Neo Corp International Ltd Directors Report

To The Members

M/s Neo Corp International Limited

Dear Shareholders

Your Directors are delighted to present the 31 Annual Report of your Company along with the audited statements for the year ended on 31st March 2016.

PERFORMANCE HIGHLIGHTS

The financial results for the year ended on 31.03.2016 are as under:

PARTICULARS	2015-16	2014-15
Gross Income	66888.74	74391.06
Profit before Interest, Depreciaon and Tax	(3714.26)	8598.69
Less :
1) Interest	5035.95	4298.73
2) Depreciaon	2028.74	807.93
3) Provision for Tax
- Current Tax	--	990.00
- Income Tax (earlier years)	235.45	(605.42)
- Deferred Tax	(784.10)	86.48
4) Prior Period adjustments
Profit a er Tax	(10230.30)	3020.98
Appropriaon
Transfer to General Reserve	--	25.00
Proposed dividend and tax on prop. Dividend	--	--
Earning per equity share	--	7.95

RESULT OF OPERATIONS AND THE STATE OF COMPANYS AFFAIRS

During the year under review, your Company has recorded a turnover of Rs. 668.88 Crores as against Rs. 743.92 Crores in the previous year registering an decrease of 10.08%. The Net loss (a er tax and extra ordinary items) for the financial year ended 31st March 2016 recorded to Rs. 102.30 Crores against Profit of Rs. 30.20 Crores in the previous year.

The year under review was highly volale for the Company and it witnessed extreme pressure both on top as well as bo om lines. The company had strategically planned to reduce and nally move out from the low margin products. The down trend and extreme volality in the polymer prices had also put pressure on the margins. The bo om line was also a ected on account of devaluaon in the inventory to the extent of nearly 20%. It has put pressure on the pro tability of your company too during the year under review.

MATERIAL CHANGES & COMMITMENTS AFTER THE END OF FY 15-16, IF ANY AFFECTING THE FINANCIAL POSITION OF THE COMPANY:

The loan account of the Company has been classi ed under substandard category by the lead bank State Bank of India, Overseas Branch, Mumbai, whereas other consorum banks connue with present status of account.

BUSINESS OVERVIEW

The technical texles sector being one of the most innovav e branches of the industry in the world is ranking as one the ve high tech sectors with the greatest potenal for development. India is now emerging as a powerhouse of both producon as well as end-use consumpon of technical texles. The demand for technical texles will be boosted by the changing economic scenario. The success of technical texles is primarily due to the creavity , innova on and versa lity in bres, yarns and woven/knie d/ nonwoven fabrics with applicaons spanning an enormous range of uses. The ability of technical texles to combine with each other and with others to create a new funconal products o er unlimited opportunity to growth. The producon of di erent items of technical texle industry has been slowly but steadily increasing in the country which is further contribung in the growth of the industry as a whole.

Global Scenario:

Technical Texle is the sunrise segment of the global Texle industry. With increasing compe on and diminishing margins in the produc on of conven onal tex les, tex le manufacturers in industrialized countries have switched over to producon of value-added technical texles. As the use of technical texles is dictated by need, its pricing normally o ers good margins. The Technical Texle industry is esma ted to account for over 50% of the total texle acvity in certain industrialized countries. While the US connues to be the main manufacturers and consumers of funconal texles, China has emerged as a large manufacturer of the same. India and Russia are the other important markets for technical texles, where consumpon is increasing at a fast pace.

The Indian Scenario:

India is emerging as a significant player in technical texles. The fast-paced economic growth leading to infrastructure creaon as well as higher disposable income has made India a key market for the technical texle products. Moreover, the country has developed a foothold in the producon of technical texles. Considering its highly skilled and scien c/t echnical manpower and abundant availability of raw materials, India can emerge as a key player in the technical texles industry. India Texle Industry involves around 35 million workers directly and accounts for 21% of the total employment generated in the economy, the second largest provider of employment a er agriculture. Thus, Technical texles holds significant potenal in India and the government has already taken steps to promote this industry. Indian technical texle market is nascent and is quite honestly depending on governments push and mandatory regulaons to penetrate into di erent sectors. The strong interest in the segment is driven by be er Profit margins and less compeon.

DIVIDEND:

In view of the losses, your Directors express their inability to recommend any dividend for the year 2015-16.

AMOUNT TRASNFERED TO RESERVE: In view of the losses, your Directors express their inability to propose transfer of any amount to reserves.

SHARE CAPITAL

The paid up Equity Share Capital of the Company as at March 31, 2016 stood at Rs. 38,02,21,980. During the year under review, the Company has not issued any shares with di erenal vong rights nor has granted any stock opons or sweat equity and not issued any warrants/GDR/ADR. As on March 31, 2016, none of the Directors of the Company holds instruments converble into equity shares of the Company.

CONSOLIDATED ACCOUNTS

The consolidated financial statements of your Company for the financial year 2015-16, are prepared in compliance with applicable provisions of the Companies Act, 2013, Accounng Standards and SEBI(LODR) Regulaons 2015. The consolidated financial statements have been prepared on the basis of audited financial statements of the Company, its subsidiary, as approved by their respective Board of Directors.

SUBSIDIARY ASSOCIATE AND JOINT VENTURE COMPANY

The consolidated financial results reffect the operaons of the following subsidiaries: Europlast Limited, Sacos Indigo Private limited, Neo ex Infracon Limited, Poly Logic International Private Limited, Prism Flexible Soluons Private Limited and Polybase (H.K.) Limited. All these subsidiaries connue to work closely with the customers and grow their business with product o erings relevant to their respective markets. During the year, the operang subsidiaries were Europlast Limited, Neo ex Infracon Limited, Sacos Indigo Private limited, and Poly Logic International Priv ate Limited. The subsidiary Polybase (H.K.) Limited and M/s Prism Flexible Soluons Private Limited has not commenced commercial ac vi es since incorporaon and currently is not operaonal. The annual accounts of the subsidiaries and the related detailed informaon will be kept open for inspecon at the Registered Office of the Company and that of the respective subsidiary companies. The company will furnish a hard copy of details of accounts of subsidiaries to any shareholder on demand.

A statement containing the salient features of the performance and financial posion of the each of the subsidiary companies is set out in the prescribed Form AOC.1 a ached to the financial statements. There is no associate companies/Joint Venture within the meaning of secon 2(6) of the Companies Act, 2013. There has been no material change in the nature of the business of the subsidiary company.

DEPOSITS

During the year under review, your Company did not accept any deposits within the earning of provisions of Chapter V Acceptance of Deposits by Companies of the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

At the ensuing Annual General Meeting , Mr. Utkarsh Trivedi, Director of the Company, rer es by rotaon and being eligible o ers himself for re-appointment. The Independent Directors of the Company have declared that they meet the criteria of Independence in terms of Secon 149(6) of the Companies Act, 2013 and that there is no change in their status of Independence. None of the Independent Directors are due for reappointment.

During the year under review, Mr. Pradhuman Sharma, resigned

from the post of Whole Time Director in the Board meeting held on 15 December 2015. Mrs. Shobha Dubey, Independent Director resigned from the post of director and Mrs. Bhadrabala Trivedi was appointed as addional director her place in the Board Meeting held on 15 March 2016.

Mrs. Kiran Phulpagar has been appointed as an addional director

(non-Executive independent) and Mrs. Bhadrabala Trivedi has resigned from the post of director in the Board meeting held on 13 August 2016.

In the Board meeting held on 30th May 2015 Ms. Jyo Dubey resigned from the post of Chief financial Officer (CFO) of the Company and Mr. Utkarsh Trivedi, Executive Director of the Company was appointed and CFO w.e.f. 1st June 2016. Further Ms. Swa Gangrade resigned from the post of Company Secretary and Ms. Ankita Gupta was appointed as Company Secretary and Compliance Officer in the Board Meeting held on 15th March 2016. Mr. Utkarash Trivedi and Ms. Ankita Gupta were designated as "Key Managerial Personnel" of the Company pursuant to Secons 2(51) and 203 of the Companies Act, 2013 read with the Companies (Appointment and Remunera on of Managerial Personnel) Rules, 2014.

DISQUALIFICATIONS OF DIRECTORS

During the year under review, declaration s received from all the Directors of the Company pursuant to Secon 164 of the Companies Act, 2013. The Board appraised the same and found that none of the director is disquali ed for holding Office as director as per the provisions of the Companies Act, 2013.

DIRECTORS RESPONSIBILITY STATEMENT

In terms of secon 134(3) (C) of the Companies Act, 2013, your Directors state that: a) in the preparaon of the annual accounts for the year ended March 31, 2016, the applicable accounng standards read with requirements set out under Schedule III to the Act, have been followed and there are no material departures from the same; b) the Directors have selected such accounng 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 a airs of the Company as at March 31, 2016 and of the Profit of the Company for the year ended on that date; c) the Directors have taken proper and su cient care for the maintenance of adequate accounng records in accordance with the provisions of the Act for safeguarding the assets of the Company and for prevenng and detecng fraud and other irregularies; d) the Directors have prepared the annual accounts on a ‘going concern basis; e) the Directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and are operang effetively ; and f ) the Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operang effetively .

BOARD MEETINGS AND ANNUAL GENERAL MEETING

During the financial year, meeting of the Board of the Directors of the Company were held thirteen mes. The gap between two meeting s did not exceed one hundred and twenty days. Further Annual General Meeting was held on 30th September, 2015. Detailed informaon on the meeting s of the Board, its Commitee and the AGM is included in the Report on Corporate Governance, which forms part of this Annual Report.

COMMITTEES OF THE BOARD OF DIRECTORS

The Company has various Commities which have been constut ed as a part of the good corporate governance pracces and the same are in compliance with the requirements of the relevant provisions of applicable laws and statutes. The Commities of the Board are: (i) Audit Commitee (ii) Nominaon and Remuneraon Commitee (iii) Stakeholders Relation ship Commitee (iv) CSR Commitee (v) Management Commitee The details with respect to the composion, powers, roles, terms of reference, meeting s held and Attendance of the Directors at such Meeting s of the relevant Commities are given in detail in the Report on Corporate Governance of the Company which forms part of this Annual Report.

EVALUATION OF BOARD EFFECTIVENESS

Pursuant to the provisions of the Companies Act, 2013 and Regulaon 17 of the SEBI(LODR) Regulaons 2015, the Board has carried out an annual performance evalua on of its own performance, and of the directors individually, as well as the evaluaon of the working of its Audit, Nominaon & Remuneraon and Compliance Commities . The result of the evalua on is sa sfactory and adequate and meets the requirement of the Company.

RELATED PARTIES TRANSACTIONS

All transactions entered by the Company during the financial year with related pares w ere in the ordinary course of business and on an arms length basis and that the provisions of secon 188 of Companies Act, 2013 are not ar acted. During the year under review, there are no material related party transactions . All related party transactions are placed before the Audit Commitee as also to the Board for approval. The policy on Related Party Transactions has been approved by the Board of Directors. Details of contracts / arrangements / transactions with related pares are given in the Note 29 to the Standalone financial Statements.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Amount outstanding as at 31 March 2016

	Rs. In Lacs
Particulars	Amount
Loans given	Nil
Guarantee given	22616.00
Investment made	8776.51

 

Name of Enty	Relation	Amount	Loan/guarantee/ investment	Purpose
Poly Logic International Private Limited	Subsidiary	600.00	Guarantee given	For availing credit facilities from Canbank Factors Ltd.

EXTRACT OF ANNUAL RETURN

In accordance with Secon 134(3)(a) and Secon 92(3) of the Companies Act, 2013, An extract of Annual Return in Form MGT-9 as on March 31, 2016 is a ached as Annexure-1 to this Report.

VIGIL MECHANISM /WHISTLE BLOWER POLICY

The Company has a vigil mechanism to deal with instance of fraud and mismanagement, if any. The details of the Vigil Mechanism Policy is explained in the ‘Corporate Governance Report which and forms part of this Report and also displayed on the website of the Company (www.neocorp.co.in).

REMUNERATION POLICY OF THE COMPANY

The Board has, on the recommenda on of the Nomination & Remunera on Commitee framed a policy for selec on and appointment of Directors, Key Managerial Personnel and Senior Execu ves of the Company including criteria for determining quali ca ons, posi ve a ributes, independence of a Director, remuneraon and other related ma ers. Details of policy covering these requirement has disclosed in Corporate Governance Report.

PARTICULARS OF EMPLOYEES

None of the employee of the company is drawing more than Rs. 1,02,00,000/- per annum or Rs. 8,50,000/- per month for the part of the year, during the year under review therefore Particulars of the employees as required under Secon 197 of Companies Act, 2013 read with rule 5 (2) & rule 5 (3) of Companies (appointment and remuneraon of Managerial Personnel) Amendment Rules, 2016 are not applicable, during the year under review.

Statement pursuant to Secon 197(12) of the Companies Act 2013 and rule 5(1) and 5(2) of the Companies (Appointment and Remuneraon of Managerial Personnel) Amendment Rules, 2016, forms part of this report as Annexure 4. However, pursuant to rst proviso to Secon 136(1) of the Act, this Report is being sent to the Shareholders excluding the aforesaid informa on. Any shareholder interested in obtaining said informaon, may write to the Company Secretary at the Registered Office / Corporate Office of the Company and the said informaon is available for inspecon at the Registered Office of the Company.

CORPORATE SOCIAL RESPONSIBILITY (CSR) INITIATIVES

Pursuant to Secon 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Board of Directors have approved a Policy on CSR and the Policy is hosted on the website of the Company www.neocorp.co.in.

As a part of CSR inia v es, Your Company during the financial year 2015-16 has amongst other acvies, undertaken projects in areas of promo ng educa on, preven ve health care, empowering women and measures for welfare of other backward class. These projects are in accordance with Schedule VII of the Companies Act, 2013. The Company has undertaken CSR ac vi es through registered trust or registered society and other permissible enes by giving dona ons and contribu ons to various permi ed entities . The Company has also undertaken CSR ini a ves on its own and has started with the play-group and nursery ‘ShishuVihar" nearby factory premises at Pithampur for pfloor children educa on at free of cost.

The Company formed a Corporate Social Responsibility Commitee to implement and monitor the CSR policy. A lot of acvies were taken up and implemented during the year, Particulars of which are given in this report. However, some of the projects envisaged could not take during the year. Hence there is a shor all in CSR amount spent compared to the amount prescribed to be spent.

The report on CSR acvies is a ached as Annexure-2 to this Report.

RISK AND AREAS OF CONCERN

The Company has laid down a well-defined risk management mechanism covering the risk mapping and trend analysis, risk exposure, potenal impact and risk mig aon process. The Board periodically reviews the risks and suggests steps to be taken to control and mi gate the same through a properly defined framework. Details on the risk elements which the Company is exposed to are covered in the Management Discussion and Analysis Report which forms part of this Report. In line with the new regulatory requirements, the Company has formally framed a Risk Management Policy to idenfy and assess the key risk areas, monitor and report compliance and e ec veness of the policy and procedure.

STATEMENT IN RESPECT OF ADEQUACY OF INTERNAL FINANCIAL CONTROL WITH REFERENCE TO THE FINANCIAL STATEMENTS

The company has an e ecv e internal control and risk mig aon system, which are constantly assessed and strengthened with new or revised standard operang procedures. The companys internal control system is commensurate with its size, scale and complexies of its operaons. The details are menoned in the Management Discussion and Analysis Report which forms part of this Report.

PREVENTION OF SEXUAL HARASSMENT AT WORKPLACE

The Company has been employing women employees in various cadres within its Office and factory premises. The Company has in place a policy against Sexual Harassment in line with the requirements of the Sexual Harassment of Women at Workplace (Preven on, Prohibi on and Redressal) Act, 2013. It ensures prevention and deterrence towards the commissioning of acts of sexual harassment and communicates procedures for their resoluon and selemen t.

Internal Complaint Commities are set up at shop floor level to redress any complaints received and are monitored by women line supervisors. All employees are covered under the policy. There was no complaint received from any employee during the financial year 2015-16 and hence no complaint is outstanding as on 31.03.2016 for redressal.

INSURANCE CLAIM

A re broke out in TECHTEXTIL, the EOU division of NCIL situated at Pithampur, on 27th February at midnight, 2010 bringing a loss to plant, machinery, stock in process and nished stock. The inferno which caused damaged was insured under various policies taken from United India Insurance Company Limited and Oriental Insurance Company Limited. The total claim launched was to the tune of INR 52.05 crores. The company has received the claim of INR 39.43 Crores during the earlier years. The company has led arbitraon against the assessment of claim of Rs. 4.88 Crores. The Company is hopeful to receive the said amount.

AUDITORS

Pursuant to the provisions of secon 139 of the Companies Act, 2013 M/s. A.P. Garg & Co., Chartered Accountants (Firm Registraon No. 002143C) statutory auditors of the company were appointed as auditor to hold Office up to the conclusion of 30th Annual General Meeting of the company and are recommended for re-appointment to audit the accounts of the company up to the conclusion of 34th AGM of the Company to be held in year 2019, subject to ra c aon of their appointment by members at every AGM held therea er. A resoluon for ra c aon for appointment of M/s. A.P. Garg & Co., Chartered Accountants, as auditors ll the conclusion of the 34th AGM and for xaon of their remuneraon for the year 2016 17 is being proposed in the noce of the ensuing AGM for the approval of the members. The Company has received from M/s. A.P. Garg & Co., Chartered Accountant a wri en consent for ra c aon of their appointment from the conclusion of the 31st AGM ll the conclusion of the 34th AGM and a cer cate to the effect that their appointment shall be in accordance with the prescribed condions and that the rm is not disquali ed under the Companies Act, 2013.

SECRETARIAL AUDIT

Pursuant to Secon 204 of the Companies Act, 2013 the Board of Directors had appointed M/s. Ashish Karodia & Co., Praccing Company Secretary (C. P. No. 6375) as Secretarial Auditor to undertake the Secretarial Audit of the Company for the FY 2015-16. The report of the Secretarial Auditor is annexed herewith as Annexure 3 and forms part of this Report.

AUDITORS REPORT/SECRETARIAL AUDIT REPORT:

Report of the auditors and their observaons and notes to the accounts of the company for the year under review are a ached herewith which are self-explanatory and do not require further explanaon.

Further there was no fraud in the Company, which was required to report by statutory auditors of the Company under sub-secon (12) of secon 143 of Companies Act, 2013.

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

The informaon on conservaon of energy, technology absorpon and foreign exchange earnings and outgo spula ted under Secon 134(3)(m) of the Companies Act, 2013 read with Rule, 8 of The Companies (Accounts) Rules is given below:

A. CONSERVATION OF ENERGY

(i) the steps taken for conservaon of energy:

Energy conservaon dictates how e ciently a company can conduct its operaons. The Company connued its conscious e orts to minimize energy consumpon and more and more innova ons and improvements were introduced to further reduce the energy consumpon. We have installed following equipments in factory premises for controlling the power conservaon: (a) MD Controller which controls the contract demand, and

(b) Power Factor Controller which is used for maximum uliz aon of power.

(ii) the capital investment on energy conserva on equipments during the year: Nil

B. TECHNOLOGY ABSORPTION, ADAPTATION AND INNOVATION

Government Recognized R & D Centers

NCIL has set its own R & D Centre which is recognized by Department of Science and Industrial Research under Ministry of Science and Technology. R & D Centre is equipped with all necessary tesng equipments and competent sciens ts to conduct R&D acvies. To help Neo Corp International Limited in its pursuit to excel in the field of Technical Texles and broaden the product range, R&D center has developed many new products in various segments of Technical Texles. In past years R&D Center of NCIL has recruited competent sciens ts also the thrust was on enhancing the competencies of scien sts for which many training sessions were organized by internal and external facules on various technical topics.

VISSION

Conforming to the vision of NCIL; the R&D center envisions assisng NCIL, its stake holders, technical texles community and society at large to live happier and healthier lives and raise NCIL pro le to the zenith of top most manufactures of technical tex le through relentless R&D acvies.

MISSION

The mission of R&D center is

• To discover new materials, processes and technologies to deliver products, services and soluons to the complete sas facon of end users.

• To establish a tesng laboratory with state of the all tesng facilies for technical texles.

• To develop R&D center as a knowledge hub facilitang shirring of technical knowledge in the field of technical texles in the country.

• To develop a team of technically pro cient sciens ts.

Expenditure on R & D during FY 2015-16: NIL

C. FOREIGN EXCHANGE EARNING AND OUTGO

The company has earned foreign exchange of Rs. 12964.32 lacs during the year.

The details of foreign exchange outgo are as follflows :

Material import	Rs. 1308.76 lacs
Stores & spares	Rs. Nil
Capital goods	Rs. Nil
Expenditure in foreign currency	: Rs. 15.71 lacs

CORPORATE GOVERNANCE

Your Company has complied with the Corporate Governance requirements as per the Schedule V of the SEBI (Lisng Obligaon and Disclosure Requirements) Regulaons 2015. A separate report on Corporate Governance along with a Certificate of Compliance from Praccing Company Secretary forms a part of this Annual Report.

LISTING OF THE SHARES

The shares of the Company are listed on the Bombay Stock Exchange Limited and Luxembourg Stock Exchange.

CODE OF CONDUCT

The Company has laid down a code of conduct for all Board members and senior management and independent directors of the Company. All the Board members including independent directors and senior management personnel have a rmed compliance with the code of conduct. The policy on Code of Conduct has been uploaded on the Companys website at the www.neocorp.co.in

REPORT ON MANAGEMENT AND DISCUSSION ANALYSIS

A detailed analysis of the Companys performance is discussed in the Management Discussion and Analysis Report, which forms part of this Annual Report.

ACKNOWLEDGEMENT

Your Directors provide their gratude to the various Government Agencies, Banks and financial instuons, investors, Companys business associates, customers, dealers, suppliers and other service providers for their connued support. Your Directors place on record their sincere apprecia on of the contribu ons made by the employees of the Company and its subsidiaries at all level through their hard work, dedicaon and support in ensuring an e xcellent all around operaonal performance. The Board is also deeply grateful to the shareholders for the con dence and faith that has been reposed in them. Driven by values and powered by internal vitality, the enrich "NCIL Group" stands commited to create an even brighter future for all the stakeholders.

Date: 3 rd September 2016	For and on behalf of the Board of Directors
Place: Indore
	SUNIL K. TRIVEDI
	CHAIRMAN & MANAGING DIRECTOR
	DIN 00053000