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Directors Report of Aarvee Denims and Exports Ltd.

Mar 31, 2015

The Directors have pleasure in presenting the 26th Annual Report on the business and operation of your Company together with the audited accounts for the year ended 31st March, 2015.

FINANCIAL RESULTS

Your Company's performance during the year is as below:

(in Lacs) Particulars Year ended Year ended 31.03.2015 31.03.2014

Sales & Operating Income 74,551.14 68,531.57

Operating Profit 6,624.19 7,600.29

Add: Other Income 273.70 261.45

Less: Net Interest & Finance Cost 3,487.91 3,935.72

Less: Depreciation 3,070.58 3,284.86

Profit before tax 339.40 641.16

Provision for Tax & Deferred tax 320.63 322.95

Profit after Tax 18.77 318.21

Appropriations / Adjustments

PROFIT FOR THE YEAR 18.77 318.21

Balance of Profit brought forward 18,945.03 18,626.82

Depreciation on transition to Schedule II (239.00) Nil of the Companies Act, 2013

Profit carried to Balance Sheet 18,724.80 18,945.03

DIVIDEND

The Board of Directors has not recommended any dividend on Share Capital of the Company for the year ended on 31st March, 2015, considering the current cash flow position of the Company.

PERFORMANCE DURING THE YEAR

During the year under review, your Company reported top-line growth of 8.78% over the Previous Year. Gross Revenue from Operations stood at Rs. 74,551.14 lacs as compared to Rs. 685,31.57 lacs during the Previous Year.

During the year under review, the Company has earned Profit Before Tax (PBT) of Rs. 339.40 lacs and Profit after Tax (PAT) of Rs. 18.77 lacs as compared to PBT of Rs. 641.16 lacs and PAT of Rs. 318.21 lacs during the Previous Year.

FINANCE

During the year under report your company has raised total Rs. 589.79 lacs through term loan and working facilities from various banks.

During the year company has paid External Commercial Borrowing (ECB) of US$ 2.57 million (Rs. 1570.36 lacs) to Standard Chartered Bank (SCB) and US$ 0.87 million (Rs. 541.94 lacs) to Bank of Baroda (UAE).

SHARE CAPITAL

The paid up Equity Share Capital as at 31st March, 2015 stood at Rs. 2345.98 Lacs. During the year under review, the Company has not issued shares with differential voting rights nor has granted any stock options or sweat equity. The Company has no scheme of provision of money for purchase of its own shares by employees or by trustees for the benefit of employees. Hence the details under rule 16 (4) of Companies (Share Capital and Debentures) Rules, 2014 are not required to be disclosed.

TRANSFER TO RESERVES

No amount is appropriated from Statement of Profit and Loss and transferred to any Reserve Account.

BUSINESS OVERVIEW

As per the latest GDP growth estimates, India economy grew by 7.4% in financial year 2015 compared to 6.9% in financial year 2014, mostly driven by improved economic fundamentals and revision of GDP methodology calculation. Even inflation showed signs of moderation, a welcome sign – wholesale price and consumer price inflation declined to 4.2% and 7.4% respectively, compared with last year's 6.3% and 10.1% Reduced inflation, falling crude oil prices, stable rupee, improved purchasing power and consumer spending, higher capital inflows supported by the new government policy reforms have already put India on accelerating growth track and improved the business outlook.

The Government envisages GDP growth to accelerate to 8% in financial year 2016 driven by strengthening macro-economic fundamentals and implementation of policy reforms recently announced.

Indian textile and denim industry had faced multiple challenged such as global recession, less export orders due to reductions in inventories by global retail giants, over supply of goods in market, hike in power, fuel cost and man power cost. The Indian denims industry is facing out the in-house competition due to over expansions and introduction of new capacities in Denim.

In the backdrop of above macro-economic scenario, your Company has closed the financial year 2014-15 with 8.78% growth in Revenue as compared to Previous Year. However Operating Earnings before Interest, Depreciation and Taxes (EBITDA) has declined to 9.63% as compared to 11.77% for the Previous Year.

CORPORATE GOVERNANCE

The Board of Directors supports to maintain highest standards of corporate governance and adhere to corporate governance requirements set out by SEBI. In addition to basic governance issues, Board lays strong emphasis on transparency, accountability and integrity. The Report on corporate governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report. The requisite certificate from the Auditors of the Company confirming compliance with conditions of corporate governance as stipulated under aforesaid Clause 49, is attached to the Report on corporate governance.

PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS

Details of Loans, Guarantees and Investments covered under the provisions of Section 186 of the Companies Act, 2013 are given in the notes to the Financial Statements.

FIXED DEPOSITS

Your company has accepted the deposits aggregating to Rs. 1070.29 lacs during the year under review after complying with the provisions of the said act and Companies (Acceptance of Deposits) Rules, 2014. There has been no default in repayment of deposits or payment of interest thereon during the year under review. There are no deposits which are not in compliance with the requirements of Chapter V of the Companies Act, 2013.

Your directors appreciate the support which the company has received from the public and shareholders to its fixed deposit scheme.

INSURANCE AND CLAIMS

All properties and insurable interests of the company including building, plant and machinery and stocks wherever necessary and to the extent required have been adequately insured.

During the previous Financial Year a fire broke at Company's Inspection and Packing Department of Vijay Farm Unit resulting into loss of finished goods, semi-finished goods, Plant & Machinery, Factory Building, Furniture & Fixtures and Other Miscellaneous Items. The carrying value of the assets destroyed in fire is estimated at Rs.1732.21 lacs.

The company has insurance policies of all affected assets, so the Company has lodged claims with the insurance companies which claims include claim towards loss of the above stated assets.

PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES

All related party transactions that were entered into during the financial year were at arm's length basis. A detailed report on material contracts and arrangements made during the year 2014-15, being arm's length transactions have been reported and annexed hereto in form AOC-2 as Annexure - A and forms part of this report.

There are no materially significant related party transactions made by the company with promoters, key managerial personnel or other designated persons which may have potential conflict with interest of the company at large.

The Company has adopted a Related Party Transactions Policy. The Policy, as approved by the Board, is uploaded on the Company's website at the web link: http://www.aarvee-denims.com/pdfs/related-party-transaction- policy.pdf

SUBSIDIARY COMPANIES

Your Company does not have any subsidiary.

RISK MANAGEMENT

The Company has adopted a Risk Management Policy in accordance with the provisions of the Act and Clause 49 of the Listing Agreement. It establishes various levels of accountability and overview within the Company, while vesting identified managers with responsibility for each significant risk.

The Internal Audit Department facilitates the execution of Risk Management Practices in the Company, in the areas of risk identification, assessment, monitoring, mitigation and reporting. Through this programme, each Function and Unit addresses opportunities and risks through a comprehensive approach aligned to the Company's objectives. The Company has laid down procedures to inform the Audit Committee as well as the Board of Directors about risk assessment and management procedures and status.

Sustainability is embedded in the Corporate Enterprise Risk Management programme, which gives an opportunity to increase the effectiveness of risk management practices and for improving business efficiency.

This risk management process, which is facilitated by internal audit, covers risk identification, assessment, analysis and mitigation. Incorporating sustainability in the process also helps to align potential exposures with the risk appetite and highlights risks associated with chosen strategies. The current risk slate and the comprehensive risk policy have been further redefined during the year. The major risks forming part of the Enterprise Risk Management process are linked to the audit universe and are covered as part of the annual risk based audit plan.

INTERNAL CONTROLS SYSTEMS AND ADEQUACY

The Company's internal audit systems are geared towards ensuring adequate internal controls commensurate with the size and needs of the business, with the objective of efficient conduct of operations through adherence to the Company's policies, identifying areas of improvement, evaluating the reliability of Financial Statements, ensuring compliances with applicable laws and regulations and safeguarding of assets from unauthorized use. Details of the internal controls system are given in the Management Discussion and Analysis Report, which forms part of the Directors' Report.

The Internal Audit Department monitors and evaluates the efficacy and adequacy of internal control system in the Company, its compliance with operating systems, accounting procedures and policies at all locations of the Company. Based on the report of internal audit function, process owners undertake corrective action in their respective areas and thereby strengthen the controls. Significant audit observations and corrective actions thereon are presented to the Audit Committee of the Board.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

1) Changes in Directors and Key Managerial Personnel

Mrs. Komal S. Majmudar resigned from the Board of Directors of the Company with effect from 29th May, 2015. Your Directors take this opportunity to express their deep sense of appreciation for the valuable services rendered during her tenure as a Director.

Mrs. Komal Majmudar was appointed w.e.f. 30th September, 2014 during the year. Mr. Amish Shah, Company Secretary has resigned w.e.f. 30th September, 2014. Mr. K. K. Mohale, CEO of the Company retired w.e.f. 31st December, 2014 and Mr. Utsav Pandwar, CFO of the Company has resigned w.e.f. 30th May, 2015.

Mr. Hardik Modi has been appointed as Company Secretary w.e.f. 8th October, 2014. Mr. Suketu Shah has been appointed as CEO of the Company w.e.f. 6th April, 2015 and Ms. Shivani Shah has been appointed as an Additional Director of the Company (Woman Director) w.e.f. 13th August, 2015.

Mr. Kalpesh V. Shah, Director shall retire by rotation at the forthcoming Annual General Meeting of the Company and being eligible offer himself for re-appointment.

2) Declaration by an Independent Director(s) and reappointment, if any

All Independent Directors have given declarations that they meet criteria of independence as laid down under Section 149 (6) of the Act and Clause 49 of the Listing Agreement entered into with the Stock Exchanges. In opinion of the Board, they fulfill conditions of independence as specified in the Act and the Rules made there under and are independent of management.

3) Procedure for Nomination and Appointment of Directors

The Nomination and Remuneration Committee is responsible for developing competency requirements for the Board based on the industry and strategy of the Company. Board composition analysis reflects in- depth understanding of the Company, including its strategies, environment, operations, financial condition and compliance requirements.

The Nomination and Remuneration Committee conducts a gap analysis to refresh the Board on a periodic basis, including each time a Director's appointment or re-appointment is required. The Committee is also responsible for reviewing and vetting the CVs of potential candidates vis-à-vis the required competencies and meeting potential candidates, prior to making recommendations of their nomination to the Board. At the time of appointment, specific requirements for the position, including expert knowledge expected, is communicated to the appointee.

4) Criteria for Determining Qualifications, Positive Attributes and Independence of a Director

The Nomination and Remuneration Committee has formulated the criteria for determining qualifications, positive attributes and independence of Directors in terms of provisions of Section 178 (3) of the Act and Clause 49 of the Listing Agreement.

Independence: In accordance with the above criteria, a Director will be considered as an 'Independent Director' if he/ she meets with the criteria for 'Independent Director' as laid down in the Act and Clause 49 of the Listing Agreement.

Qualifications: A transparent Board nomination process is in place that encourages diversity of thought, experience, knowledge, perspective, age and gender. It is also ensured that the Board has an appropriate blend of functional and industry expertise. While recommending the appointment of a Director, the Nomination and Remuneration Committee considers the manner in which the function and domain expertise of the individual will contribute to the overall skill-domain mix of the Board.

Positive Attributes: In addition to the duties as prescribed under the Act, the Directors on the Board of the Company are also expected to demonstrate high standards of ethical behavior, strong interpersonal and communication skills and soundness of judgment. Independent Directors are also expected to abide by the 'Code for Independent Directors' as outlined in Schedule IV to the Act.

5) Annual Evaluation of Board Performance and Performance of its Committees and of Directors Pursuant to the provisions of the Act and Clause 49 of the Listing Agreement, the Board has carried out an annual evaluation of its own performance, performance of Directors as well as evaluation of working of its Committees.

The Nomination and Remuneration Committee has defined the evaluation criteria, procedure and time schedule for Performance Evaluation process for the Board, its Committees and Directors.

The Board's functioning was evaluated on various aspects, including inter alia degree of fulfillment of key responsibilities, Board structure and composition, establishment and delineation of responsibilities to various Committees, effectiveness of Board processes, information and functioning.

Directors were evaluated on aspects such as attendance and contribution at Board/ Committe Meetings and guidance/ support to the management outside Board/ Committee Meetings. In addition, the Chairman was also evaluated on key aspects of his role, including setting the strategic agenda of the Board, encouraging active engagement by all Board members and motivating and providing guidance to the Managing Director.

Areas on which the Committees of the Board were assessed included degree of fulfillment of key responsibilities, adequacy of Committee composition and effectiveness of meetings.

The performance evaluation of Independent Directors was carried out by entire Board, excluding Director being evaluated. The performance evaluation of the Chairman and the Non Independent Directors was carried out by Independent Directors who also reviewed performance of the Board as a whole. The Nomination and Remuneration Committee also reviewed performance of the Board, its Committees and of Directors.

The Chairman of the Board provided feedback to the Directors on an individual basis, as appropriate. Significant highlights, learning and action points with respect to the evaluation were presented to the Board.

REMUNERATION POLICY

The Company has adopted a Remuneration Policy for the Directors, Key Managerial Personnel and other employees, pursuant to the provisions of the Act and Clause 49 of the Listing Agreement.

The philosophy for remuneration of Directors, Key Managerial Personnel and all other employees of the Company is based on the commitment of fostering a culture of leadership with trust. The Remuneration Policy of the Company is aligned to this philosophy.

The Nomination and Remuneration Committee has considered following factors while formulating Policy:

(i) The level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors of the quality required to run the Company successfully;

(ii) Relationship of remuneration to performance is clear and meets appropriate performance benchmarks; and

(iii) Remuneration to Directors, Key Managerial Personnel and Senior Management involves a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the working of the Company and its goals.

It is affirmed that the remuneration paid to Directors, Key Managerial Personnel and all other employees is as per the Remuneration Policy of the Company.

Details of the Remuneration Policy are given in the Corporate Governance Report.

NUMBER OF MEETINGS OF THE BOARD

During the year, four board meetings and four audit committee meetings were convened and held, the details of which are given in the corporate governance report. The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the provisions of section 134 (5) of the Companies Act, 2013, your directors would like to state that:

a. in the preparation of the annual accounts, the applicable accounting standards have been followed;

b. 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 at the end of the financial year as on 31st March, 2015 and of the profit of the company for that period;

c. the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the company and for preventing and detecting fraud and other irregularities;

d. the directors have prepared the annual accounts on a "going concern" basis;

e. the directors had 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. the directors had devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

CORPORATE SOCIAL RESPONSIBILITY

The Board has constituted a Corporate Social Responsibility Committee headed by Mr. Ashish V. Shah as Chairman and Mr. Amol Dalal and Mr. Vinod P Arora as Members of the Committee.

The Company has adopted a Corporate Social Responsibility (CSR) Policy in compliance with the provisions of the Act.

As part of its CSR initiatives, the Company could not initiate CSR activities because of shortage of funds due to volatile textile market during the Previous Year. Further, it is to be noted that one of unit suffered sudden major fire accident on 1st March, 2015, which affected heavy loss of stock, building, plant and machineries due to fire. Report on CSR activities is annexed as Annexure - B.

POLICY ON PREVENTION, PROHIBITION AND REDRESSAL OF SEXUAL HARASSMENT AT WORKPLACE

The Company has zero tolerance for sexual harassment at workplace and has adopted a Policy on Prevention, Prohibition and Redressal of Sexual Harassment at the Workplace, in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules there under. The Policy aims to provide protection to employees at the workplace and prevent and redress complaints of sexual harassment and for matters connected or incidental thereto, with the objective of providing a safe working environment, where employees feel secure.

The Company has not received any complaint of sexual harassment during the financial year 2014-15.

VIGIL MECHANISM/ WHISTLE BLOWER POLICY

The Company has adopted a Whistle Blower Policy, to provide a formal mechanism to the Directors and employees to report their concerns about unethical behaviour, actual or suspected fraud or violation of the Company's Code of Conduct or ethics policy. The Policy provides for adequate safeguards against victimization of employees who avail of the mechanism and also provides for direct access to the Chairman of the Audit Committee. It is affirmed that no personnel of the Company has been denied access to the Audit Committee.

SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

No significant material orders have been passed by the Regulators or Courts or Tribunals which would impact the going concern status of the Company and its future operations.

AUDITORS

(1) Statutory Auditors

Pursuant to the provisions of Section 139 of the Act and the rules framed thereunder, M/s. Deloitte Haskins & Sells, Chartered Accountants, Ahmadabad (Registrant No. 17365W) and M/s N.C. Shah & Associates, Chartered Accountants, Ahmedabad (Registration No. 109692W) were appointed as Joint Auditors of the Company from conclusion of the 25th Annual General Meeting (AGM) of the Company held on 30th September, 2014 till the conclusion of the 28th AGM to be held in the year 2017, subject to ratification of their appointment at every AGM.

(2) Cost Auditors

The company has received a letter from the cost auditors M/s N. D. Birla and Co., Cost Accountant to the effect that their appointment, if made, would be within the prescribed limits under section 141(3) (g) of the Companies Act, 2013 and that they are not disqualified for appointment. The board of directors of the company at its meeting held on 29th May, 2015 appointed M/s. N. D. Birla & Co., Cost Accountants as the cost auditors of the Company to conduct the audit of cost records maintained by the Company as required by the Companies (Cost Records and Audit) Rules 2014 as amended from time to time.

The members are requested to ratify the remuneration to be paid to the cost auditors of the company

(3) Secretarial Auditors

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 of the Company had appointed Mr. Tapan Shah, Company Secretaries in Practice to undertake the Secretarial Audit of the Company for the year ended 31st March, 2015. The Secretarial Audit Report is annexed as Annexure - C.

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

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo stipulated under Section 134 (3) (m) of the Act read with Rule 8 (3) of The Companies (Accounts) Rules, 2014, is annexed as Annexure - D.

PARTICULARS OF EMPLOYEES AND REMUNERATION

The information required pursuant to Section 197 read with Rule, 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 in respect of employees of the Company, will be provided upon request. In terms of Section 136 of the Act, the Report and Accounts are being sent to the Members and others entitled thereto, excluding the information on employees' particulars which is available for inspection by the Members at the Registered Office of the Company during business hours on working days of the Company up to the date of the ensuing Annual General Meeting. If any Member is interested in obtaining a copy thereof, such Member may write to the Company Secretary in this regard.

EXTRACT OF ANNUAL RETURN

Pursuant to Section 92 (3) of the Act and Rule 12 (1) of The Companies (Management and Administration) Rules, 2014, the extract of Annual Return in form MGT.9 is annexed as Annexure - E.

MANAGEMENT DISCUSSION AND ANALYSIS REPORT

The management discussion and analysis report as required under clause 49 of the listing agreement with the Stock Exchanges has been attached and forms part of this report.

AUDITORS' REPORT

The Auditors' Report to the members on the Accounts of the Company for the financial year ended 31st March, 2015 does not contain any qualification.

Members' attention is invited to the observation made by the Auditors under "Emphasis of Matter" appearing in the Auditors' Report.

INDUSTRIAL RELATIONS

The industrial relations continued to be generally peaceful and cordial.

REGULATORY STATEMENT

In conformity with provision of Clause 32 in the Listing Agreement(s) the Cash Flow Statement for the year ended 31st March, 2015 is annexed hereto.

The Equity shares of your company are listed on the BSE Limited and the National Stock Exchange of India Limited (NSE).

The Company has paid the listing fees for the year 2015-16 to above stock exchanges.

ACKNOWLEDGEMENTS

Your Directors thank the various Central and State Government Departments, Organizations and Agencies for the continued help and co-operation extended by them. The Directors also gratefully acknowledge all stakeholders of the Company viz. customers, members, dealers, vendors, banks and other business partners for the excellent support received from them during the year and look forward to their continued support in future. The Directors place on record their sincere appreciation to all employees of the Company for their unstinted commitment and continued contribution to the Company.

For and on behalf of Board of Directors

Vinod P. Arora Place : Ahmedabad Chairman and Managing Director

Date : 13/08/2015 (DIN: 00007065)


Mar 31, 2014

Dear Members

The Directors take great pleasure in presenting the 25th Annual Report on the business and operation of your Company together with the aaudited accounts for the year ended 31st March, 2014.

FINANCIAL RESULTS

Your Company''s performance during the year is as below:

(Rs. in Lacs)

FINANCIAL RESULTS Year ended Year ended 31.03.2014 31.03.2013

Sales & Operating Income 68,531.57 72332.27

Operating Profit 7600.29 12260.67

Add: Other Income 261.45 182.81

Less: Net Interest & Finance Cost 3,935.72 3754.51

Less: Depreciation 3,284.86 3095.59

Profit before tax 641.16 5593.38

Provision for Tax & Deferred tax 322.95 1091.62

Profit after Tax 318.21 4501.76

Appropriations / Adjustments

PROFIT FOR THE YEAR 318.21 4501.76

Balance of profit / (loss) brought forward 18626.82 14261.39

Equity Dividend Nil 117.30

Corporate Dividend Tax (including Edu. cess and surcharge) Nil 19.03

Profit carried to Balance Sheet 18945.03 18626.82

DIVIDEND

The dividend payout for the year under review has been formulated in accordance with the company''s policy to pay substantial dividend linked to long term performance, keeping in view of the company''s need for capital for its future growth plan, requirements of working capital and the intent to finance through internal accruals your directors do not recommend any dividend for the year.

PERFORMANCE DURING THE YEAR

Domestic and global economic growth has been declined in the fiscal year 2013-14, the negative trends of economy has revealed its effect over the performance of the company. The company had noted turnover of Rs. 68531.57 lacs compared to preceding year Rs. 72332.27 lacs showing decrease of 5.25%. The Operating Profit for the current year is Rs. 7600.29 lacs (previous year Rs. 12260.67 lacs) which is 37% less than the preceding year. Profit after tax is Rs. 318.21 lacs (Previous year Rs. 4501.76 lacs). Provision for tax Rs. 49.27 lacs & Provision for Deferred Tax Rs. 273.68 lacs is made for the current year which was Rs. 977.66 lacs and Rs. 113.96 lacs respectively in last year.

EXTERNAL COMMERCIAL BORROWING

During the year company has paid External Commercial Borrowing (ECB) of US$ 2.25 million (Rs. 1361.30 lacs) to Standard Chartered Bank (SCB) and US$ 0.37 million (Rs. 228.12 lacs) to Bank of Baroda (UAE).

BUSINESS OVERVIEW:

Global growth was noted in low gear, and the drivers of growth have been changed. The developed economies have gain re-momentum growth but emerging market economies have faced dual challenges like stumpy international demand and unbalanced global financial conditions.

Indian textile and denim industry had faced multiple challenged such as global recession, less export orders due to reductions in inventories by global retail giants, over supply of goods in market , unsteady prices of raw materials like cottons, colour chemicals and allied materials and hike in power and fuel cost. The Indian denims industry is facing cut through competition from countries such as China, Pakistan, Vietnam and Thailand.

The domestic demand of denim in India has grown immensely over the years. While metros have been the main driver of demand in the initial phase for most denim wear brands in the country, the largest growth is now expected to come from a more deep penetration of denim in India. The denim market in India was secured at USD 1.2 Bn in 2011. This is projected to grow at the CAGR of 15-18% and has the potential of almost doubling its size by 2015.

In spite of admirable expectation about future growth of denims industry, the company has faced great challenge of overs supply in market which has been negatively impacted over the performance of the company in fiscal year 2013-14. In negative global economic scenario the Company has noticeable increased its export turnover. Even though of the company has taken effective measures of cost control, but negative domestic demand, high competition and uncertain global scenario has limited the turnover of the company at Rs. 68531.57.

CORPORATE GOVERNANCE

A separate report on Corporate Governance is enclosed as a part of this Annul Report. A certificate from the Auditors of the company regarding compliances with corporate governance norms stipulated under Clause 49 of the Listing Agreement (L.A.) is annexed to the Report on Corporate Governance.

FINANCE

During the year under report your company has raised total Rs. 574.63 lacs through term loan and working facilities from various banks.

CREDIT RATING

The Credit Analysis & Research Limited, has awarded "CARE A-" [Single A minus] to the long-term borrowing facilities and "CARE A2 " [A Two Plus] to the short-term borrowing facilities for the financial year 2013-14.

DIRECTORS

Mr. Tilakraj Kapoor, resigned from the Board of Directors of the Company with effect from 14th August, 2014. Your Directors take this opportunity to express their deep sense of appreciation for the valuable services rendered during his tenure as a Director.

pursuant to the provisions of Sections 149, 150, 152 and any other applicable provisions of the Companies Act, 2013 and the rules made thereunder (including any statutory modification(s) or re-enactment thereof for the time being in force) read with Schedule IV to the Companies Act, 2013 and Clause 49 of the Listing Agreement, your Directors appointed Mr. Sanjay S. Majmudar, Mr. Ashok C. Gandhi, Mr. Arvind D. Sanghvi and Mr. Amol R. Dalal, as Independent Directors of the Company to hold office for a period of five years with effect from 1st April, 2014, subject to approval by the members in the ensuing Annual General Meeting and their office as independent shall not be subject to retirement by rotation.

Mr. Rajesh P. Arora, Director shall retire by rotation at the forthcoming Annual General Meeting of the Company and being eligible offer himself for re-appointment.

The tenure of Mr. Vinod P. Arora, Chairman & Managing Director, Mr. Ashish V. Shah, Managing Director and Mr. Kalpesh V. Shah, Whole-time Director shall be expired on 30th September, 2015. Your Directors decided to terminate the existing tenure and re-appoint al, three executive directors at revised terms and conditions, details are as mentioned in explanatory statements item No. 10, 11 & 12.

AUDITORS

M/s Deloitte Haskins & Sells, Chartered Accountants, Ahmadabad (Registration No. 17365W) and M/s N.C. Shah & Associates, Chartered Accountants, Ahmedabad (Registration No. 109692W) are proposed to be appointed as Auditors of the Company from the conclusion of the ensuing Annual General Meeting till the conclusion of the twenty eighth Annual General Meeting of the Company held thereafter, subject to ratification of the appointment by the members at every AGM held after the ensuing AGM.

As required under Section 139 of the Companies Act, 2013, the Company has obtained a written consent from M/s Deloitte Haskins & Sells, M/s N.C. Shah & Associates, to such appointment and also a certificate to the effect that their appointment, if made, would be in accordance with Section 139(1) of the Companies Act, 2013 and the rules made there under, as may be applicable.

AUDITORS'' REPORT

The Auditors'' Report to the members on the Accounts of the Company for the financial year ended March 31, 2014 does not contain any qualification.

DIRECTORS'' RESPONSIBILITY STATEMENT

The Directors confirm that:

1. in the preparation of the annual accounts, the applicable accounting standards have been followed. There are no material departures from the applicable accounting standards;

2. such accounting policies have been selected and applied consistently and such judgments and estimates have been made as 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 on 31st March, 2014 and of the profit of the Company for that period;

3. proper and sufficient care has been taken for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities; and

4. the statements of accounts for the year ended on 31st March, 2014 have been prepared on a going concern basis.

Pursuant to sub-section (2AA) of Section 217 of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that:

a) in the preparation of the Annual Accounts, the applicable accounting standards have been followed;

b) the Directors had 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 at the end of the financial year and of the profit of the Company for that period.

c) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and or preventing and detecting fraud and other irregularities;

d) the Directors had prepared the annual accounts on a going concern basis.

DEPOSITS

For the Financial year ending March 31, 2014 the company has accepted fixed deposits to the tune of Rs. 427.35 lacs. The Company repaid the deposits amounting to Rs. 27.70 lacs and the outstanding deposits at the end of the year were amounting to Rs. 952.83 lacs.

As the company has accepted deposit under the provisions of the Companies Act 1956, the company will follow provisions of Section 74 of the Companies Act, 2013 hence entire outstanding deposit along with interest shall be repayable at maturity or on or before 31st March, 2015.

The Company have plan to accept public deposits up to Rs. 50 crores, pursuant to the provisions of section 73 and 76 of the Companies Act, 2013, read with the Companies (Acceptance of Deposits) Rules, 2014, subject to approval of members in 25th Annual General Meeting.

INDUSTRIAL RELATIONS

The industrial relations continued to be generally peaceful and cordial.

INSURANCE

All properties and insurable interests of the company including building, plant and machinery and stocks wherever necessary and to the extent required have been adequately insured.

PARTICULARS OF EMPLOYEES

Particulars required by the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (particulars of Employees) Rules, 1975 as amended have not been provided since no employee is drawing remuneration in excess of prescribed limits as per above provisions.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY BY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Details required to be disclosed under section 217 (1) (e) of the Companies Act, 1956 read with Companies ( Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 are set out in Annexure of this Report.

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation for the contribution made by employee at all levels. Your Company''s growth was made possible by employee''s support, co-operation, commitment, solidarity and hard work.

Your Directors wish to take this opportunity to express their deep sense of gratitude to the Central and State Governments, Bankers, Shareholders, employees and Customers for their co-operation and support and look forward to their continued support in future.

For and on behalf of the Board of Directors

Vinod P. Arora Place : Ahmedabad Chairman and Managing Director Date : 14/08/2014 DIN:00007065


Mar 31, 2013

To , The Members

The Directors are pleased to present the 24th Annual Report along with the Audited Financial Statement for the year ended 31st March, 2013.

FINANCIAL RESULTS

Your Company''s performance during the year is as below:

(Rs.in Lacs) FINANCIAL RESULTS Year ended Year ended 31.03.2013 31.03.2012

Sales & Operating Income 72332.27 66139.30

Operating Profit 12260.67 8355.28

Add: Other Income 182.81 113.50

Less: Net Interest & Finance Cost 3754.51 3680.66

Less: Depreciation 3095.59 2569.25

Profit before tax 5593.38 2218.87

Provision for Tax & Deferred tax 1091.62 815.65

Profit after Tax 4501.76 1403.22

Appropriations / Adjustments

PROFIT FOR THE YEAR 4501.76 1403.22

Balance of profit / (loss) brought forward 14261.39 12858.17

Equity Dividend 117.30

Corporate Dividend Tax (including Edu. cess and surcharge) 19.03

Profit carried to Balance Sheet 18626.82 14261.39

DIVIDEND

The Company has already declared and paid interim dividend @ 5% on the fully paid-up equity share capital of the Company as recommended by the Board of Directors of the Company in its meetings held on 14th August, 2012 for the year 2012-13. To conserve resources for growth your directors do not recommend any final dividend for the year.

PERFORMANCE DURING THE YEAR

With the help of strong domestic consumption and export demands of denims your Company had achieved turnover of Rs. 72,332.27 lacs compared to preceding year Rs. 66,139.30 lacs showing increase of 9.36%. The Operating Profit for the current year is Rs. 12,260.67 lacs (previous year Rs. 8355.28 lacs) which is 46.74% higher than the preceding year. Profit after tax is Rs. 4501.76 lacs (Previous year Rs. 1403.22 lacs). Provision for tax Rs. 977.66 lacs & Provision for Deferred Tax Rs. 113.96 lacs is made for the current year which was Rs. 541.44 lacs and Rs. 274.21 lacs respectively in last year.

REPAYMENT OF FOREIGN CURRENCY CONVERTIBLE BONDS

During the year the company has redeemed zero coupon Foreign Currency Convertible Bonds (FCCBs) with face value of USD 4.00 Million (approx Rs. 20.52 Crore) with premium of USD 1.92 Million (approx Rs. 9.85 Crore) on due date.

EXTERNAL COMMERCIAL BORROWING

During the year company had availed External Commercial Borrowing (ECB) of US$. 5.00 million from Standard Chartered Bank (SCB) for repayment of FCCB of the Company. The company has repaid all the FCCBs with premium on due date, now the company has cleared his liability of the conversion of FCCBs in to the Equity Share of the company or to redeem the FCCB.

BUSINESS OVERVIEW:

The two giant denim producer countries China and United States have cut down their production of denim, as a result of rising labour and energy costs. Despite of this vast export opportunity, sluggish export demand and vast competition in international market created difficulties to Indian denim players to achieve export target.

During the financial year 2012-13 the textile industry passed out from challenging operating environment amongst uncertainty over demand growth and volatility in raw material prices. The rising power, fuel and wage costs, higher interest rates and domestic and global competition increased margin pressure over the industry.

Quiet international demand of cotton and surplus production had retained cotton prices stable and range bound during the entire year. The exports revenues had shown downfall on the back of the sturdy economic slowdown in key export destinations of US and Europe. The global demand of denim fabrics had increased but hard-hitting competition from well-known denims producers'' countries had reduced profit margin. Domestically, weak consumer sentiment, high inflation and low wage growth had been reduced denim sales. With the help of strong domestic consumption and sustain export demands the denims and textiles industry wrote the success story of good profitability and development.

Despite of major global economic challenges, fluctuation in currency value, high cost of wages and power in year 2012-13 your Company had reported very good turnover and profit for the financial year ended March, 2013.

CORPORATE GOVERNANCE

Pursuant to the requirements of Clause 49 of the Listing Agreement with the Stock Exchanges, a report on Corporate Governance and a Certificate from the Auditors of the Company regarding compliance with Corporate Governance guidelines as stipulated and Management Discussion & Analysis report have been attached by way of separate section as part of this Annual Report.

DIRECTORS

Shri Arvind Sanghavi and Shri Amol Dalal, retire by rotation as per the provisions of Articles of Association of the Company. Your Directors recommend their reappointment.

AUDITORS

Auditors of the Company M/s. N.C. Shah & Associates, Chartered Accountants and M/s Deloitte Haskins & Sells, Chartered Accountants, will retire at the conclusion of the ensuing 24th Annual General Meeting from the office of the Auditors and being eligible, offer themselves for re-appointment from the end of the ensuing Annual General Meeting till the conclusion of the next Annual General Meeting. The Company has received a certificate from them certifying that their appointment, if made, would be within the limits specified under Section 224(1-B) of the Companies Act, 1956.

The notes to the accounts referred to in the Auditors'' Report are self-explanatory and therefore do not call for any further comments. The Company has adequate system of internal control procedures commensurate with the size of the Company and the nature of its business to keep check on the activities of the various departments.

COST AUDITOR

The Central Government had vide their Order No. 52/552/CAB-2000 dated 10th August, 2000 directed an audit of the cost accounts maintained by the Company in respect of textiles business. For conducting the cost audit for this business for the financial year ended 31st March, 2013, the Central Government has approved the appointment of M/s. N. D. Birla & Co, Cost auditors.

DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to sub-section (2AA) of Section 217 of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that:

(i) in the preparation of the Annual Accounts, the applicable accounting standards have been followed;

(ii) the Directors had 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 at the end of the financial year and of the profit of the Company for that period.

(iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and or preventing and detecting fraud and other irregularities;

(iv) the Directors had prepared the annual accounts on a going concern basis.

DEPOSITS

For the Financial year ending 31st March, 2013 the company has accepted fixed deposits to the tune of Rs. 690.83 lacs. The Company repaid the deposits amounting to Rs. 516.38 lacs and the outstanding deposits at the end of the year were amounting to Rs. 550.18 lacs.

INSURANCE

All properties and insurable interests of the company including building, plant and machinery and stocks wherever necessary and to the extent required have been adequately insured.

PARTICULARS OF EMPLOYEES

Particulars required by the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (particulars of Employees) Rules, 1975 as amended have not been provided since no employee is drawing remuneration in excess of prescribed limits as per above provisions.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY BY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Details required to be disclosed under section 217 (1) (e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 are set out in Annexure of this Report.

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation for the contribution made by employee at all levels. Your Company''s growth was made possible by employee''s support, co-operation, commitment, solidarity and hard work.

Your Directors wish to take this opportunity to express their deep sense of gratitude to the Central and State Governments, Bankers, Shareholders, employees and Customers for their co-operation and support and look forward to their continued support in future.

For and on behalf of the Board of Directors

Place : Ahmedabad Vinod P. Arora

Date : 29th May, 2013 Chairman and Managing Director


Mar 31, 2012

The Directors are pleased to present the 23rd Annual Report along with the Audited Financial Statement for the year ended 31st March, 2012.

FINANCIAL RESULTS

Your Company's performance during the year is as below:

(Rs. in Lacs)

FINANCIAL RESULTS Year ended Year ended 31.03.2012 31.03.2011

Sales & Operating Income 66139 49483

Operating Profit 8356 8163

Add: Other Income 113 428

Less: Net Interest & Finance Cost 3681 1929

Less: Depreciation 2569 2357

Profit before tax 2219 4305

Provision for Tax & Deferred tax 816 961

Profit after Tax 1403 3344

Appropriations / Adjustments

PROFIT FOR THE YEAR 1403 3344

Balance of profit / (loss) brought forward 12858 9651

Equity Dividend - 117

Corporate Dividend Tax (including Edu. cess and surcharge) - 19

Profit carried to Balance Sheet 14261 12858

DIVIDEND

In view to conserve resources for ongoing expansion, business growth of the Company and considering uncertain forex and economic situation, your Directors do not recommend any dividend for the year.

REDEMPTION OF FOREIGN CURRENCY CONVERTIBLE BONDS

During the year the Company has bought back zero coupon foreign currency convertible bonds (FCCBs) with the face value of USD 3.50 million (approx Rs. 1558.20 lacs) out of total outstanding FCCB of USD 7.50 million, at discount to their book value, as per RBI approval.

EXTERNAL COMMERCIAL BORROWING

During the year company had availed External Commercial Borrowing (ECB) of US$. 9.25 million from Bank of Baroda(BOB) and Standard Chartered Bank (SCB)for expansion of the Company.

PERFORMANCE DURING THE YEAR

With the help of Strong domestic consumption and export demands of denims your Company had achieved turnover of Rs. 66139.30 lacs compared to preceeding year Rs. 49483.41 lacs showing increase of 33.66 %. The Operating Profit for the current year is Rs. 8356 lacs (previous year Rs. 8163 lacs) which is 2.36 % higher than the preceeding year. Profit after tax is Rs. 1403.22 lacs (Previous year Rs. 3343.88 lacs). Provision for tax Rs. 541.44 lacs & Provision for Deferred Tax Rs. 274.21 lacs is made for the current year which was last year Rs. 811.97 lacs and Rs. 149.45 lacs respectively.

BUSINESS OVERVIEW:

Financial year 2011-12 had witnessed significant growth in export demand of Indian denim, as China and United States two big runner of denim market had cut down production due to rising in labour and energy costs. During the year in review with the help of huge export and domestic demand, Indian denim market had grown by 15%. The Indian denim players had faced vast competition in international market from neighborhood Asian nations Pakistan, Bangladesh & Indonesia.

In track of the global trend, demand for denims in India has also perceived a oceanic change. The Indian denim market is among the fastest growing market with an estimated growth rate of 12%. The retail boom has led to a upwelling in domestic denim demand. Certainly the Indian market currently presents a huge potential for denim producers to spread their wings.

Your Company have reported very good turnover for the year ended 31st March, 2012.

EXPANSION

The Company has expanded capacity by 40% in two phases. The 1st phase was completed in March, 2011 and the Second phase in April, 2012. The denim capacity increased from 60 million mtrs to 84 million mtrs per annum.

CORPORATE GOVERNANCE

Pursuant to the requirements of Clause 49 of the Listing Agreement with the Stock Exchanges, a report on Corporate Governance and a Certificate from the Auditors of the Company regarding compliance with Corporate Governance guidelines as stipulated and Management Discussion & Analysis report have been attached by way of separate Section as part of this Annual Report.

DIRECTORS

Shri Parmanand Arora and Shri Tilakraj Kapoor, retire by rotation as per the provisions of Articles of Association of the Company. Your Directors recommend their reappointment.

AUDITORS

Auditors of the Company M/s. N.C. Shah & Associates, Chartered Accountants and M/s Deloitte Haskins & Sells, Chartered Accountants, will retire at the conclusion of the ensuing 23rd Annual General Meeting from the office of the Auditors and being eligible offer themselves for re-appointment from the end of the ensuing Annual General Meeting till the conclusion of the next Annual General Meeting. The Company has received a certificate from them certifying that their appointment, if made, would be within the limits specified under Section 224(1-B) of the Companies Act, 1956.

The notes to the accounts referred to in the Auditors' Report are Self-explanatory and therefore do not call for any further comments. The Company has adequate system of internal control procedures commensurate with the size of the Company and the nature of its business to keep check on the activities of the various departments.

COST AUDITOR

The Central Government had vide their Order No. 52/552/CAB-2000 dated 10th August, 2000 directed an audit of the cost accounts maintained by the Company in respect of textiles business. For conducting the cost audit for this business for the financial year ended March 31, 2012, the Central Government has approved the appointment of M/s. N. D. Birla & Co, Cost auditors.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to sub-section (2AA) of Section 217 of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that:

(i) in the preparation of the Annual Accounts, the applicable accounting standards have been followed;

(ii) the Directors had 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 the financial year and of the profit of the Company for that period.

(iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and or preventing and detecting fraud and other irregularities;

(iv) the Directors had prepared the annual accounts on a going concern basis.

DEPOSITS

For the Financial year ending March 31, 2012 the company has accepted fixed deposits to the tune of Rs. 455.73 lacs. The Company repaid the deposits amounting to Rs. 327.52 lacs and the outstanding deposits at the end of the year were amounting to Rs. 375.73 lacs.

INSURANCE

All properties and insurable interests of the company including building, plant and machinery and stocks wherever necessary and to the extent required have been adequately insured.

PARTICULARS OF EMPLOYEES

Particulars required by the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (particulars of Employees) Rules, 1975 as amended have not been provided since no employee is drawing remuneration in excess of prescribed limits as per above provisions.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY BY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Details required to be disclosed under section 217 (1) (e) of the Companies Act, 1956 read with Companies ( Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 are set out in Annexure of this Report.

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation for the contribution made by employee at all levels. Your Company's growth was made possible by employee's support, co-operation, commitment, solidarity and hard work.

Your Directors wish to take this opportunity to express their deep sense of gratitude to the Central and State Governments, Bankers, Shareholders, Retail Partners, employees and Customers for their co-operation and support and look forward to their continued support in future.

For and on behalf of the Board of Directors

Vinod P. Arora

Chairman and Managing Director

Place : Ahmedabad

Date : 28/05/2012


Mar 31, 2011

The Members,

AARVEE DENIMS AND EXPORTS LTD.

We are delighted to present the report on our business and operations for the year ended March 31,2011

FINANCIAL RESULTS

The highlights of the Financial Results are given below:

(Rs.in Lacs)

FINANCIAL RESULTS Year ended Year ended

31.03.2011 31.03.2010

Sales & Operating Income 49495 37847

Operating Profit 8174 6224

Add: Other Income 68 101

Less: Net Interests Finance Cost 1929 1485

Exceptional Items (Gain)/ Loss (349) (502)

Less: Depreciation 2357 2321

Profit before tax 4305 3021

Provision for Tax & Deferred tax 961 724

Profit after Tax 3344 2297

Appropriations / Adjustments

PROFIT FOR THE YEAR 3344 2297

Balance of profit / (loss) brought forward 9651 8525

Preference Dividend - 512

Equity Dividend 117 234

Corporate Dividend Tax (including Edu.cess and surcharge) 19 127

Capital Redemption Reserve - 299

General Reserves

Profit carried to Balance Sheet 12858 9651

DIVIDEND

The Company has already declared and paid interim dividend @ 5% on the fully paid-up equity share capital of the Company as recommended by the Board of Directors of the Company in its meetings held on 11 th August, 2010 for the year 2010-11. To conserve resources for ongoing expansion and growth your Directors do not recommended any final dividend for the year.

REDEMPTION OF FOREIGN CURRENCY CONVERTIBLE BONDS:

During the year the Company has bought back zero coupon foreign currency convertible bonds (FCCBs) with the face value of USD 5.00 million (approxRs.23.26 crore) out of total outstanding FCCB of USD 12.50 million, at discount to their face value, as per RBI approval.

PERFORMANCE DURING THE YEAR:

Turnover of the company for the year is Rs. 49495 lacs compared to Rs. 37847 lacs showing increase by 30.78 %. The Operating Profit for the current year is Rs. 8174 lacs (Rs. 6224 lacs) which is 31.33 % higher than the preceding year. Profit after tax is Rs. 3344 lacs (2297 lacs). Provision for tax Rs. 903 lacs & Provision for Deferred Tax Rs. 150 lacs is made for the current year which was last year Rs. 543 lacsandRs.825 lacs respectively.

BUSINESS OVERVIEW:

With the help of Strong domestic consumption and export demands the denims and textiles industry wrote the success story of good profitability and development. In spite of various challenges like high price of cotton, colour & chemicals, power & fuel and interest costs the Indian denim industry has managed to hold its own and grow rapidly. It emerges that the last years both domestic markets and exports have grown. The domestic market has grown from US$30 billion to US$47-52 billion and the total market from US$46 to US$78 billion. This is remarkable because in a world filled with uncertainty one is witnessing 11 % growth over a five year period. Cotton textiles have registered a growth of 10.8 % in the financial year 2010-11, while textile products including wearing apparel have registered a growth of 4.3 %.The main drivers for denims & textiles industries growth are the favorable young demographic profile, rapidly increasing incomes, more organized retail and penetration of brands into smaller towns and cities, the advent of international buying houses, more garment exports, government initiatives like the Technology Up gradation Fund Schemes (TUFS) and other positive factors.

Your Company have reported very good turnover and profit for the year ended 31 th March, 2011.

Demand of denims in domestic market as well as in the international market is growing at significant growth rate considering this your Company has framed an expansion plan to increase its Denim capacity from existing 60 Million MTR to 84 Million MTR. The expansion plan has been divided in two phase. The first phase for 12 Million Mtr was completed in March 2011 and the second phase is expected to be completed by December 2011.

CORPORATE GOVERNANCE

Pursuant to the requirements of Clause 49 of the Listing Agreement with the Stock Exchanges, a report on Corporate Governance and a Certificate from the Auditors of the Company regarding compliance with Corporate Governance guidelines as stipulated and Management Discussion & Analysis report have been attached by way of separate Section as part of this Annual Report.

DIRECTORS

Shri Rajesh Arora and Shri Sanjay Majmudar retire by rotation as per the provisions of Articles of Association of the Company. Your Directors recommend their reappointment.

AUDITORS

Auditors of the Company M/s. N.C. Shah & Associates, Chartered Accountants and M/s. Deloitte Haskins & Sells, Chartered Accountants, will retire at the conclusion of the ensuing 22nd Annual General Meeting from the office of the Auditors and being eligible offer themselves for re-appointment from the end of the ensuing Annual General Meeting till the conclusion of the next Annual General Meeting. The Company has received a certificate from them certifying that their appointment, if made, would be within the limits specified under Section 224(1 -B) of the Companies Act, 1956.

The notes to the accounts referred to in the Auditors' Report are Self-explanatory and therefore do not call for any further comments. The Company has adequate system of internal control procedures commensurate with the size of the Company and the nature of its business to keep check on the activities of the various departments.

COST AUDITOR

The Central Government had vide their Order No. 52/552/CAB-2000 dated 10th August, 2000 directed an audit of the cost

accounts maintained by the Company in respect of texti les business. For conducting the cost audit for this business for the financial year ended March 31,2011, the Central Government has approved the appointment of M/s. N. D. Birla & Co, Cost auditors.

DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to sub-section (2AA) of Section 217 of the Companies Act, 1956, the Board of Directors of the Company hereby state and confirm that:

(i) in the preparation of the Annual Accounts, the applicable accounting standards have been followed;

(ii) the Directors had 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 at the end of the financial year and of the profit of the Company for that period.

(iii) the Directors had taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Companies Act, 1956 for safeguarding the assets of the Company and or preventing and detecting fraud and other irregularities;

(iv) the Directors had prepared the annual accounts on a going concern basis.

DEPOSITS

For the Financial year ending March 31,2011 the company has accepted fixed deposits to the tune of Rs. 301.12 lacs. The Company repaid the deposits amounting to Rs. 266.30 lacs and the outstanding deposits at the end of the year were amounting to Rs. 247.52 lacs.

INSURANCE

All properties and insurable interests of the company including building, plant and machinery and stocks wherever necessary and to the extent required have been adequately insured.

PARTICULARS OF EMPLOYEES

Particulars required by the provisions of Section 217 (2A) of the Companies Act, 1956 read with the Companies (particulars of Employees) Rules, 1975 as amended have not been provided since no employee is drawing remuneration in excess of prescribed limits as per above provisions.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENTJECHNOLOGY BY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Details required to be disclosed under section 217 (1) (e) of the Companies Act, 1956 read with Companies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 are set out in Annexure of this Report.

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation for the contribution made by employee at all levels. Your Company's growth was made possible by employee's support, co-operation, commitment, solidarity and hard work.

Your Directors wish to take this opportunity to express their deep sense of gratitude to the Central and State Governments, Bankers, Financial Institutions, Shareholders, Retail Partners and Customers for their co-operation and support and look forward to their continued support in future.

For and on behalf of the Board of Directors

Vinod P.Arora

Chairman and Managing Director

Place : Ahmedabad

Date :30th May, 2011




Mar 31, 2010

We are delighted ro present the report on or business and operations for the year ended March 31,2010

FINANCIAL RESULTS

The highlights of the Finanial Results are given below:

(Rs. in Lacs)

FINANCIAL RESULTS Year ended Year ended

31.3.2010 31.3.2009

Sales & Operatin Income 37851 32512

Opearating Portfit 6224 4328

Add: Other Income 101 52

Less: Net Interest & Finance Cost 1485 1097

Exceptional Items (Gain)/ Loss (502) 809

Lees: Depreciation 2321 2205

Profit before tax 3021 269

Provision for Tax & Deferred tax 724 37

Profit after Tax 2297 232

Appropriations/ Adjustments

PROFIT FOR THE YEAR 2297 232

Balance of profit/ (loss) brought forward 8525 8,593

Preference Dividend 512 0

Equity Dividend 234 0

Corporate Dividend Tax (inclu. edu. ccss and surcharge) 127 0

Capital Redemption Reserce 299 300

General Reserves 0 0

Profit carried to Blances Sheet 9651 8,252



PEROFORMANCE DURING THE YEAR:

Turnover of the company for the year is Rs. 37851 lacs compared to Rs.32512 lacs showing increase by 16.42%. The Operating Profit for the current year is Rs. 6224 lacs (Rs.4328 lacs) which is 43.81% higher than the preceding year. Profit after tax is Rs.2297 lacs (232 lacs). Provision for tax Rs. 543 lacs & Provision for Deferred Tax is Rs. 181 lacs is made for the current year which was last year at RS. 37 Lacs and Rs. Nil respectively.

DIVIDEND

The Comapny has already declared and paid interim diviend @ 5% on the fully paidup equity share capital of the Comapny as recommended by the Board of Directors of the Coampny in its meetings held on 16th October, 2009 for the year 2009-10.

In addition to the Interim Dividend declared and paid during for the year 2009-10, the Directors in their meeting deated 28th May 2010 recommended final dividend @5% (i.e. Rs. 0.50) on 2,34.59,800 equiry shares of Rs.10/- each aggregating the total dividend 2 10% i.e. Rs. 1/-) for the year 2009-10, subject to approval by the Members at the ensuring Annual General Meeting.

The Comapny has declared and paid full outstanding dividend to 18991340 13% Cumulative Redeemable non convertivle preference shares for the financial years 2007-08 and 2008-09 and also declared and paid 6.5% dividend for the financial year 2009-10 as recommended by the Board of Directors of the company in its meeting held on 5th September, 2009. Later the Comapny has declared and paid 3.25% dividend to 7495670 13% Cummlative Redeemable non convertible preference shares for the financial year 2009-10 as recommended by the Board of Directors of the company in its meeting held on 22nd December, 2009.

REDEMPTION OF 14991340 13% CUMULATIVE REDEEMABLE NON CONVERTIBLE PREFERENCE SHARES

During the year the Comapy has redeemed all 14991340 13% cumulative redeemable non convertible preference shares which were issued to DEG Germany along with the two years sccrued dividend and pro rata dividend for the current year These preforence shares were due for redemption in June. 2010

REDEMPTION OF FOREIGN CURRENCY CONVERTIBLE BONDS:

During the year the Comapny has bought back zero coupon foreign currency converible bonds (FCCBs) with the face value of USD 7.50 million, out of tatal FCCB of USD 20 million, at discount to their face value, as per RBI approval.

BUSINESS OVERVIEW:

Year 2009 witnessed the textile industry recovering from the slowdown with strong domestic consumption and renewed export demand. Whereas the textile industry, is a major contributor to export carnings, had encountered global economic slowdown shocks. Export registered month on month negative growth for most part of 2009. However, strong domestic markets and timely government intervention helped the Indian textile industry to overcome the slowdown effect. Despite of major economic showdown, fluctuatuin in currency value and high price of cotton in year ended March, 2010. Reevival in demand from domestic as well as from major export markets, including the US and Europe, and control over the input cost. including power & fuel and interest costs, helped your company to report good growth.

Considering future demands, your Coampny has maintained its modernization and growth play in this line the company has installed four lines for the conversion of POY into PTY, With help of this the Comapny will reduce the incremental cost of raw material. This year your Comapny has added 12 air jet looms of latest technology and hired 24 jet looms on lease. With the help of these additonal looms the Comapny will increase its weaving capacity. The Coampny has also expanded its proccssing capacity

CORPORTATE GOVERNACE

Pursuant to the requirements of Clause 49 of the Listing Agreement with the Stock Exchanges, a report on Corporate Governace and a Certificate from the Auditors of the Coampny regareding compliacnce with Corporate Goverance guidelines as stipulated and Management Discussion & Analysis report have been attached by way of separate Section as part of this Annual Report.

DIRECTORS

Shri Aevind Sanghvi ad Shri Amol Dalal retire by rotation as per the provisions of Articles of Association of the Company. Your Directors recommend their reappointment.

AUDITORS

Auditors of the Comapny M/s. N.C. Shah & Associates, Chartered Accountants and M/s Deloitte Haskins & Sells, Charetered Accountants. will retire at the conclusion of the ensuing 21st Anual General Meeting from the office of the Auditors and beings eligible offer themselves for re-appointment from the end of the ensuing Annual General Meetin till the conlusion of the next Annual General Meeting. The Comapny has received a certificate from them certifying that their appointment. if made, would be within the limits specified under Section 224(1B) of the Coampnies Act,1956.

The notes to the accounts referred to in the Auditors Report are Self-explantory and therefore do not call for any further comments. The Company has adequate system of internal control procedures commensurate with the size of the Comapny and the nature of its business to keep check on the activities of the various departments.

COST AUDITOR

The Central Government had vide their Order No. 52/552/CAB-2000 dated 10th August, 2000 directed an audit of the cost accounts maintained by the Comapny in respect of textiles business. For conducting the cost audit for this business for the financial year ended March 31, 2010, the Central Government has approved the appointment of M/s, N.D. Birla & Co auditors.

DIRECTORS RESPONSIBILITY STATEMENT

Pursuant to sub-section (2AA) of Section 217 of the Coampnies Act, 1956, the Board of Directors of the Comapny hereby state and confirm that:

(i) in the preparation of the Annual Accounts, the applicable accounting standards have been followed;

(ii)the Directors had selected such accounting policies and applied them consistently and made judgments and estimates that are reasonble and prudent so as to give a true and fair view of the state of affairs of the Comapny at the end of the financial year and of the profit of the Comapny for that period.

(iii) the Directors had taken proper and sufficient care for the maintence of adequate accountng records in accordance with the provisions of the Comapnies Act, 1956 for safeguarding the assets of the Coampny and or preventing and detecting fraud and other irregularities;

(iv) the Directors had p repared the annual accounts on a going concern basis.

DEPOSITS

For the Financial year ending March 31, 2010 the company has accepted fixed deposits to the tune of Rs. 1033.70 lacs. The Coampny repaid the deposits amounting to Rs. 1279.72 lacs and the outstanding deposits at the end of the year were amounting to Rs. 123.70 lacs.

INSURANCE

All properties and insurable interests of the company including bulding, plant and machinery and stocks wherever necessary and to the extent requred have been adequately insured.

PARTICULARS OF EMPLOYEES

Particulars required by the provisions of Section 217 (2A) of the Companies Act,1956 read with the Comapnies (particluars of Employees) Rules, 1975 as amended have not been provided since no employee is drawing remueration in excess of prescribed limits as per above provisions.

CONSERVATION OF ENERGY, RESEARCH AND DEVELOPMENT, TECHNOLOGY BY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

Details required to be disclosed under section 217 (1) (e) of the Comapnies Act, 1956 read with Comapnies (Disclosure of particulars in the Report of the Board of Directors) Rules, 1988 are ser out in Annexre of theis Report.

ACKNOWLEDGEMENTS

Your Directors place on record their appreciation for the contribution made gy employee at all levels. Your Companys growth was made possible by employees support, co-operation, commitment, solidarity and hard work.

Your Directors wish to take this opportunity to express their deejp sense of gratitude to the Central and State Governments, Bankers, Financial Institutions, Shareholders, Retail Partners and Customers for their co-operation and look forward to their continued support future.

For and on behald of the Board od Directors

Vinod P. Arora

Chairman and Managing Directors

Place: Ahmedabad

Date: 28th May 2010

 
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