Priti International Limited

The Board of Directors are pleased to present the Company's Fifth (5th) Board Report, together with the Audited Financial Statements for the financial year ended March 31,2022 (‘FY 2022').

1. Financial Results

I n compliance with the provisions of the Companies Act, 2013 ("Act"), and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), the Company has prepared its standalone financial statements as per Indian Accounting Standards ("Ind AS") for FY 2022. The standalone financial highlights of the Company's operations are as follows:

The segment-wise financial results are disclosed in the Financial Statements section of this Annual Report.

2. Change in Nature of Business

The company is engaged in the activities of domestic as well as export trade of Wooden Handicraft and Textile products. There was no change in the nature of business of the Company during the financial year ended on March 31,2022.

3. Dividend

The Board of Directors of your company, after considering holistically the relevant circumstances and keeping in view the company's performance for the FY 2022, has decided that it would be prudent not to recommend any Dividend for the financial year 2022.

4. Reserves

To conserve its financial resources and to meet its growth plan, the Board of Directors of your Company, has decided not to transfer any amount to the Reserves for the year under review.

5. COVID-19 impact on business

The country faced the second wave of the COVID-19 pandemic in the beginning of the financial year 2022, which had a much higher rate of transmission and resulting in higher rate of human capital loss.

The Company followed guidelines issued by the Government and has taken all the steps necessary to ensure safety of its workers and employees. Further, the Company had strong business continuity plan during the pandemic and so there was a continuity in the business and no breakdown was noticed during the year. Resultantly, there was no impact on the revenue and profits of the Company. The year ended successfully for the Company, adding customers, employee head count, revenue, profit and number of exports assignments as well.

6. Proceeds From Public Issues

During the financial year 2018-19, the Company has issued 7,00,800 equity shares through Initial Public Offer (‘IPO') at the Issue Price of ' 75 each (including premium of ' 65) raising capital of ' 5.256 crores. Out of 7,00,800 shares issued, 35,200 shares were reserved for the market makers and the remaining shares were issued to the public.

Till the end of FY 2022, out of the proceeds of the IPO amounting to ' 525.60 lakhs, the company has spent a sum of ' 495.55 lakhs. The Company has kept the unspent amount in a Fixed Deposit with a Scheduled Commercial Bank in the Interest of the stakeholders of the Company. Pursuant to Regulation 32 of the SEBI LODR, the Company hereby confirms that there has been

no deviation in the use of IPO proceeds from the objects stated in the prospectus.

7. Management Discussion and Analysis

I n terms of Regulation 34 and Schedule V of the SEBI Listing Regulations, Management Discussion and Analysis Report is presented in a separate section, forming part of the Annual Report.

8. Information About Subsidiary/ Joint Ventures/Associate Company

The Company does not have any Subsidiary, Joint Venture or Associate Company(ies).

9. Transfer of Unclaimed Dividend to Investor Education and Protection Fund

I n terms of Section 124, Sub-Section (5) and (6) of the Companies Act, 2013 read with Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("IEPF Rules"), the Company is required to transfer following amounts and shares to Investor Education and Protection Fund ("IEPF Authority") established under above rules:

a. Any money transferred to the Unpaid Dividend Account of a company in pursuance of this section which remains unpaid or unclaimed for a period of seven years from the date of such transfer.

b. All shares in respect of which dividend has not been paid or claimed for seven consecutive years or more.

The Company has no amount lying in the Unpaid Dividend Account, and accordingly Company is not required to transfer any money or shares to IEPF Authority.

Further in terms of Rule 7(2A) of IEPF Rules, the Company is not required to appoint a Nodal Officer for the purposes of verification of claim and for co-ordination with IEPF Authority.

10. Material Changes and Commitments

During the year under review, following significant developments occurred:

a. The Equity Shares of the Company, which were previously listed on NSE Emerge platform were migrated on Main Board of National Stock Exchange of India Limited with effect from March 02, 2022.

b. The Company increased its authorised share capital from INR 6,00,00,000/- to INR 12,00,00,000/-.

c. The Company increased its paid-up share capital by allotment of 77,82,996 equity shares as bonus shares.

Other than above, no material changes and commitments affecting the financial position of the Company occurred during the FY 2022. However, after the closure of the FY 2022, the Company raised funds by issuance of 29,76,000 convertible warrants on preferential basis.

11. Meetings of the Board of Directors and Committees thereof

The Board of Directors met seventeen (17) times during the FY 2022. A detailed update on the Board, its composition, governance of committees including terms and reference of various Board Committees, number of Board and Committee meetings held during FY 2022 and attendance of the Directors at each meeting is provided in the Corporate Governance Report, which forms part of this Annual report.

12. General Meetings

The Fourth (4th) Annual General Meeting of the members of the Company was held on Thursday, 30th September 2021. Further details of general meeting, postal ballot carried out during FY 2022 and details of Fifth (5th) Annual General Meeting are provided in the Corporate Governance Report, which forms part of this Annual report.

13. Secretarial Standards

Pursuant to the provisions of Section 1 1 8 of the Companies Act, 2013, the Company has complied with the applicable provisions of Secretarial Standard 1 on Meetings of the Board of Directors and Secretarial Standard 2 on General Meetings during the FY 2022.

14. Directors' Responsibility Statement

Pursuant to Section 134(5) of the Companies Act, 2013 the Board of Directors of the Company confirms that-

i. In the preparation of the annual accounts, the applicable accounting standards had been followed along with proper explanation relating to material departures.

ii. The directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonable and prudent to give a true and fair view of the situation of the company at the end of the financial year and of the profit and loss of the company for that period.

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

iv. The directors had prepared the annual accounts on a going concern basis; and

v. 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.

vi. 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.

15. Statutory Auditors

M/s J.K. Daga & Associates, Chartered Accountants, Jodhpur (FRN: 010314C) were appointed as Auditors of the Company for a term of 5 (five) consecutive years, at the annual general meeting held on December 31, 2018 to hold office till the conclusion of 6th AGM pf the Company to be held in year 2023. The Auditors have confirmed that they are not disqualified from continuing as Auditors of the Company.

The Board has duly examined the Statutory Auditors' Report to the Financial Statements, which is self-explanatory. Clarifications, wherever necessary, have been included in the Notes to Financial Statements section of this Annual report. The Auditors' Report does not contain any qualification, reservation, adverse remark or disclaimer.

Further, The Auditors have not reported any fraud u/s 143(12) of the Act, therefore no detail is required to be disclosed under Section 134 (3)(ca) of the Act..

16. Secretarial Auditors

Pursuant to the provisions of Section 204 of the Act, Rules made thereunder and Regulation 24A of the SEBI Listing Regulations, Ms. Reeptika Barmera, Practicing Company Secretary (C.P. No. 16551, FCS Membership No. 11280) was appointed as Secretarial Auditor of the Company for the Purpose of Conducting the Secretarial Audit for the FY 2022. The Secretarial Audit Report is annexed herewith marked as Annexure A to this Report.

The Secretarial Audit report does not contain any qualification, reservation, adverse remark or disclaimer.

Further, The Secretarial Auditors have not reported any fraud u/s 143(12) of the Act, therefore no detail is required to be disclosed under Section 134 (3)(ca)

The Board, on the recommendation of Audit Committee, has re-appointed Ms. Reeptika Barmera, Practicing Company Secretary (C.P. No. 16551, FCS Membership No. 11280), Jodhpur, as Secretarial Auditors of the Company for financial year 2022-23.

17. Internal Auditors

Pursuant to Section 138 of the Act and Rules made thereunder, Ms. Ronak Pungaliya, Chartered Accountant (Membership no: 423891) was appointed as internal auditor of the company to carry out the internal audit for three (3) consecutive financial years commencing from FY 2022 till FY 2024.

Internal auditors periodically appraise the Audit Committee on findings/observation of Internal Audit and actions taken thereon. During the year, the Audit Committee periodically reviewed significant audit observations and follow-up actions thereon.

18. Cost Record Maintenance and Cost Audit

Maintenance of Cost Records and requirement of Cost Audit as prescribed under the provisions of Section 148 of the Act and Rules made thereunder are not applicable to the business activities carried out by the Company.

19. Internal Financial Controls

The Company has adequate internal financial controls systems in place, which facilitates orderly and efficient conduct of its business including adherence to Company's policies, safeguarding of its assets, prevention and detection of frauds and errors, accuracy and completeness of the accounting records and timely preparation of reliable financial information.

The Statutory Auditors of the Company have reported unmodified opinion on the adequacy and operating effectiveness of the Company's internal financial controls over financial reporting for the FY 2022.

20. Loans, Guarantees and Investments

During the year under review the Company has not made any loans, has not provided any guarantee or security in connection with a loan and has not made investment in securities of any other body corporate, as provided in Section 186 of the Act.

21. Particulars of Employees and Related Disclosures

The details disclosure required under Section 197(12) of the Act read with Rule 5 of the Companies (Appointment & Remuneration of Managerial Personnel) Rules, 2014 is given in the Statement annexed herewith marked as Annexure B to this Report.

22. Disclosure of Additional Details under Schedule V of the Companies Act, 2013

A statement containing additional information, as required under Clause IV of Section II of Part II of Schedule V of the Companies Act, 2013, is provided in the Corporate Governance Report (under the heading "Remuneration of Directors"), which forms part of this Annual Report.

23. Related Party Transactions

All Contracts, Arrangements and Transactions entered by the Company during FY 2022 with related parties ("RPTs") were in the ordinary course of business and on arm's length basis and were approved by the Audit Committee. The Board of Directors of the Company had laid down the criteria for granting the omnibus approval by the Audit Committee, in line with the Policy on Related party transaction ("RPT Policy"). The said policy is available on the website of the Company at (https:// pritihome.com/wp-content/uploads/2022/01/7.-Related- Party-Transaction-Policy.pdf)

In terms of Schedule V of the SEBI Listing Regulation the disclosure regarding transactions with person or entity belonging to the promoter/promoter group which hold 10% or more shareholding in the Company have been disclosed in the Notes to Financial Statements which forms part of this Annual report.

24. Conservation of Energy, Technology Absorption & Foreign Exchange Earnings and Outgo

As required by Section 134(3)(m) read with the Companies (Accounts) Rules, 2014, your director's report as under:

A. Conservation of Energy:

(i) Steps taken / impact on conservation of energy

The Company is already having strict control systems to monitor day to day power consumption.

(ii) Steps taken by the company for utilizing alternate sources of energy including waste generated: Nil

(iii) Capital investment on energy conservation equipment: Nil

B. Technology Absorption:

(i) Efforts made towards technology absorption: Nil

(ii) Benefits derived as a result of the above efforts, e.g., product improvement, cost reduction, product development, import substitution, etc.: Not Applicable

(iii) In case of imported technology (imported during the last 3 years reckoned from the beginning of the financial year): Not Applicable

(iv) Expenditure incurred on Research and Development:

During the year under review company has not incurred any expenditure on research and development.

C. Foreign Exchange Earnings and Outgo:

The details for foreign exchange earnings and outgo for the FY 2022 are as under:

25. Risk Management

The Company has laid down Internal Financial Controls that includes a risk-based framework to ensure orderly and efficient conduct of its business, safeguarding of its assets, accuracy, and completeness of the accounting records and assurance on reliable financial information. The Board has satisfied itself with the adequacy and effectiveness of Internal Financial control system and ensured that the Risk Management including internal financial controls is in place. The Board regularly keeps a check and ensures that elements of risk threatening on the Company's existence are very minimal.

The Company has a Risk Management Policy which is in line with the provisions of the Act and SEBI Listing Regulations. The said policy is available on the website of the Company at (https://pritihome.com/wp-content/ uploads/2022/01/8.-Risk-Management-Policy.pdf)

26. Annual Return

The Draft Annual Return (MGT 7) of the Company for the Financial Year 2022 is available on the website of the Company at (www.pritihome.com/investor/).

A. Board and Committee Composition

As on March 31, 2022, the Board consists of Eight (8) Directors out of which half of the Board comprises of Independent Directors. Out of the 8 Board members, 2 (two) are Women Directors including Managing Director.

The Chairperson to the board is a whole-time director. The Audit and Nomination and Remuneration Committee has an Independent Director as its chairperson.

The composition of the Board is in conformity with Regulation 17 of the SEBI Listing Regulations read with Section 149 of the Act.

Additional details regarding Board of Directors, its committees, composition and terms of reference of its committees has been provided in the Corporate Governance Report, which forms part of this Annual report.

All the recommendations made by the Committees of the Board, including the Audit Committee, were accepted by the Board.

B. Appointment, Cessation and other changes in Board

During the FY 2022, the Board appointed two (2) Independent Directors on February 10, 2022 for a period of one year. The Members of the Company on May 07, 2022, approved, by way of postal ballot, the regularization of Independent Directors.

Other than above, there were no changes occurred in the Board composition or any of its committees.

C. Rotation of Directors

I n terms of provision of Section 152(6) of the Act, Mr. Goverdhan Das Lohiya (DIN: 7787326) is liable to retire by rotation at the ensuing Annual General Meeting, and being eligible, offer himself for re-appointment. The Board of Directors recommend his re-appointment for consideration by the members of the Company at the ensuing AGM.

D. New appointments/re-appointments proposed at the 5th Annual General Meeting

After the closure of FY 2022, the Board on the recommendation of Nomination and Remuneration Committee, approved the appointment of Ms. Tamanna Kumari, as Non-Executive Independent Director of the Company for a period of two years i.e. from August 13, 2022 till August 12, 2024.

The appointment of Tamanna Kumari is subject to approval by the members of the Company at this 5th AGM.

I n the Opinion of the Board Ms. Tamanna Kumari possesses relevant expertise, experience (including the proficiency) and integrity.

E. Annual Performance Evaluation

The Company has in terms of applicable provisions of the Act, SEBI Listing Regulations have carried out the Performance Evaluation of the Board, its committees, individual directors on the basis of parameters laid down.

The details of Annual Performance Evaluation have been provided in the Corporate Governance Report forming part of the Annual Report.

F. Nomination and Remuneration Policy

The Company has a Nomination and Remuneration Policy approved by its Board of Directors. The said policy inter-alia provides for details of level and composition of remuneration of the Board members, Key Managerial Personnel and Senior Management, terms of reference of the Nomination and Remuneration Committee, procedure and terms of reference of appointment of Directors on the Board and criteria for determining qualifications, positive attributes and independence of a director.

The said policy is available on the website of the Company at (https://pritihome.com/ wp-content/uploads/202 2/01/4.-Nomination- and-Remuneration-Policy.pdf)

G. Declaration of Independent Directors

The Company has in terms of Section 149(7) of the Act and Regulation 25(8) of SEBI Listing Regulations, received a declaration from all the Independent Directors that they meet the criteria as mentioned under regulation 16(1 )(b) of the SEBI Listing Regulation and Section 149 of the Companies Act, 2013 and have complied with code of conduct as prescribed in Schedule IV to the Act. Further, the Independent Directors have in terms of Section 150 of the Act read with Rule 6 of the Companies (Appointment & Qualification of Directors) Rules, 2014, confirmed that they have enrolled themselves in the Independent Directors' Databank maintained with the Indian Institute of Corporate Affairs.

28. Details relating to Deposits covered under chapter V of the Companies Act, 2013:

No deposits have been accepted by the Company from the public. The Company had no outstanding, unpaid or unclaimed public deposits at the end of FY 2022.

29. Share Capital

The Authorised Share Capital of the Company was INR

6,00,00,000/- (60,00,000 Equity Shares of INR 10 each) which was increased vide Ordinary Resolution dated September 30, 2021 to INR 12,00,00,000/- (1,20,00,000 Equity Shares of INR 10 Each). The Company declared a Bonus Issue of Equity Shares in the Ratio of 3 shares for every 1 share held by the members of the Company. Consequent to the above, the Paid-up Share Capital of the Company was increased to INR 10,37,73,280/- (1,03,77,328 Equity Shares of INR 10 each).

Further, The Equity shares of the Company was previously listed on Emerge Platform of National Stock Exchange of India Limited ("NSE"). These Equity Shares were Migrated to Main Board of the NSE w.e.f. March 02, 2022.

During the year under review, the Company has neither issued any shares with differential voting rights nor issued any sweat equity shares.

However, after the closure of FY 2022, the Company has issued 29,76,000 Convertible warrants each convertible into one Equity share of the Company, on preferential basis.

The Exercise price for conversion if INR 98/- per warrant.

The Company do not have any Employee Stock Option Scheme. Thus, disclosures under Rule 12 of the Companies (Share Capital and Debentures) Rules, 2014 and the Securities and Exchange Board of India (Share Based Employee Benefits and Sweat Equity) Regulations, 2021 are not required.

30. Orders Passed by the Regulators or Courts or Tribunals etc.

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.

31. Details on Corporate Social Responsibility (CSR)

The Company had a Net Profit of less than INR 5,00,00,000/- (Five Crore) during the FY 2021 and accordingly, it was not obligated to contribute towards CSR activities during financial year 2021-22 or to prepare any report on CSR.

32. Corporate Governance

Your company provides utmost importance at best Governance Practices and are designated to act in the best interest of its stakeholders. Better governance practice enables the company to introduce more effective internal controls suitable to the nature of business operations, improve performance and provide an opportunity to increase stakeholders understanding of the key activities and policies of the organization. Your Company has incorporated the appropriate standards for corporate governance.

The Company has complied with all the Corporate Governance requirements as provided in SEBI Listing Regulations and the Companies Act, 2013. The Company has prepared a Corporate Governance report in compliance with Provisions of Schedule V of the SEBI Listing Regulations which forms part of this Annual report.

33. Prohibition of Insider Trading

With a view to regulate trading in securities by the Directors and Designated Employees & their immediate relatives, the Company has adopted a Code of Internal Procedures and Conduct for Regulating, Monitoring and Reporting of Trading by Insiders.

The Code, as approved by the Board, inter alia, prohibits trading in securities of the Company by Directors and

Designated Employees & their immediate relatives while in possession of Unpublished Price Sensitive Information in relation to the Company.

The Said code is available on the website of the Company at (https://pritihome.com/ wp-content/uploads/2022/01/1.-Policy-on-Code- of-Conduct-under-the-SEBI-Prohibition-of-Insider- Trading-Regulations-2015.pdf)

34. The Details of Application made or any Proceeding pending under the Insolvency and Bankruptcy Code, 2016 (31 of 2016) during the year along with their status as at the end of the Financial Year.

During the year under review, neither any application has been made nor any such proceedings were pending under the Insolvency and Bankruptcy Code, 2016, hence the company has nothing to report in this regard.

35. The Details of difference between 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

During the year under review, there has been no such instances wherein, the company has undertaken the One-time settlement of any borrowings from banks or financial institutions. Your company has always been prompt in paying its dues therefore the company has nothing to report in this regard.

36. Disclosures under Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013.

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition, and Redressal of Sexual Harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and Rules there under. The policy aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure.

The Company has constituted committee (known as the Prevention of Sexual Harassment (POSH) Committee) under the sexual harassment of women at workplace (prevention, prohibition, and Redressal) Act, 2013 and complied with the provisions of the same.

The Company is committed to provide a safe and conducive work environment to its employees during the financial year. Your directors, further, state that during the financial year, there were no cases filed pursuant to the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013.

During the Financial Year 2021-22, the Company has received no complaint on sexual harassment.

37. Acknowledgment

The Board wishes to express their grateful appreciation to the continued co-operation and financial assistance received from the Bankers, Business Associates and all other authorities. The Directors acknowledge the support and co-operation received from the employees and whole management team.