Dear Shareholders,

The Directors are pleased to present their 36th Annual Report and the Audited Accounts of the year ended March 31, 2018.

FINANCIAL RESULTS :

Rs. in lakhs

OPERATIONS :

During the year under review, the turnover of the Company was lower to the tune of Rs. 3,848.66 lakhs compared to Rs. 4,214.26 lakhs in the previous financial year. There was a net loss from operations of Rs. 265.42 lakhs during the current financial year compared to a net profit of Rs. 63.23 lakhs during the previous financial year. The demand for glass lenses has dropped drastically. The drop in sales of glass lenses has been partly made up by plastic lenses.

DIVIDEND :

With the view to conserve the resources, your Directors regret their inability to recommend any dividend for the year 2017-18. No amount has been transferred to reserve for the financial year ended March 31, 2018.

SHARE CAPITAL :

The paid up equity share capital as on March 31, 2018 was Rs. 415.35 lakhs. There was no change in the share capital of the Company, during the year under review.

SUBSIDIARIES :

The Company has a Wholly Owned Subsidiary, namely, GKB Ophthalmics Products FZE, Sharjah, UAE. The Lens Company NJ, USA, is a Subsidiary of GKB Ophthalmics Products FZE and a Step Down Subsidiary of the Company. The proposal for winding up of GKB Ophthalmics GmbH, is pending for approval with Reserve Bank of India, Mumbai.

A statement under Section 129(3) of the Companies Act, 2013, containing salient features of the financial statement of subsidiaries in Form AOC-1, is annexed herewith as Annexure - I. In terms of Section 136(1)(a) of the Companies Act, 2013, the Audited Accounts of the subsidiaries are placed on website of the Company at www.gkb.net. A copy of the audited financial statements in respect of each of the subsidiaries will be made available to interested shareholders, upon a written request, as per Section 136(1) (b) of the Act. The audited accounts of the subsidiaries are also available at the Registered Office of the Company for inspection, during business hours.

INDIAN ACCOUNTING STANDARDS (Ind AS)

The Ministry of Corporate Affairs ( MCA) , has notified the Companies ( Indian Accounting Standards) Rules 2015, under Section 133 of the Companies Act 2013, on February 16, 2015. These are Company’s first Financial Statements prepared in accordance with Ind AS. The Company has prepared Ind AS financials for the year ending March 31, 2018, along with comparable financials as on March 31, 2017 with opening statement of Assets and Liabilities as on April 01, 2016.

GOODS AND SERVICES TAX (GST)

The Goods and Services Tax (GST) is levied on the supply of Goods and Services. The GST came into effect from July 01, 2017 and replaces multiple taxes levied by Central and State Governments. The GST has been successfully implemented by the Company.

TRANSFERS TO INVESTOR EDUCATION AND PROTECTION FUND (IEPF)

The Ministry of Corporate Affairs has set up the Investor Education and Protection Fund for promotion of investor awareness and protection of investor interests.

In terms of Section 124 of the Companies Act, 2013 and the rules made thereunder, the dividends in respect of the shares of the Company which have remained unpaid or unclaimed for seven consecutive years or more, are required to be transferred to IEPF.

The Company has not declared any dividend since 2010-11 and hence there are no unclaimed dividends to be transferred to IEPF.

ACCREDITION : The company has been accredited with ISO 9001:2008 by TUV SUD.

CHANGE IN NATURE OF BUSINESS, IF ANY :

There has been no change in the nature of business of the Company during the year 2017-18.

DIRECTORS AND KEY MANAGERIAL PERSONNEL:

Mr. Vikram Gupta will retire by rotation, pursuant to Articles of Association of the Company being eligible offers himself for reappointment. Brief resume together with other relevant details of Mr. Vikram Gupta are given in Note No. 10 of the Notice for the ensuing Annual General Meeting.

Mr. K. M. Gupta, Non-Executive Director, resigned with effect from August 09, 2017. The Board places on record its appreciation for the guidance provided by him.

Mr. Prakash V. Joshi was appointed as an Executive Director of the Company with effect from September 23, 2017, for a period of three years.

Pursuant to provisions of Section 2 (51) and Section 203 of the Companies Act, 2013 read with Rule 8 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors have designated the following existing officers of the Company as Whole-Time Key Managerial Personnel. Mr. K. G. Gupta, Managing Director and Mr. Noel da Silva, CFO & Company Secretary, are Whole-Time Key Managerial Personnel of the Company .

CHANGE IN PROMOTERS’ SHAREHOLDING :

During the year under review, Mr. K. M. Gupta, who ceased to be Director w.e.f. August 09, 2017, together with his family members had applied for reclassification of their shares from Promoter and Promoter Group Category to Public Shareholding under Regulation 31A of SEBI ( Listing Obligations and Disclosure Requirements) Regulations, 2015 (Listing Regulations). The same was approved by the members by way of a Postal Ballot. The details are provided in the Corporate Governance Report which is a part of this Report.

SEPARATE MEETING OF THE INDEPENDENT DIRECTORS :

In terms of Section 149 (8) read in terms of schedule IV, the Independent Directors held a Meeting on March 27, 2018, without the attendance of Non-Independent Directors and members of Management. All the Independent Directors were present at the meeting.

At this meeting, the Independent Directors :

1. Reviewed the performance of the Non-Independent Directors and the Board as a whole.

2. Reviewed the performance of Chairperson, taking into account the views of Executive Directors and Non-Executive Directors.

3. Assessed the quality, quantity and timeliness of flow of information between the Company Management and the Board that is necessary for the Board to effectively and reasonably perform their duties.

4. Discussed and decided about the familiarization of Independent Directors’ programme, conducted by the Company and also views of the Independent Directors on the familiarization programmes.

The Independent Directors have confirmed that they meet with the criteria of Independence laid down under the Act and Listing Regulations.

INDEPENDENT DIRECTORS’ DECLARATION

The Independent Directors have submitted the Declaration of Independence, as required pursuant to Section 149 of the Companies Act, 2013 and provisions of the Listing Regulations, 2015, stating that they meet the criteria of independence as provided therein.

MEETINGS OF THE BOARD OF DIRECTORS :

During the year under review, five Board Meetings were held. Further details are given in Corporate Governance Report, forming part of this Report. The maximum gap between two Board Meetings held during the year was not more than 120 days.

AUDIT COMMITTEE :

As provided in section 177(8) of the Act, the information about composition of Audit Committee and other details are given in Corporate Governance Report. The Board has accepted the recommendations of the Audit Committee. The Audit Committee is comprising of Mr. Sadashiv Shet as Chairman, Mr. Gaurav Gupta, Mr. Anil Palekar, Mr. Joseph A.A. D’Costa and Mr. Christopher Hickman, as members.

NOMINATION AND REMUNERATION COMMITTEE :

The Nomination and Remuneration Committee has formulated the criteria for determining qualifications, positive attributes and independence of a director, relating to remuneration for directors, key managerial personnel as provided under section 178(3) of the Companies Act, 2013 and Listing Regulations.

The Remuneration Policy is stated in the Corporate Governance Report which is part of this report. Further details have been disseminated on the Company’s website www.gkb.net

PERFORMANCE EVALUATION :

The Board evaluated the performance of the Board as a whole, committees of the Board and the performance of individual directors including the Chairman of the Board pursuant to Regulation 17(10) of the Listing Regulations. The Independent Directors also carried out the performance evaluation in terms of Part VIII of Schedule IV of the Companies Act, 2013, in their meeting held on March 27, 2018.

The details of the Performance Evaluation carried out is provided in the Corporate Governance Report which is a part of this report.

DIRECTORS’ RESPONSIBILITY STATEMENT :

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

a) that in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures.

b) that they have selected such accounting policies and applied them consistently and made judgements 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 financial year and of the Profit and Loss of the Company for that period;

c) that they have taken proper and sufficient care for the maintenance of 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) that they have prepared the annual accounts on a going concern basis;

e) that they have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively; and

f) that they have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

AUDITORS :

M/s. Sharp & Tannan LLP (Firm Registration No. 27145W), Chartered Accountants, have been the Statutory Auditors of the Company. A letter dated May 29, 2018, was received from M/s. Sharp & Tannan LLP, Statutory Auditors, expressing their unwillingness to be reappointed as the Statutory Auditors of the Company for the financial year 2018-19, due to their administrative reasons.

The Company has received a letter from M/s. MSKA & Associates (formerly known as M/s. MZSK & Associates), (Firm Registration No.105047 W), Chartered Accountants, expressing their willingness to be appointed as Statutory Auditors of the Company. The Audit Committee and the Board of Directors of the Company in their respective meetings held on May 30, 2018, recommended and approved the appointment of M/s. MSKA & Associates, Chartered Accountants, as Statutory Auditors of the Company, to fill the casual vacancy caused by the resignation of M/s. Sharp & Tannan, Chartered Accountants.

MSKA & Associates is a large leading Chartered Accountancy firm in India of International repute having expertise across service lines and strong servicing capabilities in Goa and on other multiple geographies. In view of the proposed joint venture with a foreign partner, preferential issue of equity shares/warrants and the international operations of the Group, the Board of Directors have appointed MSKA & Associates in the casual vacancy arising on the resignation of the existing statutory auditors of the Company. M/s. MSKA & Associates, Chartered Accountants, Mumbai, have confirmed that the appointment if made, would be within the limits specified under Section 139 of the Companies Act, 2013.

AUDITORS’ REPORT:

In respect of the observations made by the Auditors in their Report, the Board’s response thereon is as follows:

Paragraphs (ii) and (vii)(a) of the Annexure ‘A’ referred to in paragraph 1 of the Auditor’s Report, are self explanatory..

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS :

There is no significant or material order passed by any Regulators or Courts or Tribunals impacting the going concern status and Company’s operations in future.

INTERNAL FINANCIAL CONTROL :

As per Section 134 (5) (e) of the Companies Act, 2013, read with Rule 8 (viii) of Companies (Accounts) Rules, 2014, the Board has laid the Internal Financial Control to be followed by the Company and that such Internal Financial Controls are adequate and are operating effectively. As per Section 143(3)(i) of the Companies Act, 2013, a report issued by M/s. Sharp & Tannan, Statutory Auditors of the Company is attached with their Independent Auditor’s Report, which is self explanatory.

RISK MANAGEMENT POLICY :

The Company has constituted the Risk Management Committee which has formulated Risk Management Policy for the Company. The committee identifies and assesses the various business risks and mitigates these risks by determining a response strategy.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER SECTION 186 :

Particulars of loans, guarantees given and investments made during the year as required under Section 186 of the Companies Act, 2013 and Schedule V of the Listing Regulations are provided in Notes 8, 9, 20, 23, 25 and 26 of the Financial statements.

RELATED PARTY TRANSACTIONS :

All transactions entered into with related parties, pursuant to Section 188 of the Companies Act, 2013 and Regulation 23 of Listing Regulations, during the year were at arm’s length basis and in ordinary course of business. Therefore, disclosure in Form AOC-2, is not required.

EXTRACT OF ANNUAL RETURN :

As required as per Section 92(3) of the Companies Act, 2013 and the Rules framed thereunder , the extract of the Annual Return in Form MGT-9 is annexed herewith as Annexure - II.

CORPORATE GOVERNANCE :

A separate section on Corporate Governance practices followed by the Company, together with certificate from the Practising Company Secretary confirming compliance, forms a part of this Annual Report as per Listing Regulations.

SECRETARIAL AUDIT:

As per provisions of Section 204 of the Companies Act, 2013 read with Rule 9 of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Secretarial Audit Report submitted by Ms. Girija Nagvekar, Practising Company Secretary, for the financial year ended March 31, 2018, forming part of this Annual Report, is annexed herewith as Annexure - III. The Secretarial Audit Report is self explanatory and requires no comments.

CORPORATE SOCIAL RESPONSIBILITY :

Provisions of Section 135 of the Companies Act, 2013, and Rules made thereunder, regarding Corporate Social Responsibility are not applicable to the Company.

INSURANCE :

The Company has taken adequate insurance covers for its properties and insurable interest.

FIXED DEPOSIT :

The Company has not accepted any deposits from the public during the year. No amount on account of principal or interest on public deposits was outstanding as on the date of the Balance Sheet.

PERSONNEL :

The relations between the employees and the management, during the year, have been cordial.

MATERIAL CHANGES AND COMMITTMENTS :

There are no material changes and commitments, affecting the financial position of the company, which have occurred between the end of the financial year of the Company to which the financial statements relate and the date of this report.

PARTICULARS UNDER SECTION 197(12) AND RULE 5 OF THE COMPANIES (APPOINTMENT AND REMUNERATION OF MANAGERIAL PERSONNEL) RULES, 2014 :

(i) the ratio of the remuneration of each director to the median remuneration of the employees of the Company for the financial year:

(ii) (a) the percentage increase in remuneration of each Director, Chief Financial Officer, Chief Executive Officer, Company

Secretary or Manager, if any, in the financial year:

(ii)(b) The Non-Executive Directors of the Company are entitled to sitting fees within the limits approved by the Board of Directors and shareholders. The details of remuneration of Directors are provided in the Corporate Governance Report.

* Remuneration was paid w.e.f. October 01, 2017 and hence the ratio of his remuneration to median remuneration and percentage increase in remuneration is not comparable.

(iii) the percentage increase in the median remuneration of employees in the financial year : 13.81%

(iv) the number of permanent employees on the rolls of Company : 195

(v) the explanation on the relationship between average increase in remuneration and company performance : Employees are granted increment based on their performance as well as the performance of the Company. The net loss for the financial year ended March 31, 2018 was Rs. 265.42 lakhs and there was an average decrease in the remuneration to the extent of 4.83%

(vi) comparison of the remuneration of the Key Managerial Personnel against the performance of the Company :

The total revenue from sales and other income of the Company for the year 2017-18 was Rs.3,848.66 lakhs as compared to Rs. 4,214.26 lakhs for the previous year 2016-17. The Company’s performance during the year 2017-18 was considered while approving the increase in remuneration of Key Managerial Personnel .

(vii) variation in the market capitalisation of the Company, price earnings ratio as at the closing date of the current financial year and previous financial year and percentage increase over decrease in the market quotations of the shares of the Company in comparison to the rate at which the Company came out with the last public offer in case of listed companies, and in case of unlisted companies, the variations in the net worth of the Company as at the close of the current financial year and previous financial year:

(viii) average percentile increase already made in the salaries of 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:

The average annual increase in the salaries of employees was 13.89%. The Managing Director is paid minimum remuneration as per the Companies Act, 2013. Whereas, there is marginal decrease in managerial remuneration of CFO & Company Secretary.

(ix) comparison of each remuneration of the Key Managerial against the performance of the Company:

The remuneration of the Managing Director was within the minimum remuneration as per Schedule V, Part II and Section II of the Companies Act, 2013.

(x) the key parameters for any variable component of remuneration availed by the directors :

Mr. K. G. Gupta, Managing Director is entitled to commission not exceeding 1% of the net profit of the Company computed in the manner laid down under the Act as may be determined by the Board. Due to net loss, no commission was paid to him for the year under review. None of the other Directors are paid any remuneration except sitting fees and traveling expenses for attending Board and Committee Meetings.

(xi) the ratio of the remuneration of the highest paid director to that of the employees who are not directors but receive remuneration in excess of the highest paid director during the year : N.A.

(xii) affirmation that the remuneration is as per the remuneration policy of the Company :

The remuneration is as per the Remuneration Policy of the Company.

PARTICULARS OF EMPLOYEES :

None of the employees is covered under Section 197 of the Companies Act, 2013 read with Rule 5 of Companies ( Appointment and Remuneration of Managerial Personnel) Rules 2014.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT :

As per Listing Regulations, Management Discussion and Analysis Report is attached as annexure to this report.

FINANCE :

The Company has not availed any term loans from Banks during the financial year ended March 31, 2018. Total Fund based exposure of the Company with the Banks was to the tune of Rs. 900.00 lakhs.

CREDIT RATING :

CRISIL has reaffirmed “CRISIL B/Stable” for long term rating and “CRISIL A4” for short term rating.

REPORTING OF FRAUD BY AUDITORS :

During the year under review, no offense involving fraud has been committed against the Company by its employees or officers of the Company in terms of Section 143(12) of the Companies Act, 2013.

DISCLOSURE UNDER THE SEXUAL HARRASMENT OF WOMEN AT WORKPLACE (Prevention, Prohibition and Redressal) Act, 2013.

The Company has in place an Anti Sexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee (ICC) has been set up to redress complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this policy.

During the year under review no complaints were received.

CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO :

Particulars required to be disclosed under the provisions of Section 134(3)(m) of the Companies Act, 2013 read with Rule 8 of Companies (Accounts) Rules, 2014 are annexed herewith as Annexure - IV and forms an integral part of this report.

ACKNOWLEDGEMENT :

Your Directors wish to acknowledge and are grateful for the excellent support received from all levels, customers, vendors, regulatory authorities, bankers, shareholders and all other stakeholders. Your Directors recognize and appreciate the hard work and efforts put in by all the employees of the Company and their contribution to the progress of the Company in a very challenging environment.

FOR AND ON BEHALF OF THE BOARD OF DIRECTORS

Place : Mapusa - Goa. K. G. GUPTA

Date : May 30, 2018 CHAIRMAN & MANAGING DIRECTOR

DIN:00051863