DIRECTORS' REPORT

To

The Members

Mysore Petro Chemicals Limited

The Directors have pleasure in presenting the Forty Eighth Annual Report together with the Audited Statements of Accounts and the Auditors Report of your company for the financial year ended 31^st March, 2018

The financial statements are prepared in accordance with Indian Accounting Standards ( Ind AS'). In accordance with the notification issued by the Ministry of Corporate Affairs your Company has adopted Indian Accounting Standards ("Ind AS") notified under the Companies (Indian Accounting Standards) Rules with effect from 1^stApril, 2017.

1. FINANCIAL HIGHLIGHTS

The summary of Company's financial performance is given below:

(' In lakhs]

2. OPERATIONAL REVIEW

The Company is engaged in the trading of petrochemicals products. During the financial year 2017-18, total revenue amounted to Rs,1,656.77 lakhs as compared to Rs, 3,488.07 lakhs in the previous year. Due to exceptional gain of Rs, 6,459.20 lakhs on account of sale of Maleic Anhydride business, the Profit After Tax rose to Rs, 5,354.83 lakhs as compared to profit of Rs, 206.27 lakhs in 2016-17.

3. DIVIDEND

Your Directors are pleased to recommend dividend of Rs, 2/- (20%) per equity share of Rs, 10/each. The total outgo on account of dividend (including dividend distribution tax) for the current year amounts to Rs,158.74 lakhs (previous year Rs, 79.24 lakhs).

4. TRANSFER TO RESERVES

The undistributed profits amounting to Rs,7159.94 lakhs is proposed to be retained in the Statement of Profit & Loss.

5. DETAILS ABOUT CSR COMMITTEE, POLICIES, IMPLEMENTATION AND INITIATIVES

In accordance with the provisions of Section 135 of the Companies Act, 2013 ("the Act") and the Rules framed thereunder, the CSR Committee reviews and monitors the projects and expenditures incurred by the Company. The Company was not able to spend the amount of Rs, 12.52 lakhs towards CSR and proposes to carry forward the same. The Report on CSR are annexed to the Directors' Report as "Annexure-A".

6. AUDITORS

a. SECRETARIAL AUDIT

Pursuant to the provisions of Section 204 of the Act and The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors had appointed M/s. Makarand M Joshi and Associates, Practicing Company Secretaries (CP No. 3662) to conduct the Secretarial Audit of the Company for the Financial Year 2017-18. The said Report is annexed herewith as "Annexure-B".

The Secretarial Audit Report does not contain any qualification, reservation or adverse remark.

b. STATUTORY AUDIT

M/s MSKA & Associates were appointed as Statutory Auditors of the Company by the members of the Company at the 47^th annual general meeting.

Pursuant to the amendment to Section 139 of the Act vide Companies (Amendment) Act, 2017, the proviso relating to the ratification of the appointments of the Statutory Auditors at every annual general meeting has been removed.

In accordance with the above provisions, the ratification of the appointments of the Statutory Auditors shall not be placed at the ensuing annual general meeting.

7. DIRECTORS AND KEY MANAGERIAL PERSONNELS

a) Appointment/Re-Appointment

On the recommendation of the Nomination & Remuneration Committee and in accordance with the provision of the Act read with Rules framed thereunder, the Board of Directors appointed Shri M M Dhanuka as Managing Director & CEO of the Company for a period of 3 years with effect from 14^th August, 2018; subject to the approval of the Members.

In accordance with the provisions of Section 152 of the Act, read with Companies (Management & Administration) Rules, 2014, Shri Nikunj Dhanuka retires by rotation at the ensuing Annual General Meeting of the Company and offers himself for reappointment.

As stipulated under the Regulation 36(3) of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015 ("SEBI Listing Regulations"), brief resume of the Directors proposed to be appointment/re-appointed is given in the Notice convening 48^th Annual General Meeting.

b) Change in Key Managerial Personnel

Shri Anand Kadkol tendered his resignation from the post of Company Secretary w.e.f 19^th January, 2018. The vacancy caused by his resignation was filled by the appointment of Ms. Pragati Nathani w.e.f 14^th February, 2018.

c) Number of Meetings of the Board

During the year, four Board Meetings were convened and held, which are disclosed in the Report on Corporate Governance forming part of the Annual Report of the Company

d) Performance Evaluation of the Board

As stipulated by the Code of Independent Directors pursuant to Act and the SEBI Listing Regulations, a separate meeting of the Independent Directors of the Company was held to review the performance of Non-independent Directors (including the Chairman) and the entire Board. The Independent Directors also reviewed the quality, content and timeliness of the flow of information between the Management and the Board and its Committees which is necessary to effectively and reasonably perform and discharge their duties.

All Independent Directors have given their respective declarations that they meet the criteria of independence as laid down under Section 149(6) of the Act.

8. DIRECTORS' RESPONSIBILITY STATEMENT

To the best of our knowledge and belief and according to the information and explanation obtained by us, in terms of Section 134(3)(c) of the Act we state:

a) that in the preparation of the annual financial statements for the year ended 31^st March 2018, all the applicable accounting standards have been followed and no material departures have been made from the same;

b) that appropriate accounting policies have been selected and applied consistently and have 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 ended 31^st March 2018 and of the profit of the Company for that year;

c) that proper and sufficient care has been taken 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/detecting fraud and other irregularities;

d) that the annual financial statements have been prepared on a going concern basis;

e) that proper internal financial controls were in place and that the financial controls were adequate and were operating effectively;

f) that systems to ensure compliance with the provisions of all applicable laws were in place and were adequate and operating effectively.

9. TRANSFER OF SHARES TO IEPF

In compliance with the provisions of Section 124(6) of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 ("the IEPF Rules") and amendments thereto, during the year the Company has transferred 84,803 shares to IEPF Authority in respect of shares on which dividend has not been paid or claimed for seven consecutive years.

Members whose shares are so transferred can claim their dividend and shares from the IEPF authority by filing Form IEPF-5 at www.iepf.gov.in. Member should also note that only one consolidated claim can be filed in a financial year as per the IEPF Rules. Members are advised to claim any un-encashed dividends.

The Company Secretary of the Company has been designated as the Nodal Officer who can be contacted for any guidance/assistance to claim the dividend and shares from IEPF Authority.

10. PHTHALIC ANHYDRIDE (PA) PLANT

The PA Plant at Raichur, Karnataka was closed down in 2013 and the final settlement with some of the workmen is in progress.

11. CONTRIBUTION TO THE EXCHEQUER

The Company has contributed '1,697.04 lakhs to the exchequer on account of income tax, GST, service tax etc.

12. PARTICULARS OF CONTRACTS AND ARRANGEMENTS WITH RELATED PARTIES

All transactions entered into with related parties as defined under the Act and Regulation 23 of SEBI Listing Regulations during the financial year were in the ordinary course of business and on an arm's length basis and do not attract the provisions of Section 188 of the Act.

The details as required to be provided under Sec 134 of the Act are disclosed in Form AOC-2 as "Annexure-C'' and forms part of this report.

13. EXTRACT OF ANNUAL RETURN

The extracts of Annual Return in Form MGT-9 is annexed herewith as "Annexure-D" to the Directors Report.

14. VIGIL MECHANISM

The Company has a Vigil Mechanism Policy to deal with instance of fraud and mismanagement, if any. The details of the Policy is explained in the Corporate Governance Report and also posted on the Company's website www.mysorepetro.com. There was no fraud or irregularity noticed during the year under review.

15. PARTICULARS OF LOANS, GUARANTEE AND INVESTMENTS

The Company has not given any guarantee or advanced any loans pursuant to the provisions of Section 186 of the Act. Details of investments made by the Company have been given in the notes to the Financial Statements.

16. DEPOSITS

The Company has not accepted any deposits from the public during the year under review. No amount on account of principal or interest was outstanding as at 31^st March, 2018.

17. PARTICULARS OF EMPLOYEES AND REMUNERATION

During the year, there are no employees who are in receipt of the remuneration exceeding the limit specified in Rule 5(2) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.

The information relating to remuneration in respect of directors/employees of the Company as required pursuant to Section 197(12) of the Act read with Rule 5 of the Companies

(Appointment and Remuneration of Managerial Personnel) Rules, 2014, will be provided to the members upon request.

18. ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption is not applicable to the Company. During the year under review, the foreign exchange outgo was ' 321.61 lakhs (previous year ' 466.82 lakhs)

19. REPORT ON CORPORATE GOVERNANCE

The Company has taken the requisite steps to comply with the recommendations concerning Corporate Governance. The disclosures as required under Schedule V to the SEBI Listing Regulations together with a certificate from the auditors of the Company regarding compliance of conditions of Corporate Governance forms part of to this Annual Report.

20. DISCLOSURE UNDER SEXUAL HARASSMENT OF WOMEN

The Company has adopted a policy on prevention and redressal of sexual harassment at work place in accordance with the provisions of Sexual Harassment of Women at Work Place (Prevention, Prohibition and Redressal) Act, 2013. No complaints of sexual harassment were received during the year.

21. CAUTIONARY STATEMENT

Statements made in this report describes the Company's objectives, projections and estimates and may be forward looking and are stated as required by applicable laws and regulations. Actual results may differ substantially or materially from those expressed or implied. Important developments that could affect the Company's operations include market conditions, Government regulations, exchange rate fluctuations, interest and other costs.

22. ACKNOWLEDGEMENT

The Directors gratefully acknowledge all stakeholders of the Company viz. customers, members, banks etc. for their continued support.

For and on behalf of the Board of Directors

M M Dhanuka

Mumbai Chairman & Managing Director

29^th May, 2018 DIN – 00193456