Creative Newtech Ltd Directors Report.

To,

The Members,

Creative Peripherals and Distribution Limited

Your Directors have pleasure in presenting the Sixteenth Annual Report on business and operations along with the Audited Financial Statements for the year ended March 31, 2020.

WHO WE ARE AND WHERE WE WILL BE:

Founded in 1992, Creative Peripherals was originally incorporated on September 22, 2004 as a Private Limited Company. We are now into the 29th year of our journey and now have emerged as market entry and penetration specialists in a wide range of segments, covering a variety of IT, Imaging, Lifestyle and Security products. Information Technology lies at the core of the Companys business. The sector has grown and evolved over the last 27 years since it emerged after the Government liberalized the Indian economy. It prompted and shaped industrial growth and transformed the lifestyle of the average Indian by successfully changing the notion of a luxury item to one of necessity.

We have carved a niche for ourselves through our value-added service offerings. In addition to distribution, we handhold new and niche brands in their market entry by conducting extensive market research, pre-sales and marketing activities for the success of the brand as well as to enable the channel partners to leverage their expertise and bottom line. Creative Peripherals works closely with partners across all channels including Large Format Retail (LFR), e-commerce/online and specialized retailers. The Company is one of the few large distributors who conduct specialized training modules, events and promotional activities at the ground level with channel partners along with workshops and demos for resellers. This is possible due to a good mix of young, dynamic, dedicated and experienced corporate and sales teams which constantly track latest market developments to build a closer market connect.

The objective of the Company is to grow sustainably while staying connected to its roots. Currently, the Company is operating nationwide through its 20+ branches, warehouses and service centres. Our strategy is to optimize our core technology solutions business while expanding and investing in higher-margin high-growth-potential product segments. Over the recent past, we have been further optimizing our operating model and intend to continue doing so with the objective of cementing our reputation as a one-stop shop. Our bouquet of 20+ brands covers multiple verticals and aims to capture a considerable market share in each of the product categories, which will help our channel partners as well as thin out any market risks arising out of fluctuations in the market share of various brands. As we expand, we expect to benefit from higher economies of scale.

Another noteworthy pillar of our Company is the brand licensing business. For Honeywell, our relationship runs deeper than traditional distribution. We undertake contract manufacturing for several Honeywell products and have recently started distribution in the Middle East. Potentially expanding the licensing business will continue to be one of our focus areas.

During this financial year, the Company migrated from the NSE-SME platform to the NSE Main board, after fulfilling all required criteria. This migration is symbolic of our commitment to sustainable growth and expansion.

Our industry is at a crossroads where we are witnessing a paradigm shift towards online technologies, from traditional means of doing business. A rising number of businesses are conducting activities online due to various reasons including cost and time savings, convenience, and a wider reachability. We believe that more and more services will go online and become platform-based in the near future.

In line with this, we have developed a digital platform for all our customers. This online B2B platform will host our entire 5,000-strong customer-base and allow them to view, share and transact their products amongst each other. It will even allow customers to deal in products which are not on Creative Peripherals portfolio, thereby expanding our product domain. The platform is feature-rich with options for invoicing, drop-shipments, and hosting a clients micro-site on the platform. We expect this platform to not only improve working capital and profitability, but also increase our customer- base with minimal increase in manpower.

FINANCIAL HIGHLIGHTS

The highlights of the Standalone Financial Results are:

(Amount in Rs. Lakhs, except EPS)

Particulars March 31, 2020 March 31, 2019
Total Income 45,248.37 37,071.60
Less: Expenses (44,005.09) (36,244.18)
Profit Before Tax 1,243.29 827.42
Less: Exceptional Items 0 0
Less: Extraordinary Items 0 0
Less: Tax Expenses (338.84) (242.65)
Profit after Tax 904.45 584.77
Other Comprehensive Income (1.68) (3.54)
Total Comprehensive Income for the year 902.77 581.23
Balance brought forward 1,581.34 1,010.96
Amount available for Appropriation 2,484.10 1,592.19
Add: Share Premium Account 1,170.00 1,170.00
Less: Allotment of Bonus Equity Shares (580.00) 0
Less: Dividend Paid (18.01) (9.00)
Less: Dividend Distribution Tax Paid (3.70) (1.85)
Balance carried to Balance Sheet 3,052.40 2,751.34
Earnings per Share (Basic) 7.78 5.01
Earnings per Share (Diluted) 7.78 5.01

BUSINESS PERFORMANCE

The year gone by has been really profitable. The Companys revenue increased to Rs.45,248.37 Lakhs as compared to Rs.37,071.60 Lakhs in the previous year marking an increase by Rs. 8,176.77 Lakhs.

The Companys Net Profit after Tax stood at Rs. 904.44 Lakhs as compared to Rs. 584.77 Lakhs in the previous year registering an increase of by Rs. 319.67 Lakhs.

DIVIDEND

Considering financial growth and future prospects of your Company, Board of Directors in their Board Meeting held on 25th June, 2020, has recommended a Final Dividend of 5% on face value per share for the financial year ending at 31st March, 2020, subject to approval of shareholders in Annual general meeting to be held for Financial Year 2019-20.

Further, with also keeping in mind for plough back of profit, your promoter directors, holding 68.95% of overall paid up equity share capital of the Company, have opted out from their rights to have dividend. So, the above said dividend will be distributed to Public Shareholders only, who hold 31.05% of total paid up equity share capital.

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 RESERVES

The whole profit after tax has been transferred to Surplus in the Statement of Profit & Loss.

SHARE CAPITAL

At the beginning of the year, the Authorised Share Capital of the Company was Rs.8,00,00,000/- divided into 80,00,000 Equity Shares of Rs. 10/- . During the year, on 12th June, 2019, the Company increased its Authorised Share capital to Rs.14,00,00,000/- divided into 1,40,00,000 Equity Shares of Rs. 10/- each by approval of members of the Company through Postal Ballot.

At the beginning of the year, the Issued, Subscribed and Paid Up Equity Share Capital of the Company was Rs. 5,80,00,000/- divided into 58,00,000 Equity Shares of Rs. 10/-. During the year, on 12th June, 2019, the Company has issued and allotted Bonus Equity Shares in ratio of 1:1 by approval of members of the Company through Postal Ballot. After the said Bonus Allotment, the Issued, Subscribed and Paid Up Equity Share Capital of the Company is Rs.11,60,00,000 divided into 1,16,00,000 of Rs. 10/- each.

DEPOSITORY SYSTEM

The Company has entered into an agreement with the National Securities Depository Limited (NSDL) as well as the Central Depository Services (India) Limited (CDSL) to enable shareholders to hold shares in dematerialized form. The Company also offers simultaneous dematerialisation of the physical shares lodged 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.

During the year under review,:

1. Mr. Mandar Joshi, Independent Director resigned as on 10th October, 2019

2. Mr. Suresh Bhagavatula, appointed as Additional Independent Director as on 10th October, 2019

3. Mr. Piyush Shah, Independent Director resigned as on 25th December, 2019

4. Mr. Chandy Kurian, appointed as Additional Independent Director as on 01st February, 2020.

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

BOARD MEETINGS

During the year, Ten 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.

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, 2020, 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, 2020 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, 2020, 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 15th Annual General Meeting held on 23rd 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 15th Annual General Meeting till the conclusion of 20th Annual General Meeting of the Company.

As per amendment of Companies Act, 2013, read with Notification no. G.S.R. 432(E) dated 7th 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.

INTERNAL AUDIT AND INTERNAL FINANCIAL CONTROLS

The Company has in place well defined and adequate internal controls commensurate with the size of the Company and the same were operating effectively throughout the year. The Company has an Internal Control System, commensurate with the size, scale and complexity of its operations. Apart from in-house Internal Audit function, to strengthen and maintain transparency, the Company has also appointed M/s Somaiya & Co., Chartered Accountants, Mumbai, as Internal Auditors of the Company in accordance with Section 138 of the Companies Act, 2013, to examine the effectiveness of internal control system.

DECLARATION BY INDEPENDENT DIRECTORS

The Company has received declarations from all the Independent Directors of the Company confirming that they meet with the criteria of independence as prescribed under sub-section (6) of Section 149 of the Companies Act, 2013 and SEBI Listing Regulations 2015. Further, The Independent Directors are not liable to retire by rotation.

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. The Audit Committee also meets the Companys Statutory Auditors to ascertain their views on financial statements, including the financial reporting system, related parties transactions, compliance to accounting policies and procedures.

NOMINATION AND REMUNERATION COMMITTEE

During the year, Three 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 Directors appointment and remuneration is uploaded on to the Companys website and the same is available at http://ecreativeindia.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.

PREVENTION AND REDRESSAL OF SEXUAL HARASSMENT AT WORK PLACE

During the year, Four Meeting of Internal Compliant Committee (under Sexual Harassment Policy) were convened and held and details of which are given in the Corporate Governance Report. The Company has a Policy on "Prevention of Sexual Harassment of Women at Work Place" and matters connected therewith or incidental thereto covering all the aspects as contained under the The Sexual Harassment of Women at Work Place (Prohibition, Prevention and Redressal) Act, 2013. Your Directors state that during the year under review, no cases were filed pursuant to the Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act, 2013.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has adopted a Whistle Blower Policy establishing vigil mechanism, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Companys Code of Conduct or other policies. The policy provides for adequate safeguards against victimization of employees who avail of mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee. The policy of vigil mechanism is available on the Companys website.

The policy of the Company on Vigil Mechanism / Whistle Blower is uploaded on to the Companys website at http:// ecreativeindia.com/

PERFORMANCE EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Regulation 17(10) of Securities of Exchange Board of India (Listing Obligations & Disclosure Requirements) Regulation 2015, the Board has carried out the annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination and Remuneration and other Committees of the Board, which covers various aspects of the Boards functioning such as adequacy of the composition of the Board and its Committees, Board Culture, execution and performance of specific duties, responsibilities, obligations and governance.

The performance evaluation of the Directors was carried out by the entire Board.

FAMILIARIZATION PROGRAMME

The familiarization programme aims to provide Independent Directors with the industry scenario, the socio-economic environment in which the Company operates, the business model, the operational and financial performance of the Company, significant developments so as to enable them to take well informed decisions in a timely manner. This programme also seeks to update the Directors on the roles, responsibilities, rights and duties under various Acts and other statutes.

CRITERIA OF MAKING PAYMENTS TO NON-EXECUTIVE DIRECTORS

The policy of the Company on Criteria of making payments to Non-executive Directors is uploaded on to the Companys website and the same is available at http://ecreativeindia.com/

BOARD EVALUATION

In compliance with the provisions of Section 134(3)(p) of the Act read with Rule 8(4) of the Companies (Accounts) Rules, 2014, the Board carried out annual evaluation of its own performance, that of its Committees and individual directors.

The performance of the Board and its committees and individual directors were evaluated by the Board after seeking inputs from all the Directors on the basis of criteria, such as composition and structure of the Board, quality of deliberations, effectiveness of the procedures adopted by the Board, participation of the Board and committee meetings and governance reviews etc.

DEPOSITS

Your Company has not accepted any deposit and as such no amount of principal and interest were outstanding as at the Balance Sheet date.

HUMAN RESOURCES

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 Companys operations do not require significant absorption of technology.

C. Foreign Exchange Earnings and Outgo

(Amount in Rs. Crores)

Particulars For the Year ended on March 31, 2020 For the Year ended on March 31, 2019 For the Year ended on March 31, 2018
Foreign Exchange Earnings 105.54 79.60 40.39
Foreign Exchange Outgo 311.53 198.84 108.68

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 an extract of the Annual Return in prescribed form MGT - 9 is appended as Annexure - A to the Boards Report.

RELATED PARTY TRANSACTIONS

During the year, Company has made several related party transactions which were in the ordinary course of business and on an "arms length" basis. The particulars of contracts or arrangements entered into by the Company with related parties as referred in sub-section (1) of section 188 of the Companies Act, 2013, in prescribed Form No. AOC-2, is appended as Annexure - B to the Boards 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 - Cand 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 2019-20 under Section 204 of the Companies Act, 2013 as part of good corporate governance and transparency. The Secretarial Audit Report in form MR-3, for the financial year 2019-20, forms part of the Directors Report as Annexure - D.

Further the Secretarial Audit Report doesnt contain any adverse remark or comments.

CORPORATE GOVERNANCE

The Company has complied with the corporate governance requirements as stipulated under the Listing Regulations. A separate section on corporate governance along with a certificate from the Secretarial Auditor confirming the compliance is annexed as Annexure - E and forms part of this Annual Report.

SUBSIDIARY COMPANIES

Your Company has 2 Subsidiary Companies, both are based at Hong Kong, namely Creative Peripherals and Distribution Limited (100% wholly owned Subsidiary) and Secure Connection Limited (70% Investment).

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

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 is provided in Corporate Governance Report. The CSR Policy of the Company is available on its website at www.ecreativeindia.com.

During the year, the Company has spent Rs. 13.5 Lacs on CSR activities as annexed herewith Annexure - G to this report. A detailed discussion on CSR Projects and initiatives are included as a separate section in the Annual Report.

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 155 employees as on March 31, 2020.

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

The Company has an internal controls system commensurate with size, scale and complexity of its operations. In order to enhance controls and governance standards, the Company has adopted Standard Operating Procedures which ensures that robust internal financial controls, exist in relation to operations, financial reporting and compliance.

In addition, the internal audit functions, monitors and evaluates the efficiency and adequacy of the internal control system in the Company, its compliance with operating systems, accounting procedures and policies. Periodical reports on the same are also presented to the Audit Committee. Compliance is in place as regards to statutory and regulatory requirements.

The internal control systems of the Company are monitored and evaluated by Auditors and reviewed by Management and Audit Committee of the Board of Directors.

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.ecreativeindia.com.

LOANS, GUARANTEES & INVESTMENTS

The particulars of loans, guarantees and investments have been disclosed in the financial statements.

MATERIAL CHANGES AND COMMITMENTS

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

CHANGE IN NATURE OF BUSINESS

There has been no change in nature of business of the Company, during the period, under review.

CHANGE IN ACCOUNTING TREATMENT

During the year, your Company has adopted IND-AS Accounting Standards accounting treatments since Company has been migrated from NSE SME Exchange to NSE Main Board Exchange.

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 Companys resources for sustainable and profitable growth. To them goes the credit for all of the Companys achievements.

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

For and on behalf of the Board of Directors

Creative Peripherals and Distribution Limited

Ketan Patel

Chairman & Managing Director

DIN 00127633

Date: 25th June, 2020

Place: Mumbai

Registered Office:

Creative Peripherals and Distribution Limited

Registered Office:

3rd & 4th Floor, Plot No. 137AB,

Kandivali Co Op Industrial Estate Limited,

Charkop, Kandivali West, Mumbai – 400 067

Website: www.ecreativeindia.com

Email ID: cs@ecreativeindia.com.