Affordable Robotic & Automation Ltd

Dear Members,

The Board of Directors hereby submits the Fourteenth Annual Report of the business and operations of Affordable Robotic & Automation Limited (the Company or ARAL or ARAPL) along with the audited financial statements, for the financial year ended on March 31, 2024.

1. Financial results

The highlights of the financial performance on consolidated and standalone basis for the year ended March 31, 2024 are as under:

(INR in Lakhs)

*Including Deferred Tax Charges (Revenue)

2. Dividend

The Board of Directors does not recommend any dividend for the financial year.

3. Reserves

The Board proposes to carry the Net profit after taxation of Rs. 607.19 Lakhs for the financial year 2023- 24 [P.Y.: Net profit After Taxation of Rs. 447.79 Lakhs] for standalone and for consolidated Net profit after taxation of Rs. 642.75 Lakhs for the financial year 2023-24 [P.Y.:Net profit After Taxation - Rs. 216.13 Lakhs]

4. Change of Name

There is no change in the name of the Company during the financial year under review i.e., 1st April, 2023 to 31st March, 2024.

5. Fixed Deposits

In terms of the provision of Sections 73 and 74 of the Companies Act, 2013 (the ‘Act') read with the relevant rules, your Company has not accepted any fixed deposits during the year under report.

6. Company's performance

On a Consolidated basis, the revenue from operations for the financial year 2023-24 was at Rs. 16,309.93 Lakhs- as against Rs. 11378.68 Lakhs for the financial year 2022-23 and the profit for the financial year 2023-24 was Rs. 642.75 Lakhs as against Rs. 216.13 Lakhs for the financial year 2022-23.

On a Standalone basis, the revenue from operations for financial year 2023-24 was at Rs. 15,007.46 Lakh as against Rs 11,315.91 Lakhs for the financial year 2022-23. The profit for the financial year 2023-24 was Rs. 607.19 Lakhs as against Rs. 447.79 Lakh- for the financial year 2022-23.

7. Brief Description of the Company's working during the year/State of Company's Affair

Your Company is leading in automation world from more than a decade serving in Automotive, Non- Automotive, General Industries & also in Government Sector. ARAL has customer base in India & other parts of Asia and world. ARAL is a Turnkey Automation Solution provider for all kind of Industrial Automation needs such as Line Automation, Assembly Line, Conveyor, Robotic Inspection Stations, Pick & Place Systems, Gantry, Auto Assembly stations, Robotic Welding Cell & Lines, Fixed, Indexing & Rotary type Welding fixtures, Spot, Mig, Tig Welding Robotic Cell, SPM's for Welding, Pneumatic, Hydraulic, Hydro-pneumatic SPM's, Jigs, Gauges & Fixtures. Automatic Car Parking System is also Company's major area of expertise.

a) Contingencies Occurring after Balance Sheet Date

No such Liabilities were noticed which are contingent in nature.

b) Events Occurring after Balance Sheet Date

No such event occurred after balance sheet date.

9. Change in the nature of Business, if any

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

10. Material Changes and Commitments, if any, affecting the Financial Position of the Company which have occurred between or at the end of the Financial year of the Company to which the Financial Statements relate and the date of the report

All Material Changes and Commitments, affecting the Financial Position of the Company which have occurred between or at the end of the financial year of the Company to which the Financial Statements relate and the date of the report are mentioned under applicable heads under this report or the Corporate Governance Report as the case may be.

11. Auditors

The company at its Annual General Meeting held on 29^th September, 2022, had appointed M/s. Vijay Moondra & Co, Chartered Accountants, Ahmedabad (FRN 112308W), as the Auditors of the Company for the next five consecutive financial years.

12. Secretarial Audit

Pursuant to the provisions of Section 204 of the Companies Act 2013, every listed company and company belonging to class of companies as prescribed is required to annex with its Board's Report, a Secretarial Audit Report given by a Company Secretary in Whole time Practice.

The Board of Directors has appointed Meenu Maheshwari, Practicing Company Secretaries, Ahmedabad as the Secretarial Auditors of the Company.

13. Internal Audit

The Company appoint M/s. MGAM & Co. as Internal Auditor of the company as required under section 138 of the Companies Act, 2013.

14. Auditor's Qualifications

The statutory auditors of the company have not made any qualification, reservation or adverse remark or disclaimer in their report. The observation made in the Auditors' Report read together with relevant notes thereon are self-explanatory and hence, do not call for any further comments under Section 134 of the Companies Act, 2013.

15. Number of meetings of the Board

Ten meetings of the Board were held during the year.

16. Directors and key managerial personnel

Mr. Manohar Padole (DIN 02738236), Mr. Milind Padole (DIN 02140324) and Mrs. Bhagirathi Padole (DIN 08048862), Director liable to retires by rotation and being eligible, offered themself for re- appointment.

Pursuant to the provisions of Section 149 of the Act, Mr. Bharat Kishore Jhamvar, Mr. Ajay Vishnu Deshmukh and Mr. Rohan Vijay Akolkar are Independent Directors of the Company. They have submitted a declaration that each of them meets the criteria of independence as provided in Section149(6) of the Act and Regulation 16(1)(b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"). Their re-appointed as an Independent Director for the second term of five years, subject to approval of members was done in the previous Annual General Meeting.

During the year, the non-executive directors of the Company had no pecuniary relationship or transactions with the Company, other than sitting fees, commission and reimbursement of expenses incurred by them for the purpose of attending meetings of the Company.

Pursuant to the provisions of Section 203 of the Act, the Key Managerial Personnel of the Company as on March 31, 2024 are:

Mr. Milind Manohar Padole, Managing Director, Mr. Manohar Pandurang Padole, Whole time Director, Mr. Rahul Milind Padole, Director, Mrs. Bhagirathi Manohar Padole, Director, Mr. Bharat Kishore Jhamvar, Independent Director, Mr. Ajay Vishnu Deshmukh, Independent Director, Mr. Rohan Vijay Akolkar, Independent Director, Mr. Sengunthar Dakshnamurthy Kalidas, Chief Financial Officer and Mrs. Ruchika Shinde, Company Secretary. During the year, Mr. Vivek Mukherjee was appointed as a cost auditor of the company.

17. Particulars of Employees:

The Company had no such employees covered who is receipt of remuneration of Rs. 8.50 Lakhs per month or Rs.1.02 Crore per annum as covered under Section 197 read with Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, during the period under review and hence, the same is not required to be attached to this report.

18. Remuneration Policy:

The remuneration paid to the employees are as per the remuneration policy made by the company.

19. Declaration of Independence by Independent Directors

The Board confirms that all Independent Directors of your Company have given a declaration to the Board that they meet the criteria of independence as prescribed under Section 149 of the Act.

Separate meetings of the Independent Directors have been held during the Financial Year 2023-24 in which the Independent Directors have transacted the following business:

1. Reviewed the performance of the Management of the Company

2. Discussed the quality, quantity and timeliness of the flow of information between the Directors and the Management of the Company

3. Discussed the strategic matters of the Company.

21. Performance Evaluation of the Board, its Committees and Directors

The Company conducted the annual performance evaluation of the Board, its various Committees and the Directors individually. The performance of the Board was evaluated by the Board after seeking inputs from all the directors and senior management on the basis of criteria such as the board composition and structure, effectiveness of board processes, information and functioning, etc. Board is being involved and briefed on all important issues. Very high levels of engagement were observed and the opinions of each other were respected.

22. Audit Committee

The details pertaining to the composition, terms of reference and other details of the Audit Committee of the Board of Directors of your Company and the meetings thereof held during the Financial Year are given in the section "Corporate Governance Report" forming part of this Annual Report. The recommendations of the Audit Committee in terms of its Charter were accepted by theBoard of Directors of the Company from time to time during the year under Report.

23. Employees' remuneration

There were no employees during the year drawing remuneration in excess of limits specified under Rule 5 (2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

24. Employee stock option plans

The Company has not issued any stock options to its employees during the year 01.04.2021 to 31.03.2022 and hence, the details as provided in rule 12 (9) of Companies (Share Capital and Debentures) Rules, 2014, are not applicable.

But have get approval from shareholder by way of Postal Ballot in month of May 2021 for "AFFORDABLE ROBOTIC AND AUTOMATION LIMITED EMPLOYEE STOCK OPTION PLAN 2021' ("ESOP 2021"/ "PLAN")" which will be roll out in the year 2022-23 on the basis of the performance of the employees in the current financial year i.e., 2021-22.

Hence, during the Financial Year 2022-23, the Nomination Remuneration and compensation committee has recommended the name of the eligible employees for grant of options under "ESOP 2021" /" PLAN". In terms of the recommendation by the Nomination Remuneration and compensation committee, the Board decided to grant stock options to select employees under the existing Affordable Robotic & Automation Limited Stock Option Plan 2021' ("ESOP 2021"/"PLAN").

10714 (Ten Thousand Seven Hundred and Fourteen) options be and are hereby granted to the persons as detailed in the list. For the same, intimation was given to BSE Limited on April 22, 2022 pursuant to Regulation 30 of SEBI(LODR) Regulations, 2015

25. Particulars required as per Section 134 of the Companies Act, 2013

As per Section 134 of the Act, your Company has provided the Consolidated Financial Statements as on March 31, 2023. Your Directors believe that the consolidated financial statements present a more comprehensive picture as compared to standalone financial statements. These documents will also be available for inspection during the business hours at the Registered Office of your Company and the respective subsidiary companies. A statement showing financial highlights of the subsidiary companies is enclosed to the consolidated financial statements.

26. Consolidated financial statements

Consolidated financial statements of your Company and its Subsidiary as at March 31, 2024 are prepared in accordance with applicable provisions of Companies Act 2013 and the Rules made thereunder, and form part of this Annual Report.

27. Share Capital

At present, the Authorised Share Capital of your company as on the date of this report is Rs. 12,00,00,000/- (Twelve Crores Only) consisting of 1,20,00,000 Equity Shares of Rs. 10/- (Ten) each. The Issued, Subscribed, called up and paid-up Share Capital of your Company is Rs. 10,17,96,000/- (Ten Crores Seventeen Lakhs Ninety-Six Thousand Only) consisting of 1,01,79,600 Equity Shares of Rs. 10/-(Ten) each fully paid up. Company is listed with BSE SME platform through its Initial Public Offer (IPO) in June 2018. All shares of the Company are in dematerialized form. The company has issued 10,66,666 nos of additional equity shares to the existing shareholders via right Issue at the face value of Rs.10 per share and at the premium of Rs.440 per share As of now paid-up Share Capital of the company is 11,24,62,660 (Eleven Crores Twenty-Four Lakhs Sixty-two Thousand Six Hundred and Sixty Only) consisting of 1,12,46,266 Equity Shares of Rs.10- (Ten) each fully paid up.

28. Subsidiary Companies, Associate Companies and Joint Ventures

The Company has 4 subsidiary Companies as on March 31, 2023. There are no associate companies or joint venture companies within the meaning of Section 2(6) of the Companies Act, 2013 ("Act").

ARAPL RaaS Private Limited is a subsidiary company of Affordable Robotic Automation Limited, holding 81.20% of Stake. The Company was incorporated on 17^th October 2021 for carrying on business of godown / warehouse automation.

The Company has also formed ARAPL North America LLC, but any investment is not done till date. "ARAPL North America LLC" is incorporated in United States of America (USA) in the previous year, but due to pandemic Covid-19 "ARAPL North America LLC" did not start its functioning, once the favorable situation available, it will start its function.

ARAPL Intelligent Equipment Shanghai Co. Ltd (China) subsidiary is under legal procedure for its closure.

Masterji.AI Private Limited is a subsidiary company of Affordable Robotic Automation Limited, holding 67% of Stake. The Company was incorporated on 30^th December 2020 for carrying on business of formal and informal education to train students in both India and abroad for various educational programs through e- learnings. To Enhance education by developing Products using latest technology tools using different mediums including internet, satellite, television, mobile, tablets, Holograms, AGV and AI etc.

ARAPL RaaS International LLC is step subsidiary of Affordable Robotic & Automation Limited as it is direct subsidiary of ARAPL RaaS Private Limited. It was incorporated North Carolina, United states of America in August 2022. The organization has yet not started its working.

Pursuant to the provisions of Section 129(3) of the Act, a statement containing the salient features of financial statements of the Company's subsidiaries in Form AOC-1 is attached to the financialstatements of the Company.

Further, pursuant to the provisions of Section 136 of the Act, the financial statements of the Company, consolidated financial statements along with relevant documents and separate audited financial statements in respect of subsidiaries, are available on the website of the Company.

29. Particulars of Loans and Guarantees given and Investments made

Loans, guarantees and investments covered under Section 186 of the Act form part of the notes to the financial statements provided in this Annual Report.

30. Related Party Transactions

The Policy to determine materiality of related party transactions and dealing with related party transactions as approved by the Board of Directors.

During the year under review, your Company had not entered into any material transaction with anyparty who is related to it as per the Act. There were certain transactions entered into by your Company with its foreign subsidiaries and other parties who are related within the meaning of IndianAccounting Standard (Ind AS) 24. The Board of Directors confirms that none of the transactions with any of related parties were in conflict with your Company's interest.

All related party transactions are entered into on an arm's length basis, are in the ordinary course of business and are intended to further your Company's interests.

The information on transactions with related parties pursuant to Section 134(3)(h) of the Act read with Rule 8(2) of the Companies (Accounts) Rules, 2014 are given in Form No. AOC-2 and the same forms part of this report.

31. Vigil Mechanism/Whistle Blower Policy

The Company has a vigil mechanism named Whistle Blower Policy to deal with instance of fraud and mismanagement, if any. A vigil (Whistle Blower) mechanism provides a channel to the employees and Directors to report to the Management, concerns about unethical behavior, actual or suspected fraud or violation of the Codes of Conduct or Policy. The mechanism provides for adequate safeguards against victimization of employees and Directors to avail of the mechanism and also provide for direct access to the Managing Director / Chairman of the Audit Committee in exceptional cases.

32. Corporate Governance

A separate section on Corporate Governance with a detailed compliance report as stipulated under the Listing Regulations and any other applicable law for the time being in force forms an integral part of this Report.

Compliance Certificate from the Practicing Company Secretary regarding compliance of conditions of Corporate Governance as stipulated in the Listing Regulations (as applicable to BSE SME platformlisted Companies) forms part of this Annual Report.

33. Management Discussion and Analysis

Report on Management Discussion and Analysis as stipulated under the Listing Regulations and any other applicable law for the time being in force based on audited, consolidated financial statements for the Financial Year 2023-24 forms part of this Annual Report.

34. Business Responsibility Report

Report on Business Responsibility as stipulated under the Listing Regulations and any other applicable law for the time being in force describing the initiatives taken by the Management from an environmental, social and governance perspective.

35. Conservation of energy, Technology absorption and Foreign Exchange Transactions:

• Conservation of energy

Energy conservation continues to receive priority attention at all levels. All efforts are madeto conserve and optimize use of energy with continuous monitoring, improvement in maintenance and distribution systems and through improved operational techniques.

• Technology absorption

The Company continues to adopt and use the latest technologies to improve the productivity and quality of its products and services.

• Foreign Exchange Transactions

Transactions denominated in foreign currency are recorded at the exchange rate prevailing at the date of transaction. Exchange differences arising on the foreign exchange transaction settled during the period are recognized in the Profit and Loss Account. Monetary items outstanding on date of Balance sheet have been accounted at exchange rate as on that date and difference has been charged to Profit and Loss account.

• Foreign exchange earnings and outgo as per (standalone) financials

(INR)

36. Corporate Social Responsibility (CSR)

According to Section 135 of the Companies Act, 2013, CSR is applicable to the company for the year 2023-24. And the company has done the CSR Expenditure of Rs.12,05,430.00 as donation given to Vrundavan Educational Trust, they runs formal educational programme for the underprivileged children in Pune.

37. Human Resources

Your Company treats its "human resources" as one of its most important assets. Your Company continuously invests in attraction, retention and development of talent on an ongoing basis. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement.

38. Transfer of Amounts to Investor Education and Protection Fund

Your Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore, there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF).

39. Listing with Stock Exchanges

The company has listed its share with BSE Limited, under (Small & Medium Enterprises) SME platform of BSE Limited, in the month of June 2018 by way of Initial Public Offer (IPO). Further, during the year under review, the Company has passed a Resolution for the "Migration of Equity Shares of the Company from SME Platform of BSE to Main Board of BSE as well as Main Board of NSE. The Company has received In-Principle approval from the Bombay stock exchanges and in the stage of final listing.".

40. Disclosure relating to equity shares with differential rights:

The Company has not issued any equity shares with differential rights during the year under reviewand hence no information as per provisions of Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

41. Disclosure relating to sweat equity shares:

The Company has not issued any sweat equity shares during the year under review and hence no information as per provisions of Rule 8(13) ofthe Companies (Share Capital and Debenture) Rules, 2014 is furnished.

42. Disclosures in respect of voting rights not directly exercised by employees:

There are no shares held by trustees for the benefit of employees and hence no disclosure under Rule16(4) of the Companies (Share Capital and Debentures) Rules, 2014 has been furnished.

43. Fraud Reporting

During the year under review no instances of fraud were reported by the Statutory Auditors of the Company.

44. Adequacy of Internal Financial Controls

The Board is responsible for establishing and maintaining adequate internal financial control as per Section 134 of the Act.

The Board has laid down policies and processes in respect of internal financial controls and such internal financial controls were adequate and were operating effectively. The internal financial controls covered the policies and procedures adopted by your Company for ensuring orderly and efficient conduct of business including adherence to your Company's policies, safeguarding of the assets of your Company, prevention and detection of fraud and errors, accuracy and completeness ofaccounting records and timely preparation of reliable financial information.

45. Directors' Responsibility Statement

Pursuant to Section 134(5) of the Act, the Board of Directors, to the best of its knowledge and ability, confirm that:

i. In the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

ii. They have selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

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

iv. They have prepared the annual accounts on a going concern basis;

v. They have laid down internal financial controls to be followed by the Company and such internal financial controls are adequate and operating effectively;

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

46. Extract of Annual Return

Pursuant to the provisions of the Section 92(3) of the Act read with Rule 12(1) of the Companies (Management and Administration) Rules, 2014, the extract of Annual Return of your Company for the Financial Year ended on March 31, 2024 is provided as Form No. MGT-9 to the Directors' Report.

47. Risk management

The Company has in place a mechanism to identify, assess, monitor and mitigate various risks to key business objectives. Major risks identified by the businesses and functions are systematically addressed through mitigating actions on a continuing basis. These are discussed at the meetings of the Board of Directors of the Company.

The Company's internal control systems are commensurate with the nature of its business and the size and complexity of its operations. These are routinely tested and certified by the Statutory Auditors of

The Board of Directors reviews the adequacy and effectiveness of the Company's internal control environment and monitors the implementation of audit recommendations.

48. Cost Audit

During the year under review, your company fall within the ambit of the provisions of Section 148 of the Companies Act, 2013 read with the Companies (Cost records & Audit) Rules, 2014, therefore cost auditor was required to be appointed.

Mr. Vivek Mukherjee, Practicing Cost Accountant, was appointed to conduct cost audit for the company for the year.

49. Disclosure under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013

Your Company has an Anti-Sexual Harassment Policy in place which is in line with requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

All employees (permanent, contractual, temporary and trainees) are covered under this policy.

During the year under report, your Company did not receive any case of sexual harassment and hence as on March 31, 2024, there were no pending cases of sexual harassment in your Company.

50. Details of significant and material orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future:

There are no orders passed by the regulators or courts or tribunals impacting the going concern status and company's operations in future.

51. Acknowledgements

The Directors thank the Company's employees, customers, vendors, investors and others for their continuous support. The Directors also thank the Government of India, Governments of various states in India, Governments of various countries and concerned Government departments and agencies for their co-operation. The Directors appreciate and value the contribution made by every member of the ARAL family.