Directors Report of NIBE Ltd.

Mar 31, 2023

Your Directors have the immense pleasure to present the 18^th (Eighteenth) Board’s Report on the business and operations of the Company and the accounts for the Financial Year ended March 31, 2023.

1. FINANCIAL RESULTS

The Company’s financial performance for the year ended March 31, 2023 is summarised below;		(Rs. in Lakhs)
Particulars	Standalone
	2022-23	2021-22
Total Income	10610.41	2,253.69
Less: Expenditure	9,983.14	2,286.95
ProfW(Loss) before Tax	627.27	(33.27)
Tax Expense (including Previous Year Tax Adjustment)	170.08	11.29
Profit/(Loss) after Tax	457.19	(44.56)

2. OPERATIONS & STATE OF COMPANY’S AFFAIRS

During the year under review, the standalone Revenue of the Company has increased to Rs.10610.41 lakhs compared to Rs. 2253.69 lakhs in the previous year, registering growth of 370.80%. The Standalone Net Profit after tax for the year has stood at Rs. 457.19 Lakhs as against loss of Rs. 44.56 Lakhs in the previous year.

This year under review was the first year consolidation of the Company and there was no business operation was carried out by the subsidiaries. During the year under review, the consolidated revenue of the Company was at Rs.10645.43 lakhs. At consolidated level Net Profit after tax for the year was stood at Rs. 159.30 Lakhs.

3. DIVIDENDANDRESERVES

Your directors have recommended a dividend of Rs. 0.10/- per equity share of Rs. 10/- each as dividend for the financial year ended March 31, 2023 for approval by the shareholders at the ensuing Annual General Meeting (“AGM”) of the Company. The Company does not propose to transfer any amount to reserves.

4. SHARE CAPITAL

The authorised share capital of the Companyis Rs. 30,00,00,000 (Rupees Thirty crores only) comprising of 30,000,000 equity shares of face value of Rs. 10/- each. There was no change in the authorized share capital of the Company during the financial year ended on March 31, 2023.

The paid-up equity share capital as at March 31, 2023 stood at Rs. 11,85,94,850 (Rupees Eleven crores eighty-five lakhs ninety-four thousand eight hundred fifty only) divided into 11,859,485 equity shares of Rs. 10/ each as against Rs. 10,41,87,060 divided into 1,04,18,706/- equity shares of 10/- each at the end on previous year.

During the year the Company has issued and allotted 14,40,779 equity shares of 10/- each at a premium of Rs, 355/- per equity share through preferential issue.

The Company has not issued any equity shares with or without differential rights during the year under review and hence no information as per provisions of Rule 4(4) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

The Company has not issued any sweat equity shares during the year under review and hence no information as per provisions of Rule 8(13) of the Companies (Share Capital and Debenture) Rules, 2014 is furnished.

There are no shares held by trustees for the benefit of employees and hence no disclosure under Rule 16(4) of the Companies (Share Capital and Debentures) Rules, 2014 has been furnished.

5. EMPLOYEES STOCK OPTION SCHEME (ESOP)

The Nibe Limited - Employee Stock Options Plan 2022 (“Nibe Limited ESOP 2022”) was approved by the Members of the Company by Special Resolution passed at the Extra-ordinary General Meeting held on December 26, 2022. The Company has not granted any stock option to the eligible employee under the Nibe Limited ESOP 2022 during the year under review.

A certificate from the Secretarial Auditor on the implementation of Nibe Limited ESOP 2022 will be placed at the ensuing Annual General Meeting for inspection by the Members. The particulars with regard to stock options as on March 31, 2023, as required to be disclosed pursuant to the provisions of Companies (Share Capital and Debentures) Rules, 2014 read with the applicable SEBI (Share Based Employee Benefits and Sweat Equity) Regulations, 2021, are set out at Annexure-1 to this Report.

200,000 (Two Lakhs only) stock options were available for grant to the eligible employees as on March 31, 2023 under Nibe Limited ESOP 2022.

6. SUBSIDIARYAND ASSOCIATES COMPANIES

As on March 31, 2023 the Company has the following subsidiaries:

• Nibe E-Motor Limited

• Nibe Defence and Aerospace Limited

• Nibe Technologies Private Limited, wholly owned subsidiary

The Company has no associate or joint venture Company during the financial year and as on March 31, 2023.

7. CONSOLIDATED FINANCIAL STATEMENTS

In accordance with the Act and implementation requirements of Indian Accounting Standards (‘IND-AS’) on accounting and disclosure requirements and as prescribed by the SEBI Listing Regulations, the Audited Consolidated Financial Statements are provided in this Annual Report

Pursuant to Section 129(3) of the Act, a statement containing the salient features of the Financial Statements of the Subsidiaries, Associates and Joint Ventures of the Company in the prescribed form AOC-1 is annexed at Annexure - 2 to this Annual Report.

8. CORPORATE GOVERNANCE

The Company is committed to maintain the highest standards of Corporate Governance and adheres to the Corporate Governance requirements as stipulated by the Securities and Exchange Board of India (‘the SEBI’).The report on Corporate Governance as prescribed in the SEBI Listing Regulations forms an integral part of this Annual Report.

The requisite certificate from NKM & Associates, Company Secretaries, confirming compliance with the conditions of Corporate Governance along with a declaration signed by CEO of the Company stating that the Members of the Board of Directors and Senior Management have affirmed the compliance with code of conduct of the Board of Directors and Senior Management, is attached to the report on Corporate Governance.

9. ANNUALRETURN

Pursuant to Section 92(3) read with Section 134(3)(a) of the Act, the Annual Return as on March 31, 2023 is available on the website of the Company at www.nibelimited.com under Investor relations tab.

10. DIRECTORSANDKEYMANAGERIALPERSONNEL

• All Independent Directors have furnished the declarations to the Company confirming that they meet the criteria of Independence as prescribed under Section 149 of the Act and Regulation 16 (1)(b) read with Regulation 25(8) of the SEBI Listing Regulations and the Board has taken on record the said declarations after undertaking due assessment of the veracity of the same.

• The Company has also received Form DIR-8 from all the Directors pursuant to Section 164(2) and Rule 14(1) of Companies (Appointment and Qualification of Directors) Rules, 2014.

• Brief profile of the Director seeking re-appointment has been given as an annexure to the Notice of the ensuing AGM.

• In terms of the provision of Section 152 of the Companies Act, 2013 and of Articles of Association of the Company, Mr. Venkateswara Gowtama Mannava (DIN: 07628039), Non-Executive Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, seeks re-appointment.

• During the year under review;

- Mr. Venkateswara Gowtama Mannava was appointed as a Non-Executive, Independent Director w.e.f. August 09, 2022 and redesignated as Non-Executive Director, Non-Independent w.e.f. November 12, 2022.

- Mr. Gaurav Brahmdev Thakur was appointed as a Non-Executive Director, Independent Director w.e.f. October 01, 2022.

- Mr. Manish P. Kella and Mr. Sanjay Shivajirao Dighe, Non-Executive, Independent Directors have resigned from the Directorship of the Company w.e.f. October 01, 2022.

• Mr. Dasharath Ram was appointed as Non-Executive, Independent Director of the Company w.e.f. May 23, 2023.

• Mr. Soonil V Bhokare was appointed as Non-Executive, Independent Director of the Company w.e.f. August 12, 2023.

• Mr. Aditya Joshi, Non-Executive, Independent Director of the Company resigned from the Directorship of the Company w.e.f. June 01, 2023.

• Mrs. Manjusha Nibe, Whole-time Director of the Company resigned from the Directorship of the Company w.e.f. closure of the business hours of August 28, 2023.

• Mrs. Ranjana Mimani was appointed as Non-Executive, Non-Independent Director of the Company w.e.f. August 28, 2023.

• The following persons are the Key Managerial Personnel (KMP) of the Company pursuant to Section 2(51) and Section 203 of the Act read with the Rules framed thereunder:

• Mr. Ganesh Nibe :	Chairman & Managing Director
• Mr. Sachin Raosaheb Shinde :	Chief Executive Officer
• Mr. Hemant Dilip Wani :	Chief Financial Officer
• Ms. Priya Pandey (w.e.f. June 26, 2023) :	Company Secretary & Compliance Officer

11. MEETINGS

A calendar of Board Meetings, Annual General Meeting and Committee Meetings is prepared and circulated in advance to the Directors of your Company. The Board of Directors of your Company met 11 (Eleven) times during the financial year 2022-23. The details of these Meetings are provided in the Corporate Governance Section of the Annual Report.The maximum time gap between any two consecutive Meetings did not exceed one hundred and twenty days.

12. BOARD COMMITTEES

The Board had constituted/re-constituted various Committees in compliance with the provisions of the Act and the SEBI Listing Regulations viz. Audit Committee, Nomination and Remuneration Committee, Stakeholders Relationship Committee.

All decisions pertaining to the constitution of Committees, appointment of Members and fixing of terms of reference/role of the Committees are taken by the Board.

The details of the role and composition of these Committees, including the number of Meetings held during the financial year and attendance at these Meetings are provided in the Corporate Governance Section of the Annual Report.

13. PERFORMANCE EVALUATION

Pursuant to the applicable provisions of the Act and the SEBI Listing Regulations, the Board has carried out an Annual Evaluation of its own performance, performance of the Independent Directors and the working of its committees based on the evaluation criteria specified by Nomination and Remuneration Committee for performance evaluation process of the Board, its Committees and Directors.

The Board’s functioning was evaluated on various aspects, including, inter-alia, the structure of the Board, Meetings of the Board, functions of the Board, degree of fulfilment of key responsibilities, establishment, and delineation of responsibilities to various Committees and effectiveness of Board processes, information and functioning.

The Committees of the Board were assessed on the degree of fulfilment of key responsibilities, adequacy of Committee composition and effectiveness of Meetings. The Directors were evaluated on aspects such as attendance, contribution at Board/ Committee Meetings and guidance/support to the management outside Board/Committee Meetings.

As mentioned earlier, the performance assessment of Non-Independent Directors, Board as a whole and the Chairman were evaluated in a separate Meeting of Independent Directors. The same was also discussed in the Board Meeting. Performance evaluation of Independent Directors was done by the entire Board, excluding the Independent Director being evaluated.

14. CRITERIA FOR SELECTION OF CANDIDATES FOR APPOINTMENT AS DIRECTORS, KEY MANAGERIAL PERSONNELAND SENIOR MANAGEMENT PERSONNEL

The Nomination and Remuneration Committee has laid down well-defined criteria, in the Nomination and Remuneration Policy, for selection of candidates for appointment as Directors, Key Managerial Personnel and Senior Management Personnel.

The said Policy is available on the Company’s website and can be accessed at www.nibelimited.com.

15. FAMILIARIZATION PROGRAMOFINDEPENDENTDIRECTORS

In compliance with the requirements of the SEBI Listing Regulations, the Company has put in place a familiarization program for Independent Directors to familiarize them with their role, rights and responsibility as Directors, the operations of the Company, business overview etc.

The details of the familiarization program are explained in the Corporate Governance Report and the same is also available on the website of the Company and can be accessed at www.nibelimited.com.

16. A STATEMENT REGARDING OPINION OF THE BOARD WITH REGARD TO INTEGRITY, EXPERTISE, AND EXPERIENCE (INCLUDING THE PROFICIENCY) OF THE INDEPENDENT DIRECTORS APPOINTED DURING THE YEAR

The Company has received declaration from the Independent Directors that they meet the criteria of independence as prescribed under Section 149 of the Act and Regulation 16 (1)(b) read with Regulation 25(8) of the SEBI Listing Regulations. In the opinion of the Board, they fulfil the condition for appointment/re-appointment as Independent Directors on the Board and possess the attributes of integrity, expertise and experience as required to be disclosed under Rule 8(5) (ii) (a) of the Companies (Accounts) Rules, 2014.

17. INDEPENDENTDIRECTORS’ MEETING

In terms of Schedule IV of the Act and Regulation 25 of the SEBI Listing Regulations, Independent Directors of the Company are required to hold at least one meeting in a financial year without the attendance of Non-Independent Directors and Members of Management. During the year under review, Independent Directors met separately on February 11, 2023, inter-alia, for

• Evaluation of performance of Non-Independent Directors and the Board of Directors of the Company as a whole.

• Evaluation of performance of the Chairman of the Company, taking into views of Executive and Non-Executive Directors; and

• Evaluation of the quality, content, and timelines of flow of information between the Management and the Board that is necessary for the Board to effectively and reasonably perform its duties.

18. REMUNERATION POLICY FOR DIRECTORS, KEY MANAGERIAL PERSONNELAND SENIOR MANAGEMENT EMPLOYEES

The Nomination and Remuneration Committee has laid down the framework for remuneration of Directors, Key Managerial Personnel and Senior Management Personnel in the Nomination and Remuneration Policy recommended by it and approved by the Board of Directors. The Policy, inter-alia, defines Key Managerial Personnel and Senior Management Personnel of the Company and prescribes the role of the Nomination and Remuneration Committee. The Policy lays down the criteria for identification, appointment and retirement of Directors and Senior Management. The Policy broadly lays down the framework in relation to remuneration of Directors, Key Managerial Personnel and Senior Management Personnel. The Policy also provides for the criteria for determining qualifications, positive attributes and independence of Director and lays down the framework on Board diversity.

The said Policy is available on the Company’s website and can be accessed at www.nibelimited.com.

19. PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS BY COMPANY

Particulars of Loans, Guarantees and Investments made during the year as required under the provisions of Section 186 of the Act are given in the notes to the Financial Statements forming part of Annual Report.

Also, pursuant to Paragraph A (2) of Schedule V of the Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, (‘SEBI Listing Regulations’) particulars of Loans/Advances given to subsidiaries have been disclosed in the notes to the Financial Statements forming part of Annual Report.

20. WHISTLE BLOWER POLICY/VIGIL MECHANISM

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 provides for direct access to the Chairman of the Audit Committee. It is affirmed that no person has been denied access to the Audit Committee.

The said Policy is available on the Company website and can be accessed at www.nibelimited.com.

21. RELATED PARTY TRANSACTIONS AND POLICY

The related party transactions attracting the compliance under the Companies Act, 2013 and/or the SEBI Listing Regulations were placed before the Audit Committee and/or Board and/or Members for necessary review/approval.

The routine related party transactions were placed before the Audit Committee for its omnibus approval. A statement of all related party transactions entered was presented before the Audit Committee on a quarterly basis, specifying the nature, value and any other related terms and conditions of the transactions.

Transactions to be reported in Form AOC-2 in terms of Section 134 of the Act read with Companies (Accounts) Rules, 2014, with related parties are annexed as Annexure - 3.

The Related Party Transactions Policy in line with the requirements of Regulation 23 of the SEBI Listing Regulations is available on the Company website and can be accessed at www.nibelimited.com.

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

22. SIGNIFICANTAND MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS

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

23. MATERIAL CHANGES AND COMMITMENT IF ANY, AFFECTINGFINANCIALPOSITION OF THE COMPANYFROM THE END OF FINANCIAL YEAR TILL THE DATE OF THE REPORT

There have been no material changes and commitments affecting the financial position of the Company which have occurred between the end of the financial year to which the Financial Statements relate and the date of this Report.

24. DIRECTORS'' RESPONSIBILITY STATEMENT

Pursuant to the provisions of section 134(5) of the Companies Act, 2013, the Directors confirm that;

i. in the preparation of the Annual Accounts for the year ended March 31, 2023, the applicable accounting standards have been followed along with proper explanation relating to departures, if any;

ii. appropriate accounting policies have been selected and applied consistently and such judgments and estimates have been made that are reasonable and prudent so as to give a true and fair view of the state of affairs ofthe Company as at March 31, 2023 and of the profit of the Company for the year ended on that date

iii. proper and sufficient care has been taken 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;

iv. the annual accounts have been prepared on a “going concern” basis;

v. proper internal financial controls are laid down and such internal financial controls are adequate and operating effectively;

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

Your Auditors have opined that the Company has in, all material respects, maintained adequate internal financial controls over financial reporting and that they were operating effectively.

25. STATUTORYAUDITORS

M/s. RT Jain & Co LLP, Chartered Accountants (Firm Registration No. 131092W) have tendered their resignation as the Statutory Auditor of the Company w.e.f. August 12, 2023.

To fill up the casual vacancy, the Board of Directors of the Company at its Meeting held on August 28, 2023, appointed M/ s Bhatter & Co., Chartered Accountants on the recommendation of Audit Committee, subject to the approval of the Members at the ensuing Annual General Meeting.

Necessary resolution to appoint M/s Bhatter & Co., Chartered Accountants, as Statutory Auditors has been incorporated in the notice of the ensuing 18^th Annual General Meeting.

The Auditors’ Report for the Financial Year ended March 31, 2023 submitted by the M/s. RT Jain & Co LLP, Chartered Accountants does not contain any qualification, reservation or adverse remark.

26. REPORTTNGOF FRAUD

There was no instance of fraud during the year under review, which required the Statutory Auditors to report under Section 143(12) of the Act and the Rules made thereunder.

27. COST AUDIT AND COST RECORDS

Provision of Section 148 of the Companies Act, 2013 read with the Companies (Cost Records and Audit) Rules, 2014 are not applicable to the Company during the financial year under review.

28. SECRETARIALAUDIT

Pursuant to the provisions of Section 204 of the Companies Act, 2013 and rules made thereunder, the Company has appointed NKM & Associates, Company Secretaries (“Secretarial Auditors”) to undertake the Secretarial Audit of the Companyfor the financial year 2022-23 and the same was conducted by them in accordance with the provisions of Section 204 of the Act. The Secretarial Auditor’s Report is attached to this Annual Report at Annexure - 4.

The Secretarial Auditor’s observations are self-explanatory.

29. SECRETARIAL STANDARDS

The Company has complied with the applicable SS-1 (Secretarial Standard on Meetings of the Board of Directors) and SS-2 (Secretarial Standard on General Meetings) issued by the Institute of Company Secretaries of India and approved by the Central Government under Section 118(10) of the Companies Act, 2013.

30. TRANSFER OF UNCLAIMED DIVIDENDAND EQUITY SHARES TO INVESTOR EDUCATIONAND PROTECTION FUND (IEPF)

Pursuant to Section 124 of the Act read with the Investor Education and Protection Fund Authority (Accounting, Audit, Transfer and Refund Rules), 2016 (‘the IEPF Rules’), during the year under review, no amount of Unclaimed dividend and corresponding equity shares were due to be transferred to IEPF account.

31. INTERNAL CONTROL SYSTEMSAND THEIRADEQUACY

The Company has an adequate system of internal control to ensure that the resources are used efficiently and effectively so that:

• assets are safeguarded and protected against loss from unauthorized use or disposition.

• all significant transactions are authorised, recorded and reported correctly.

• financial and other data are reliable for preparing financial information.

• other data are appropriate for maintaining accountability of assets.

The internal control is supplemented by an extensive internal audits programme, review by management along with documented policies, guidelines and procedures.

32. INTERNALFINANCIALCONTROLS AND THEIR ADEQUACY

The Company has in place adequate internal financial controls commensurate with the size, scale and complexity of its operations. The Company has policies and procedures in place for ensuring proper and efficient conduct of its business, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records and the timely preparation of reliable financial information. The Company has adopted accounting policies, which are in line with the Accounting Standards and the Act.

33. RISK MANAGEMENT

Your Company recognizes that risk is an integral part of business and is committed to managing the risks in a proactive and efficient manner. Your Company periodically assesses risk elements in the internal and external environment, along with the cost of treating such risk elements and incorporates risk treatment plans in its strategy, business and operational plans. As on the date of this report, the Company does not foresee any critical risk, which threatens its existence.

34. PREVENTION OF SEXUAL HARASSMENT POLICY

The Company has always believed in providing a conducive work environment devoid of discrimination and harassment including sexual harassment. The Company has a well formulated Policy on Prevention and Redressal of Sexual Harassment. The objective of the Policy is to prohibit, prevent and address issues of sexual harassment at the workplace. This Policy has striven to prescribe a code of conduct for the employees and all employees have access to the Policy document and are required to strictly abide by it. The Policy covers all employees, irrespective of their nature of employment and is also applicable in respect of all allegations of sexual harassment made by an outsider against an employee.

The Company has duly constituted an Internal Complaints Committee in line with the provisions of the Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rules thereunder.

During the year 2022-23, no case of Sexual Harassment was reported.

35. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Provision of Schedule VII of the Companies Act, 2013 read with Companies Corporate Social Responsibility Policy Rules, 2014 are not applicable to the Company during the year under review.

36. ENVIRONMENTAL SAFETY

Your Company is committed to ensure sound Safety, Health and Environmental (SHE) performance related to its activities, products and services. Your Company is taking continuous steps to develop Safer Process Technologies and Unit Operations and has been investing heavily in areas such as Process Automation for increased safety and reduction of human error element.

The Company is committed to continuously take further steps to provide a safe and healthy environment.

37. INDUSTRIAL RELATIONS

The industrial relations continued to be generally peaceful and cordial during the year under review.

38. CONSERVATION OFENERGY, TECHNOLOGYABSORPTIONAND FOREIGNEXCHANGEEARNINGSAND OUTGO

(A) Conservation of Energy

Your company is taking continuously taking initiatives to ensure optimum utilization of energy available in day-to-day operations. Your company uses energy efficient lighting devices, light fittings to save energy, capacitor bank/devices to maintain power factor which are environment and power efficient.

(B) TechnologyAbsorption

Your company is doing its business by ensuring optimum utilisation of its available resources. Your company has not taken any research & development activity so far.

(C) Foreign Exchange Earnings and Outgo

The Company has foreign earning of Rs. 624.54 lakhs and and outgo of Rs. 12.99 lakhs during the financial year 202223.

39. PUBLIC DEPOSITS

Your Company has not accepted any deposit falling under Chapter V of the Act during the year under review. There were no such deposits outstanding at the beginning and end of the FY 2022-23.

40. PARTICULARS OF EMPLOYEES AND OTHER ADDITIONAL INFORMATION

Disclosure pertaining to remuneration and other details as required under Section 197(12) of the Act read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 is annexed to the Report as Annexure - 5 and 6. In terms of proviso to Section 136(1) of the Act, the Report and Accounts are being sent to the Members, excluding statement containing particulars of top 10 employees and the employees, drawing remuneration in excess of limits prescribed under Rule 5(2) and (3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014. The said Statement is also open for inspection. Any member interested in obtaining a copy of the same may write to the Company Secretary

41. BUSINESS RESPONSIBILITY AND SUSTAINABILITY REPORT

The Business Responsibility Reporting as required under SEBI (LODR), 2015 and is not applicable to your Company for the financial year under review.

42. MANAGEMENTDISCUSSIONANDANALYSIS

Management Discussion and Analysis Report for the year 2022-23 as stipulated under SEBI (LODR), Regulations, 2015 has annexed and forming the part of this Report.

43. DISCLOSURE OFAGREEMENTS

As on date of the notification i.e., June 14, 2023, there was no agreement are subsisting as specified in clause 5A of para-A of part A of Schedule III of SEBI LODR Second Amendment Regulations, 2023.

44. CAUTIONARY STATEMENT

Statements in this Report, Management Discussion and Analysis, Corporate Governance, notice to the Shareholders or elsewhere in this Annual Report, describing the Company’s objectives, projections, estimates and expectations may constitute ‘forward looking statement’ within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied in the statement depending on the Market conditions and circumstances.

45. ACKNOWLEDGEMENTANDAPPRECTATTON

Your directors would like to acknowledge and place on record their sincere appreciation to all Stakeholders, Clients, Financial Institutions, Banks, Central and State Governments, the Company’s valued Investors and all other Business Partners, for their continued co-operation and support extended during the year.

Your Directors recognize and appreciate the efforts and hard work of all the employees of the Company and their continued contribution to promote its development.

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Mar 31, 2015

Dear Members,

The Directors have pleasure in presenting the 10th Annual Report of your Company along with the Audited Statement of Accounts for the Period ended 31st March, 2015.

FINANCIAL HIGHLIGHTS :

Year Ending March, Year Ending March, Particulars 2015 2014 Amt. in Rs. Amt. in Rs.

Sales 111,103,636 95,593,031

Other Income 115,528 -

Total Income 111,219,164 95,593,031

Less:Expenditure 107,613,159 92,720,837

Profit/(Loss) before Interest, Depreciation & Tax 3,606,005 2,872,194

Less:Interest 938,244 575,140

depreciation And Amortization Cost 1,374,121 1,175,155

Profit/(Loss) before Tax 1,293,640 1,121,899

Tax Expense 322,536 508,389

Profit/(Loss) after Tax 971,103 613,510

Add:Profit/(Loss) Brought Forward 2,241,422 1,741,411

Less: Prior year Tax Lability - (8,007)

Less: Utilised for Bonus Issue (1,655,630) -

Less: : Depreciation / Prior period adjustments (27,281) (105,492)

Amount available for Appropriation/(Loss) 1,529,614 2,241,422

RESULTS OF OPERATION REVIEW:

During the current period, your Company has shown an increase in revenue to the extent of 16.34 % from Rs.95.60 Lakhs during FY 2013-14 to Rs. 111.22 Lakhs during FY 2014-15. PAT has shown an increase of 58.29 % from Rs. 6.13 Lakhs during FY 2013-14 to Rs. 9.71 Lakhs during FY2014-15.

FINANCIAL YEAR

This report of Directors along with its Annexure, Management Discussion and Analysis, Corporate Governance Report, Financial Statements alongwith their Notes are prepared for the period April 01, 2014 to March 31, 2015 (a period of 12 months). Pursuant to the provisions of Section 2(41) of the Companies Act, 2013, a 'financial year' in relation to the Company means the period ending on the 31st day of March every year, in respect whereof financial statement of the Company is made.

Your Company in compliance with the provisions of the Companies Act, 2013.

SHARE CAPITAL

During the period April 01, 2014 to March 31, 2015, there is a change in the Issued, Subscribed and Paid Up Capital of your Company pursuant to bonus issue in the ratio of 2:1 (i.e. two bonus equity share of Rs.10/- for every one fully paid up equity shares of Rs.10/- each held) to the shareholders. The Share Capital Audit as per the directives of the Securities and Exchange Board of India (SEBI) is being conducted by RanjanaMimani& Associates, Practicing Company Secretaries. The Equity Shares of your Company are listed on Bombay Stock Exchange in India viz. BSE Limited (BSE) and the Company has entered into Listing Agreement with the Stock Exchange. As per the requirements of Listing Agreement, the said Share Capital Audit reports are duly forwarded to the Stock Exchanges where the Company's' Equity Shares are Listed. The paid up Share Capital of the Company stands at Rs. 104,187,060/- (Rupees Ten Crores Forty One Lakh Eighty Seven Thousand and Sixty Only).

DIVIDENDS:

The Company has decided to sustain the growth in line with the long term growth objectives of the Company by retaining the profits and utilizing the same for opportunities in hand.

RESERVES

No Amount has been transferred by the Company to Reserve during the Year DIRECTORS AND KEY MANAGERIAL PERSONNEL

In accordance with the provisions of the Section 152 Companies Act, 2013 read with applicable Rules, if any, Mr. Shailesh Chandak, retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for a re-appointment.

The Company has appointed Mr. Shailesh Chandak as the Chief Financial Officer of the Company. DIRECTORS' RESPONSIBILITY STATEMENT

Pursuant to the Directors' Responsibility Statement referred to in clause (c) of sub-section (3) of Section 134 of the Companies Act, 2013, the Board of Directors of the Company state that —

a) In the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation and there are no material departures from the same;

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 viz. March 31, 2015 and of the profit and loss 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 this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

d) The Directors had prepared the annual accounts on a going concern basis; and

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.

PUBLIC DEPOSITS

The Company has neither invited nor accepted any public deposits during the period under review. CORPORATE SOCIAL RESPOSIBILITY :

The provisions of Section 135 of the Companies Act, 2013 are not applicable to the Company NUMBER OF MEETINGS OF BOARD OF DIRECTORS

During the Financial Year 2014-15, the Board of Directors of the Company met 6 times on 27 May, 2014, July 08, 2014, July 22, 2014, November 12, 2014, January 09, 2015 and March 31, 2015. Frequency and quorum at these meetings were in conformity with the provisions of the Companies Act, 2013 and the Listing Agreement entered into by the company with the Stock Exchanges. All the Board members and the senior management personnel have affirmed compliance with the Code of Conduct during the year ended on 31stMarch, 2015.

EXTRACT OF ANNUAL RETURN

As required pursuant to section 92(3) of the Companies Act, 2013 and rule 12(1) of the Companies (Management and Administration) Rules, 2014, an extract of annual return in MGT 9 as a part of this Annual Report as Annexure I.

PARTICULAR OF EMPLOYEES AND RELATED DISCLOSURES

The information required pursuant to Section 197 read with Rule 5 of The Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 and Companies (Particulars of Employees) Rules, 1975, in respect of employees of the Company and Directors is furnished as Annexure II.

AUDIT COMMITTEE

The composition of Audit Committee is as follows:

Name of Directors Designation in Nature of Directorship Committee

Mr.Nitin Maheshwari Chairman Non-Executive and Independent

Mr.Kishan Kumar Sarda Member Non-Executive and Independent

Mr.Shailesh Chandak Member Executive Director

During the Financial Year 2014-15, Audit Committee met 4 times on 27 May, 2014, August 13, 2014, November 12, 2014andFebruary 13, 2015.

All the recommendations made by the audit committee were accepted by the board.

Frequency and quorum at these meetings were in conformity with the provisions of the Companies Act, 2013 and the Listing Agreement entered into by the company with the Stock Exchanges.

DECLARATION OF INDEPENDENCE BY INDEPENDENT DIRECTORS

All the Independent Non-Executive Directors of the Company viz. Mr.GovindlalSaboo, Mr.Nitin Maheshwari and Mr.Kishan Kumar Sarda have submitted the declaration of independence as required pursuant to Section 149(7) of the Companies Act, 2013, stating that they meet the criteria of independence as laid down under Section 149(6) of the Companies Act, 2013 and Clause 49 of Listing Agreement.

NOMINATION AND REMUNERATION COMMITTEE

The Company follows a policy on "Nomination and Remuneration of Directors, Key managerial Personnel and Senior Management". The policy is approved by the Nomination & Remuneration Committee and the Board. More details on the same are given in Annexure III.

CONTRACTS AND ARRANGEMENT WITH RELATED PARTY

The Company had entered into related party transactions. Form AOC 2 as required under the Companies Act, 2013 for related party transaction is annexed as Annexure IV to the Directors Report.

STATUTORY AUDITORS

The Statutory Auditors of the Company are M/s. Sanjay Maheswari & Associates, Chartered Accountants (ICAI Registration No.113289W, have audited the Financial Statements of the Company for the period April 01, 2014 to March 31, 2015. The Statutory Auditors were appointed by the members of the Company at the 9th Annual General Meeting of the Company held on June 26, 2014 to audit the Financial Accounts of the Company. Their term in the office of Statutory Auditors concludes at the ensuing Annual General Meeting and pursuant to provisions of Section 139 of the Companies Act, 2013 read along with the applicable rules framed thereunder, M/s. Sanjay Maheswari & Associates are eligible for re-appointment.

M/s. Sanjay Maheswari & Associates have expressed their willingness to get re-appointed as the Statutory Auditors of the Company and have furnished a certificate of their eligibility and consent under section 141 of the Companies Act, 2013 and the rules framed thereunder to hold the office of Statutory Auditors of the Company. As per the requirements of the Listing Agreement, M/s. Sanjay Maheswari & Associates have vide letter confirmed that they hold a valid certificate. The Board on recommendation of Audit Committee have recommended the members of the Company, for appointment of M/s. Sanjay Maheswari& Associates, as the Statutory Auditors of the Company for a term of 4 years, subject to ratification of members at every consequent Annual General Meeting.

SECRETARIAL AUDITORS

The Board of Directors vide their meeting held on March 31, 2015 have appointed M/s R. M Mimani& Associates as Secretarial Auditors to conduct Secretarial Audit for the Financial Year 201415.

The Secretarial Audit Report issued by M/s R. M Mimani& Associates, Company Secretaries in Practice is self explanatory and does not call for further comments. The Secretarial Audit Report and Management reply on the qualifications stated in the said Report forms a part of Directors Report in Annexure V.

BUSINESS RISK MANAGEMENT

The Company has a robust Business Risk Management (BRM) framework to identify, evaluate business risks and opportunities. This framework seeks to create transparency, minimize adverse impact on the business objectives and enhance the Company's competitive advantage. The business risk framework defines the risk management approach across the enterprise at various levels including documentation and reporting. The framework has different risk models which help in identifying risks trend, exposure and potential impact analysis at a Company level as also separately for business. The Company has adopted risk management policy.

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

( A ) Conservation of Energy

Your Company is continuously taking initiatives to ensure the optimum utilization of energy available in day to day operations. Your Company uses energy efficient lighting devices, light fittings to save energy, capacitor bank / devices to maintain power factor which are environment and power efficient.

( B ) Technology Absorption

Your Company is doing its business by ensuring optimum utilization of its available resources. Your Company has not taken any research & development activity so far.

( C ) Foreign Exchange Earnings and Outgo: The Company has not incurred in foreign currency during the financial year 2014-15.

CODE OF CONDUCT

The Board has laid down a Code of Conduct for all Board members and senior management personnel of the Company, which is available on website of the company i.e. www.kavitafabrics.com. The Company has obtained confirmations for the compliance with the said code from all its Board members and senior management personnel for the year ended March, 31, 2015.

CAUTIONARY STATEMENT

Statements in this Report, Management Discussion and Analysis, Corporate Governance, Notice to the Shareholders or elsewhere in this Annual Report, describing the Company's objectives, projections, estimates and expectations may constitute 'forward looking statement' within the meaning of applicable laws and regulations. Actual results might differ materially from those either expressed or implied in the statement depending on the Market conditions and circumstances.

INTERNAL FINANCIALS CONTROLS

The Company has in place adequate internal financial controls with reference to financial statements. During the year, such controls were tested and no reportable material weakness were observed.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Mr.Shailesh Chandak retires by rotation at the ensuing Annual General Meeting under the applicable provisions of Companies Act, 2013, Mr.Shailesh Chandak being eligible and offering himself for appointment, is proposed to be appointed as an Executive Director.

Mr Shailesh Chandak is appointed as Chief Financial Officer of the Company.

Based on the confirmations received from Directors, none of the Directors are disqualified from appointment under Section 164 of the Companies Act 2013.

BOARD EVALUATION

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, the Board has carried out an annual performance evaluation of its own performance, the Directors individually as well as the evaluation of the working of its Audit Compliance Committee , Nomination and Remuneration Committee and Stakeholders Relation Committee. The manner in which the evaluation has been carried out has been explained in the Corporate Governance Report.

DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013

The Company has always believed in providing a safe and harassment free workplace for every individual through various interventions and practices.

The Company always endeavors to create and provide an environment that is free from discrimination and harassment including sexual harassment. The Company has in place an AntiSexual Harassment Policy in line with the requirements of The Sexual Harassment of Women at the Workplace (Prevention, Prohibition &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

The following is a summary of sexual harassment complaints received and disposed off during the year 2014-15

* Number of complaints received: NIL

* Number of complaints disposed off: NIL

PARTICULARS OF EMPLOYEES

Particulars of employees as required u/s 134 of the Companies Act, 2013 are not annexed since there are no employees drawing remuneration of more than Rs. 60,00,000/- per annum during the year under review, if employed for full year or more than Rs. 5,00,000/- per month, if employed for part of the year.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report under requirements of Clause 52 of the SME Listing agreement (as Company was listed on SME Platform of BSE Limited for the Financial Year 2014-15) forms part of this Annual Report for the year ended 31st March 2015.

CORPORATE GOVERNANCE

The Company is committed to maintain high standards of corporate governance and adhere to corporate governance requirement set out by SEBI. The report of corporate governance as stipulated under the Listing Agreement forms an integral part of the report. The Compliance certificate from the auditors or practicing company secretaries regarding compliance of conditions of corporate governance as stipulated in Clause 52 of the SME Listing agreement (As Company was listed on SME Platform of BSE Limited for the Financial Year 2014-15) shall be annexed with the report.

AUDITORS' REPORT

The Auditors' Report does not contain any qualification. Notes to Accounts and Auditors remarks in their report are self-explanatory and do not call for any further comments.

VIGIL MECHANISM

The Vigil Mechanism of the Company, which also incorporates a whistle blower policy in terms of the Listing Agreement, includes an Ethics & Compliance Task Force comprising senior executives of the Company. Protected disclosures can be made by a whistle blower through an e-mail, or dedicated telephone line or a letter to the Task Force or to the Chairman of the Audit Committee.

The Vigil Mechanism / Whistle Blower Policy has been uploaded on the Company's Website i.e www.kavitafabrics.com

PARTICULARS OF LOANS GIVEN, OR INVESTMENTS MADE

Particulars of loans given, investments made, along with the purpose for which the loan or guarantee or security is proposed to be utilized by the recipient are provided in the financial statement . (Please refer the standalone financial statement).

HUMAN RESOURCES

Your Company treats its "human resources" as one of its most important assets. Your Company continuously invest in attraction, retention and development of talent on an ongoing basis. A number of programs that provide focused people attention are currently underway. Your Company thrust is on the promotion of talent internally through job rotation and job enlargement.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND

Your Company did not have any funds lying unpaid or unclaimed for a period of seven years. Therefore there were no funds which were required to be transferred to Investor Education and Protection Fund (IEPF).

LISTING WITH STOCK EXCHANGES

The Company was listed on BSE SME segment for the Financial Year 2014-15 and now has migrated to BSE main frame. The Company confirms that it has paid the Annual Listing Fees for the year 20152016 to BSE where the Company's Shares are listed.

ACKNOWLEDGEMENTS

The Directors wish to thank and deeply acknowledge the co-operation, assistance and support extended by the Regulatory Authorities, Company's Bankers, Customers, Shareholders and other business constituents during the year under review.

The Directors also wish to place on record their appreciation for all round co-operation and contribution made by employees at all levels.

For and on behalf of the Board Kavita Fabrics Limited

Place: Surat Harish Chandak Shailesh Chandak Date:August 31, 2015 (Chairman & Managing Director) (Executive Director)