DIRECTOR'S REPORT

Dear Members,

The Directors are pleased to present the Twenty Fifth Annual Report on the business and operations of the Company together with the Audited Financial Statements for the year ended March 31, 2018.

FINANCIAL RESULTS

The Company’s financial performance for the year ended 31st March 2018 is summarized below. Segment wise reporting as per Accounting Standards AS-17 is not applicable to your Company, since your Company is engaged in the activity of single segment only

FINANCIAL PERFORMANCE

The Gross Revenue from operations for FY 2018 was at Rs.11,707.14 Lakhs/- (Previous Year Rs.6,607.34 Lakhs/-), registering a growth of 44%. The Profit after tax stood at Rs.1518.02 Lakhs/- (Previous Year Rs.303.29 Lakhs/-).

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return in form MGT-9, as required under Section 92 of the Companies Act, 2013, is annexed as Annexure -1 to this Report.

DIVIDEND AND TRANSFER TO RESERVES IN TERMS OF SECTION 134 (3) (J) & (k) OF THE COMPANIES ACT, 2013

Your Directors recommend a dividend of 20 % (Twenty percent) i.e. Rs.2.00/- per equity share of face value of Rs.10/-each (Previous Year 15%). Payment of Dividend is subject to the approval of Shareholders at the ensuing Annual General Meeting.

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:

i. in the preparation of the annual accounts, the applicable accounting standards have been followed and there are no material departures;

ii. the Directors have 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 as at 31st March 2018 and of the profit of the Company for the year ended on that date;

iii. the Directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

iv. the Directors have prepared the annual accounts on a going concern basis;

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

vi. The Directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

SHARE CAPITAL

The paid up Equity Share Capital as at March 31, 2018 stood at Rs.4,14,22,000/-. During the year under review, the company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. As on March 31, 2018, none of the Directors of the company hold instruments convertible into equity shares of the Company INFORMATION ABOUT HOLDING / SUBSIDIARY/ JV/ ASSOCIATE COMPANY The Company does not have any Holding, Subsidiary, Joint venture or Associate Company.

DIRECTORS

The Board of Directors of the company comprises of One Managing Director, Two Whole-time Directors who are the Promoters of the company and Four Non-Executive Directors, including Three Independent Directors. The Company also has One Women Director who is Non-Executive. The composition of the Board of Directors is in compliance with Section 149 of the Companies Act, 2013.

In accordance with the provisions of Section 152 of the Companies Act, 2013 and the Company's Articles of Association, Mrs. Pushpa S Jain (DIN:06939054), Non-Executive Director retires by rotation at the forthcoming Annual General Meeting and, being eligible, offers herself for re-appointment. The Board recommends her reappointment for the consideration of the Members of the Company at the ensuing Annual General Meeting.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Regulation 16 (b) of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 NUMBER OF MEETINGS OF THE BOARD

During the year, 9 (nine) meetings of the Board of Directors were held. The details of the meetings are furnished in the Corporate Governance Report which is attached to this report.

KEY MANAGERIAL PERSONNEL

The following are the Key Managerial Personnel of the Company:

a) Mr. Suresh Shah (DIN: 01659809) Managing Director

b) Mr. Dipesh S Jain (DIN: 01659930), Whole Time Director

c) Mr. Arun V Shah (DIN: 01744884), Whole Time Director

d) Mr. K. C. Radhakrishnan, Chief Financial Officer

e) Ms. A.Priyanka, Company Secretary COMMITTEES OF THE BOARD

The Board of Directors has the following Committees:

1. Audit Committee

2. Nomination and Remuneration Committee

3. Stakeholders' Relationship Committee

4. CSR Committee

The details of the Committees along with their composition, number of meetings and attendance at the meetings are provided in the Corporate Governance Report.

AUDITORS

(a) STATUTORY AUDITOR

Pursuant to the Provisions of Sections 139, 141& 142 of the Companies Act, 2013 ("the Act"), the Companies (Audit and Auditors) Rules, 2014 ("the Rules"), Schedules attached thereto, (including any statutory modification(s) or enactment(s) or re-enactment(s) thereof, for the time being in force), pursuant to the recommendation of Audit Committee of the Company and that of the Board and pursuant to the approval of Members at the Twenty fourth Annual General Meeting held on September 28, 2017, consent of the Members of the Company is be and hereby accorded to appoint M/s. P. Chandrasekar, LLP, Chartered Accountants, Bangalore(Firm Registration Number: 000580S/S200066) as Statutory Auditors of the Company, to hold office as Statutory Auditors from the conclusion of Twenty fourth Annual General Meeting till the conclusion of Twenty ninth Annual General Meeting.

There is no audit qualification for the year under review.

(b) COST AUDITOR

The Company’s products come under Table B (Non-Regulated Sector) Companies (Cost Records and Audit) Rules 2014.

As per Rule 4 Companies (Cost Records and Audit) Rules 2014, Every Company specified in Table B of the Cost Audit would be applicable if the overall turnover of the Company from all its products and services during the immediately preceding financial year is Rs.100 Crores or more and the aggregate turnover of the individual product(s) or Service(s) for which cost records are required to be maintained under Rule 3 is Rs.35 Crores or more.

Hence, M/s. N. Sivashankaran& Co., Cost Accountants, appointed as Cost Auditors by the Board of Directors to audit the cost records of the Company for the FY 2017-18.

(c) SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made there under, the Company has appointed M/s. P. Sriram & Associates , Practicing Company Secretaries to undertake the Secretarial Audit of the Company. The Secretarial Audit Report is annexed as Annexure-2 to this Report.

There is no secretarial audit qualification for the year under review.

(d) INTERNAL AUDITOR

Pursuant to the provisions of Section 138 of the Companies Act, 2013 and rules made there under, the Company has appointed M/s. R. Subramanian and Co., LLP , Chartered Accountants to undertake the Internal Audit of the Company. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Your Company has not given any loan or made any investment or given a guarantee or provided any security in accordance with Section 186 of the Companies Act, 2013.

PARTICULARS OF CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES All transactions entered with Related Parties for the year under review were on arm's length basis All related party transactions are placed before the Audit Committee for approval. Details of the transactions are provided in form AOC-2 in terms of Section 134 of the Companies Act, 2013 is appended as Annexure-3 to this Report. MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL POSITION OF THE COMPANY There were no material changes and commitments affecting the financial position of the Company between the end of the financial year (31st March 2018) and the date of the report .

CORPORATE SOCIAL RESPONSIBILITY

The Company does meet the provisions laid down in Section 135 of the Companies Act, 2013 read with Companies (Corporate Social Responsibility Policy) Rules, 2014 hence the Company has constituted a Corporate Social Responsibility Committee.

DEPOSITS FROM PUBLIC

During the year under review, your company did not accept any deposits within the meaning of provisions of Chapter V, Acceptance of Deposits by the Companies Act, 2013 read with the Companies (Acceptance of Deposits) Rules, 2014. INTERNAL CONTROL SYSTEM AND THEIR ADEQUACY

Your Company has internal control system which includes financial control commensurate with the size, scale and complexity of company's operations and also ensures that the Company's assets are well protected. The internal audit evaluates the efficacy and adequacy of internal control system in the Company, its compliance with accounting procedures and policies of the Company. The Audit Committee of the Board of Directors actively reviews the adequacy and effectiveness of the internal control systems and suggests improvements to strengthen the same.

CORPORATEGOVERNANCE

The Company is not only committed to maintain the standards of Corporate Governance set out by SEBI but also morally committed to its members. As per Regulation 34 (3) read with Schedule V of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, a separate section on corporate governance practices followed by the Company, together with a certificate from the Company's Auditors confirming compliance forms an integral part of this Report.

VIGIL MECHANISM / WHISTLE BLOWER POLICY

The Company has a Whistle Blower Policy to report genuine concerns or grievances. Your company hereby affirms that no complaints were received during the year.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 a structured questionnaire was prepared after taking into consideration the various aspects of the Board’s functioning, composition of the Board and its Committees, culture, execution and performance of specific duties, obligations and governance. The performance evaluation of the Independent Directors was completed. The performance evaluation of the Managing Director and the Non-Independent Directors was carried out by the Independent Directors. The Board of Directors expressed their satisfaction with the evaluation process.

The criteria for performance evaluation have been detailed in the Corporate Governance Report.

REMUNERATION AND NOMINATION POLICY

The Board of Directors has framed a policy which lays down a framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management of the Company. This policy also lays down criteria for selection and appointment of Board Members. The details of this policy are explained in the Corporate Governance Report.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report on the operations of the Company, as required under SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 is provided in a separate section and forms a part of this Report.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

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

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

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo pursuant to Section 134(3)(m) of the Companies Act, 2013, read with the Rule 8(3) of the Companies (Accounts) Rules, 2014 is annexed as Annexure-4 and forms a part of this Report RISK MANAGEMENT

Your Company as part of Standard Operating System and Procedure institutionalized risk management covering risk identification, mitigation and management measures. This Risk Charter and Policy have been brought to practice as per part of internal control systems and procedures. The Management has applied the risk management policy to activities and processes of the business and this is reviewed to ensure that executive management manages risk through means of a properly defined framework.

DETAILS IN RESPECT OF FRAUDS REPORTED BY AUDITORS UNDER SUB-SECTION (12) OF SECTION 143 OTHER THAN THOSE WHICH ARE REPORTABLE TO THE CENTRAL GOVERNMENT : NIL

DISLCOSURE AS PER SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

Your Company has zero tolerance for sexual harassment at workplace and has adopted a policy and implemented an effective mechanism for the prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition & Redressal) Act, 2013, the Company has formulated and implemented a policy on prevention of sexual harassment at the workplace with a mechanism of lodging complaints. During the year under review, no complaints were received by the Board.

PARTICULARS OF EMPLOYEES

The Disclosure required under Section 197(12) of the Companies Act, 2013 read with the Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, relating to the ratio of remuneration of each director to the median employee's remuneration is annexed as Annexure-5 to this Report.

APPRECIATIONS AND ACKNOWLEDGMENTS

Your Directors place on record their appreciation to employees at all levels for their dedication and commitment. Your Directors would also like to express their sincere appreciation for the assistance and co-operation received from the banks, financial institutions, Government Authorities, customers, vendors and members during the year under review

For & on Behalf of the Board

For KANCHI KARPOORAM LIMITED

Dipesh S Jain Suresh V Shah

Place: Chennai (DIN: 01659930) (DIN: 01659809)

Date: 14.08.2018 Whole-time Director Managing Director