Novopan Industries Ltd Directors Report

Dear Shareholders,

Your Directors have pleasure in presenting the Thirty Third Annual Report and Audited Accounts of your Company, together with the Schedules and Notes thereon, for the Financial Year ended 31^st March, 2018.

FINANCIAL RESULTS:

(Rs. in Crores)

Particulars	2017-18	2016-17
Net Turnover	-	-
Gross Operating Profit (Loss)	(1.39)	1.29
Less: Interest	-	-
Profit (Loss) Before Dep. & Tax	(1.39)	1.29
Less: Depreciation	0.05	0.05
Profit/(Loss)Before Extraordinary item	(1.44)	1.24
Profit/ (Loss) Before Tax	(1.44)	1.24
Prov for Taxes of earlier years	-	0.02
Profit (Loss) After Tax	(1.44)	1.22

PERFORMANCE:

As the entire operations of the company has been stopped at all its manufacturing units, there was no revenue from manufacturing activities during the financial year ended 31^st March, 2018. Net loss for the year is Rs. 1.44 Crores, as compared to net profit of Rs.1.22 Crores earned during the previous year.

OPERATIONS

In line with the Committees recommendations and decision of the company for the disposal of Plant & Machineries, the Company has obtained the approval from its members and has already disposed of its machineries at all three plants.

DE-LISTING OF EQUITY SHARES OF THE COMPANY

As the members of the company are aware GVK Projects & Technical Services Limited, promoter of the company (The Acquirer) had made an offer to the public shareholders of the Company for the acquisition and voluntary delisting of fully paid-up equity shares of Rs.10/- each ("Shares") of the Company in accordance with the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009 and in accordance with SEBI Delisting Regulations, the Acquirer fixed the exit price at Rs.40/- per Share ("Final Price") calculated by the reverse book building process using the electronic facility of the BSE.

Accordingly, your company had paid final price fixed to the shareholders those who have opted for exit offer process thereby the promoter groups holding in the company increased to 92.05% of equity share capital of the company (which is presently 98.11%). Further, w.e.f. 10^th November, 2014 the shares are discontinued for trading from the both the listed Stock Exchanges i.e., BSE Ltd and National Stock Exchange of India Ltd.

In accordance with Regulation 21 of the SEBI Delisting Regulations, the Acquirer has provided an exit opportunity (Exit Offer) to the public shareholders who continue to hold shares in the company (Residual Shareholders). The Residual Shareholders of the company could tender their shares to the Acquirer at the Final Price of Rs.40/- per share at any time from November 10, 2014 to till November 9, 2015 (Exit Period), as per the terms and conditions set out in the exit offer letter for the exit offer sent to the Residual Shareholders by the Acquirer.

Promoters are still providing an option to shareholders to exit. If any shareholder is interested in selling / disposing / transferring his/her shares may approach to the Company in writing.

BOARD / COMMITTEE & GENERAL MEETINGS:

A calendar of Meetings is prepared and circulated in advance to the Directors.

During the year, the Board of Directors of the Company met four times on 06-05-2017, 27-07-2017, 24-10-2017 & 22-01-2018. The intervening gap between the two consecutive Meetings was within the time gap of 120 days as prescribed under section 173(1) of the Companies Act, 2013.

Attendance of the Board of Directors:

Name of the Director	Category	Attendance particulars
		Board Meeting	Last AGM
Dr. P Krishnam Raju	Independent Director	4	Yes
Syed Ali Naqui	Director	4	Yes
Murali Varadarajan	Executive Director	4	Yes
Illyas Ghouse	Director	4	Yes
Issac George Anicattu*	Director	2	No

*Vacation of office under section 164(2) w.e.f. 29.09.2017

DIRECTORS AND KEY MANAGERIAL PERSONNEL (KMP) :

In accordance with the provisions of the Companies Act, 2013 and the Articles of Association of the Company, Mr. Syed Ali Naqui will be retiring by rotation at the ensuring Annual General Meeting and being eligible offer himself for re-appointment.

Mr. A Issac George has vacated office of Director of the company under section 164(2) of the Companies Act, 2013 with effect from 29^th September, 2017.

DIRECTORS RESPONSIBILITY STATEMENT:

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

a) the preparation of the annual accounts for the financial year ended 31^st March, 2018, the applicable accounting standards had been followed along with proper explanation relating to material departures;

b) the Directors had selected such accounting policies and applied them consistently and made judgments 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 the financial year and of the profit or loss of the Company for the financial year ended 31^st March, 2018; c) the Directors took proper and sufficient care to maintain 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) the Directors prepared the annual accounts for the financial year ended 31^st March, 2018, on a going concern basis.

Evaluation of Boards Performance:

Pursuant to the provisions of the Companies Act, 2013, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit, Nomination & Remuneration Committee.

The performance evaluation of the Board was carried out during the year under review. A structured questionnaire was prepared after taking into consideration inputs received from the Directors, covering various aspects of the Boards functioning such as adequacy of the composition of the Board and its Committee, Board culture execution and performance of specific duties, obligations and governance.

Remuneration Policy:

The Board on recommendation of the Nomination & Remuneration Committee framed a policy at group level for selection and appointment of Directors, Senior Management and their remuneration.

As per the provisions of the company, the Independent Directors of the Company shall not be entitled to participate in the Stock Option Scheme of the company, if any introduced by the Company in future.

Board Committees:

Audit Committee

The Audit Committee acts as a link between the statutory and internal auditors and the Board of Directors. Its purpose is to assist the Board in fulfilling its oversight responsibilities of monitoring financial reporting process, reviewing the Companys established system and processes for internal financial controls, governance and reviewing the Companys Statutory and internal audit activities.

Nomination & Remuneration Committee

In compliance with Section 178 of the Companies Act, 2013, the Board has renamed the existing "Remuneration Committee" as "Nomination & Remuneration Committee".

The Chairman of the Board of Directors informed that some of the Directors had already relinquished the right of drawing sitting fees as the company has closed its operations during 2010. Considering the financial health of the company the Nomination and Remuneration Committee has recommended that no sitting fees will be paid to Directors and its subcommittee members of the Board and the same is agreed unanimously by the Board of Directors.

NOMINATION AND REMUNERATION POLICY

The objectives of the Policy

1) To lay down criteria and terms and conditions with regard to identifying persons who are qualified to become Directors (Executive and Non-Executive) and persons who may be appointed in Senior Management and Key Managerial positions and to determine their remuneration.

2) To determine remuneration based on the Companys size and financial position and trends and practices on remuneration prevailing in peer Companies.

3) To carry our evaluation of the performance of Directors,

4) To provide them reward linked directly to their effort, performance, dedication and achievement relating to the Companys operations.

To retain, motivate and promote talent and to ensure long term sustainability of talented managerial persons and create competitive advantage.

STATEMENT ON DECLARATION GIVEN BY INDEPENDENT DIRECTORS UNDER SUB SECTION 6 OF SECTION 149

The Independent Directors have submitted the declaration of independence, as required pursuant to section 149(6) of the Companies Act, 2013 stating that they meet the criteria of independence as provided in sub section 6.

Nomination and Remuneration Committee consists of the following directors namely Dr. P Krishnam Raju, Chairman, Mr. Syed Ali Naqui & Mr. Illyas Ghouse, Members of the Committee.

Brief description of terms of reference:

• Identifying persons who are qualified to become directors and

• Identifying persons who may be appointed as Key Managerial Person, senior management in accordance with the criteria laid down and recommend to the Board for their appointment and removal;

• Carry on the evaluation of every directors performance;

• Formulation of the criteria for determining qualifications, positive attributes and independence of a director;

• Recommend to the Board a policy relating to the remuneration of the directors, key managerial personnel and other employees;

• Formulation of criteria for evaluation of Independent Directors and the Board;

• Devising a policy on Board diversity; and

• Any other matter as the Board may decide from time to time.

The Brief Policy for Selection of Directors and determining Directors independence is annexed to this report.

RELATED PARTY TRANSACTIONS:

There were no related party transactions during the financial year. There are also no materially significant related party transactions made by the company with promoters, Directors, Key Managerial Personnel or other designated persons which may have a potential conflict with the interest of the Company at large.

All Related Party Transactions if any, are placed before the Audit Committee and also Board for approval. Prior omnibus approval of the Members/Board/Audit Committee is obtained on regular /need basis for the transactions which are of a foreseen and repetitive nature.

None of the Directors has any pecuniary relationship or transactions vis--vis the Company.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS:

The Company has not granted any loans or made any investments, or provided any guarantees or securities to the parties covered under Section 185 and 186 of the Act.

DIVIDEND:

In view of closure of operations and losses incurred during the financial year 2017-18, no dividend is recommended by the Board of Directors.

FIXED DEPOSITS:

During the year under review, your company has neither invited nor accepted any deposits from the public.

STATUTORY AUDITORS:

M/s K S Rao & Co., Statutory Auditors was appointed on 29^th September, 2017 by the Shareholders of the company for a term of 5 years i.e., from the conclusion of 32^nd AGM until the conclusion of 37^th Annual General Meeting.

In light of Companies (Amendment) Act, 2017 provision relating to appointment of Statutory Auditors under Section 139 (notified on 7^th May, 2018), the ratification of appointment of Auditors at each AGM has been omitted. Hence the appointment continues without need of ratification at each Annual General Meeting.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS:

During the period under review, there are no significant material orders passed by the Regulators/Courts/ Tribunals which would impact the going concern status of the company and its future operations.

SUBSIDIARY / ASSOCIATE COMPANIES:

During the year under review, no company has become/ceased as subsidiary/associate to the company.

PARTICULARS OF EMPLOYEES:

During the period under review, there were no such employees whose particulars are required to be given under the provisions of the Companies Act, 2013.

DISCLSOURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013:

The Company has a policy of prevention of sexual harassment of women at workplace at group level, which intends to provide protection against harassment of women at workplace and protection and redressal of sexual harassment and matters related to it. An internal committee has been set up at the group level to redress complaints received regarding sexual harassment. The Company has not received any complaints as there were no employees during the period under review.

DISCLOSURE OF INFORMATION AS REQUIRED UNDER SECTION 148 READ WITH SUB RULE (5) OF RULE 8 OF COMPANIES (ACCOUNTS) RULES, 2014:

Since the Company stopped manufacturing activity and is disposed off its undertaking(s), maintenance of cost records under section 148(1) of the Companies Act, 2013 are not applicable.

CONSERVATION OF ENERGY, TECHNOLOGY & FOREIGN EXCHANGE:

The information relating to Conversion of Energy, Technology Absorption, Foreign Exchange earnings and outgo as required under section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of the Companies (Accounts) Rules, 2014 is as per Annexure – A and forms part of this report. It may be noted that there was not expenditure on account of technology absorption during the year 2016-17.

EXTRACT OF ANNUAL RETURN:

The details forming part of the extract of the Annual Return in form MGT 9 is annexed herewith as "Annexure - B".

ACKNOWLEDGEMENTS:

Your Directors would also like to take this opportunity to express their sincere appreciation for the valuable support of the Customers, Dealers and Traders and the trust and confidence reposed by the valued shareholders in the Company.

	By order and on behalf of the Board
	For Novopan Industries Limited
Place : Hyderabad	Murali Varadarajan
Date : 25th July, 2018	Chairman (DIN:03602462)