Creative Newtech Ltd

To,

The Members,

CREATIVE NEWTECH LIMITED

The Board of Directors is pleased to present the Nineteenth Annual Report, highlighting the Company's performance for the Financial Year (FY) that concluded on March 31, 2023. This report is accompanied by the Audited Financial Statements.

FINANCIAL HIGHLIGHTS

The highlights of the Financial Results are:

(Amount in Rs. Lakhs, except EPS)

DIVIDEND

During the reviewed period, the Company extended Dividend payouts to all shareholders at a rate of 5% per share based on face value for the financial year concluding on March 31, 2022. This dividend distribution was approved and endorsed by the members of the Company during the Annual General Meeting convened on September 29, 2022.

Furthermore, acknowledging the Company's financial progress and its promising future prospects, the Board of Directors, during their meeting held on August 10, 2023, has proposed a Final Dividend of 5% per share on the face value for the financial year ended on March 31, 2023. This recommendation will be presented for the consideration and approval of the Members in the forthcoming Annual General Meeting scheduled for the financial year ended on March 31, 2023.

DIVIDEND DISTRIBUTION POLICY

Pursuant to Regulation 43A of the SEBI Listing Regulations, the Company's Board of Directors has embraced a Dividend Distribution Policy ('Policy'). This policy is formulated to uphold principles of equity, uniformity, and enduring viability in the allocation of profits to the shareholders. Detailed insights into the Policy can be obtained from the Company's official website at www.creativenewtech.com.

TRANSFER OF UNCLAIMED DIVIDEND TO INVESTOR EDUCATION AND PROTECTION FUND

The provisions of Section 125(2) of the Companies Act, 2013, do not apply as there was no dividend which were unclaimed or unpaid since last seven years.

TRANSFER TO GENERAL RESERVE

The whole profit after tax has been transferred to reserves and surplus - other equity.

SHARE CAPITAL

During the year, on 09^th August 2023, with approval of Share Allotment Committee of the Company, 600,000 Fully Convertible Warrants of Rs. 10/- each had been converted into 6,00,000 Equity Shares of Rs. 10/- each.

With the above change, the paid up share capital of the Company as on 31^st March 2023, stands at Rs. 12,60,00,000/- having 1,26,00,000 Equity shares of Rs. 10/- each.

DEPOSITORY SYSTEM

The Company has established agreements with both the National Securities Depository Limited (NSDL) and the Central Depository Services (India) Limited (CDSL) to facilitate shareholders in maintaining shares in dematerialized form. Additionally, the Company extends the convenience of concurrent dematerialization for physical shares submitted for transfer.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

The Board consists of Executive and Non-executive Directors including Independent Directors along with Key Managerial Personnel who have vast experience in the core business activity of the Company. The composition of the Board is in consonance with Corporate Governance norm specified in the SEBI Regulations with the Stock Exchange.

Pursuant to the recommendations of the Nomination and Remuneration Committee ('NRC'), the Board of Directors made the following appointments during the year under review in accordance with the Company's Articles of Association and Section 149, 161(1) and Section 196 of the Act:

1. Appointment of Ms. Prachi Jain (DIN 09691107) as a Non Executive Independent Director for a period of 5 (five) consecutive years effective from 29^th July 2022.

2. Re-appointment of Mr. Mihir Shah (DIN: 08000853) as a Non-Executive Independent Director of the Company for a second term of 5(five) consecutive years effective from 29^th July 2022.

The aforesaid appointments were also approved by the members of the Company with requisite majority through resolution passed in the Annual General Meeting held on September 29, 2022.

In accordance with the provisions of Section 152 of the Act and the Articles of Association of the Company, Mrs. Purvi Patel (DIN 02663240) Whole-time Director of the Company, retires by rotation at the ensuing AGM and being eligible, has offered herself for re-appointment.

Further, during the year under review, there is no change in the key managerial personnel of the Company and Tejas Doshi, Chief Compliance Officer and Company Secretary and Mr. Abhijit Kanvinde, Chief Financial Officer are key managerial personnel of the Company.

Remuneration paid to Executive Directors & KMPs are mentioned in Corporate Governance Report annexed with this Directors' Report.

In terms of Section 149 of the Act, Mr. Kurian Chandy, Mr. Suresh Bhagavatula, Mr. Mihir Shah and Ms. Prachi Jain are the Independent Directors of the Company. The Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under Section 149(6) of the Act and Regulation 16(1Xb) of the SEBI Listing Regulations and are independent of the management. In terms of Regulation 25(8) of the SEBI Listing Regulations, they have confirmed that they are not aware of any circumstance or situation, which exist or may be reasonably anticipated, that could impair or impact their ability to discharge their duties with an objective independent judgement and without any external influence.

The Board of Directors of the Company has taken on record the declaration and confirmation submitted by the Independent Directors. Independent Directors are not liable to retire by rotation in terms of Section 149(13) of the Act. The Board is of the opinion that the Independent Directors of the Company possess requisite qualifications, experience and expertise in the fields of science and technology, banking, treasury operations, risk management, legal, digitalization, strategy, finance, governance, human resources, safety, sustainability, etc. and that they hold highest standards of integrity.

The Independent Directors of the Company have confirmed that they have enrolled themselves in the Independent Directors' Databank maintained with the Indian Institute of Corporate Affairs ('IICA') in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment & Qualification of Directors) Rules, 2014.

BOARD MEETINGS

During the year, Four Meetings of Board of Directors were convened and held and 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 (Listing Obligations and Disclosure Requirements) Regulations 2015.

AUDIT COMMITTEE

During the year, Four Meetings of Audit Committee were convened and held and details of which are given in the Corporate Governance Report. Your directors ensures that Audit Committee meets regularly to review reports, including significant audit observations and follow-up actions thereon. During the year under review, there were no instances when the recommendations of the Audit Committee were not accepted by the Board.

NOMINATION AND REMUNERATION COMMITTEE

During the year, Two Meetings of Nomination and Remuneration Committee was convened and held and details of which are given in the Corporate Governance Report. Your directors ensures that the Company follows a Policy on Remuneration of Directors and Senior Management Employees. The policy shall be approved by the Nomination & Remuneration Committee and the Board. The main objective of the said policy is to ensure that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate the Directors, KMP and Senior Management employees.

The policy of the Company on Director's appointment and remuneration is uploaded on to the Company's website and the same is available at http://creativenewtech.com/

STAKEHOLDERS' RELATIONSHIP COMMITTEE

During the year, One Meeting of Stakeholders' Relationship Committee was convened and held and details of which are given in the Corporate Governance Report. The role of the Committee is explained in detail in the Corporate Governance Report enclosed herewith. During the year, under review, Company has complied with all compliances as mandated by various government authorities and Company has not received any complaint from its Investor or shareholders or any individuals.

DIRECTORS' RESPONSIBILITY STATEMENT

To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in accordance with the provisions of Section

134 (3) (c) and 134(5) of the Companies Act, 2013:

1. That in preparation of the Annual Accounts for the year ended March 31, 2023, the applicable accounting standards had been followed along with proper explanation relating to material departures, if any;

2. That the directors had selected such accounting policies and applied consistently and made judgments and estimates that were reasonable and prudent so as to give true and fair view of the state of affairs of the Company at the end of the financial year ended March 31, 2023 and the profits of the Company for the year under review;

3. That proper and sufficient care has been taken for the maintenance of adequate accounting records for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

4. That the annual accounts for the year ended March 31, 2023, have been prepared on a 'going concern basis.'

5. That proper internal financial controls were in place and that such internal financial controls are adequate and were operating effectively.

6. That proper systems to ensure compliance with the provisions of all applicable laws were in place and that such systems were adequate and operating effectively.

STATUTORY AUDITORS

As per Section 139 of the Act read with the Companies (Audit and Auditors) Rule, 2014, the members of the Company in its 15^th Annual General Meeting held on 23^rd September, 2019, approved the appointment of M/s Gupta Raj & Co., Chartered Accountants (ICAI Registration No.001687N) as the Statutory Auditors of the Company for a period of 5 years from the conclusion of 15^th Annual General Meeting till the conclusion of 20^th Annual General Meeting of the Company.

As per amendment of Companies Act, 2013, read with Notification no. G.S.R. 432(E) dated 7^th May, 2018 of Ministry of Corporate Affairs, the ratification of appointment of Auditors in every Annual General meeting during term of five years have been dispensed with.

SECRETARIAL AUDITORS

In terms of the provisions of Section 204 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of the Company has appointed M/s. Satyajit Mishra & Co, Company Secretary in Practice (FCS no. 5759, C P No. 4997) as the Secretarial Auditors for conducting Secretarial Audit of your Company for the financial year ended March 31, 2023.

The Secretarial Auditors' Report does not contain any qualification, reservation or adverse mark and therefore, do not call for any further explanation or comments from the Board under Section 134(3) of the Act.

The Company has complied with the Secretarial Standards issued by the Institute of Company Secretaries of India on Board Meetings and Annual General Meetings as notified under Section 118 of the Act.

INTERNAL AUDIT AND INTERNAL FINANCIAL CONTROLS

The Company maintains robust and appropriately tailored internal controls that align with its size and operations, and these controls have remained functional and efficient over the course of the year. The Company has established an Internal Control System that is in accordance with the scope and intricacy of its operations. In addition to the internal audit function conducted in-house, the Company has reinforced its commitment to transparency by appointing M/s Somaiya & Co., Chartered Accountants, Mumbai, as Internal Auditors, as mandated by Section 138 of the Companies Act, 2013. Their role encompasses evaluating the efficacy of the internal control system.

MAINTAINENCE OF COST RECORDS

The Company is not required to maintain cost records pursuant to Section 148 of the Act read with Companies (Cost Records and Audit) Rules, 2014.

PARTICULARS OF LOAN, GUARANTEE AND INVESTMENTS

Elaboration on loans, guarantees issued, and investments made in accordance with Section 186 of the Companies Act, as supplemented by the Companies (Meetings of Board and its Powers) Rules, 2014, as of March 31, 2023, is presented within the Notes accompanying the Standalone Financial Statements of the Company. Notably, no guarantees were extended by the Company during the assessed year.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

Throughout the financial year, no noteworthy or substantial orders were issued by any regulatory authority, court, or tribunal that bear implications on the Company's operational continuity or its conduct.

PREVENTION AND REDRESSAL OF SEXUAL HARASSMENT AT WORK PLACE

In the course of the year, the Internal Complaints Committee (under the Sexual Harassment Policy) convened and conducted two meetings. The particulars of these meetings are elaborated upon in the Corporate Governance Report. The Company upholds a comprehensive Policy titled "Prevention of Sexual Harassment of Women at Workplace," which encompasses all facets as stipulated within 'The Sexual Harassment of Women at Workplace (Prohibition, Prevention, and Redressal) Act, 2013.' The Board affirms that throughout the reviewed period, no instances were reported or registered under the Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013.

VIGIL MECHANISM

Pursuant to the provisions of the Act and SEBI Listing Regulations, the Company has in place Whistle Blower Policy to encourage all employees or any other person dealing with the Company to disclose any wrong doing that may adversely impact the Company, the Company's customers, shareholders, employees, investors or the public at large. This policy, inter-alia, also sets forth:

(i) Procedures for reporting of questionable auditing accounting, internal control and unjust enrichment matters

(ii) Reporting instances of leak or suspected leak of Unpublished Price Sensitive Information and;

(iii) An investigative process of reported acts of wrong doing and retaliation from employees, inter-alia, on a confidential and anonymous basis.

The Company remains steadfast in its commitment to uphold the utmost ethical, moral, and legal standards in its business operations. The Vigil Mechanism Policy, which encapsulates these principles, is accessible on the Company's official website at www.creativenewtech.com.

Throughout the reviewed year, there were no instances of complaints filed by any Company employee, nor were any issues reported to the Chairman of the Audit Committee pursuant to the Company's Vigil Mechanism and Whistleblower Policy.

PERFORMANCE EVALUATION

In compliance with the provisions of the Act and Regulation 17(10) of the SEBI Listing Regulations, the assessment of the performance of the Board, its committees, and individual Directors for the financial year 2022-23 was conducted internally.

To maintain a heightened level of confidentiality and facilitate a streamlined evaluation process, a structured questionnaire was employed. Each Board member completed the evaluation template, which encompassed aspects related to the efficacy and overall engagement of the Board and its Committees. Parameters included the composition of the entities, execution of specific responsibilities, adequacy and promptness of information flow, depth of discussions during meetings, independence in judgment, decision-making, management actions, and more. The evaluation templates were formulated in line with the alterations introduced under the SEBI Listing Regulations. Directors were also invited to offer their invaluable insights and recommendations regarding the overall performance of the Board, its committees, and avenues for enhancement.

Additionally, the Independent Directors convened a virtual meeting on February 11, 2023, exclusive of the participation of any other Director or Key Managerial Personnel, to review the performance evaluation of Non-Independent Directors and the entire Board of Directors, including the Chairman. This review took into consideration the perspectives of both Executive and Non-Executive Directors.

The Independent Directors expressed contentment with the overall functioning of the Board, its assorted committees, and the performance of fellow Non-Executive and Executive Directors. They acknowledged the commendable leadership exhibited by the Chairman of the Board in upholding and adhering to the highest standards of corporate governance.

In sum, the Board conveyed its satisfaction with the assessment process, underscoring an elevated level of engagement between the Board, its committees, and the Management.

FAMILIARIZATION PROGRAMME

The orientation program is designed to furnish Independent Directors with a comprehensive understanding of various facets, encompassing the industry landscape, socio-economic context within which the Company functions, the intricacies of the business model, the Company's operational and financial achievements, and noteworthy advancements. The objective of this initiative is to empower Independent Directors to make judicious and timely decisions. Additionally, the program serves as a platform for updating Directors on their roles, obligations, entitlements, and responsibilities under diverse legislations and statutory provisions.

A. Employee Relations

We believe that success of Company depends on the talent and dedication of our employees and we strive to attract, hire, develop and retain outstanding employees. In view of this, we have laid down a comprehensive set of policies aiming at attracting, retaining and motivating employees. We believe significant benefits are realized from having a strong and seasoned management team with many years of experience in technology distribution and related industries. We consider relations with our employees to be good.

B. Trade Relations

The Company maintained healthy, cordial and harmonious industrial relations at all levels. Despite severe competition, the enthusiasm and unstinting efforts of the employees have enabled the Company to remain at the forefront of the industry.

This accord incorporates novel elements such as introducing wide range of products, nurturing healthy competition, giving pocket friendly credit cycles, timely clearance of dues, easy accessibility to product heads, etc. Your Company will continue in its endeavour to build and nurture strong links with trade allies, based on mutuality, respect and co-operation with each other and with consistent consumer interest.

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

The information pertaining to conservation of energy, technology absorption, foreign exchange earnings and outgo, as required under the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014 is given hereunder:

A. Conservation of energy

Your Company is primarily engaged in Marketing and Trading activities and has not consumed energy of any significant level and hence no additional investment is required to be made for reduction of energy consumption. However, the Company will continue with its efforts to conserve the energy.

B. Technology absorption

The Company's operations do not require significant absorption of technology.

HUMAN RESOURCES

Your Company continues to be assured by competence and commitment of the people.

The working climate of your Company continues to remain harmonious with focus on improving Productivity, Quality and Safety. Health and Safety of the employees and our associates we work with remains as our paramount importance. Your Company ensures that operations are carried out as per the safety guidelines and procedures in place which are regularly updated. The Company has 300+ employees as on March 31, 2023.

Efforts are continuously made to strengthen organizational culture in order to attract and retain best talent in the industry. The Board appreciates the commitment and support of the employees and look forward to their continued support.

INTERNAL FINANCIAL CONTROLS RELATED TO THE FINANCIAL STATEMENTS

The Company had adequate Internal Financial Controls which is commensurate to the size and business of the Company and is designed to provide reliable financial information. It provides reasonable assurance with respect to preparation of financial statements in compliance with the Acts, Rules and Regulations as applicable including Indian Accounting Standards and also reliability of financial reporting. The controls also provide assurance that the expenditures are made in accordance with the authority given to the management of the Company duly approved by the Directors of the Company.

These controls are reviewed by the management and key areas are subject to various statutory, internal and operational audits based on periodic risk assessment. The findings of the audits are discussed with the management and key findings are presented before the Audit Committee and Board of Directors for review of actionable items. The review of the IFC, inter-alia, consists of the three components of internal controls, viz., Entity level controls, Key financial reporting controls and Internal controls in operational areas.

In addition, the Internal Auditor monitors and evaluates the efficiency and adequacy of the internal control system in the Company, its compliance with operating systems, accounting and procurement procedures and respective policies. Periodical control report on the same is presented and discussed with the Audit Committee.

Conscious efforts are in place on a continuous basis to ensure that all the assets are safeguarded and protected against loss from unauthorized use and disposal and that all transactions are authorized, recorded and financial statements show a true and fair picture of the state of affairs of the Company. Compliance is in place as regards to applicable statutory and regulatory requirements.

The internal control systems of the Company are monitored and evaluated by Internal and Statutory Auditors and reviewed by Management. Internal Auditors of the Company independently reports key findings on the internal control systems to the Audit Committee

OTHER POLICIES UNDER SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015

In accordance with the provisions of Regulations 30 of the SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, the Company has formed policy for determination of materiality for disclosures of events or information. The same has been hosted on the website of the Company at the www.creativenewtech.com.

MATERIAL CHANGES AND COMMITMENTS

No material changes have taken Place affecting the financial position of the Company from the date of closure of financial year till the date of signing of this report.

DEPOSITS FROM PUBLIC

The Company has not accepted any deposits from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on the date of the balance sheet.

EXTRACT OF THE ANNUAL RETURN

In accordance with Section 134 (3) (a) and as provided under subsection (3) of Section 92 of the Companies Act, 2013. The Annual Return as on March 31, 2023 is available on the Company's website on www.creativenewtech.com.

RELATED PARTY TRANSACTIONS

All related party transactions that were entered into during the financial year were in the ordinary course of the business and on an arm's length basis. The Company has entered into material contracts or arrangements or transactions with related parties in accordance with Section 188 of the Act read with the Companies (Meetings of Board and its Powers) Rules, 2014 and SEBI Listing Regulations.

There were materially significant Related Party Transactions made by the Company during the year that required shareholders' approval under the SEBI Listing Regulations. The Related Party Transactions are placed before the Audit Committee for prior approval, as required under applicable law. Only those members of the Audit Committee who were Independent Directors approved the same. A statement of all Related Party Transactions is placed before the Audit Committee for its review on a quarterly basis, specifying the nature and value of the transactions. The Internal Auditors and Statutory Auditors of the company also confirm compliance of Related Party Transactions at quarterly Audit Committee meeting(s) of the Company.

The Company has adopted a policy on materiality of Related Party Transactions. The policy as approved by the Audit Committee and the Board of Directors is uploaded on the website of the Company www. creativenewtech.com.

The disclosures on Related Party Transactions pursuant to Regulation 34(3) of SEBI Listing Regulations read with Schedule V thereto are set out in Notes of the Standalone and Consolidated financial statements of the Company.

The Form AOC-2 envisages disclosure of material contracts or arrangements or transactions at arm's length basis. The details of the material related party transactions on-going and entered during FY 2023, as per the Policy on dealing with related parties adopted by the Company and regulatory requirements are disclosed in Annexure - A to this Report.

MANAGEMENT DISCUSSION AND ANALYSIS

A Management Discussion and Analysis as required under the Regulation 34(2)(e) of SEBI (Listing Obligations and Disclosure Requirements) Regulation is annexed herewith as Annexure - B and forms part of the Boards' Report.

SECRETARIAL AUDIT

The Board of Directors have appointed M/s. Satyajit Mishra & Co., Practising Company Secretary, Mumbai, to conduct Secretarial Audit for the financial year 2022-23 under Section 204 of the Companies Act, 2013 and as part of good corporate governance and transparency. The Secretarial Audit Report in form MR-3, for the financial year 2022-23, forms part of the Directors' Report as Annexure -C. Further the Comments on the Secretarial Audit Reports are self-explanatory.

CORPORATE GOVERNANCE

A separate report on Corporate Governance is provided together with the Certificate from the Practicing Company Secretary confirming compliance of conditions of Corporate Governance as stipulated under the SEBI Listing Regulations is attached separately as Annexure - D and forms part of this Annual Report.

SUBSIDIARY COMPANIES

Your Company has 3 Subsidiary Companies, Two are based at Hong Kong, namely Creative Peripherals and Distribution Limited (100% wholly owned Subsidiary) and Secure Connection Limited (52.50 % Investment) and One is based at India, namely Creative eCommerce Ventures Private Limited (100% wholly owned Subsidiary).

A statement containing salient features of the subsidiary in the prescribed format of (Form AOC-1) is annexed and marked as Annexure - E.

CORPORATE SOCIAL RESPONSIBILITY

Your Company has the policy of giving back to the society and has carried a host of CSR activities this year. In line with the requirement of Section 135 of the Companies Act, 2013, your Company having a Corporate Social Responsibility Committee. The details of Committee are provided in Corporate Governance Report. The CSR Policy of the Company is available on its website at www.creativenewtech. com.

During the year, the Company has spent Rs. 33,50,000/- on CSR activities as annexed herewith Annexure - F to this report. A detailed discussion on CSR Projects and initiatives are included as a separate section in the Annual Report.

GREEN INITIATIVE

The Ministry of Corporate Affairs ('MCA') has taken a Green Initiative in Corporate Governance by permitting electronic mode for service of documents to members after considering relevant provisions of the Information Technology Act, 2000 and Act and Rules made thereunder.

Pursuant to provisions of Act, service of documents to Members can be made by electronic mode on the email address provided for the purpose of communication. If a member has not registered an email address, other permitted modes of service would continue to be applicable.

Your Company sincerely appreciates members who have contributed towards furtherance of Green Initiative. We further appeal to other Members to contribute towards furtherance of Green Initiative by opting for electronic communication.

Members who have not provided their email address will continue to receive communications, dissemination, notice(s), documents etc. via permitted mode of service of documents. Further, the members who request for physical copies, will be provided the same.

OTHER DISCLOSURES

Your directors state that no disclosure or reporting is required in respect of the following items as

there were no transactions for the same during the year under review:

i. The details of application made or any proceeding pending under the Insolvency and Bankruptcy Code, 2016 during the year along with their status as on March 31, 2023.

ii. The details of difference between the amount of the valuation done at the time of one-time settlement and the valuation done while taking loan from the Banks or Financial Institutions along with the reasons thereof.

iii. No disclosure is required under Section 62(1)(b) of the Act in respect of Employee Stock Option Scheme as the provisions of the said section read with Rule made thereunder are not applicable.

iv. No disclosure is required under Section 67(3)(c) of the Act in respect of voting rights not exercised directly by the employees of the Company as the provisions of the said section are not applicable.

APPRECIATION

Your directors are thankful to the Vendors, Customers, Bankers, National Stock Exchange, Registrar and Transfer Agent, Merchant Bankers, Depositories, Central and State governments together with their departments, the local authorities for their continued guidance, support and co-operation. Your Company has been able to operate efficiently because of the culture of professionalism, creativity, integrity and continuous improvement in all functions and areas as well as the efficient utilisation of the Company's resources for sustainable and profitable growth. To them goes the credit for all of the Company's achievements.

And to you, our Shareholders, we are deeply grateful for the confidence and faith that you have always reposed in us.