle Blower Policy to report genuine concerns or grievances and to safeguard victimization of persons while using this mechanization.

Other Policies

Companys Policies on Remuneration, Materiality of Related Party Transactions, Board diversity, Preservation of documents, Corporate Social Responsibility (CSR) are finalized in accordance with applicable laws.

DONATION

The Company has voluntarily donated Rs. 5 lacs to Sri Hombuja Padmavathi Education Trust, Rs. 0.30 lacs to Akshaypatra Foundation, Rs. 0.51 lacs to Shri Narshipura Digambar Jain Sangh and Rs. 11 lacs to Gunayatan for charitable activities during the year.

INTERNAL FINANCIAL CONTROLS

The Company has a proper, adequate and effective internal control system to ensure that all the assets are safeguarded and protected against loss from unauthorized use or disposition and those transactions are authorized, recorded and reported correctly.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

The Company has been taking steps for optimum utilisation of power and fuel. The information as required under Section 134(3)(m) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, is given by way of Annexure A forming part of this Report.

EXTRACT OF ANNUAL RETURN

As required under the amended provisions of Section 92(3) of the Companies Act, 2013, copy of Annual Return is annexed herewith as Annexure-D. CEO/CFO CERTIFICATION

Shri Dinesh A Bilgi (DIN00096099), Managing Director and CFO has given necessary certificates/compliance reports to the Company.

SECRETARIAL AUDIT

As required under the provisions of Section 204 of the Companies Act, 2013 and the Rules made thereunder, a Secretarial Audit Report is given by way of an Annexure B, forming part of this Report. The Auditors observations are self-explanatory. The explanation to the query raised by the Secretarial Auditor pertaining to website is that the website of the Company is under development and would be operative in coming time.

STATUTORY AUDITORS

M/s Sweta Patel & Associates, Chartered Accountants of Ahmedabad having Firm Registration No.139165W were appointed as Statutory Auditors of the Company for a period of five years by the members of the Company in their 28th Annual General Meeting (AGM) held on 21s* September, 2017. Their term is ending at the conclusion of the ensuing Annual General Meeting. Being eligible, they have offered themselves for re-appointment. The said Auditors have

submitted their willingness to continue to act as Statutory Auditors of the Company and certificate to the effect that they are eligible for such appointment and are not disqualified to act as such. The remuneration shall be determined by the Board of Directors upon recommendation by the Audit Committee and mutually agreed upon by the said Auditors. The Board recommends for their re-appointment.

The Auditors observations read with the notes to the Accounts for the year ended on 31st March, 2022 are self-explanatory.

MANAGEMENT DISCUSSION AND ANALYSIS (MD&A) & CORPORATE GOVERNANCE

The Companys philosophy is based on trusteeship, transparency and accountability. It fosters a culture of ethical behaviour and disclosures which build a trust of our stakeholders. The Code of Conduct, ethics and Code of Conduct for Prevention of Insider Trading are an extension of our values and reflect our commitment to ethical business practices, integrity, and compliances of both voluntary and statutory requirements. A detailed note on Management Discussion and Analysis is given as an Annexure C to this Report.

CORPORATE GOVERNANCE REPORT

As per Regulation 34{3) read with Schedule V of the Listing Regulations, a separate section with detailed note on corporate governance practices followed by the Company is given by way of an Annexure E forms an integral part of this Report.

LISTING WITH BSE LTD

The Equity Shares of the Company are listed at the BSE Ltd, Mumbai under Stock Code No. 526851 and I SI N No. is INE480H01011.

The Company has paid Annual Listing fees for the year 2022-23. The Company has also paid custodial charges to National Securities Depository Ltd and Central Depository Services (India) Ltd for the year 2022-23.

REGISTRAR AND SHARE TRANSFER AGENT (RTA)

M/s Link Intime India Pvt Ltd, Mumbai is the RTA of the Company to carry out the share transfers, transmission, dividend and other related activities. RELATED PARTY TRANSACTIONS

All the transactions entered with related party during the year under review were on arms length basis and in the ordinary course of business and approved by the Audit Committee. Hence these transactions are outside the purview of the provisions of Section 188 of the Companies Act, 201 3. However, details of such transactions i.e. purchases, lease, services, etc., are given in the Notes to the Financial Statements for the year ended on 31st March, 2022 and therefore details in Form AOC-2 are not given.

COST RECORDS:

The Company maintains cost records as per the provisions of the Companies Act, 2013 and the relevant rules made thereunder.

LOANS, GUARANTEES AND INVESTMENT

The Company has not granted any inter-corporate loan, given guarantee or provided any security for availing loan by other Company nor made any investments during the financial year under review.

ENVIRONMENT AND SAFETY

The Company considers clean and safe mode of operations in all respects. Further, as required under the provisions of Sexual Harassment (Prevention, Prohibition and Redressal) Act, 2013, the Company has formulated and implemented a policy on prevention of sexual harassment at workplace. There is no such complaint lodged during the year.

PROCEEDINGS UNDER INSOLVENCY AND BANKRUPTCY CODE, 2016, IF ANY

No proceedings were initiated against the Company during the year under review under the Insolvency and Bankruptcy Code, 2016. ACKNOWLEDGEMENTS

The Board of Directors of the Company appreciates continuous & comprehensive support and cooperation by the Companys bankers, shareholders, customers, suppliers and other business associates.

Your Directors place on record their deep appreciation for contribution and devoted services of the employees at all levels.

For and on be half of the Board

Regd Office:
612, GIDC Industrial Estate
Chahtral,Tal: Kalol Neel D Bilgi Chirag D Bilgi
Dist: Gandhinagar-382 729 Mg Director Mg Director
Date: 12th August, 2022 DIN:00Q96180 DIN:02094970