Keerthi Industries Ltd

Dear Members,

Your Directors have pleasure in presenting their 41 st Annual Report for the Financial Year 2023-2024 together with the Audited Financial Statement as at March 31,2024.

(Rs. In Lakhs)

2. OVERVIEW AND STATE OF AFFAIRS OF THE COMPANY

The Company generated operating revenue for the year 2023-24 of Rs 5023.33 Lakhs. The Total Comprehensive Loss for the FY 2023- 24 at Rs. 478.35 Lakhs (Rs. 738.22 Lakhs in 2022-23).

^ Cement Division

Production of Cement and Clinker were 4,35,523 MTS and 3,82,874 MTS respectively during the twelve months ended 31st March, 2024 as against 4,78,515 MTS and 4,74,584 MTS respectively during the previous year ended 31st March, 2023. Accordingly, revenue generated during the year ended 31st March, 2024 is Rs. 21,211.79 Lakhs as against the revenue Rs. 24,056.39 Lakhs during the previous year ended 31 st March, 2023.

Electronic Division

i The Company has produced 3268 sg. mts of Printed Circuit Boards as against 3698 sg. mts during the previous year. Accordingly, Revenue generated during the twelve months ended 31st March, 2024 is Rs. 1849.33 Lakhs as against the revenue Rs. 1872.25 Lakhs during the previous year ended 31st March, 2023.

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

During the year, our Company has faced significant challenges such as market conditions, increased competition, operational issues, etc. Despite our dedicated efforts to navigate these challenges, the company has incurred losses for the financial year. In light of the financial performance of the company, the Board of Directors has decided not to declare any dividend for the financial year ended March 31, 2024. This decision has been taken after careful consideration of the company's current financial position and future growth plans.

(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 Crores divided into 2.73 Crore Eguity shares of Rs. 10/- each aggregating Rs. 27.30 Crores and 0.107 Crore 9% Cumulative Redeemable Preference Shares of Rs. 100/- each aggregating Rs. 10.7 Crore.

(b) No Change in Paid up Share Capital:

Eguity Share Capital: During the period under review, there was no change in the Paid-up Eguity Share Capital of the Company. The Paid- up Eguity Share Capital was Rs. 8.01 Crore divided into 0.801 Crore Eguity shares of Rs. 10/- each.

A. Board of Directors

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. The Composition of the Board is as under:

In accordance with the provisions of Companies Act, 2013, Mr. Venkata Krishna, Non-Executive Director of the Company would retire by rotation and, being eligible, offer himself for re-appointment. The Board of Directors recommends his re-appointment at the ensuing Annual General Meeting.

B. Board Meetings

During the year Five (5) Board Meetings. 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.

C. Declaration of Independence

As required under Section 134 (3) (d) of the Companies Act, 2013, All independent directors as mentioned above 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.

performance, its committees and Directors

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.

E. Familiarization Programmes for Independent Directors

The Independent Directors of the Company are eminent professionals with several decades of experience in banking and financial services, technology, finance, governance and management areas, and fully conversant and familiar with the business of the Company.

The Company has an ongoing familiarization programme for all Independent Directors with regard to their roles, duties, rights, responsibilities in the Company, nature of the industry in which the Company operates, the business model of the Company, etc.

F. 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.

C. Details Of Whole-Time Key Managerial Personal (KMP)

Pursuant to the provisions of Section 203 of the Act read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Key Managerial Personnel of the Company are Mrs. J. Triveni, Executive Chairperson & Whole-time Director, Mr. J. S. Rao, Managing Director, Mr. Y. Sadasiva Rao, Chief Financial Officer and Mr. Arun Kumar Yadav, Company Secretary & Compliance Officer (upto 07.11.2023), Ms. Ashdeep Kaur Company Secretary & Compliance Officer (w.e.f 06.03.2024).

Subseguent to the year under review, Mr. T S R Anjaneyulu and Mr. Krishna Prasad Gondi were appointed as Additional Directors (Independent Category) w.e.f. May 26,2024 and July 07,2024 respectively. They will be regularized in the 41st Annual General Meeting of the company and with the approval of the shareholders, they will be appointed as Independent Directors of the Company.

H. Audit Committee

The composition of Audit Committee has been detailed in the Corporate Governance Report, forming part of this Annual Report.

All recommendations made by the Audit Committee have been accepted by the Board of Directors.

6. 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 adeguate accounting records in accordance with the provisions of this Act for safe guarding the assets of the company and for preventing and deleting 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 adeguate 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.

7. POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE

The Company has put in place the Prevention of Sexual Harassment Policy (POSH) in line with the requirements of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013. An Internal Compliance Committee (ICC) has been constituted in compliance with the requirements of said Act to redress complaints received regarding sexual harassment. All employees are covered under this Policy. Employees at all levels are being sensitized about the Policy and the remedies available thereunder.

During the Financial year 2023-24, Nil complaints were received by ICC.

A. CONSERVATION OF ENERGY

i) Company ensures that the Manufacturing Operations are conducted in the manner whereby optimum utilization and maximum possible savings of energy is achieved.

ii) No specific investment has been made in reduction in energy consumption

iii) As the impact of measures taken for conservation and optimum utilization of energy are not quantitative, its impact on cost cannot be stated accurately.

B. TECHNOLOGY ABSORPTION

Company's products are manufactured by using in-house knowhow and no outside technology is being used for manufacturing activities. Therefore, no technology absorption is required. The Company constantly strives for maintenance and improvement in quality of its products and entire activities are directed to achieve the aforesaid goal.

C. EXPENDITURE INCURRED ON RESEARCH AND DEVELOPMENT

No expenditure was incurred on Research and Development by the Company during the period under review.

STATUTORY AUDITORS

M/s. Brahmayya and Co., Chartered Accountants (FRN: 000513S) have been Re-appointed at the 39th AGM held on September 21, 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.

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 2024-25. 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 2024-25.

SECRETARIAL AUDITORS 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 2024-2025. The report of the Secretarial Auditor in Form MR-3 for the FY 2023-24 is enclosed as Annexure A and forms part of this report.

10. CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES

During the financial year, the Board of Directors approved a Corporate Social Responsibility (CSR) budget of Rs. 27.32 lakhs. This allocation was intended to support the ongoing and planned CSR projects that align with our commitment to sustainable development and social welfare.

During the year one (1) meeting of the committee was held on May 30, 2023. The CSR Committee comprises of Mr. B. V. Subbaiah, Chairman; Mr. Flarishchandra Prasad Kanuri, Member; Mr. Sivaram Prasad Jetty, Member; Mr. J. S. Rao, Member; Mr. Jasti Venkata Krishna, Member.

Please refer to Annexure B to the Board's Report for the Annual Report on CSR activities for the financial year 2023-24.

11. PARTICULARS OF EMPLOYEES

The information reguired 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 C.

12. 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/ annual-Return-Section.html

13. RELATED PARTY TRANSACTIONS

All related party transactions were placed before the Audit Committee for approval. Prior omnibus approval of the Audit Committee was obtained for the transactions which are foreseen and are repetitive in nature. The related party transactions entered into by the Company are reviewed by independent Chartered Accountants to confirm that they were in the ordinary course of business and on an arm's length basis. Form AOC-2 will not form part of Board's report, as all the transactions with related parties are in arm's length basis or in ordinary course of business. There are no materially significant related party transactions during theyear which may have a potential conflict with the interest of the Company at large.

Related party transactions as reguired under the Indian Accounting Standards are disclosed in Notes to the financial statements of the Company for the financial year ended March 31, 2024. The Policy on Related Party Transaction is available on the Company's website at http://www.keerthiindustries. com/policys.html

14. HOLDING, SUBSIDIARY/ ASSOCIATE COMPANIES

As on 31st March, 2024, the Company does not have any Holding Company, Subsidiary Company or Associate Company.

15. CORPORATE GOVERNANCE

The Corporate Governance Report together with the Certificate from the Practicing Company Secretary of the Company regarding compliance with the reguirements of Corporate Governance as stipulated SEBI (LODR) Regulations, 2015 is appended as Annexure D to this Report.

16. MANAGEMENT DISCUSSION & ANALYSIS REPORT

The Management Discussion and Analysis Report highlighting the industry structure and developments, opportunities and threats, future

outlook, risks and concerns, etc., is provided separately in the Annual Report and forms part of this Directors' Report.

17. 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/policys.html

18. 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 adeguacy 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.

19. INTERNAL FINANCIAL CONTROL

The Company has in place adequate internal financial co ntrol 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.

20. 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.

GUARANTEES OR INVESTMENTS

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

B. 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.

C. 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.

D. DEMATERIALIZATION 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 4 (four) 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.

E. 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 in its Board Meeting held on May 29, 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.

F. 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.

C. CHANCE IN THE NATURE OF BUSINESS

During the Financial Year under review, there was no change in the nature of business of the Company.

H. 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.

I. 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.

22. 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 forthe 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.