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TO THE MEMBERS

Dear Members,

Your Directors have pleasure in presenting their 40th Annual Report for the Financial Year 2022-2023 together with the Audited Balance Sheet as at 31st March, 2023 and the Profit & Loss Account for the year ended on that date.

(Rs. In Lakhs)

2. PERFORMANCE OF THE COMPANY

The Company generated operating revenue for the year 2022-23 of Rs 24,056.39. Lakhs is reduced by 4% (Rs. 24,995.27 Lakhs in 2021-22). The Total Comprehensive Loss for the FY 2022-23 at Rs. 738.22 Lakhs (Rs. 1567.13 Lakhs profit in 2021-22).

Cement Division: Production of Cement and Clinker were 4,78,515 MTS and 4,74,584 MTS respectively during the twelve months ended 31st March, 2023 as against 5,19,834 MTS and 4,32,372 MTS MTS respectively during the previous year ended 31st March, 2022. Accordingly, revenue generated during the year ended 31st March, 2023 is Rs. 22,139.15 Lakhs as against the revenue Rs. 23,093.74 Lakhs during the previous year ended 31st March, 2022.

Electronic Division: The Company has produced 3698 sq. mts of Printed Circuit Boards as against 4255 sq. mts during the previous year. Accordingly, Revenue generated during the twelve months ended 31st March, 2023 is Rs.1,872.25 Lakhs as against the revenue Rs. 1,815.54 Lakhs during the previous year ended 31st March, 2022. .

Report for year 2022-23

Electronics Division performed well in terms of sales turn over this year also. In fact there is a marginal increase in turn over this year compared to that of last year. The division showed appreciable improvement in the business in the current year. Segment-wise contribution to the total PCB business for the year 2022-2023 is given below:

Growth from healthcare segment is steady and there is an all-round improvement in the current year.

Wind Power: Revenue generated during the twelve months ended 31st March, 2023 of Rs. 44.98 Lakhs as against 85.98 during the previous year. The Board of Directors of the Company, at their meeting held on 13th November, 2021, has approved to sale Wind power division to M/s. Mission Biofuels India Private Limited on slump sale basis. The Undertaking is sold with the receipt of total consideration of Rs. 2.24 crores for the full and final settlement after adjusting receivable and payable.

Sugar Division: There is no progress in the division in particular, effective steps could not be taken for furtherance of the business.

Oilfield and Natural Gas: There is no progress in the division in particular, effective steps could not be taken for furtherance of the business.

3. DIVIDEND

Your Company do not recommend any dividend for the FY 2022-23.

Status of unpaid/unclaimed dividend

The Statement on the status of unpaid/unclaimed dividend is as under and Year wise dividend remain unclaimed/ unpaid has been updated in the website of the company which can be access at the Link: http://www.keerthiindustries. com/unpaid-dividend.html

4. RESERVE AND SURPLUS

The reserve and surplus of your company stood at Rs. 7149.46 Lakhs as against Rs. 8007.93 Lakhs in the previous year.

5. SHARE CAPITAL

(a) No Change in Authorized Capital:

During the year under review, there was no change in the Authorized Capital of the Company. The Authorized Capital of the Company is Rs. 38,00,00,000/- (Rupees Thirty-Eight Crores only) divided into 2,73,00,000 Equity shares of Rs. 10/- each aggregating Rs. 27,30,00,000/- and 10,70,000 9% Cumulative Redeemable Preference Shares of Rs. 100/- each aggregating Rs. 10,70,00,000/-.

(b) Change in Paid up Shares Capital:

Equity Share Capital: During the period under review, there was no change in the Paid-up Equity Share Capital of the Company. The Paid-up Equity Share Capital was Rs. 8,01,67,380/- divided into 80,16,738 Equity shares of Rs. 10/-.

Preference Share Capital: As on 31st March, 2023, the Company do not have any preference share capital.

6. DIRECTORS:

a) The Company's Board of Directors have been constituted in compliance with the provisions of Companies Act read with the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015 ("SEBI (LODR) Regulation". The Composition of the Board is as under:

b) During the period under review following appointment has been made:

i. Re-appointment of Sri. J. Sivaram Prasad, (DIN: 00221271) as an Independent Director:

On the recommendation of the Nomination & Remuneration Committee, the Board has, at its meeting held on 14.02.2022, approved the Re-appointment of Sri. J. Sivaram Prasad, (DIN: 00221271) as an Independent Director of the company for second term of 5 (five) years with effect from 29.05.2022 to 28.05.2027 and the Members of the Company, through postal ballot e-voting proceeding dated 06.05.2022 confirmed the said re-appointment.

ii. Appointment of Sri. Musunuri Ramakrishna Prasad, (DIN: 01781225) as an Independent Director:

On the recommendation of the Nomination & Remuneration Committee, the Board has, at its meeting held on 10.02.2023, approved the appointment of Sri. Musunuri Ramakrishna Prasad, (DIN: 01781225) as an Additional Independent Director of the company consecutive term of 5 (five) years with effect from 01.07.2023 and The Board of Directors recommends his appointment at the ensuing Annual General Meeting for the approval of Shareholders.

c) In accordance with the provisions of Companies Act, 2013, Smt. J. Triveni, Executive Chairperson & Whole time Director of the Company would retire by rotation and, being eligible, offer herself for re-appointment. The Board of Directors recommends her re-appointment at the ensuing Annual General Meeting.

d) As required under Section 134 (3) (d) of the Companies Act, 2013, All independent directors have given declarations to the Company that they meet the criteria of independence as laid down under section 149 (6) of the Companies Act, 2013 and Regulation 16(1)(b) of the SEBI (LODR) Regulation 2015.

e) Other Disclosure Board Evaluation Pursuant to Section 178 (2) of the Companies Act, 2013, the Nomination and Remuneration Committee has evaluated the performance of individual Directors in its duly convened meeting. Pursuant to Section 134 (3) (p) of the Companies Act, 2013 and Regulation 4 (2) (f) (ii) (9) of the ("SEBI (LODR) Regulation, 2015, the Board has carried out an evaluation of its own performance, as well as the evaluation of the Committees of the Board. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

Remuneration Policy

The Board has, on the recommendation of the Nomination & Remuneration Committee framed a policy for selection and appointment of Directors, Senior Management and their remuneration. Remuneration Policy is stated in the Corporate Governance Report.

Meetings

During the year Five (5) Board Meetings and Five (5) Audit Committee Meetings were convened and held. The details of which are given in the Corporate Governance Report. The intervening gap between the Meetings was within the period prescribed under the Companies Act, 2013.

7. DETAILS OF WHOLE-TIME KEY MANAGERIAL PERSONAL (KMP)

During the period under review no change in Key Managerial Personnel of the Company. Smt. J. Triveni, Executive Chairperson & Whole-time Director, Sri. J. S. Rao, Managing Director, Sri. Y. Sadasiva Rao, Chief Financial Officer and Mr. Arun Kumar Yadav, Company Secretary & Compliance Officer are the Whole-Time Key Managerial Personal of the Company.

8. PUBLIC DEPOSITS:

Your Company has not accepted any deposits within the meaning of Section 73 or 74 of the Companies Act, 2013 and Companies (Acceptance of Deposits) Rules, 2014.

9. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The company has not given any loans or guarantees covered under the provisions of Section 186 of the Companies , Act, 2013. ,

10. STATUTORY AUDITORS

M/s. Brahmayya and Co., Chartered Accountants (FRN: 000513S) have been Re-appointed at the 39th AGM held on 21.09.2022 as the Statutory Auditors of the Company for the Second term of five (5) consecutive years to audit the financial statements of the Company from FY 2022-23 to FY 2026-27 and to hold office from the conclusion of 39th AGM till the conclusion of 44th AGM.

11. COST AUDITORS

In compliance with the provisions of Section 148 of the Companies Act, 2013, the Board of Directors of the Company has appointed M/s. Vasireddy & Associates (FRN: 004181), Cost Accountants, as Cost Auditors of the Company for the FY 2023-24. In terms of the provisions of Section 148(3) of the Companies Act, 2013 read with Rule 14(a) (ii) of the Companies (Audit and Auditors) Rules, 2014, the remuneration of the Cost Auditors has to be ratified by the members. Accordingly, necessary resolution is proposed at the ensuing AGM for ratification of the remuneration payable to the Cost Auditors for FY 2023-24. M/s BVR & Associates (FRN: 000453), Cost Accountants, were the Cost Auditors of the Company for the FY 2022-23.

12. REPORTING OF FRAUDS

There have been no instances of fraud reported by the Statutory Auditors of the Company under Section 143(12) of the Companies Act, 2013 and the Rules framed there under either to the Company or to the Central Government.

13. RESEARCH AND DEVELOPMENT, CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Information pursuant to Information pursuant to Section 134 (3) (l) & (m) of the Companies Act, 2013 is annexed herewith as (Annexure II), which is detailed in Form A and Form B.

14. CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES:

The Annual Report on CSR activities is annexed herewith as: (Annexure III)

15. SECRETARIAL AUDITOR AND SECRETARIAL AUDIT REPORT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board has appointed M/s VCSR & Associates, Company Secretaries in Whole-time Practice, to carry out Secretarial Audit for the financial year 2022-2023. The Secretarial Audit report is annexed herewith as "(Annexure IV)" & "(Annexure IV.I)". The Secretarial Audit Report for the said financial year does not contain any qualification, reservation or adverse remarks.

16. PARTICULARS OF EMPLOYEES

The information required pursuant to Section 197(12) read with Rule 5(1) of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Companies (Particulars of Employees) Rules, 1975, in respect of employees of the Company and Directors is annexed herewith as "(Annexure V)"

17. WEB-ADDRESS OF ANNUAL RETURN

Web-address of the draft Annual Return pursuant to sub-section (3) of Section 92 is updated in the website of the Company. Link for the Annual Return is as under: http://www.keerthiindustries.com/images/Annual-Return- Section/ExtractofAnnualReturn2022-23.pdf

18. RELATED PARTY TRANSACTIONS

All Related Party Transactions entered by the Company with related party were in the ordinary course of the business and were presented to the Audit Committee and the Board. Omnibus approval is obtained for the transactions which are foreseen and repetitive in nature. A statement of all related party transactions is presented before the Audit Committee on a quarterly basis, specifying the nature, value and terms and conditions of the transactions. Form No. AOC-2 is tabulated hereunder

Form No. AOC-2

(Pursuant to clause (h) of sub-section (3) of Section 134 of the Companies Act, 2013 and Rule 8(2) of the Companies (Accounts) Rules, 2014)

19. HOLDING, SUBSIDIARY/ASSOCIATE COMPANIES

As on 31st March, 2023, the Company do not have any Holding Company, Subsidiary Company or Associate Company.

20. DEMAT OF SHARES

The Equity Shares of your Company have been admitted by CDSL/ NSDL for dematerialization. In response to the compliance with SEBI Circular SEBI/ HO/ MIRSD/ DOP1/ CIR/ P/ 2018/73 dated April 20, 2018, your company had issued several reminders to all the Shareholders whose shares are in physical mode and requested them to dematerialize their shares. The Board pleased to inform that in compliance with Regulation 39 of the SEBI (LODR), Regulation, 2015 entered with Bombay Stock Exchange Limited, the unclaimed equity shares were dematerialized and the same are lying in the DEMAT suspense account. Shareholders are requested to claim their shares in DEMAT form by submitting their claims to the Company / RTA.

21. VIGIL MECHANISM / WHISTLE-BLOWER POLICY

The Company promotes ethical behavior in all its business activities and has put in place a mechanism for reporting illegal or unethical behavior. The Company has established a robust Vigil Mechanism and a whistle-blower policy in accordance with provisions of the Act and Listing Regulations. Under the whistle-blower policy, employees are free to report any improper activity resulting in violation of laws, rules, regulations, or code of conduct by any of the employees to the Competent Authority or Chairman of the Audit Committee, as the case may be. Any complaint received is reviewed by the Competent Authority or Chairman of the Audit Committee as the case may be. No employee has been denied access to the Audit Committee. The policy on Vigil Mechanism/Whistle-Blower can be accessed on the Company's website at: http://www.keerthiindustries.com/images/whistle-blower-policy.pdf

22. INTERNAL CONTROL SYSTEMS AND THEIR ADEQUACY

The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations.

To maintain its objectivity and independence, the Internal Auditor reports to the Chairman of the Audit Committee of the Board & to the Chairperson & Managing Director.

The Internal Auditor monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and recommendations along with corrective actions thereon are presented to the Audit Committee of the Board. l

23. INTERNAL FINANCIAL CONTROL

The Company has in place adequate internal financial control commensurate with the size, scale and complexity of its operations. During the year, such controls were tested and no reportable material weakness in the design or operations were observed. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, 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 information. The Company has adopted accounting policies which are in line with the Accounting Standards and the Act. These are in accordance with generally accepted accounting principles in India. The Company has a robust financial closure, certification mechanism for certifying adherence to various accounting policies, accuracy of provisions and other estimates.

24. HEALTH AND SAFETY/ INDUSTRIAL RELATIONS

The company continues to accord high priority to health and safety of employees at manufacturing locations. During the year under review, the company conducted safety training programmes for increasing disaster preparedness and awareness among all employees at the Head office and the cement plants. Training programmes and mock drills for safety awareness were also conducted for all employees. Safety Day was observed with safety competition programmes with aim to imbibe safety awareness among the employees at the Head office and the cement plants. During the year under review, your Company enjoyed cordial relationship with workers and employees at all levels.

25. RISK MANAGEMENT:

Pursuant to section 134 (3) (n) of the Companies Act, 2013 & Regulation 21 of the Listing Regulation, the company has constituted a risk management committee on is Board Meeting held on 29th May, 2015. The details of the committee and its terms of reference are set out in the corporate governance report forming part of the Boards report. At present the company has not identified any element of risk which may threaten the existence of the company.

26. SIGNIFICANT & MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS OF THE COMPANY:

During the period under review, there are no significant and material orders passed by the Regulators or Courts or Tribunals which would impact the going concern status and the Company's future operations.

27. CHANGE IN THE NATURE OF BUSINESS

During the Financial Year under review, there was no change in the nature of business of the Company. However, The Wind Power division of the Company was sold to M/s. Mission Biofuels India Private Limited on slump sale basis. The Undertaking is sold with the receipt of total consideration of Rs. 2.24 crores for the full and final settlement after adjusting receivable and payable and the proposal of Sale was completed.

28. CORPORATE GOVERNANCE AND MANAGEMENT DISCUSSION & ANALYSIS REPORTS

The Corporate Governance and Management Discussion & Analysis Report, which form an integral part of this Report, are discussed separately, together with the Certificate from the Practicing Company Secretary of the Company regarding compliance with the requirements of Corporate Governance as stipulated SEBI (LODR) Regulations, 2015. Management Discussion & Analysis Report is annexed herewith as: (Annexure X)

29. COMPLIANCE WITH SECRETARIAL STANDARD

The Directors have devised proper systems to ensure compliance with the provisions of all applicable Secretarial Standards and that such systems are adequate and operating effectively.

30. OTHER CONFIRMATIONS

There is no application/proceeding pending under the Insolvency and Bankruptcy Code, 2016 and there are no application/proceeding during the year under review. Further, there are no instances of one time settlement with any Bank or Financial Institutions.

31. DIRECTORS' RESPONSIBILITY STATEMENT

In pursuance of Section 134(5) of the Companies Act, 2013, your directors confirm:

a. That the directors in the preparation of the annual accounts the applicable accounting standards have been followed along with proper explanations relating to material departures.

b. That the directors had 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 and loss of the Company for that period.

c. That the directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safe guarding the assets of the company and for preventing and detecting fraud and other irregularities.

d. That the directors had prepared the annual accounts on the going concern basis.

e. That the directors had laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

f. That 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.

32. ACKNOWLEDGEMENTS:

Your Directors are thankful to Company's employees for their dedicated service and firm commitment to pursuing the goals and Vision of the Company. Your Board also wishes to express its appreciation for the continued support of Axis Bank Limited and acknowledge with gratitude the help extended by the Central Government and Government of Telangana & Andhra Pradesh. Your directors also wish to place on record their appreciation of the services rendered and co-operation extended by the Dealers, Customers and other concerned.