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Dear Members,

Your directors present their 33^rd Annual Report on the affairs of the Company together with the Consolidated and Standalone Audited Financial Statements for the Financial Year ended 31^st March, 2023.

FINANCIAL HIGHLIGHTS

The summarized financial highlights for the year vis-a-vis the previous year are as follows:

(Rs. in Lakhs)

OPERATIONAL PERFORMANCE

During the Financial Year ended 31^st March, 2023, your Company has achieved on standalone basis an operational turnover of Rs. 73,247.39 Lakhs as compared to Rs. 54,473.96 Lakhs in the previous Financial Year and the Loss after Tax is Rs. 2,340.84 Lakhs as compared to Profit after Tax of Rs. 1,403.38 Lakhs in the previous Financial Year.

On a Consolidated basis, your Company has achieved an operational turnover of Rs. 73,247.40 Lakhs as compared to Rs. 54,473.96 Lakhs in the previous Financial Year and Loss After Tax of Rs. 2,279.24 Lakhs as compared to Profit after Tax of Rs. 1,428.23 Lakhs in the previous Financial Year.

A fire broke out at the Pithampur (M.P.) Plant, on 28^th April, 2022. Due to robust safety measures adopted by the Company, the situation was brought under control without any casualties, but stock and other assets valued at Rs 19.25 crores were damaged. These items were adequately insured and the Company has filed the necessary insurance claim which is under process. Accordingly, the company has not estimated any loss on this account. The company's manufacturing operations were impacted due to the fire incident during peak business season and therefore inventory was carried forward which could not be liquidated as per the original plan. Further sharp fall in polymer prices in the global market and extended rains had impacted stock valuations and affected company's profitability during the first half.

DIVIDEND

Due to losses in the current year and to conserve the accumulated resources for the business purposes your directors didn't recommend dividend for the year. (Previous year @ 20% {Rs.0.20 per equity shares of Re. 1/-each on 4,96,03,520 Equity Shares aggregating to Rs.99.21 Lakhs}).

CHANGE IN CONTROL AND NATURE OF BUSINESS

There is no change in control and nature of business activities during the period under review.

BUSINESS TRANSFER

There is no transfer of business during the period under review.

TRANSFER TO RESERVES

During the year, the Company hasn't transferred any amount to the general reserves or any other reserves (Previous Year Rs.100.00 Lakhs).

SHARE CAPITAL

The paid-up Equity Share Capital as on 31^st March 2023 was Rs. 496.04 Lakhs divided into 4,96,03,520 equity shares of Re. 1/- each. There is no change in Equity Share Capital of the Company during the year, the shares of the Company are listed and regularly traded at the trading platform of BSE Ltd. and National Stock Exchange of India Limited.

DEPOSITS

Your Company has not accepted any deposit from the public falling within the ambit of section 73 of the Companies Act, 2013 read withthe Companies (Acceptance of Deposits) Rules, 2014 and there were no remaining unpaid or unclaimed deposits as on 31^st March, 2023. Further, the Company has not accepted any deposit or loans in contravention of the provisions of Chapter V of the Companies Act, 2013 and the Rules made there under.

There are no deposit which are not in compliance with the requirements of Chapter V of the Companies Act, 2013 and there rules made thereunder.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Shiv Singh Mehta (DIN 00023523), Chairman and Managing Director of the Company is liable to retire by rotation at the ensuing Annual General Meeting and being eligible has offered himself for re-appointment.

Mr. Shiv Singh Mehta (DIN 00023523), was re-appointed as the Chairman and Managing Director of the Company by passing Special Resolution at the 31^st AGM held on 07.08.2021 for a term of 5 (five) years w.e.f. 01.10.2021 and will also attain age of 70 years during the proposed tenure.

Mrs. Purnima Mehta (DIN 00023632), was also re-appointed as the Whole-time Director of the Company by passing Special Resolution at the 31^st AGM held on 07.08.2021 for a period of 3(three) years w.e.f. 01.07.2022.

The Company has received declarations from all the Independent Directors of the Company confirming that they meet the criteria of independence as prescribed under section 149(6) of the Companies Act, 2013 and the SEBI Listing Regulations. The Board considered and formed an opinion that all the independent directors meet the criteria of independence as required under the provisions of the Companies Act, 2013 and the SEBI (LODR)

Regulations, 2015. All the Independent Directors have also registered themselves with Independent Directors' Databank. Your Board would like to inform that, the second term of Mr. Rakesh Kalra and Mr. Manoj Fadnis the Independent Directors would expire on 31.03.2024, and the Board needs to appoint Independent Director in place of them.

During the year under review, the company has not appointed any Independent Director, therefore, the statement regarding opinion of the Board with regard to integrity, expertise and experience of the Independent Director appointed during the year is not applicable.

During the year under review, the following changes took place in the other KMP's (Other than the Directors):

• Cessation of Office of Ms. Apeksha Baisakhiya as the Company Secretary and Compliance Officer of the company w.e.f. 4^th April, 2022 and appointment of Mr. Pankaj Baheti as the Company Secretary and Compliance Officer of the company w.e.f. 4^th April, 2022.

• Cessation of Office of Mrs. Vinita Puntambekar as the CFO of the company w.e.f. 3^rd February, 2023 and appointment of Mr. Rajesh Sisodia as CFO w.e.f. 3^rd February, 2023.

• Cessation of Office of Mr. Pankaj Baheti as the Company Secretary and Compliance Officer of the company w.e.f. 22^nd March, 2023 and appointment of Mr. Tanuj Sethi as the Company Secretary and Compliance Officer of the company w.e.f. 22^nd March, 2023.

The following are the Key Managerial Personnel (KMP's) of the Company as on the date of the report: i) Mr. Shiv Singh Mehta (DIN 00023523), Chairman and Managing Director; ii) Mrs. Purnima Mehta (DIN 00023632), Whole-time Director; iii) Mr. Rajesh Sisodia, Chief Financial Officer; iv) Mr. Tanuj Sethi, Company Secretary and Compliance Officer.

BOARD EVALUATION

The Board of Directors of the Company is committed to get its performance evaluated in order to identify its strengths and areas in which it may improve its functioning. To that end, the Nomination and Remuneration Committee (NRC) has established the process for evaluation of performance of Directors including Independent Directors, the Board and its Committees. The evaluation of performance of Executive Directors is done by Independent Directors.

The Company has devised a Policy for performance evaluation of Independent Directors, Board, Committees and other individual Directors which includes criteria and process for performance evaluation of the Non-Executive Directors and Executive Directors to judge the knowledge to perform the role, time and level of participation, performance of duties, professional conduct, independence etc. The appointment/re-appointment/ continuation of Directors on the Board shall be based on the outcome of the evaluation process.

During the year under review as per the policy for the performance evaluation, formal evaluation of performance of Directors including Independent Directors, the Board and its Committees was made by the Independent Directors and the NRC in their respective meetings and the evaluation result was placed before the Board for its information and further consideration.

MEETINGS

During the financial year six (6) Board 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 and SEBI (LODR) Regulations, 2015.

NOMINATION & REMUNERATION POLICY

The Company has a policy for selection and appointment of Directors, Key Managerial Personnel and Senior Management Personnel and for determination of their remuneration. The salient features of Nomination and Remuneration Policy are stated in the Corporate Governance Report. The Nomination and Remuneration Policy duly approved by the Board has been posted on the Company's website http://kritiindustries.com/

COMMITTEES OF THE BOARD

In accordance with the provisions of the Companies Act, 2013 and SEBI (LODR) Regulations, 2015 the Board has the following four (4) committees: i). Audit Committee ii). Nomination and Remuneration Committee iii). Stakeholders' Relationship Committee iv). Corporate Social Responsibility Committee The Company has also constituted Investment and Finance Committee and Internal Complain Committee (ICC) under the Sexual Harassment of Women at the Workplace (Prevention, Prohibition & Redressal) Act, 2013. A detailed note on the Committees is provided in the Corporate Governance Report.

HOLDING, SUBSIDIARY AND ASSOCIATE COMPANY

As on the closure of the financial year, following are Associate and Subsidiary of your companies:-

Further, your company is a subsidiary of Sakam Trading Private Limited which holds about 52.10% of the total paid-up capital of the company.

Report on performance of the Associate and Wholly Owned Subsidiary Company Pursuant to the provisions of Section 129 of the Companies Act, 2013, read with Rule 5 of the Companies (Accounts) Rules, 2014, your company is attaching Form AOC-1as "Annexure A" and forms part of this report.

RELATED PARTY TRANSACTIONS

During the period under review, all related party transactions entered were on an arm's length basis and were in the ordinary course of business. There are no materially significant related party transactions made by the Company with Promoters, Directors, KMPs or other designated persons or their relative which may have a potential conflict with the interest of the Company at large. Since, there is no material related party transactions in the company. Therefore, the company is not required to annex Form AOC-2 with this report.

Separate disclosure as per Regulation 34(3) of SEBI (LODR) Regulations, 2015 is made in the notes to the accounts attached with the financial statement, therefore not reproduced here under. The policy on Related Party Transactions duly approved by the Board has been posted on the Company's website http:// kritiindustries.com/.

Your Company has passed an Ordinary Resolution at 32ndAnnual General Meeting held on 17^th August, 2022 under Regulation 23 of the SEBI (LODR) Regulations, 2015 read with section 188 of the Companies Act, 2013 for entering into transactions for transfer of resources etc. with the related Parties.

Pursuant to SEBI/HO/CFD/CMD1/CIR/P/2021/662 dated 22/11/2021, Your board is proposing to pass an Ordinary Resolution in the ensuing General Meeting for material related party transaction related to transfer of resources with the Related Party.

CORPORATE SOCIAL RESPONSIBILITY

The Annual Report on CSR activities is attached as "Annexure B" and forms a part of this Report. The salient features of CSR policy are stated in the aforesaid Report on CSR activities.The policy on CSR duly approved by the Board has been posted on the Company's website http://kritiindustries.com/.

DISCLOSURE FOR PARTICULARS OF EMPLOYEES

The information required pursuant to section 197(12) of the Companies Act, 2013 read with Rule 5 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended in respect of employees of the Company forming part of Directors' Report is given in "Annexure C" to this Report.A statement of top-10 employees in terms of remuneration drawn as per rule 5(2) read with rule 5(3) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 as amended may be obtained by request to the Company Secretary of the Company at cs1@kritiindia.com.

During the year, none of the employees received remuneration in excess of that drawn by the Managing Director or Whole-time Director and none of the employees hold two percent of the equity shares of the Company.

Further, Shri Shiv Singh Mehta, Chairman and Managing Director is drawing remuneration from the company and from the other Company cumulatively not exceeding the higher maximum limit admissible from any one of the companies.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS & OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014, is attached as " Annexure D " and forms part of this report.

PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

The details of Loans, Guarantees and Investment are given in the notes to the Financial Statements. Hence no further disclosure is being given here to avoid repetition.

CORPORATE GOVERNANCE

The report on Corporate Governance as stipulated under Regulation 34(3) read with Schedule V of the SEBI (LODR) Regulations, 2015 along with the requisite certificate from the Practicing Company Secretary of the Company confirming compliance with the conditions of the corporate governance is appended and forms a part of this report alongwith the certificate of Disqualification of Directors received from Practicing Company Secretary as the Annexure 1 and 2 of the Corporate Governance Report.

RISK MANAGEMENT

The Company has a well-defined process to ensure the risks are identified and mitigation steps are put in place. The Company's Risk Management process focus on ensuring that these risks are identified on a timely basis and reasonably addressed. The Audit Committee oversees financial risks and controls. Major risks are identified by the businesses and functions and these are systematically addressed through mitigating actions on continuing basis

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has established a Vigil Mechanism that enables the Directors and Employees to report genuine concerns. The Vigil Mechanism provides for -A. Adequate safeguards against victimization of persons who use the Vigil Mechanism; and B. Direct access to the Chairperson of the Audit Committee of the Board of Directors of the Company in appropriate or exceptional cases.

Details of the Vigil Mechanism Policy are made available on the Company's website http://kritiindustries.com/ and have also been provided as "Annexure E" of part of this Report.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to Section 134(3)(c) read with section 134(5) of the Companies Act, 2013, the Board of Directors, to the best of their knowledge and ability, confirm that:-a) that in the preparation of the annual financial statements for the year ended 31^st March 2023, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any; b) that the Directors have selected such accounting policies and applied them consistently and have made judgment 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 ended 31^st March 2023 and of the loss of the Company for that period; c) that proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; d) that the annual financial statements have been prepared on a going concern basis; e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively. f ) that the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

INTERNAL CONTROL AND THEIR ADEQUACY

The Board of Directors of the Company is responsible for ensuring that Internal Financial Controls have been established in the Company and that such controls are adequate and operating effectively. The Company has laid down certain guidelines and processes which enables implementation of appropriate internal financial controls across the organization. Such internal financial controls encompass policies and procedures adopted by the Company for ensuring orderly and efficient conduct of business, including adherence to its policies, safeguarding of its assets, prevention and detection of frauds and errors, the accuracy and completeness of accounting records and the timely preparation of reliable financial information. The Statutory Auditors in their audit report have opined that these controls are operating effectively. The Audit team develops an audit plan based on the risk profile of the business activities. The annual internal audit plan is approved by the Audit Committee, which also reviews compliance to the plan. The Internal Audit team monitors and evaluates the efficacy and adequacy of internal control systems 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(s) in their respective area(s) and thereby strengthen the controls. Significant audit observations and corrective action(s) thereon are presented to the Audit Committee.

The Audit Committee reviews the reports submitted by the Internal Auditors.

The Board has implemented systems to ensure compliance of all applicable laws. These systems were effective and operative. At every quarterly interval, the Managing Director and the

Company Secretary place before the Board a certificate certifying compliance of laws and regulations as applicable to the business and operations of the Company after obtaining confirmation from all business unit and functional heads responsible for compliance of such applicable laws and regulations.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS U/S 143(12) OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT.

During the Financial Year, no frauds were reported by auditors in terms of section 143(12) of the Companies Act, 2013.

ANNUAL RETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2023 is available on the Company's website on https://kritiindustries.com/investor-desk/ annual-returns/

AUDITORS & THEIR REPORT

The shareholders at their 30^th Annual General Meeting (AGM) held on 8^th August, 2020upon the recommendation of Audit Committee and Board of Directors of the company had approved the re-appointment of M/s. Rakesh Kumar & Associates, Chartered Accountants (FRN: 002150C), Indore as Statutory Auditors to hold office for a second term of 5 (Five) consecutive years from the conclusion of 30^th AGM till the conclusion of 35^th Annual General Meeting to be held in the year 2025 at such remuneration as may be approved by the Audit Committee and Board of Directors of the company as per the provisions of section 139 of the Companies Act, 2013, As required under Regulation 33(d) of the SEBI (LODR) Regulation, 2015, the auditor has confirmed that they hold a valid certificate issued by the Peer Review Board of the Institute of Chartered Accountants of India.

The Auditors Report and the Notes on financial statement for the year 2022-23 referred to in the Auditor's Report are self-explanatory and does not contain any qualification, reservation or adverse remark, therefore, do not call for any further comments.

COST AUDITOR

Your company is maintaining the cost records as specified by the Central Government under section 148(1) of the Companies Act, 2013. In pursuance of Section 148 of the Companies Act, 2013, your Directors appointed Mr. S.P.S.Dangi, Cost Accountant, (FRN 100004), Indore to conduct the Audit of the Cost Accounting records for the financial year 2022-23. The Company has filed the Cost Audit Report for the year 2021-22 to the Central Government. The Board on the recommendation of the Audit Committee, at its meeting held on 25^th May, 2023 has appointed Mr. S.P.S.Dangias the Cost Auditors to conduct the Audit of the Cost Accounting records for the financial year 2023-24. As required under section 148(3) of the Companies Act, 2013 read with Rule 14 of the Companies (Audit and Auditors) Rules, 2014, the remuneration payable to the Cost Auditors is to be rati_ed by the shareholders. Therefore, the Board of Directors recommend the remuneration payable to Mr. S.P.S. Dangi, Cost Auditors for the financial year 2023-24 for the ratification by the Members in the ensuing Annual General Meeting.

SECRETARIAL AUDITOR

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. Ajit Jain & Co., Company Secretaries, Indore to conduct Secretarial Audit for the financial year 2022-23. The Secretarial Audit Report for the financial year ended 31^st March 2023 in Form MR-3 is attached as "Annexure F" and forms part of this Report. Report of the Secretarial Auditor does not contain any qualification, reservation or adverse remark, therefore, do not call for any comments.

Further, the Board of Directors of the Company on the recommendation of the Audit Committee, at its meeting held on 25^th May, 2023 has appointed M/s. Ajit Jain & Co., Company Secretaries to conduct Secretarial Audit for the financial year 2023-24.

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

No significant or material orders were passed by the Regulators or Courts or Tribunals which impact the going concern status and Company's operations in future.

INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

The details related to dividend remains unpaid-unclaimed in the Company has been given in the annual report of the Company. The details of the nodal officer appointed by the company under the provisions of IEPF is available on the Company's website at http://kritiindustries.com/ After the close of financial year 2022-23 an amount of Rs. 3,40,890/-in respect of unpaid/unclaimed interim dividend declared for the FY 2015-2016 was transferred to the Investor Education and Protection Fund Authority as well as 86,360 equity shares of face value of Rs. 1/- each, in respect of unpaid/unclaimed interim dividend declared in FY 2015-2016, was also transferred and credited to the IEPF Authority by the Company.

The investors may claim their unpaid dividend and the shares from the IEPF Authority by applying in the Form IEPF-5 and complying with the requirements as prescribed.

SEXUAL HARASSMENT OF WOMEN AT THE WORKPLACE (PREVENTION, PROHIBITION & REDRESSAL) ACT, 2013

The company has complied with provisions relating to the constitution of Internal Complaints Committee under the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy. There were no complaints received during the year.

CODE FOR PREVENTION OF INSIDER TRADING

Your Company has adopted a Code of Conduct to regulate, monitor and report trading by designated persons and their immediate relatives as per the requirements under the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 2015. The Code, inter alia, lays down the procedures to be followed by designated persons while trading/dealing in Company's shares and sharing Unpublished Price Sensitive Information ("UPSI"). The Code covers Company's obligation to maintain a digital database, mechanism for prevention of insider trading and handling of UPSI, and the process to familiarize with the sensitivity of UPSI. Further, it also includes code for practices and procedures for fair disclosure of unpublished price sensitive information which has been made available on the Company's website at https://kritiindustries.com

PROVISION OF VOTING BY ELECTRONIC MEANS THROUGH REMOTE E-VOTING AND E-VOTING AT THE AGM:

Your Company is providing E-voting facility as required under section 108 of the Companies Act, 2013 read with Rule 20 of the Companies (Management and Administration) Amendment Rules, 2015. The ensuing AGM will be conducted through Video Conferencing/OVAM and no physical meeting will be held and your company has make necessary arrangements with CDSL to provide facility for remote e-voting. The details regarding e-voting facility is being given with the notice of the Meeting.

GENERAL

Your Directors state that during the year under review: a) The Company has not issued shares (including sweat equity shares) to employees of the Company under any scheme. b) Neither the Managing Director nor the Whole-time Director receive any remuneration or commission from its subsidiary. c) The Company has complied with the applicable Secretarial Standards under the Companies Act, 2013. d) There have been no material changes and commitments affecting the financial position of the Company which have occurred between financial year ended on 31^st March, 2023, to which the financial statements relate and the date of this report.

e) Details of unclaimed dividends and equity shares transferred to the Investor Education and Protection Fund authority have been provided as part of the Corporate Governance report. f ) Your Company has not declared and approved any Corporate Action viz buy back of securities, mergers and de-mergers, split and issue of any securities and has not failed to implement or complete the Corporate Action within prescribed timelines. However, the company has declared and paid dividend during the period under review in compliance with the applicable laws of the Companies Act, 2013; g) There were no revisions in the Financial Statement and Board's Report. h) The company has not filed any application or there is no application or proceeding pending against the company under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year under review. i) There is no requirement to conduct the valuation by the Bank and Valuation done at the time of one-time Settlement during the period under review. j) There are no voting rights exercise by any employee of the Company pursuant to the section 67(3) read with the Rule 16 of the Companies (Share Capital and Debenture) Rules, 2014.

ACKNOWLEDGEMENT

Your Directors place on record, their sincere appreciation and gratitude for all the co-operation extended by Government Agencies, Bankers, Financial Institutions, Business Associates and Investors and all other stakeholders. The Directors also record their appreciation for the dedicated services rendered by all the Executive Staff and Workers of the Company at all levels in all units and for their valuable contribution in the working and growth of the Company