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Kopran Ltd.

BSE: 524280 Sector: Health care
NSE: KOPRAN ISIN Code: INE082A01010
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OPEN 36.30
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VOLUME 4065
52-Week high 81.95
52-Week low 32.70
P/E 26.53
Mkt Cap.(Rs cr) 157
Buy Price 0.00
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Sell Price 0.00
Sell Qty 0.00
OPEN 36.30
CLOSE 37.85
VOLUME 4065
52-Week high 81.95
52-Week low 32.70
P/E 26.53
Mkt Cap.(Rs cr) 157
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Kopran Ltd. (KOPRAN) - Director Report

Company director report

Dear Members

Your Directors have pleasure in presenting their 59 Annual Report together with theAudited Financial Statement for the year ended on 31 March 2018.

1. Financial Performance

(Rs. in Lakhs)
Particulars Standalone Basis* Consolidated Basis*
For the Period Ended FY 2017-18 FY 2016-17 FY 2017-18 FY 2016-17
Total Revenue 16156.51 19077.86 32430.42 32947.82
Less Expenses 15460.42 17742.60 30141.89 30471.82
Profit before Tax 696.09 1335.26 2288.53 2476.00
Net Tax Expenses 225.41 484.83 239.90 484.83
Profit / ( Loss ) for the Financial Year (FY) 470.68 850.43 2048.63 1991.17
Other Comprehensive Income/(Loss) for the FY 10.11 (2.01) 6.03 (1.85)
Total Comprehensive Income/(Loss) for the FY 480.79 848.42 2054.66 1989.32

*The Company has adopted Indian Accounting Standards (Ind AS) from 1 April 2017 asprescribed under Section 133 of the Companies Act 2013 read with the relevant rulesissued thereunder and accordingly these financial statement for all the periods presentedhave been prepared in accordance with the recognition and measurement principles as statedtherein. Reference to reconciliation for first time Ind AS adoption is mentioned in NoteNo.55 of the Standalone Financial Statement and Note No. 57 of the Consolidated FinancialStatement.

2. Performance review

A) Standalone: Standalone Total Revenue was Rs.16156.51 Lakhs as against theprevious year's figures of Rs. 19077.86 Lakhs down by 15.31%. Profit before tax was Rs.696.09 Lakhs down by 47.87% over the previous year's figures of Rs. 1335.26 Lakhs. TotalComprehensive Income was Rs. 480.79 Lakhs down by 43.33% over the previous year's figuresof Rs. 848.42 Lakhs.

B) Consolidated: Consolidated Total Revenue was Rs. 32430.42 Lakhs as against theprevious year's figures of Rs. 32947.82 Lakhs down by 1.58%. Profit before tax was Rs.2288.53 Lakhs down by 7.57% over the previous year's figures of Rs. 2476 Lakhs. TotalComprehensive Income was Rs. 2054.66 Lakhs up by 3.28% over the previous year's figuresof Rs. 1989.32 Lakhs.

3. Operations of the Company

Your Company's Exports during the financial year was Rs. 13527 Lakhs as against theprevious year's figures of Rs.15472 Lakhs down by 12.57% and Local sales was Rs. 1304Lakhs as against the previous year's figures of Rs. 2085 Lakhs down by 37.46% .

Operations of the Kopran Reseach Laboratories Limited a Subsidiary Company

Kopran Research Laboratories Ltd achieved total revenue of Rs. 17810 Lakhs in thecurrent year as against total revenue of Rs. 16072 Lakhs in the previous year Exportsduring the Financial year was Rs. 10572 Lakhs as against the previous year's figures ofRs. 7690 Lakhs up by 37.48% and Local sales was Rs. 6958 Lakhs as against the previousyear's figures of Rs. 8173 Lakhs down by 14.87%. During the year the company's TotalComprehensive income for the year is Rs. 1268 Lakhs compared to Rs. 841 Lakhs in theprevious year up by 50.77%.

The Industry had been coping with impact of demonitisation and introduction of GSTpolicy has led to some operating challenges.

4. Dividend

In view of expansion plans and to conserve resources the Board has not recommended anydividend on Equity shares or Preference shares for the FinancialYear 2017-18.

5. Management Discussion and Analysis

The Report on Management Discussion and Analysis as required under SEBI (LODR)Regulations 2015 is provided as a separate section in Annexure A of this Report.

6. Subsidiaries Associates and Joint Ventures

Kopran Research Laboratories Ltd. Kopran (H.K.) Ltd. and Kopran Lifesciences Ltd. arethe existing wholly owned subsidiaries of the Company. Salient features and financialsummary is provided as a separate section in Annexure B of this Report.

As required under Rule 8(1) of the Companies (Accounts) Rules 2014 the DirectorsReport has been prepared on Standalone Financial Statements and a report on performanceand financial position of each of the subsidiaries and associates included in theConsolidated Financial Statements.

In accordance with third proviso of Section 136(1) of the Companies Act 2013 theAnnual Report of the Company containing therein its Standalone and Consolidated FinancialStatements has been placed on the website of the Company www.kopran.com Shareholdersinterested in obtaining a copy of the Financial Statements of the subsidiary companies maywrite to the Company Secretary at the Company's registered office.

7. Directors & Key Managerial Personnel

In accordance with the provisions of the Act and the Articles of Association of theCompany Mr. Susheel G Somani Non-Executive Director of the Company retires by rotationat the ensuing AGM and being eligible has offered himself for re-appointment.

The Board at its meeting held on 29 May 2018 subject to the approval of members atAnnual General Meeting appointed Mr. Adarsh Somani and Mr. Varun Somani as AdditionalDirector of the Company liable to retire by rotation. The Company has received a noticeunder section 160 of the Companies Act 2013 as amended thereof from a member of a Companyproposing his candidature for the office of the Director. The Board seeks approval of theshareholders at the 59 Annual General Meeting for confirmation of the appointment of Mr.Adarsh Somani and Mr. Varun Somani. The brief profile of the aforesaid Directors has beendetailed in the Notice.

In terms of section 203 of the Companies Act 2013 following are the Key ManagerialPersonnel of the Company

Mr. Surendra Somani Executive Vice Chairman; Mr. Basant K Soni Chief FinancialOfficer; Mr. Sunil SodhaniCompany Secretary and Compliance Officer. No KMP has beenappointed or has retired or resigned during the financial year.

All Independent Directors of the Company have given declarations that they meet thecriteria of independence as laid down under Section 149 (6) of the Act and Regulation 16(1) (b) of the SEBI (LODR) Regulations 2015. In the opinion of the Board they fulfill theconditions of independence as specified in the Act and the Rules made there under and areindependent of the management.

8. Meetings of the Board

Five Board Meetings were held during the Financial Year ended 31 March 2018. TheDetails of the Board Meetings with regard to their dates and attendance of each of theDirectors has been provided in the Corporate Governance Report as a separate section inAnnexure C of this Report.

9. Committees of the Board

At present the Board has following five Committees: Audit Committee Nomination andRemuneration Committee Stakeholders Relationship Committee Corporate Affairs Committeeand Corporate Social Responsibility Committee

The Composition of the Committees and relative compliances are in line with theapplicable provisions of the Companies Act 2013 read with Rules and Listing Regulations.Brief terms of reference of the Committees Committees' Membership and attendance at themeetings of the Committee are provided in the Report on Corporate Governance as a separatesection in Annexure C of this Report.

10. Board and Committee Evaluation

Pursuant to the provision of the Companies Act 2013 SEBI (LODR) Regulations 2015 andGuidance Note on Board Evaluation issued by SEBI the Board has carried out the AnnualPerformance Evaluation of the Directors individually as well as evaluation of the workingof the Board and of the Committees of the Board and performance of Independent Directorsby way of individual and collective feedback from Directors. The matrix of Manner ofEvaluation is given in the table below.

Manner of Evaluation
Evaluation done by Evaluation of whom/process
Independent Directors a) Board as a Whole
b) Non-Independent Directors
c) Chairperson (taking into consideration the view of Executive Director)
d) Assess the Quality Quantity and Timeliness of Flow of Information between the Company Management and the Board
Board of Directors a) Committees of the Board
b) Independent Director (excluding the Director who is being evaluated)
Nomination & Remuneration Committee All Directors (excluding the Director who is being evaluated)

The Board Evaluation included aspects such as Board Composition and structureeffectiveness of Board processes functions of the Board etc. The evaluation of BoardCommittees included aspects such as functioning and effectiveness of the Committeemeetings independence structure and composition of Committees etc.

The Directors expressed their satisfaction with the evaluation process.

11. Vigil Mechanism

Pursuant to the provisions of Section 177(9) and (10) of the Companies Act 2013 andRegulation 22 of SEBI (LODR) Regulations 2015 the Company has adopted a Vigil Mechanismor ‘Whistle Blower Policy' for directors employees and all stakeholders to reportany concerns within the framework of the policy. The same is also disclosed on the websiteof the Company www.kopran.com

12. Risk Management and Internal Control Systems and their adequacy

Risk management comprises all the organizational rules and actions for earlyidentification of risks in the course of doing business and the management of such risks.The Company has in place internal financial control systems and risk management systemcommensurate with the size and complexity of its operations to ensure proper recording offinancial and operational information and compliance of various internal controls andother regulatory and statutory compliances.

13. Corporate Social Responsibility (CSR)

The Company is not mandated to carry CSR spending pursuant to section 135 of theCompanies Act 2013.

14. Related Party Transactions

All related party transactions that were entered into during the financial year were inordinary course of business and on arm's length basis of repetitive nature and proposedto be entered during the Financial year are placed before the Audit Committee dulyempowered by the Board with prior omnibus approval at the commencement of Financial year.A statement giving details of all related party transactions are placed before the AuditCommittee on quarterly basis for their approval. There are no materially significantrelated party transactions made by the Company which may have potential conflict with theinterest of the Company and hence enclosing of Form AOC-2 is not required. Suitabledisclosure as required by the Indian Accounting Standard (Ind AS 24) has been made in thenotes to the Financial Statements.

The policy for Related Party Transactions as approved by the Board has been uploaded onthe Company's website www.kopran.com.

15. Corporate Governance

The Report on Corporate Governance as stipulated under SEBI (LODR) Regulations 2015forms part of the Annual Report which is given in Annexure C. The requisitecertificate from GMJ & Associates Practicing Company Secretaries of the Companyconfirming compliance with the conditions of corporate governance as stipulated under theaforesaid SEBI (LODR) Regulations 2015 is attached to the Report on Corporate Governance.

16. Loans Guarantee or Investments

Particulars of loans given investments made guarantees given and securities providedalong with the purpose for which the loan or guarantee or security is proposed to beutilised by the recipient are provided in the Financial Statements (Please refer to Notesto the Financial Statements).

17. Rating

The Rating issued by CRISIL for long term is CRISIL BBB /stable and short term ratingis CRISIL A3+ upgraded from CRISIL BBB-/stable and CRISIL A3 respectively.

18. Auditors

a) Statutory Auditors: In compliance with the Companies (Audit and Auditors) Rules2014 M/s. Khandelwal Jain & Co. Chartered Accountants (Firm Registration No. 105049W)were appointed as Statutory Auditors of the Company for a period of five consecutive yearsfrom the conclusion of 58 AGM to the conclusion of 63 AGM. Vide notification dated May 72018 issued by Ministry of Corporate Affairs the requirement of seeking ratification ofappointment of Statutory Auditors by members at each AGM has been done away with.Accordingly no such item has been considered in Notice of the 59 AGM.

Further the report of the Statutory Auditors along with notes to Schedules is a partof the Annual Report. There has been no qualification reservation adverse remark ordisclaimer given by the Auditors in their Report.

b) Secretarial Auditors: Pursuant to the provisions of Section 204 of the Act theBoard of Directors of the Company had appointed M/s. GMJ & Associates PracticingCompany Secretaries (Firm Regn. No.1432) to conduct the Secretarial Audit of the Companyfor the FY 2018-19. M/S GMJ & Associates has issued the Secretarial Audit Report forFY 2017-18 given in

Annexure D. Secretarial Audit Report for the financial year ended 31 March 2018 donot contain any qualification reservation adverse remark or disclaimer.

c) Internal Auditors: The Board of Directors has appointed M/s STDJ & CoChartered Accountants (Firm Regn. No. 136551W) as Internal Auditors of the Company for theFY 2018-19.

19. Directors' Responsibility Statement

Pursuant to Section 134 (3) (c) and 134 (5) of the Companies Act 2013 the Board ofDirectors to the best of their knowledge and ability confirm that:

i. In preparation of the annual accounts for the financial year ended 31 March 2018the applicable accounting standards have been followed along with proper explanationrelating to material departures;

ii. They have selected such accounting policies listed in the financial statements andapplied them consistently and made judgments and estimates that are reasonable and prudentso as to give true and fair view of the state of affairs of the Company atthe end of thefinancial year as on 31 March 2018 and of the profit of the Company for that period;

iii. They have taken proper and sufficient care for maintenance of adequate accountingrecords in accordance of the Company and for preventing and detecting fraud and otherirregularities;

iv. They have prepared the Annual Accounts on a going concern basis;

v. They have laid down internal financial controls to be followed by the Company andthat such internal financial controls are adequate and were operating effectively;

vi. They have devised proper systems to ensure compliance with the provisions of allapplicable laws and that such systems were adequate and operating effectively.

20. Extracts of Annual Return

The extract of Annual Return required under Section 134(3)(a) of the Companies Act2013 read with Rule 12(1) of the Companies (Management and Administration) Rules 2014 isplaced on the Company's website. The web-link as required under Companies Act 2013 ishttp://kopran.com/pdf/MGT-9-Kopran-2018.pdf

21. Conservation of Energy Technology Absorption & Foreign Exchange Earnings andOutgo

The information on conservation of energy technology absorption and foreign exchangeearnings and outgo stipulated under Section 134 (3) (m) of the Companies Act 2013 readwith Rule 8 of The Companies (Accounts) Rules 2014 is attached as Annexure E.

22. Details of Unclaimed Suspense Account:

Disclosure pertaining to Unclaimed Suspense Account as required under Schedule V of theSEBI (Listing Obligations and Disclosure Requirements) Regulations 2015 is annexedherewith as Annexure F.

23. Particulars of employees and related disclosures

Disclosures pertaining to remuneration and other details required under Section 197(12)of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration ofManagerial Personnel) Rules 2016 is annexed herewith as Annexure G. AnyShareholder interested in obtaining the information required under Rule 5(2) and (3) ofThe Companies (Appointment and Remuneration of Managerial Personnel) Rules 2014 may writeto the Company Secretary at the Registered Office of the Company.

24. Disclosure under the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal) Act 2013

The Company has in place an Anti-Sexual Harassment Policy in line with the requirementsof the Sexual Harassment of Women at Workplace (Prevention Prohibition and Redressal)Act 2013. An Complaint Redressal Committee has been set up by your Company to redresscomplaints received regarding sexual harassment. All employees (permanent contractualtemporary trainees) are covered under this policy. During the Financial year noComplaints were received.

25. Other Disclosures/Reporting:

Your Directors further state that during the year under review:

a) No amount is transferred to General Reserve;

b) The paid up Equity Share Capital as on 31 March 2018 was Rs.43.25 crores. Duringthe year under review the Company has not issued any shares. The Company has not issuedshares with differential voting rights. It has neither issued employee stock options norsweat equity shares and does not have any scheme to fund its employees to purchase theshares of the Company;

c) The Company has not accepted any deposits from the public and as such there are nooutstanding deposits in terms of the Companies (Acceptance of Deposits) Rules 2014;

d) There were no significant/material orders passed by the Regulators or Courts orTribunals impacting going concern status of your Company and its operations in future;

e) There was no change in nature of Business. There have been no material changes andcommitments affecting the financial position of the Company which have occurred betweenthe end of the financial year of the Company to which this Financial Statement relate andthe date of this Report.

26. Acknowledgements

The Directors wish to place on record their appreciation for the continued support andco-operation by Financial Institutions Banks Government Authorities and otherStakeholders. Your Directors also acknowledge the support extended by the Company's Unionsand all the employees for their dedicated services.

On behalf of the Board of Directors

Surendra Somani Executive Vice Chairman

29 May 2018

Annexure B

(TO THE DIRECTOR'S REPORT)

FORM AOC-1

(Pursuant to section 129 (3) (1) read with rule 5 of Companies (Accounts) Rules 2014)

Statement containing salient features of the financial statement of subsidiaries/associate companies/ joint ventures.

Part "A": Subsidiaries

Fig in Rs.

Name of Subsidiary & CIN
Information Kopran (H.K.) Ltd. Kopran Research Laboratories Ltd. U24230MH1986PLC040601 Kopran Lifesciences Ltd. U74120MH2010PLC21112
1 Reporting Period for the Subsidiary Concerned if different from holding company's reporting period 01-04-2017 to 31-03-2018 01-04-2017 to 31-03-2018 01-04-2017 to 31-03-2018
2 Reporting Currency and Exchange rate as on the last date of the relevant financial year in the case of Foreign subsidiaries Hong Kong Dollar (HKD) Rs. 8.27 = 1HKD NA NA
3 Share Capital 2318750 200000000 500000
4 Reserves & Surplus 556 1006611744 (110940)
5 Total Assets 2319306 1992400224 1126372
6 Total Liabilities 2319306 1992400224 1126372
7 Investment Nil Nil 1000000
8 Turnover 2206821 1781090523 Nil
9 Profit Before Taxation 16149 128691892 (6377)
10 Provision for Taxation - 1448824 -
11 Profit after Taxation 16149 127243068 (6377)
12 Proposed Dividend Nil Nil Nil
13 % of Shareholding 100% 99.50% 100%

Part " B" : Associates and Joint Ventures : None

Annexure E

(TO THE DIRECTOR'S REPORT)

Information required under section 134 (3)(m) of the Companies Act 2013 read with Rule8(3) of the Companies (Accounts)Rules 2014 pertaining to Conservation of energyTechnology absorption Foreign exchange earnings and outgo

A. CONSERVATION OF ENERGY

1. The company has replaced 75W CFL conventional lights by energy efficient of 5W-15Wof 2500 tube light fixtures which reduced the electricity consumption at Production Pen& Non Pen Plant including other areas.

2. Street Lights: Replaced 250W CFL conventional lights by energy efficient of 60W LEDof 25 street pole light i.e. reduced energy consumption form 12 KW to 1.2 KW per Hrs &saved 10.5 KW per Hrs.

3. Soft starter installed at various locations instead of earlier DOL starter.

4. Automatic Power factor Control: There is reduction in usage of current whichultimately saves energy

5. Screw Chiller 350 TR installed in place of reciprocation compressor. Screw chillerdrew two third current as compare to reciprocating compressor. Saving 150 KW per Hrs.

6. VFD :There are MD Controller panel for controlling usage of Electrical power atfactory and temperature Monitoring Device along with controlling Cooling tower fan autoswitching system to reduce fuel power consumption. VFD is installed at various loads tosave electrical power.

B. TECHNOLOGY ABSORPTION

The Company has focused on new product development for both the Finished Dosage Formsand the Active Pharmaceutical Ingredients. During the year several new products weredeveloped in the field of Oncology Pain Management Anti-infective and Cardiac therapies.New products developed for the Finished Dosage Forms include HyroxychloroquineAmiodarone Verapamil Doxycycline Metformin Amoxyclav and Doxycycline which are focusedfor the US EU & ROW markets. New products developed for Active PharmaceuticalIngredients are Dabigatrin Apixaban Rivaroxaban Chlortalidone Tebipenem ImipenemErtapenem and Azithromycin (Borohydride route).

1. Efforts made towards Technology Absorption a. Literatures searched throughScifinder internet books etc. and identify scope of improvement of product developmentcost reduction in existing products. Identify new molecules suitable for existing benchscale. b. Conduct Laboratory trials for identified products developed products generatedocuments like SLP TTD PDR etc. c. Conduct Pilot plant validation for developedproducts kept for stability e.g.Nitroxelene Ticagralor. d. Transfer technology toCommercial level of new product e.g. Lymecycline Biapenem Pregabalin (Enzyme route)

2. Benefits derived like product improvement cost reduction product development orimport substitution a. Developed new Resin technology in Atenolol to removal of wastee.g.Carbon. b. Adopt press filter technology for filtration to improve quality as well asreduce time cycle in Atenolol. c. Improved yield in CMMHA from 1.42 to 1.67 w/w ultimatelyreduced cost in Pregabalin d. Improved yield in Metoprolol Succinate and Tartrate from1.62 to 1.70 w/w.Plant validation of Metoprolol tartrate completed. e. Improved yield inAzithromycin from 0.93 to 0.96 w/w

C. FOREIGN EXCHANGE EARNINGS AND OUTGO

Earnings: Rs.13174.64 Lakhs (Previous year: Rs. 14964.73 Lakhs) Outgo : Rs.770.81Lakhs (Previous year : Rs. 779.99 Lakhs)

Annexure F

(TO THE DIRECTOR'S REPORT)

Details of Unclaimed Suspense Account as per the provisions of Schedule V of the SEBI(Listing Obligations and Disclosure Requirements) Regulations 2015.

Aggregate number of shareholders and the outstanding shares in the suspense account lying at the beginning of the year None
Number of shareholders who approached the company for transfer of shares from suspense account during the year None
Number of shareholders to whom shares were transferred from suspense account during the year None
Aggregate number of shareholders and the outstanding shares in the suspense account lying at the end of the year None

Annexure G

(TO THE DIRECTOR'S REPORT)

As per the provision of section 197 of the Companies Act 2013 read with Companies(Appointment & Remuneration of Managerial Personnel) Rules 2016 every listed companyare required to disclose following information in Board Report.

Ratio of Remuneration of each Director to the median Remuneration of the Employees ofthe Companies for the FinancialYear.

Name Ratio to employees
Surendra Somani Executive Vice Chairman 1: 0.0158

Percentage increase in remuneration of each Director Chief Financial Officer ChiefExecutive Officer Company Secretary or Manager if any in the FinancialYear.

Name % increase
Surendra Somani Executive Vice Chairman No change
Basant Kumar Soni Chief Financial Officer 10.15%
Sunil Sodhani Company Secretary & Compliance Officer 7.40%
Percentage increase in the median remuneration of employee in the financial year -10.56%
Number of permanent employees on the Roll of the Company 346
Average percentile increase already made in the Salaries of the 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 increase in Managerial Remuneration is 14% and Average increase in Non-managerial person is 29%.

We affirm that the Remuneration paid to the Managerial and Non-Managerial Personnel isas per the Remuneration policy of the Company.

On behalf of the Board of Directors

Surendra Somani

Executive Vice Chairman