To,

The Members,

Clara Industries Limited

Your directors have pleasure in presenting the Second Annual Report together with the Audited Statements of Accounts of the Company on Stand-alone basis for the year ended on March 31,2023.

FINANCIAL RESULTS:

The Company's financial performance, for the year ended on March 31,2023 is given in the table below:

(Rs in Lakh)

PERFORMANCE OF THE COMPANY

Your Company is primarily engaged in the business of manufacturing of LDPE, HDPE, PP, BOPP, ADHESIVE TAPES and its related products and activities and also to carry on the business of Manufacturers and traders of Plastic Bags, Industrial Packaging SELF ADHESIVE TAPES, PRINTING AND PLAIN MULTI LAYERED FLEXIBLE PACKAGING, MANUFACTURER OF PP PLASTIC MATS, TWINE AND ROPES

The Total Revenue: of the Company increased by Rs. 752.21 Lakh or 194.21% to Rs. 1,139.52 Lakh for the financial year 2022-23. from 387.31 Lakh for the financial year 2021-22.

It also mentions here that our revenue from operations is Rs. 1,138.32 Lakh for the financial year 2022-23 as compared to Rs. 364.89 Lakh for the financial year 2021-22 representing an incline of 211.96% on account of increase in sales because of fast recovery from covid pandemic.

The company in spite of many challenges and competitive market conditions was able to achieve satisfactory Sales and Net Profit (After Tax) figures. The management is of the opinion that in the coming future as the overall situation seems to be improving and Directors are optimistic about Company's business and hopeful of better performance with increased revenue in next year.

There has been no change in the business of the Company during the financial year ended March 31, 2023.

CAPITAL STRUCTURE:

Your Company during the FY 2022-2023 has increased its Authorised Equity Share Capital from Rs.

2.50.00. 000/- (Rupees Two crore Fifty Lakh Only) divided into 25,00,000 (Twenty-Five Lakh Only) Equity Shares of Rs. 10/- (Rupees Ten Only) each to Rs. 11,00,00,000/- (Rupees Eleven crore Only) divided into

1.10.00. 000 (One Crore Ten Lakh Only) Equity Shares of Rs. 10/- (Rupees Ten Only) each ranking pari passu with the existing Equity Shares of the Company.

CHANGE IN DIRECTORSHIP:

There have been no changes in the constitution of Board during the year under review i.e., Financial Year 2022-2023.

None of the Directors of the Company is disqualified for being appointed / re-appointed as directors of the company as per the provisions of Section 164 of the Companies Act, 2013

CHANGES IN NATURE OF BUSINESS

There is no significant change made in the nature of the company during the financial year ended March 31,2023.

ANNUAL RETURN:

In terms of Section 92(3) of the Companies Act, 2013 and Rule 12 of the Companies (Management and Administration) Rules, 2014, the Annual Return of the Company is available on the website of the Company https://clara.co.in/

GENERAL RESERVES:

The Accounting Standards permit that the amounts in the Profit after tax stands are included in the Reserve & Surplus Schedule; hence the Company has not transferred any amount to its General Reserves.

BOARD EVALUATION

The Board of Directors has carried out an annual evaluation of its own performance, board committees and individual directors pursuant to the provisions of the Companies Act, 2013.

The performance of the Board was evaluated by the board after seeking inputs from all the directors on the basis of the criteria such as the board composition and structure, effectiveness of board process, information and functioning etc.

The Board was of the view that the performance of the Board as a whole was adequate and fulfilled the parameters stipulated in the evaluation framework in its pro-growth activity. The Board also ensured that the Committee functioned adequately and independently in terms of the requirements of the Companies Act, 2013.

Further, the individual directors fulfilled their applicable responsibilities and duties laid down by the Companies Act, 2013 and at the same time contributed with their valuable knowledge, experience and expertise to grab the opportunity and counter the adverse challenges faced by the Company during the year.

PARTICULARS OF EMPLOYEES:

No employee in the Company was in receipt of remuneration in excess of the amount mentioned Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

DEPOSITS FROM PUBLIC:

Your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 in the year under review.

DIVIDEND:

The Board of Directors of your company has not declared any Dividend for the current financial year ended March 31,2023.

DECLARATION FROM INDEPENDENT DIRECTORS ON ANNUAL BASIS

Pursuant to section 134(3)(d) of the Act, your Company confirm having received necessary declarations from all the Independent Directors under section 149(7) of the Companies Act, 2013 declaring that they meet the criteria of independence laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16(b) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

SEPARATE MEETING OF INDEPENDENT DIRECTOR

In terms of requirement of Schedule IV of the Companies Act, 2013, Independent Director had a separate meeting on December 04, 2022 without the attendance of Non-Independent Director and Members of management. All the Independent Directors were present at the said meeting. The activities prescribed in paragraph VII of Schedule IV to the Act were carried out at the said meeting.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTY TRANSACTIONS:

The particulars of contracts or arrangements with related parties referred to in Section 188 (1) entered by the Company during the financial year ended March 31,2023 is annexed hereto in prescribed Form AOC-2 as Annexure-A and forms part of this report.

EVENTS SUBSEQUENT TO THE DATE OF FINANCIAL STATEMENTS

Except as mentioned below, there are no significant events occurred during the financial year after the date of financial statements.

Our Company has taken in principal approval on proposed rights issue of fully paid-up equity shares by the company from BSE as on date 09-02-2023.

DETAILS OF SUBSIDIARY/JOINT VENTURES/ASSOCIATE COMPANIES (IF ANY)

Your Company has no subsidiary Company, Joint Ventures or Associate Companies during the year under review.

CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES

In pursuance of the provision of Section 135 of the Companies Act, 2013, the CSR provisions are not applicable to our Company for F.Y 2022-2023.

However, for the current year i.e. 2023 - 24, the same has become applicable to the Company, since the Profits of the financial year 2022 - 23 has exceeded the limits prescribed for CSR Provisions. Therefore, the company has created a provision of Rs. 6,86,000.00 (Rupees Six Lakh Eighty Six Thousand Only) for CSR Expenditure.

MEETINGS OF BOARD OF DIRECTORS:

The Board of Directors met 8 (Eight) times during the year under review that is on 20.05.2022, 30.05.2022, 18.06.2022, 12.08.2022, 08.09.2022, 06.11.2022, 04.01.2023, 14.02.2023, The maximum gap between any two Board Meetings was less than one Hundred and Twenty days.

DIRECTORS' ATTENDANCE RECORD

The last Annual General Meeting was held on September 30, 2022. The attendance record of the Directors at the Board Meetings during the year ended on March 31, 2023, and at the last Annual General Meeting is as under

BOARD COMMITTEES:

In accordance with requirement SEBI (Listing Obligations and Disclosure Requirements), 2015, provisions on Corporate Governance the Board of Directors of the Company had constituted following Committees. The details of which are as under:

a) Audit Committee

b) Nomination & Remuneration Committee

c) Shareholders & Investor's Grievance Committee

d) Internal Complaint Committee

The composition of various committees is as follows:

AUDIT COMMITTEE

The terms of reference of the Audit Committee are as per the guidelines set out in the Regulation 18 of the SEBI (Listing Obligations and Disclosure Requirements) Regulation, 2015 with the stock exchanges read with Section 177 of the Companies Act, 2013. The detail of the Committee is as follows: follows:

NOMINATION AND REMUNERATION COMMITTEE

The Board of Directors of the Company has constituted a Nomination & Remuneration Committee, as per the provisions of Section 178 of the Companies Act, 2013 and Regulation 19 of SEBI (Listing Obligations and Disclosure Requirements), Regulation 2015, with the object of Remuneration & Nomination committee is to recommend / review the remuneration of Managing Directors / Wholetime Directors. The remuneration policy of the Company is directed towards rewarding performance and attracting new talents / retaining them. While deciding the remuneration, the Committee considers the financial position of the Company, trend in the Industry, Appointee's qualification, experience, past performance, past remuneration etc.

STAKEHOLDERS RELATIONSHIP ANDINVESTOR GRIEVANCE COMMITTEE

The Committee is in charge of looking after grievances of Investors and Shareholders. The detail of the Committee is as follows:

INTERNAL COMPLAINT COMMITTEE

The Committee is in charge of looking after grievances of Internal complaints of the company The detail of the Committee is as follows:

DEMATERLISATION OF SHARES AND LIQUIDITY

Currently 100% of the Company Share Capital is held in dematerialized form.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

In line with the provisions of the Section 177(9) of the Companies Act, 2013 and the Regulation 22 of the SEBI (Listing Obligations and Disclosures Requirements) Regulations, 2015, your Company has adopted Whistle Blower Policy, as part of vigil mechanism to provide appropriate avenues to the Directors and employees to bring to the attention of the management any issue which is perceived to be in violation of or in conflict with the fundamental business principles of the Company.

This vigil mechanism provides for adequate safeguards against victimization of employees and directors who avail of the vigil mechanism and also provide for direct access to the chairperson of the Audit committee, in exceptional cases. The Company Secretary is the designated officer for effective implementation of the policy and dealing with the complaints registered under the policy

ENVIRONMENT AND SAFETY

The Company is conscious of the importance of environmentally clean and sale operations. The company's policy requires the conduct of all operations in such manner so as to ensure safety of all concerned, compliance of statutory and industrial requirements for environment protection and conservation of natural resources to the extent possible.

MANAGEMENT DISCUSSION & ANALYSIS REPORTS

The Management Discussion and Analysis Report of the Company is annexed to this Report.

DIRECTORS' RESPONSIBILITY STATEMENT:

(i) To the best of their knowledge and belief and according to the information and explanation obtained by them, your Directors make the following statements in terms of the Section 134(3)? of the Companies Act, 2013.

(ii) That in the preparation of the annual financial statements for the year ended March 31,2021, the applicable accounting standards have been followed along with proper explanation relating to material departures, if any;

(iii) That such accounting policies, as mentioned in the Financial Statements as 'Significant Accounting Policies' have been selected and applied consistently and judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs of the company as at March 31,2021 and of the profit of the Company for the year ended on that date;

(iv) That proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(v) That the annual financial statements have been prepared on a going concern basis.

(vi) That proper internal financial controls were in place and that the financial controls were adequate and were operating effectively.

(vii) That proper system to ensure compliance with the provisions of all applicable laws was in place and was adequate and operating effectively.

STATUTORY AUDITORS:

The Company's Auditors, M/s. Gupta Agarwal & Associates, Chartered Accountants, who were appointed with your approval at the 1st Annual General Meeting for a period of five years, will complete their present term on conclusion of the ensuing 18th Annual General Meeting of the Company.

SECRETARIAL AUDITORS

The Board had appointed M/s. Verma Ashish & Co.(Peer reviewed firm) (Membership No. 59867), Practicing Company Secretary, to carry out secretarial audit Pursuant to provision of Section 204 of the Companies Act, 2013 and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The Secretarial Audit report is annexed herewith as "Annexure A"

BOARD'S COMMENT ON THE AUDITORS' REPORT:

The Statutory Auditors Report for Financial Statement on Standalone basis for the financial year 2022 2023, when read together with the relevant notes to the accounts and accounting policies was self explanatory and do not call for any further comment.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The company has not given any loans or guarantees or investments covered under the provisions of section 186 of the Companies Act, 2013 during the Financial Year 2022-23..

MATERIAL CHANGES

Except as stated below there have been no material changes and commitments, which affect the financial position of the company which have occurred between the end of the financial year to which the financial statements on Standalone and Consolidated basis relate and the date of this Report.

Company had filed Draft Prospectus of right issue equity shares with SME platform of BSE Limited on January12, 2023 and received In Principle approval on February 09, 2023.

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

The particulars as required under the provisions of Section 134(3) (m) of the Companies Act, 2013 in respect of conservation of energy and technology absorption have not been furnished considering the nature of activities undertaken by the company during the year under review and hence are not required to be given.

The Company has not entered into any technology transfer agreement and also there are no foreign currency earnings and outgo during the financial year.

DETAILS OF SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS, COURTS AND TRIBUNALS:

There are no significant and material orders passed by the Regulators/Courts, which would impact the going concern status of the Company and its future operations.

ADEQUACY OF INTERNAL FINANCIAL CONTROLS

Your Company has an effective internal financial control and risk-mitigation system, which are constantly assessed and strengthened with new/revised standard operating procedures which also covers adherence to the Company's Policies for safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of accounting records and timely preparation of reliable financial disclosures. The Company's internal financial control system is commensurate with its size, scale and complexities of its operations.

CORPORATE GOVERNANCE

The Company being listed on the Small and Medium Enterprise Platform is exempted from provisions of corporate governance as per Regulation 15 of Securities and Exchange Board of India (Listing Obligation and Disclosure Requirements) Regulation, 2015. Hence no corporate governance report is disclosed in this Annual Report. It is Pertinent to mention that the Company follows Majority of the provisions of the corporate governance voluntarily.

COST AUDITOR:

The company does not fall under the criteria specific in Section 148 of the Companies Act, 2013 and hence the provisions of cost auditor appointment and maintenance of cost records are not applicable.