Directors’ Report

To The Members, Your Directors present this 22^ndAnnual Report of the Company together with the Audited Statement of Accounts for the year ended 31st March, 2016.

Financial Results

Performance Review

During the year under review your Company sustained with limited growth path due to which though the gross total income increased from Rs23,70,313to Rs29,07,617 in comparison of last year and the Company incurred loss of (11,86,517) in the year under review as compared to Profit of previous year to Rs. 3,96,877. During the year under review company has paid listing processing fees to BSE in the tune of Rs.20.00 Lakh.

Dividend

Your directors did not recommend payment of any dividend for the year ended 31st March, 2016.

Directorate

Mr. Bhadresh Bhavsar, Director of the Company, retires by rotation at this Annual General Meeting and being eligible offer himself for re-election. A brief resume of Mr. Bhadresh Bhavsar is given separately in the notice convening AGM. Your directors recommend his appointment for the members' approval.

On the recommendations of nomination and remuneration committee, Mr. Ashish Pandya has been appointed as Whole Time Director and Key Managerial Person of the Company with effect from 1st September, 2016 for Period of three years i.e. from 1st September, 2016 upto 31st August, 2016.Abrief resume of Mr. Ashish Pandya is given separately in the notice convening AGM. Your directors recommend his appointment for the members' approval.

Mr. Haresh Patel has resigned as Whole Time Director of the Company with effect from 1^st September, 2016.

Transfer to Reserves

Due to Loss for the year under review accumulated loss in the tune of Rs.15.83 was transferred to General Reserve.

Number of Board Meetings held during the year

The number of Board meetings held during the year from1st April 2015 to 31st March 2016 is the dates of meeting are given below:

1. 18^thMay 2015.

2. 28^thMay 2015.

3. 13^thAugust 2015.

4. 10^thNovember 2015.

5. 12^thFebruary 2016.

The time gap between any two meetings did not exceed four months. The compliance report in respect of laws applicable to the Company has been periodically reviewed by the Board of Directors of the Company.

Directors’ Responsibility Statement:

Your directors’ confirm:

I. That in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departure.

II. That the director’s have selected such accounting policies & applied them consistently & made judgment & estimates that are reasonable & prudent so as to give a true & fair view of the state of affairs of the company at the end of the financial year & of the Profit of the company for the year.

III. That the director’s have taken proper & sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the company & for preventing & detecting fraud & other irregularities.

IV. That the director’s have prepared the annual accounts on a going concern basis.

Listed on Stock Exchanges

At Present the Equity shares of the Company are listed and traded with the Bombay Stock Exchange Limited and the Listing Fee for the year 2016-17 has been duly paid. Scrip Code of the Company is 539595

Corporate Governance Report

As per SEBI LODR, Compliance with the provisions of regulation 17 through 27and clauses (b) to (i) of sub - regulations 46 and Para C,D and E of schedule V is not mandatory for the time being, in respect of the following class of Companies:

a. Companies having paid -up equity share capital not exceeding Rs. 10 crore and Net Worth not exceeding Rs. 25 Crore, as on the last day of previous financial year;

b. The listed entity which has listed its specified securities on the SME Exchange;

As such our Company full’s in the ambit of aforesaid exemption Consequently Corporate Governance does not forms part of the Annual Report for the Financial Year 2015-16. However, the Company is following industry best corporate governance standards.

Associate & Subsidiary Companies

The company does not have any Associate or Subsidiary Companies

Deposits

The Company has not invited or accepted any fixed deposit from the public during the year under review.

Secretarial Audit

Secretarial Audit Report as per Section 204 of Companies Act 2013 is placed as annexure to this report. No adverse comments have been made in the sand report by the Practicing Company Secretary.

Extracts of Annual Return and other disclosures under Companies (appointment & Remuneration) Rules, 2014

The Extract of Annual Return in form No MGT-9 as per Section 134 (3) (a) of the Companies Act, 2013 read with Rule 8 of Companies Act (Accounts) Rules 2014 and Rule 12 of Companies(Management & Administration) Rules, 2014 duly certified by the Practicing Company Secretary is annexed hereto and forms part of this report. Further the Disclosure in the Board Report under Rule 5 of Companies (Appointment & Remuneration) Rules, 2014 is also annexed hereto and forms part of this report.

Declaration on Independent Directors

The Board of Directors declares that the Independent Directors Miss Dhvani Hareshbhai Contractor & Mr. Bhadresh Kumar Bhavsar & Mr. Rupesh Upadhyay are:

a) in the opinion of the Board, are persons of integrity and possesses relevant expertise and experience;

b) who were or were not a promoter of the company or its holding, subsidiary or associate company who are not related to promoters or directors in the company, its holding, subsidiary or associate Company;

c) Who have or had no pecuniary relationship with the company, its holding, subsidiary or associate company or

d) Their promoters or directors, during the two immediately preceding financial years or during the current financial year;

e) None of whose relatives has or had pecuniary relationship or transaction with the company, its holding, subsidiary or associate company or their

promoters, or directors, amounting to two percent or more of its gross turnover of total income or fifty Lakh rupees or such higher amount as may be prescribed, whichever is lower, during the two immediately preceding financial years or during the current financial year;

Who, either himself or any of his relatives -

i. Holds or has held the position of a key managerial personnel or is or has been employee of the company or its holding, subsidiary or associate company in any of the three financial year immediately preceding the financial Year in which he is proposed to be appointed;

ii. is or has been an employee or propriety or a partner, in any of the three financial years immediately preceding the Financial year in which he is proposed to be appointed, of -

- A firm of auditors or company secretaries in practice or cost auditors or the company or its holding, subsidiary or Associate company; or

- Any legal or a consulting firm that has or had any transaction with the company, its holding, subsidiary or Associate company amounting to ten percent or more of the gross turnover of such firm;

iii. Holds together with his relative two per cent, or more of the total voting power of the company; or

iv. Is a Chief Executive or director, by whatever name called, of any non-profit organization that receives twenty-five percent or more of its receipts from the company, any of its promoters, directors or its holding, subsidiary or associate company or that holds two per cent or more of the total voting power of the company; or

Particulars of Loans, guarantees or investments

The particulars of Loans, Guarantees or investments as covered under provision of section 186 of the Companies Act, 2013 made by the company during financial year 2015-16 are given under the respective head and the same is furnished in the notes to the financial statement

Related Party Transactions

There were no materially and significant transaction with Related Parties i.e. Promoters, Directors or the Management, their subsidiaries or relatives conflicting with the Companies interest. There were no transactions that took place with related parties which can be considered not to be in the normal course of business.

Particulars of Employees

None of the Employees of the company was in receipt of the remuneration exceeding the limits prescribed under section 197 of the Companies Act, 2013 as amended, during the year under review.

Particulars of Conservation Of Energy, Technology Absorption and Foreign Exchange Earnings and out-go.

Since your company does not own any manufacturing facility particulars about Conservation of Energy and Technology absorption are not applicable. The Foreign exchange Earnings and out-go for the year under review is nil.

Risk Management Policy implementation

The board takes responsibility for the overall process of risk management in the organization. Risk Management is the process of minimizing mitigating the risk. Its start with identification and evaluation of risk. The Company has followed strict approach to deal with possibility of any risk in the finance business. To Control the Operational risk Company has taken several measures and applied strict credit strategies. Through a detailed risk management programme, each functional head addresses opportunities and the attendant risks through a systematic approach aligned to the Company's objectives. The audit committee also reviews reports covering operational, financial and other business risk areas.

Formation and adoption of Different Policies:

a) Policy Determination of Materiality: In Accordance with Regulation 30 of the SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015 the Company has adopt a policy determination of Materiality containing Disclosure of Events or Information relating to specified securities.

b) Policy for Preservation of Documents: Regulation 9 of SEBI (Listing Obligation and Disclosure Requirements) Regulation, 2015 requires every listed entity should formulate a policy for preservation of documents and accordingly the Company has adopted the same and upload the same on the website.

c) Policy on Materiality of Related Party Transactions: The Company has adopted a policy of Related Party Transactions with a view to set out the materiality thresholds for the related party transactions and the manner of dealing with the transactions between the Company and its related parties based on the Companies Act, 2013, SEBI (LODR) Regulations and any other laws and regulations as may be applicable to the Company.

d) Whistle Blower Policy: The Company has adopted the Whistle Blower Policy for their employees and directors to report the concerns about unethical behavior, actual or suspected fraud or violation of the code of conduct or policy as per Section 177(9) of the Companies Act, 2013 and as per Regulation 22 of the SEBI (Listing Obligation and Disclosure Requirements) Regulations, 2015.

Remuneration policy

A Nomination & Remuneration policy has been formulated pursuant to the provisions of section 178 and other applicable provisions of the companies act, 2013 and rules thereto and SEBI LODR stating therein the Company’s policy and Directors/Key Managerial Personnel/other Employees appointment and remuneration recommended by the Nomination and Remuneration Committee and approved by the Board of Directors. The said policy may be referred on Company’s Website.

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

The Company has zero tolerance for sexual harassment at workplace and has adopted a policy on prevention, prohibition and redressal of sexual harassment at workplace in line with the provisions of Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the rules framed there under. During the financial year 2015-16, the Company has not received any complaint on sexual harassment.

Auditors

M/s. Jayesh Patel & Co., (Membership No. 034745) Chartered Accountants retire at the ensuing Annual General meeting. Financial Auditors of the Company will retire at the forthcoming Annual General Meeting and are eligible for reappointment. In accordance with the Companies Act 2013, it is proposed to reappoint them as Auditors for the financial year 2016-17 from the conclusion of this Annual General Meeting till the conclusion of the next Annual General Meeting, subject to the approval of shareholders.

Audit Committee

The Audit Committee comprises of Mr. Rupesh Upa,dhyay (Independent Director) Miss. Dhvani Contractor (Independent Director) and Mr. Haresh Patel all are financially literate and having accounting and related Administrative Expertise.

The Independent Auditors and the Secretarial Auditors of the Company is also invited to the Audit Committee meetings. The Chairman of the Audit Committee Mr. Rupesh Upadhyay was present at the Annual General Meeting of the Company held on 30^th September, 2015.

During the financial year 2015-16 Four (4) meetings of the Audit Committee were held:_

1. 28th May 2015

2. 13th August 2015

3. 10th November 2015.

4. 12th February 2016

As on March 31, 2016, all three Directors of the Board are the Members of Audit Committee &the details of the meetings attended by members during the year 2015-16 are as follows:

Stakeholders Relationship Committee/Investor Grievance Committee

In compliance with the provisions of Listing agreement and Section 178 of Companies Act, 2013, the company re-constituted this committee as “Stakeholders Relationship Committee”. This committee of the Board of the Company looks into various issues relating to shareholders/investors including transfer and transmission of shares held by shareholders in physical format as well as non-receipt of dividend, Annual Report, shares after transfer and delays in transfer of shares. The committees also looks into issues including status of dematerialization/dematerialization of shares and issue of duplicate share certificates and tracks investor complaints and suggest measures for improvement from time to time.

During the financial year 2015-16 Four (4) meetings of the Shareholders’/ Investors’ Grievance Committee were held: (1). 28th May 2015 (2) 13^th August, 2015 (3) 10^th November 2015 (4). 12^th February, 2016

As on March 31, 2016, the Shareholders’/ Investors’ Grievance Committee comprised of the following members & the details of the meetings attended by members during the year 2015-16 are as follows:

Remuneration Committee

In compliance of Section 178 of Companies Act, 2013 the Board has constituted the Remuneration Committee. Your Board has constituted the Remuneration Committee. The terms of reference of the committee inter alia include Succession planning for Board of Directors and Senior Management Employees, identifying and selection of candidates for appointment of Directors/Independent Directors based on certain laid down criteria,’s, identifying potential individuals for appointment of Key Managerial personnel and other senior managerial position and review the performance of the Board of Directors and Senior Management personnel including Key managerial personnel based on certain criteria approved by the Board. While reviewing the performance, the committee ensures that the remuneration is reasonable and sufficient to attract, retain and motivate the best managerial talents, remuneration commensurate with the performance of individual and group and also maintains a balance between fixed and incentive pay reflecting both short and long term objectives of the company.

As on March 31, 2016, the Remuneration Committee comprised of the following members &the details of the meetings attended by members during the year 2015-16 are as follows:

Acknowledgement

Your Directors wish to place on record their appreciation for the whole hearted and sincere co-operation the Company has received from its banker, State Bank of India and various Government agencies. Your Directors also wish to thank all the employees for their co-operation.

By Order of the Board

for Natco Economicals Limited

Place: Ahemdabad SD/- SD/-

Haresh Patel Rupesh Upadhyay

Date: 22^nd August, 2016 (Whole Time Director) (Director)