GKB Ophthalmics Ltd Directors Report.

Dear Shareholders,

Your directors have great pleasure in presenting before you the 39th Annual Report of the Company together with the Audited Annual Financial Statements of the Company for the year ended March 31, 2021.

FINANCIAL RESULTS:

The Companys financial performance for the year under review along with the previous year figures is given hereunder:

Rs. in lakhs

2020-21 2019-20
Revenue from Operations & Other Income 2,467.91 2,694.54
Profit/Loss before Financial Charges, Depreciation & Taxation 276.23 65.21
Less: Finance Charges 133.72 135.04
Less: Depreciation 299.20 347.33
Less: Deferred Tax (18.01) 0.00
Profit/ (Loss) for the year (156.69) (417.17)
Other Comprehensive Income (Net of Taxes) (37.13) 9.98
Total Comprehensive Income for the year (247.92) (407.19)
Balance from previous years 680.26 1,087.45
Balance carried forward 432.34 680.26

OPERATIONS:

During the year under review, the turnover from operations of the Company declined to Rs. 2134.31 lakhs compared to Rs. 2556.17 lakhs in the previous financial year. However, the Company reported a net loss from operations of Rs. 247.92 lakhs only during the current financial year compared to a net loss of Rs. 407.19 lakhs incurred during the previous financial year. The Company is a manufacturer of the plastic lenses. The Companys business has been facing a stiff competition from China as Chinese are dumping lenses at a very lower price. The Company has made a representation to impose an Anti- Dumping Duty on the import of the plastic lenses into India and the said application with the Central Government is under review.

The spread of the Covid -19 pandemic all across the globe has affected the demand for plastic lenses. The shut-down of the plant operations during the first quarter of April 2020, in line with the State Governments Covid-19 guidelines, restrictions on the movement of required manpower and the disrupted supply-chain network resulted in lower production and accordingly lower sales for the year 2020-21. However, as the lenses are an essential commodity, the company is expecting that the demand for its products will be restored as soon as the second wave of the pandemic gets over.

DIVIDEND:

With the view to conserve the resources, your directors regret their inability to recommend any dividend for the year 2020-21. No amount has been transferred to reserve for the financial year ended March 31, 2021.

SHARE CAPITAL:

The paid-up equity share capital of the Company as on March 31, 2021, is Rs. 504.05 lakhs.

SUBSIDIARIES:

GKB Ophthalmics Products FZE, Sharjah, UAE is a Wholly Owned Subsidiary of the Company.

The Lens Company NJ, USA, is a Subsidiary of GKB Ophthalmics Products FZE and a Step-Down Subsidiary of the Company.

GSV Ophthalmics Private Limited is another Subsidiary of the Company, being set-up to produce Hi-Index Ophthalmic Lenses with SOMO Holdings and Technology Co., Ltd, Korea (JV Partner). The commissioning of this JV Project continues to face challenges in this tough and uncertain times on account of the ongoing pandemic. Due to the surge in Covid cases in April 2021 and May 2021 and the resultant restrictions, the structural work had slowed down for a certain period but has now again picked up. The Company and the JV Partner are waiting for the respective Governments to lift the international travel restrictions to depute the engineers on site to commence the essential training to be extended to the project supervisors/ engineers in South Korea. This will follow the import of the technological machinery by the Company.

A statement under Section 129(3) of the Companies Act, 2013, containing salient features of the financial statement and performance of subsidiaries in Form AOC-1, is annexed with the Consolidated Financial Statements. In terms of Section 136(1)(a) of the Companies Act, 2013, the Audited Accounts of the subsidiaries are placed on website of the Company at www.gkb.net. A copy of the audited financial statements in respect of each of the subsidiaries will be made available to interested shareholders, upon a written request. The audited accounts of the subsidiaries are also available at the Registered Office of the Company, for inspection, during business hours.

TRANSFERS TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

The Ministry of Corporate Affairs has set up the Investor Education and Protection Fund for promotion of investor awareness and protection of investor interests. In terms of Section 124 of the Companies Act, 2013 and the rules made thereunder, the dividends in respect of the shares of the Company which have remained unpaid or unclaimed for seven consecutive years or more, are required to be transferred to IEPF.

The Company has not declared any dividend since 2010-11. In one instance, an amount of Rs. 12,822, pertaining to FY 200910 which was lying in the Banks Stale Demand Draft account needs to be transferred to IEPF account as soon as the matter is sorted out with the Bank.

ACCREDITATION:

The Company has been accredited with ISO 9001:2015 by TUV SUD, South Asia Private Limited.

CHANGE IN PROMOTERS SHAREHOLDING:

The Company, on the request of Mr. Krishna Murari Gupta and family had reclassified Mr. Krishna Murari Gupta, Ms. Usha Gupta, Mr. Aditya Gupta and Mr. Vivek Gupta ("Krishna Murari Gupta and family") from the "Promoter Category" to the "Public Category" in the year 2018. However, in February 2021, the Company received a correspondence from BSE advising the Company to reinstate Mr. Krishna Murari Gupta and Family into the Promoter Category as the reclassification done by the company was not meeting certain stipulated criteria, i.e. out going Promoters were holding more than 10% of the paid up capital of the Company. Accordingly, the Board of Directors, after deliberations, approved the reinstatement of the shareholding of Krishna Murari Gupta and Family into the Promoter Category effective March 31, 2021. In view of the above, the Promoters Shareholding as on March 31, 2021 has gone up to 59.44% from 48.97% and Public shareholding has decreased to 40.56% from 51.03%.

CHANGE IN NATURE OF BUSINESS, IF ANY:

There has been no change in the nature of business of the Company during the year 2020-21.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Director retiring by rotation: -

Mr. K.G. Gupta will be retiring by rotation at the forthcoming AGM, pursuant to Articles of Association of the Company being eligible offers himself for re-appointment. Brief resume together with other relevant details of Mr. K.G. Gupta are given in Note no. 13 to the Notice for the ensuing Annual General Meeting.

Second term of Independent Directors: -

Mr. Anil Palekar and Mr. Joseph A.A. Dcosta have been re-appointed for a second consecutive term up to March 31, 2024 (4 years) and March 31, 2022 ( 2 years) respectively, as both of them will be attaining the age of 75 years on June 15, 2024 and November 02, 2022, respectively. Mr. Sadashiv Shet and Mrs. Shashi K.Katreddi have been re-appointed for a term of five years up to May 22, 2025 and March 31, 2025, respectively.

Key Managerial Personnel:-

Pursuant to provisions of Section 2 (51) and Section 203 of the Companies Act, 2013 read with Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the following are the Key Managerial Personnel (KMP) of the Company as on the date of this report:-

Sr. No. Name of the KMP Designation
1 Mr. K. G. Gupta Managing Director
2 Mr. Gurudas Sawant Chief Financial Officer
3 Ms. Pooja Bicholkar Company Secretary

SEPARATE MEETING OF THE INDEPENDENT DIRECTORS:

In terms of Section 149 (8) read with Schedule IV, of the Companies Act, 2013, the Independent Directors held a Meeting on March 24, 2021 without the attendance of Non-Independent Directors and members of Management. All the Independent Directors were present at the meeting. A familiarization programme for the Independent Directors was held on March 24, 2021. The details of the Familiarization programme are given in the Corporate Governance Report.

At this meeting, the Independent Directors:

1. Reviewed the performance of the Non-Independent Directors and the Board as a whole.

2. Reviewed the performance of Chairperson, taking into account the views of Executive Director and Non-Executive Directors.

3. Assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

INDEPENDENT DIRECTORS DECLARATION

The Independent Directors have submitted the Declaration of Independence, as required pursuant to Section 149 of the Companies Act, 2013 and provisions of the Listing Regulations, 2015, stating that they meet the criteria of independence, as provided therein. The Independent Directors have complied with the Code for Independent Directors prescribed in Schedule IV to the Act. Further, all Independent Directors on the Board of the Company have registered themselves under Independent Director database vide notification no. G.S.R. 804(E) dated 01st December, 2019, the Companies (Appointment and Qualification of Directors) Fifth Amendment Rules, 2019.

MEETINGS OF THE BOARD OF DIRECTORS:

During the year under review, seven Board Meetings were held. Further details are given in Corporate Governance Report, forming part of this Report. The maximum gap between two Board Meetings held during the year was not more than 120 days. However, the meetings held in February 2020 and July 2020 exceeded 120 days which is in compliance with the MCA Circular no. 11/2020 dated March 24, 2020 relaxing the gap between two consecutive meetings of the Board to 180 days instead of 120 days as required in the Companies Act, 2013.

AUDIT COMMITTEE:

The composition of the Audit Committee and other details are given in Corporate Governance Report, which is part of this report.

NOMINATION AND REMUNERATION COMMITTEE:

The Nomination and Remuneration Committee has formulated the criteria for determining qualifications, positive attributes and independence of a director, relating to remuneration for directors, key managerial personnel as provided under section 178(3) of the Companies Act, 2013 and Listing Regulations, 2015.

The Remuneration Policy is stated in the Corporate Governance Report which is part of this report. Further details have been disseminated on the Companys website www.gkb.net

PERFORMANCE EVALUATION:

The Board evaluated the performance of the Board as a whole, Committees of the Board and the performance of individual directors including the Chairman of the Board pursuant to Regulation 17(10) of the Listing Regulations. The performance of the Board, Committees and individual Directors was evaluated by the Board seeking inputs from all the Directors. The Independent Directors also carried out the performance evaluation in terms of Part VIII of Schedule IV of the Companies Act, 2013, in their meeting held on March 24, 2021.

The details of the Performance Evaluation carried out is provided in the Corporate Governance Report which is a part of this report.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to provision of Section 134 (5) of the Companies Act, 2013, the Board of Directors to the best of their knowledge and ability hereby state and confirm:

a) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

b) that they have selected such accounting policies and applied them consistently and made judgements 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 financial year and of the Profit and Loss of the Company for that period;

c) that they have 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

d) that they have prepared the annual accounts on a going concern basis;

e) that they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) that they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

AUDITORS:

Pursuant to provisions of Section 139 of the Companies Act, 2013 read with the Companies (Audit and Auditors) Rules, 2014, in the 36th Annual General Meeting held on August 27, 2018, M/s. MSKA & Associates, Chartered Accountants (FRN 105047 W) were appointed as Statutory Auditors of the Company for a term of five years at such remuneration and out of pocket expenses, as may be decided by the Board of Directors of the Company. The Statutory Auditor to hold the office till the conclusion of the Annual General Meeting to be held in the year 2022-23.

AUDITORS REPORT:

The Auditors Report is unmodified and there are no qualifications, reservations or adverse remarks or disclaimers.

In respect of the observation made by the Auditors in their report, the Boards response thereon is as follows:

(i) Paragraph 2 (g) (iii)

Regarding the observation made by the Auditors, the Company will be transferring the unpaid Dividend of Rs. 12, 822/-, pertaining to FY 2009-10 to IEPF account as soon as the matter is sorted out with the Bank.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS:

There is no significant or material order passed by any Regulators or Courts or Tribunals impacting the going concern status and Companys operations in future.

INTERNAL FINANCIAL CONTROL:

As per Section 134 (5) (e) of the Companies Act, 2013, read with Rule 8 (viii) of Companies (Accounts) Rules, 2014, the Board has laid the Internal Financial Control to be followed by the Company and that such Internal Financial Controls are adequate and are operating effectively. As per Section 143(3)(i) of the Companies Act, 2013, a report issued by M/s. MSKA & Associates, Statutory Auditors of the Company is attached with their Independent Auditors Report, which is self explanatory.

RISK MANAGEMENT POLICY:

The company has developed and implemented a Board approved Risk Management Policy that ensures appropriate management of risks which aligns with its internal systems and culture. Risk Management is the identification, assessment, and prioritization of risks followed by coordinated and economical application of resources to minimize, monitor, and control the probability and/or impact of uncertain events or to maximize the realization of opportunities.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186:

Particulars of loans, guarantees given and investments made during the year as required under Section 186 of the Companies Act, 2013 and Schedule V of the Listing Regulations are given in the notes to financial statements.

RELATED PARTY TRANSACTIONS:

All transactions entered into with related parties, pursuant to Section 188 of the Companies Act, 2013 and Regulation 23 of Listing Regulations, during the year were at arms length basis and in ordinary course of business. Therefore, disclosure in Form AOC-2, is not required.

The Company has formulated a policy on materiality of related party transactions and on dealing with related party transactions in terms of Regulation 23(1) of Listing Regulations. The Board of Directors of the Company has approved and adopted a policy on related party transactions and the same has been uploaded on Companys website (http://gkb.net/en/wp-content/uploads/Accounts/Related-partv-transactions-policv.pdf).

EXTRACT OF ANNUAL RETURN:

The extract of the Annual Return as provided under Section 92(3) of the Companies Act, 2013 and as prescribed in Form No. MGT-9 of the Companies ( Management and Administration) Rules, 2014, is set out in Annexure - I and the same is also placed on the website of the company at www.gkb.net.

CORPORATE GOVERNANCE:

A separate section on Corporate Governance practices followed by the Company, together with certificate from the Practising Company Secretary confirming compliance, Management Discussion and Analysis Report and Declaration regarding compliance of Code of Conduct by Board Members and Senior Management Personnel forms the part of this annual report.

SECRETARIAL AUDIT:

As per provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Audit Report submitted by Ms. Girija Nagvekar, Practising Company Secretary, for the financial year ended March 31, 2021, forming part of this Annual Report, is annexed herewith as Annexure - II. The Secretarial Audit Report is self-explanatory and requires no comments.

CORPORATE SOCIAL RESPONSIBILITY:

Provisions of Section 135 of the Companies Act, 2013, and Rules made thereunder, regarding Corporate Social Responsibility are not applicable to the Company.

INSURANCE:

The Company has taken adequate insurance covers for its properties and insurable interest.

FIXED DEPOSIT:

The Company has not accepted any deposits from the public during the year. No amount on account of principal or interest on public deposits was outstanding as on the date of the Balance Sheet.

PERSONNEL:

The relations between the employees and the management, during the year, have been cordial.

MATERIAL CHANGES AND COMMITMENTS :

There are no material changes and commitments, affecting the financial position of the company, which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of this report.

PARTICULARS UNDER SECTION 197(12) AND RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014:

(i) the ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year:

Name Ratio
Mr. K. G. Gupta, Managing Director 17.99:1
Mr. Subhash Redkar, Executive Director 4.54:1

(ii) (a) the percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company Secretary or Manager, if any, in the financial year:

Name Percentage
Mr. K. G. Gupta, Managing Director 1.3%
Mr. Subash Redkar, Executive Director 0.46%
Mr. Gurudas Sawant, Chief Financial Officer 8.00%
Ms.Pooja Bicholkar, Company Secretary 38.00%

(ii) (b) The Non-Executive Directors of the Company are entitled to sitting fees within the limits approved

by the Board of Directors and shareholders. The details of remuneration of Directors are provided in the Corporate Governance Report.

(iii) the percentage increase in the median remuneration of employees in the financial year: 13.03%

(iv) the number of permanent employees on the rolls of Company: 180

(v) average percentile increase already made in the salaries of employees other than the managerial personnel in the last financial year and its comparison with the percentile increase in the managerial remuneration and justification thereof and point out if there are any exceptional circumstances for increase in the managerial remuneration:

Average percentage increase (decrease) made in the salaries of employees other than the managerial personnel in the last financial year i.e 2020-21 is 13.61% whereas the increase (decrease) in the managerial remuneration for the same financial year was 1.1%

(vi) comparison of each remuneration of the Key Managerial against the performance of the Company:

The remuneration of the Managing Director was within the minimum remuneration as per Schedule V, Part II and Section II of the Companies Act, 2013.

(vii) the key parameters for any variable component of remuneration availed by the directors:

Mr. K. G. Gupta, Managing Director is entitled to commission not exceeding 1% of the net profit of the Company computed in the manner laid down under the Act as may be determined by the Board. In the absence of net profit, no commission was paid to him for the year under review.

Mr. Subhash Redkar, Executive Director, is entitled to remuneration as approved in his letter of appointment.

None of the other Directors are paid any remuneration except sitting fees and traveling expenses for attending Board and Committee Meetings.

(viii) the ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year: N.A.

(xi) affirmation that the remuneration is as per the remuneration policy of the Company:

The remuneration is as per the Remuneration Policy of the Company.

PARTICULARS OF EMPLOYEES:

None of the employees is covered under Section 197 of the Companies Act, 2013 read with Rule 5 of Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT:

As per Listing Regulations, Management Discussion and Analysis Report is attached to this report.

FINANCE:

Total Fund based exposure of the Company with the Banks was to the tune of Rs. 876.00 lakhs. Total Non-Fund based exposure of the Company with the Banks was to the tune of Rs. 560.00 lakhs. Additionally, the Company has availed credit facilities from State Bank of India under its "Common Covid Emergency Credit Line" (CCECL) to the tune of Rs. 50.00 lakhs and a credit facility of Rs. 120.00 lakhs under the " Guaranteed Emergency Credit Line" (GECL) scheme.

PUBLIC DEPOSITS

The Company has not accepted any deposits falling under the ambit of Section 73 of the Companies Act, 2013 from public and as such, no amount on account of principal or interest on deposits from public was outstanding as on 31st March 2021.

CREDIT RATING:

CRISIL Limited - the credit rating agency, has assigned the credit rating of "CRISIL B/Stable ( Re-affirmed)" to the long-term Bank facilities availed by the Company and credit rating of "CRISIL A4 ( Re-affirmed)" to the short-term Bank facilities availed by the Company.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has in place a Vigil Mechanism. It provides a channel to the employees to report to the management concerns about unethical behavior, actual or suspected fraud or violation of the code of conduct policy and the same has been posted on the Companys website www.gkb.net.

REPORTING OF FRAUD BY AUDITORS:

During the year under review, no offense involving fraud has been committed against the Company by its employees or officers of the Company in terms of Section 143(12) of the Companies Act, 2013.

DISCLOSURE UNDER THE SEXUAL HARRASMENT OF WOMEN AT WORKPLACE (Prevention, Prohibition and Redressal) Act, 2013.

The Company has in place an Anti-Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

During the year under review no complaints were received.

RESUME OF HEALTH & SAFETY PERFORMANCE OF THE FACTORY:

In terms of Section 90 B (5) (d) of the Goa Factories Rules, 1985, the Company has an Occupational Health, Safety and Environment Policy through which every employee is made responsible for the observance of the measures designed to prevent accidents, damage to property, occupational ill- health and avoidable environmental pollutants.

Safety & Health:- For the safe work environment , Hazard Identification & Risk Assessment workshops and training programme were conducted for the employees on First Aid procedure, Behavioral Safety, Occupational Safety, Health & Environment, etc., with a view to equip them to recognize the hazards and risks associated with a given task and take preemptive action. Also, the Annual event via Safety Week Celebration, besides statutory requirements under Factories Act, a seminar was conducted on the topic, "Industrial Hygiene for the Production Engineers." Another seminar, "Accident Prevention on Shop-floor" and "Manual Material Handling and Ergonomics" was organized for the employees .

Audit - Occupational Safety & Health Audit, and Internal Electrical Safety Audit was conducted to assess potential fire hazards in the factory set-up and to provide assurance on the implementation and effectiveness of these system and processes. The company has organized Eye-testing for employees engaged in Quality Control operations during the year.

Environment: - The Company has been focusing on achieving environmental standards with "Go Green" philosophy. The Company is certified with ISO 9001:2015 standard of TUV Certifying body. The company has continued its efforts for water and energy conservation. Licenses under Pollution Control Board are periodically renewed under Air, Water and Hazard Waste Management. The process of Solid waste management disposal is done on regular basis through Mumbai Waste Management Ltd., Taloja in Maharashtra.

Measure to fight against COVID-19: - The Company is adhering to all the guidelines and safety protocols provided by the Ministry of Home Affairs together with the directives issued by the State Government which includes temperature sensing, wearing face masks, sanitizing and washing hands in the factory and office premises to safeguard the well-being of its employees and other stakeholders from spread of Covid-19 pandemic. All Social distancing norms are being followed in the factory and the administrative office.

OTHER DISCLOSURES:-

1) The consolidated financial statement is also being presented in addition to the standalone financial statement of the company.

2) The maintenance of cost records is not applicable to the Company as per the amended Companies (Cost Records and Audit) Rules, 2014, prescribed by the Central Government under Section 148(1) of the Companies Act, 2013.

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

Particulars required to be disclosed under the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of Companies (Accounts) Rules, 2014 are annexed herewith as Annexure - III and forms an integral part of this report.

ACKNOWLEDGEMENT:

Your Directors wish to acknowledge and are grateful for the excellent support received from all levels, customers, vendors, regulatory authorities, bankers, shareholders and all other stakeholders. Your Directors recognize and appreciate the hard work and efforts put in by all the employees of the Company and their contribution to the progress of the Company in a very challenging environment.

For and on behalf of the Board of Directors
K. G. Gupta
Place : Mapusa - Goa. Chairman and Managing Director
Date : June 10, 2021 DIN : 00051863