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Directors Report of Mafatlal Industries Ltd.

Mar 31, 2018

Directors'' Report

The Members,

Mafatlal Industries Limited

Your Directors present the 104th Annual Report together with the Audited Statement of Accounts for the year ended 31st March, 2018.

Pursuant to the Notification issued by the Ministry of Corporate Affairs, your Company has adopted Indian Accounting Standards (Ind AS) w.e.f. April 01, 2017. Accordingly, these are the first Financial Statements prepared as per Ind AS.

1. Financial Results:

The Financial Results of the Company are as under:

		(Rs. in Lakhs;
	Current Year 2017-18	Previous Yea\| 2016-17
Revenue from operations	116,760.04	123,885.23
Other Income	3,289.59	4,792.97
Total Income/ Revenues	120,049.63	128,698.20
EBIDTA	2,524.31	6,312.58
Less: Depreciation	3,610.59	3,237.67
Finance Costs	3,108.54	2,658.40
Profit before Exceptional Items	-4,194.82	416.51
Exceptional Items (Net)	0.00	-467.15
Profit before Taxes	-4,194.82	-50.64
Tax (Expense)/ Benefits	17.00	463.04
Profit after Taxes	-4,177.82	412.40

2. Year in Retrospect:

During the year under review, Textile industry was plagued with series of macro level challenges leading to all round underperformance. Your company''s business pivots around domestic trade segment. The company has to rely for growth of its business on the strength of its distribution network of Dealer, Distributors, Retailers etc to push the sale of fabrics in the retail markets. The majority of the trade partners are part of unorganized sector of India and not used to the banking system for carrying out financial transactions. While textile trade fraternity was yet trying to resurrect from the effects of demonetization, there came another blow in the form of introduction of Goods & Service Tax (GST). As it is known, Textile industry (especially fabric) was hitherto more or less outside the ambit of excise duty & sales tax. Hence entire trade fraternity was against the move of introduction of GST for Textile industry and this led to various protests, agitations and strikes. The domestic trade was not at all prepared for GST compliance and hence sales in domestic market paralyzed for 2-3 months post GST implementation causing widespread disruption. This led to substantial inventory build-up with the mills which created distress selling scenario putting huge pressure on selling prices. The impact was catastrophic for Denim fabric as there is huge overcapacity in domestic market.

Against this backdrop, it became impossible for your company defend its operating margins leading to losses. Total Revenue fell by 7% to Rs. 120,050 Lakhs, EBIDTA went down by 60% to Rs. 2524 Lakhs leading to a Net Loss for the year of Rs. 4178 Lakhs as against a Net Profit of Rs. 412 Lakhs for the previous year.

Further for FY 2017-18, the Company had higher Finance Cost & Depreciation charge since we implemented the capacity expansion projects leading to higher term borrowings and increase in fixed assets. The interest cost was also higher as working capital requirement went up, even though sales was down, as Textile industry was beset with liquidity crisis.

Your Directors are of the view that the pain may continue during FY 2018-19 especially in the Denim market. Your Company is taking several initiatives aimed at turn around of its business in the area of product development to produce differentiated & value added products, aggressive thrust on exports and forming strategic relationship with customers. Your company is also looking at downsizing in certain areas of manufacturing to remain competitive and is taking several initiatives to improve manufacturing efficiency and cost reduction to improve the operating margins.

During the year under review, your company has repaid long term borrowings amounting to Rs. 3,631 Lakhs as per scheduled timeline and raised Rs. 667 Lakhs to part finance capital expenditure plans being implemented. Your company expresses gratitude to all the term loan and working capital lenders for their continuing support and faith in the company.

During the year, the Company has sold its non core investments (6250 equity shares) in Navdeep Investments Ltd. Beside, as a part of restructuring of shareholding of promoters, the Company sold 118,389 equity shares of Navin Fluorine International Limited.

During the year Credit Analysis & Research Limited (CARE) has revised credit rating of the Company from CARE BBB to "CARE BBB-(negative) for the long term facilities having tenure of more than one year and also revised rating for short term facilities from its "CARE A3 " to "CARE A3" for the short term facilities having tenure of up to one year.

Pursuant to the disclosure requirements, it is pertinent to note here that there has been no change in nature of business during the year under review and no order has been passed by any Regulatory or Court or Tribunal, which can impact the going concern status of the Company and its Operations in the future. A detailed analysis of the financial results is given in the Management Discussion and Analysis Report which forms part of this report.

3. Dividend:

The Board of Directors regret their inability to recommend any dividend for the year 2017-18 in view of the Loss for the financial year ended 31st March, 2018 and accordingly, has not recommended any dividend.

4. Restructuring of Promoters Shareholding & reclassification of Promoters holding:

As reported earlier, during the year 2016-17 Shri H A. Mafatlal, Shri V. R Mafatlal, their family members, family trusts and the Companies including the three listed entities viz. the Company, Navin Fluorine International Limited (NFIL) and NOCIL Ltd. entered into an agreement to amicably restructure the shareholding of the three listed companies and other group companies in such a way that the Management of the Company and NOCIL Ltd. reside with Shri H. A. Mafatlal and the Management of NFIL reside with Shri V. P. Mafatlal. The restructuring is part of a family settlement and succession plan between Shri H. A. Mafatlal and Shri V. P. Mafatlal. Pursuant to the above, the Company has already divested its shareholding in Navin Fluorine International Limited and increased its shareholding in NOCIL Ltd.

Accordingly, it is proposed to re-classify Shri V P Mafatlal and his Associates including Navin Fluorine International Limited as Promoters of the Company and categorize them as non-promoter general public for all purposes for which requisite resolution has been proposed at the ensuing AGM for approval.

5. Details of changes of Directors and Key Managerial Personnel:

There is no change in Directors and Key Managerial Personnel for the year 2017-18. Pursuant to the provisions of Section 152 of the Companies Act, 2013, Shri Aniruddha P Deshmukh, a director is liable to retire by rotation and being eligible offers himself for reappointment. Accordingly, the requisite resolution is proposed at the ensuing Annual General Meeting for approval.

6. Employee Stock Option Scheme, 2017:

The shareholders of the Company at 103rd Annual General Meeting held on 2nd August, 2017 consented for creation of 6,95,000 options employee stock option pool under Mafatlal Employee Stock Option Plan, 2017 by way of special resolution. The Board of Directors of the Company has, as per the recommendation of Nomination & Remuneration Committee (NRC) approved "Mafatlal Employees Stock

Option Plan 2017. Thereafter, NRC has at their meeting held on 10th November, 2017 approved the grant of 1,38,000 options to certain senior management employees. The further disclosures as required under SEBI Employee Share Based Benefits Regulations, 2016 are provided in annexure III to this report alongwith other disclosures.

7. Subsidiaries, Associates and Joint Ventures:

The financial position of the subsidiary company viz. Mafatlal services Limited is given in the Notes to Consolidated Financial Statements. The Company does not have any material subsidiary. The Policy on Material Subsidiary framed by the Board of Directors of the Company is available on https://www. mafatlals.com/wp-content/uploads/2017/08/ policy_on_materiality_of_subsidiary.pdf. The audited accounts of Mafatlal Services Limited, a subsidiary of the Company, for the year ended 31st March, 2018 is placed on the Company''s website www.mafatlals.com and is also open for inspection by any member at the Registered Office of the Company on any working day (Monday-Friday) during working hours and the Company will make available these documents upon request by any member of the Company who may be interested in obtaining the same.

As reported last year also, Al Fahim Mafatlal Textiles LLC (UAE) remained non-operational and since there is no foreseeable beneficial future, the Board of Directors of the Company and the JV Partner have consented for voluntary winding up/closure of that entity. The Company has also written to the Ministry of Commerce, Department of Economic Development, Dubai that there has been no operation of the said JV Company from 2016 and accordingly we have not applied for renewal of license. Accordingly, the audited accounts of that JV Company are not available and the same are not consolidated with the Accounts of the Company for the year 2017-18.

8. Deposits:

The Company does not have "Deposits" as contemplated under Chapter V of the Companies Act, 2013. Further, the Company has not invited or accepted any such deposits during the year ended 31st March, 2018.

9. Internal Financial Controls:

The existing internal financial controls are adequate and commensurate with the nature, size, complexity of the Business and the Business Processes followed by the Company. During the year, the Company has laid down the framework for ensuring adequate internal controls over financial reporting and such Internal Financial Controls have been reviewed by Independent Experts to ensure its effectiveness who have confirmed that such controls are adequate and operating effectively.

10. Directors'' Responsibility Statement:

As required under the provisions of Section 134 (5) of the Companies Act, 2013, your Directors state that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(ii) 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 and of the loss of the Company for the period under review;

(iii) the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) the directors have prepared the annual accounts on a ''going concern'' basis;

(v) the directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

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

11. Industrial Relations:

The relations between the employees and the Management have remained cordial and harmonious during the year under review. The total number of permanent employees as on 31st March, 2018 were 2939 (2808 in previous year).

12. Insurance:

The properties and insurable interests of your Company like buildings, plant and machinery, stocks etc. are adequately insured by the Company. Further disclosure on Risk Management of the Company has been made under the Corporate Governance Report which forms a part of this report.

13. Corporate Social Responsibility (CSR):

Mafatlal Industries Ltd., a part of Arvind Mafatlal Group, has been fulfilling its corporate social responsibilities for over 50 years much before CSR has been prescribed statutorily. The focus area of our working has been in the field of poverty alleviation, health care, education for young children and women''s upliftment in rural India.

Based on the recommendations of the CSR Committee, the Board of Directors have formulated a CSR Policy encompassing the Group''s and the Company''s philosophy for describing its responsibility as a corporate citizen and laid down the guidelines and mechanisms for undertaking socially relevant programs, in conformity with the statutory provisions which is posted on the website of the Company and available on web link https://www.mafatlals.com/wp-content/uploads/2017/08/corporate_social_responsibility_ policy.pdf.

As per the provisions of section 135 read with the Section 198 of the Companies Act, 2013, the Company does not have CSR Obligation for the year 2017-18. Accordingly, there has been no meeting of CSR Committee held during the year. The statutory disclosures with respect to CSR is annexed hereto forming a part of this report.

14. Related Party Transactions:

There are no materially significant related party transactions made by the Company during the year. Related Party Transactions Policy is posted on the website of the company and is available at https://www.mafatlals.com/wp-content/ uploads/2017/08/related_party_policy.pdf. The details of all the transactions with the related parties are disclosed in the Notes forming part of financial statements annexed to the financial statements for the year 2017-18.

All the Related Party Transactions entered in to by the Company are in ordinary course of business and on an arm''s length basis except the promoters shareholding changes (selling of shares of Navin Fluorine International Limited and purchase of shares of NOCIL Limited by the Company) which were on an arms'' length basis, for which requisite approvals from the Audit Committee and the Board of Directors were obtained. The transaction amounts were not exceeding the applicable statutory limits and therefore no approvals from the shareholders were required.

15. Management Discussion and Analysis Report & Corporate Governance:

As required under Schedule V (B) and (C) of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015, "Management Discussion and Analysis Report" as well as "Corporate Governance Report", are attached herewith and marked as Annexure I & II respectively and the same forms part of this Directors'' Report.

Further, during the year under review, the Company has complied with all the mandatory requirements of the Corporate Governance. A certificate from the statutory auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 is annexed to the Report on Corporate Governance.

16. Other Statutory disclosures:

The other statutory disclosures pursuant to Sections 134, 135, 188, 197 and other applicable provisions of the Companies Act, 2013 read with related rules are attached herewith and marked as Annexure III.

17. Statutory Auditors & Audit Report:

The specific notes forming part of the Accounts referred to in the Auditor''s Report read with the notes to financial statements as referred to therein, are self-explanatory and give complete information and addresses the observations if any. The Audit report does not have any qualification or reservations or adverse comments.

18. Secretarial Auditor and Secretarial Audit Report:

The Board of Directors of the Company has, in compliance with the provisions of Section 304(1) of the Companies Act, 2013 and Rules made in this behalf, appointed Shri Umesh Ved, Company Secretary in practice to carry out Secretarial Audit of the Company for the financial year 2017-18. The Report of the Secretarial Auditor is annexed to this Report as Annexure IV. The Audit report does not have any qualification or reservations. As observed in that report please note that the Company has filed certain forms under the provisions of the Companies Act, 2013 with additional fees. The further observations made in audit report with respect to the compounding and adjudication, are suitably clarified/dealt with in para VII of MGT 7 provided in annexure III to the Directors Report.

19. Cost Audit:

In accordance with the provisions of Section 148 (3) of the Companies Act, 2013 read relevant Rules made thereunder the audit of the cost records of the Company for the year

2017-18 relating to the "Textiles" products manufactured and traded by the Company is being carried out by Cost Auditors Shri. B. C. Desai, Cost Accountants. The Cost Audit Report will be filed on or before due date with the Ministry of Corporate Affairs in due course of time after the same is approved by the Board of Directors of the Company within the permissible timeline.

The Board has, at their Meeting held on 3rd May, 2018 re- appointed Shri B. C. Desai as Cost Auditor to audit cost records in respect of "Textiles" products manufactured and traded by the Company for the Financial Year 2018-19 and the remuneration payable to the Cost Auditor has been proposed for the approval/ ratification by the Members of the Company at the ensuing Annual General Meeting.

20. Internal Auditor:

M/s. Aneja Associates, a reputed firm of Chartered Accountants, are Internal Auditors of the Company. The Audit Committee of the Board of Directors in consultation with the Internal Auditors, formulate the scope, functioning, periodicity and methodology for conducting the internal audit.

21. Appreciation:

The Directors wish to place on record their appreciation of the devoted services of the workers, staff and the officers for their continued contribution to your Company.

	For and on behalf of the Board,
Place: Mumbai	H. A. MAFATLAL
Date: 3rd May, 2018	Chairman
	(DIN: 00009872)

Regd. Office:

Mafatlal Industries Limited (CIN L17110GJ1913PLC000035) 301-302, Heritage Horizon, 3rd Floor, Off: C G Road, Navrangpura, Ahmedabad 380009 Tel: 079 - 26444404-06 Fax: 079 26444403, Email: [email protected] Website: www.mafatlals.com

Mar 31, 2017

Directors'' Report

The Members,

Mafatlal Industries Limited

The Directors are pleased to present the 103rd Annual Report together with the Audited Statement of Accounts for the year ended 31st March, 2017.

1. Financial Results:

The Financial Results of the Company are as under:

(Rs. in Lakhs)

	Current Year 2016-17	Previous Year 2015-16
Revenue from Operations	1,27,022.28	1,32,308.74
Other Income	1,046.11	2,157.19
Total Income / Revenues	1,28,068.39	1,34,465.93
EBIDTA	3,764.09	6,119.18
Less: Depreciation	2,705.59	2,119.18
Finance Costs	2,620.14	2,116.12
Profit before Exceptional Items	(1,561.64)	1,883.88
Exceptional Items (Net)	869.94	-
Profit before Taxes	(691.70)	1,883.88
Tax (Expense) / Benefits	477.17	(171.50)
Profit after Taxes	(214.53)	1,712.38
Add: Surplus brought forward from previous year	6,080.27	4,870.25
Amount available for appropriation	5,865.74	6,582.63
Appropriation
Proposed Dividend	-	417.39
Corporate Dividend Tax	-	84.97
Surplus carried to Balance Sheet	5,865.74	6,080.27

Note: Figures are regrouped wherever necessary to make the information comparable.

2. Year in Retrospect:

During the year under review, consumer spending remained subdued with continued global economic slowdown; the geopolitical risk environment across the globe and the challenging regulatory changes on the domestic front. Despite the favorable monsoon and 7^th pay commission pay-outs which led to agriculture and rural growth, the slowdown in industrial and service sector and demonetization kept the scope of growth for the textile sector limited. Profit margins for the organized textile sector remained depressed with higher raw material cost and intense competition in the segment.

Against this backdrop, the year was indeed very challenging for your company. The overall performance of the Company during FY 2016-17 was adversely impacted by several macro level factors. Total Revenue fell by 5% to Rs.1, 28,068.39 Lakhs, EBIDTA went down by 38% to Rs.3, 764.09 Lakhs leading to a Net Loss for the year of Rs.214.53 Lakhs as against a Net Profit of Rs.1, 712.38 Lakhs for the previous year.

At the macro level the factors like a steep increase in Cotton prices, impact of demonetization on retail demand and a slump in the Denim industry impacted the performance of the Company.

Further for FY 2016-17, the Company had higher Finance Cost & Depreciation charge since we have implemented the capacity expansion projects leading to higher term borrowings and increase in fixed assets. The full benefits of these projects shall accrue in subsequent years. Further operating margins were squeezed because of higher Cotton prices on one side and intense competition, weaker demand and curtailed selling prices on the other side.

After an arduous year, the Company expects to turn around on the back of initiatives taken for improvements in plant efficiency, new product developments and a widening of the marketing and distribution network. Towards this, during the year the Company invested net of Rs.10, 196.21 Lakhs in Fixed Assets to balance and upgrade the existing manufacturing equipment''s and facilities.

During the year under review, your company has repaid long term borrowings amounting to Rs.1, 711.79 Lakhs as per scheduled timeline and raised Rs.6, 975.53 Lakhs to part finance capital expenditure plans being implemented. Your company expresses gratitude to all the term loan and working capital lenders for their continuing support and faith in the company.

During the year Credit Analysis & Research Limited (CARE) has upgraded the credit rating of the Company to CARE BBB from "CARE BBB-" for the long term facilities having tenure of more than one year and also upgraded its "CARE A3" rating to "CARE A3 " for the short term facilities having tenure of up to one year.

Pursuant to the disclosure requirements, it is pertinent to note here that there has been no change in nature of business during the year under review and no order has been passed by any Regulator or Court or Tribunal, which can impact the going concern status of the Company and its Operations in the future. A detailed analysis of the financial results is given in the Management Discussion and Analysis Report which forms part of this report.

3. Dividend:

Your Board of Directors are cognizant of the fact that during the year under review the operations of the Company have resulted in losses. However, in the opinion of the Board, this is an aberration as Company was impacted by macro level factors at the same time it commissioned capacity expansion projects leading to higher interest and depreciation cost. Your Directors believe that the capital expenditure which the Company has incurred on capacity expansion and for improving the product mix should yield result in the years to come. Keeping in mind the future outlook, it is proposed to pay dividend out of the accumulated profits of the Company for the previous financial years (Rs.6080.27 lakhs) remaining undistributed and not transferred to general reserves in absence of profit for the financial year ended 31^st March, 2017. The Loss for the financial year ended 31^st March, 2017 is Rs.214.53 lakhs. Accordingly, the Board of Directors recommends a dividend for the year of Rs.2/per share (previous year Rs.3/- per share) on 1, 39, and 12,886 Equity Shares of face value of Rs.10/- each, aggregating to Rs.278.26 lakhs. (Previous year Rs.417.39 lakhs)

4. Restructuring of Promoters Shareholding:

During the year under review, Shri H. A. Mafatlal, Shri V. P. Mafatlal, their family members, family trusts and the Companies including the three listed entities viz. the Company, Navin Fluorine International Limited (NFIL) and NOCIL Ltd. entered into an agreement to amicably restructure the shareholding of the three listed companies and other group companies in such a way that the Management of the Company and NOCIL Ltd. reside with Shri H. A. Mafatlal and the Management of NFIL reside with Shri V. P. Mafatlal. The restructuring is part of a family settlement and succession plan between Shri H. A. Mafatlal and Shri V. P. Mafatlal.

Pursuant to the above, the Company has divested part of its shareholding in Navin Fluorine International Limited and increased its shareholding in NOCIL Ltd. during the year.

5. Details of changes of Directors and Key Managerial Personnel:

During the year under review, Shri Praful R. Amin, Non-Executive Independent Director of the Company, has opted for retirement after a very long association with the Company and accordingly he ceased to be a director w.e.f. 11^th August, 2016.

Pursuant to the arrangements amongst the Promoters as mentioned hereinabove in para 4, Shri V. P. Mafatlal, Executive Vice Chairman stepped aside as such with effect from close of office hours on 19^th August, 2016.

The Board of Directors of the Company places on record its appreciation for the services rendered and invaluable contributions made by Shri Praful R. Amin and Shri V. P. Mafatlal during their long tenure with the Company.

Further, the Board of Directors of the Company at their meeting held on 25^th October, 2016, appointed Shri Hrishikesh

A. Mafatlal as Executive Chairman of the Company w.e.f. 1^st November, 2016 subject to the approval of the shareholders of the Company. Besides, the Board at that meeting also appointed Shri Priyavrata H. Mafatlal as an Additional Director of the Company who will hold office until the date of ensuing 103rd Annual General Meeting of the shareholders of the Company. He has also been appointed as Executive Director (whole time director) w.e.f. 1^st November, 2016 of the Company for a period of five years subject to the approval of the shareholders of the Company. Accordingly, the requisite resolutions for approval of the shareholders have been proposed in the Notice convening 103rd Annual General Meeting.

Pursuant to the provisions of Section 152(6) of the Companies Act, 2013, Shri Atul K Srivastava (DIN 00046776) Director of the Company retires by rotation at the ensuing Annual General Meeting and being eligible, offers himself for re-appointment.

6. Subsidiaries, Associates and Joint Ventures:

Mafatlal Services Ltd continues to be a subsidiary of the Company and Al Fahim Mafatlal Textiles LLC (UAE), continues to be Joint Venture (JV company) in which the Company and JV Partner has 49:51 share.

The financial position of the subsidiary company is given in the Notes to Consolidated Financial Statements. The Company does not have any material subsidiary.The Policy on Material Subsidiary framed by the Board of Directors of the Company is available on http://www.mafatlals.com/uploads/8/3/1/2/8312181/policy_ on_materiality_of_subsidiary.pdf. The audited accounts of Mafatlal Services Limited, a subsidiary of the Company, for the year ended 31^st March, 2017 is placed on the Company''s website www.mafatlals.com and is also open for inspection by any member at the Registered Office of the Company on any working day (Monday-Friday) during working hours and the Company will make available these documents upon request by any member of the Company who may be interested in obtaining the same.

Al Fahim Mafatlal Textiles LLC (UAE) remained non-operational and since there is no foreseeable beneficial future , the Board of Directors of the Company as well as the JV Partner have consented for voluntary winding up/closure of that entity subject to the compliance of applicable laws. Accordingly, even the audited accounts of that JV Company are not available and the same are not consolidated with the Accounts of the Company for the year 2016-17.

7. Deposits:

8. Internal Financial Controls:

9. Directors'' Responsibility Statement:

As required under the provisions of Section 134 (5) of the Companies Act, 2013, your Directors state that:

(i) in the preparation of the annual accounts, the applicable accounting standards have been followed along with proper explanation relating to material departures;

(iii) The directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) The directors have prepared the annual accounts on a ''going concern'' basis;

(v) The directors have laid down internal financial controls to be followed by the Company and that such internal financial controls are adequate and were operating effectively.

(vi) The directors have devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems were adequate and operating effectively.

10. Industrial Relations:

The relations between the employees and the Management have remained cordial and harmonious during the year under review. The total number of permanent employees as on 31^st March, 2017 was 2808 (2769 in previous year).

11. Insurance:

12. Corporate Social Responsibility (CSR):

In conformity with the provisions of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has a CSR Committee which presently comprises of Shri H. A. Mafatlal who is the Chairman of the said Committee, Shri A. K .Srivastava and Shri V. R. Gupte (Independent Director) are other Members of the Committee. Shri V. P. Mafatlal was a member of the Committee until his resignation on 19^th August, 2016 when he ceased to be a director of the Company. Shri A. K. Srivastava, Non-Executive Director of the Company, was appointed as a member of the said Committee. During the year under review, two meetings of CSR Committee were held i.e. on 29^th July, 2016 and 23^rd March, 2017, which were attended by all Committee members.

Based on the recommendations of the CSR Committee, the Board of Directors have formulated a CSR Policy encompassing the Group''s and the Company''s philosophy for describing its responsibility as a corporate citizen and laid down the guidelines and mechanisms for undertaking socially relevant programs, in conformity with the statutory provisions which is posted on the website of the Company and available on web link http://www. mafatlals.com/uploads/8/3/1/2/8312181/corporate_social_ responsibility_policy.pdf.

The Company has fulfilled its CSR Obligation for the year 2016 -17. The statutory disclosures in respect of the CSR activities undertaken and amount spent by the Company during the year under review are disclosed in prescribed format and the same is annexed hereto forming a part of this report.

13. Related Party Transactions:

There are no materially significant related party transactions made by the Company during the year. Related Party Transactions Policy is posted on the website of the company and is available at http://www.mafatlals.com/uploads/8/3/1/2/8312181/related_ party_policy.pdf. The details of all the transactions with the related parties are disclosed in the Notes forming part of financial statements annexed to the financial statements for the year 2016-17.

All the Related Party Transactions entered in to by the Company are in ordinary course of business and on an arm''s length basis except the promoters shareholding changes (selling of shares of Navin Fluorine International Limited and purchase of shares of NOCIL Limited by the Company) which were on an arms'' length basis, for which requisite approvals from the Audit Committee and the Board of Directors were obtained. The transactions amount were not exceeding the applicable statutory limits and therefore no approvals from the shareholders were required.

14. Management Discussion and Analysis Report & Corporate Governance:

15. Other Statutory disclosures:

16. Statutory Auditors & Audit Report:

The existing Statutory Auditors M/s. Deloitte Haskins & Sells, Chartered Accountants, will retire upon conclusion of the ensuing 103^rd Annual General Meeting, in compliance with the provisions relating to mandatory rotation of Auditors under the Companies Act, 2013. Accordingly, pursuant to Section 139 of the Companies Act, 2013, the Board of Directors has, at its meeting held on 24^th March, 2017 based on the recommendation of the Audit Committee, subject to the approval of the Members at the ensuing 103^rd Annual General Meeting, approved the appointment of M/s. Price Waterhouse Chartered Accountants LLP (Firm Registration No.012754N/N500016) as the Statutory Auditors of the Company to hold office from the conclusion of the ensuing 103^rd Annual General Meeting until the conclusion of 108^th Annual General Meeting.

At the ensuing Annual General Meeting, Members are requested to approve the appointment of M/s. Price Waterhouse Chartered Accountants LLP (Firm Registration No.012754N/N500016), as Auditors of the Company to hold office from the conclusion of the 103rd Annual General Meeting until the conclusion of the 108th Annual General Meeting. The requisite resolution with explanatory statement is proposed for consideration by the members in the notice convening ensuing annual general meeting.

The specific notes forming part of the Accounts referred to in the Auditor''s Report read with the notes to financial statements as referred to therein, are self-explanatory and give complete information and addresses the observations if any . The Audit report does not have any qualification or reservations or adverse comments.

17. Cost Audit:

In accordance with the provisions of Section 148 (3) of the Companies Act, 2013 read relevant Rules made there under the audit of the cost records of the Company for the year 2016-17 relating to the "Textiles" products manufactured and traded by the Company is being carried out by Cost Auditors Shri. B. C. Desai, Cost Accountants. The Cost Audit Report will be filed on or before due date with the Ministry of Corporate Affairs in due course of time after the same is approved by the Board of Directors of the Company by 27th September, 2017.

The Board has, at their Meeting held on 5th May, 2017 reappointed Shri B. C. Desai as Cost Auditor to audit cost records in respect of "Textiles" products manufactured and traded by the Company for the Financial Year 2017-18 and the remuneration payable to the Cost Auditor has been proposed for the approval/ ratification by the Members of the Company at the ensuing Annual General Meeting.

18. Internal Auditor:

19. Secretarial Auditor and Secretarial Audit Report:

The Board of Directors of the Company has, in compliance with the provisions of Section 304(1) of the Companies Act, 2013 and Rules made in this behalf, appointed Shri Manuprasad M. Patel, Company Secretary in practice to carry out Secretarial Audit of the Company for the financial year 2016-17. The Report of the Secretarial Auditor is annexed to this Report as Annexure

IV. The said report does not contain any qualification, adverse observations/ remarks. The observations made therein, are self-explanatory.

20. Appreciation:

The Directors wish to place on record their appreciation of the devoted services of the workers, staff and the officers for their continued contribution to your Company.

For and on behalf of the Board,

Sd/-

Place: Mumbai H. A. MAFATLAL

Date: 5^th May, 2017 Chairman

(DIN: 00009872)

Mar 31, 2014

The Members,

Mafatlal Industries Limited

The Directors are pleased to present the 100th Annual Report together with Audited Statement of Accounts for the year ended 31st March, 2014.

1. Financial Results:

The Financial Results of the Company are as under:

(Amount Rs in Lacs) Current Previous Year 2013-14 Year 2012-13

Revenue from Operations 91,772.63 79,749.07

Other Income 1,776.49 4,289.06

EBIDTA 4,610.45 8,999.05

Less: Depreciation 1,834.60 1,444.05

Finance Costs 1,489.45 3,199.92

Profit before Exceptional Items 1,286.40 4,355.08

Exceptional Items (Net) 736.77 697.74

Profit before Taxes 2,023.17 5,052.82

Tax (Expense) / Benefits 370.21 (1,336.89)

Profit after Taxes 2,393.38 3,715.93

Add: Surplus brought forward from previous year 4,386.64 3,768.28

Add: Pursuant to Scheme of Amalgamation - (1,908.71)

Amount available for appropriation 6,780.02 5,575.50

Appropriation

Transfer to Capital Redemption Reserve 3,000.00 -

Transfer to General Reserve 245.00 375.00

Proposed Final Dividend 417.39 695.64

Corporate Dividend Tax 70.94 118.22

3,733.33 1,188.86

Surplus carried to Balance Sheet 3,046.69 4,386.64

2. Dividend:

The Board of Directors is pleased to recommend a dividend for the year of Rs. 3 per Share (30%) on 1,39,12,886 Equity Share of Rs.10/- each, aggregating to Rs. 4.17 crores as compared to total dividend of Rs. 5/- per share (@ 50%) for the previous year comprising of normal dividend of Rs. 3/- per share (@ 30%), and a Special Centenary Dividend of Rs. 2/- per share (@ 20%).

3. Year in Retrospect:

The overall deceleration of India'' GDP growth had a significant negative impact on the general business environment and consumer sentiment. While the textile industry in general had to face the impact of high raw material prices, the same could not be recovered in pricing due to the over-supply of products emanating from capacity built up by most fabric manufacturers in the last couple of years.

The Profit before Tax decreased from Rs. 50.53 crores in the previous year to Rs. 20.23 crores for the year under review and the Profit after Tax has decreased from Rs. 37.16 crores in the previous year to Rs. 23.93 crores for the year under review.

During the year, the Company obtained credit rating from both Crisil Ltd. (CRISIL) and Credit Analysis and Research Ltd. (CARE) to its proposal of obtaining financial facilities to the tune of Rs. 100 crores. CRISIL has assigned its ''CRISIL BBB-/Stable'' rating to the cash credit and proposed term loan facilities and has assigned its ''CRISIL A3'' rating to the letter of credit and bank guarantee facilities and indicated ''Stable outlook to the Company''. CARE has assigned its ''CARE BBB-'' rating to the long term facilities having tenure of more than one year and has assigned its ''CARE A3'' rating to the short term facilities having tenure of up to one year. All the above ratings indicate moderate degree of safety regarding timely payment of financial obligations.

During the year, the Company redeemed the entire outstanding balance of Fully Redeemable Non-Cumulative Preference Shares of Rs. 30 crores.

4. Listing of Shares pursuant to the Amalgamation of Mishapar Investments Limited and Mafatlal Denim Limited with the Company:

The Scheme of Arrangement and Amalgamation of Mishapar Investments Limited (Wholly Owned Subsidiary Company) and Mafatlal Denim Limited (Promoter Group Company) with the Company has become effective w.e.f. 28th May, 2013.

The Company had issued and allotted 40,99,415 equity shares of face value of Rs. 10/- each fully paid-up to the shareholders of Mafatlal Denim Limited on 30th May, 2013 in ratio of 1:10. The said shares have been admitted to listing and trading at the BSE Ltd. w.e.f. 15th July, 2013 and at the Ahmedabad Stock Exchange Ltd. w.e.f. 18th July, 2013.

5. Project Promotion Division:

NOCIL Limited (NOCIL):

Nocil Limited achieved a growth of 6.5% in its sales volumes as compared to the previous year through sustained marketing efforts and also due to some exits/closures of a few local and international Rubber Chemical players. The gross turnover for the year under review was Rs. 643 crores as compared to Rs. 527 crores in the previous year, representing an increase of about 22%. This increase was possible due to a combination of Rupee depreciation, a change in the product mix alongwith some price corrections which were done to offset some rising input costs. Nocil Limited continued its efforts to improve its price realisations, but the same were severely constrained in this regard on account of the aggressive dumping resorted to by competitors.

The new plant commissioned at Dahej in Gujarat, during the end of previous year, initially witnessed certain teething problems as is expected in any chemical plant of this nature. The capacity utilisation of this plant was impacted by the very high imports of this product into the country due to the aggressive dumping resorted by the competitors. However, with the recent enhancement of anti-dumping and safeguard duties, Nocil Limited is hopeful that capacity utilisation will mprove which will have a significant positive impact on the performance of Nocil Limited

6. Corporate Social Responsibility (CSR):

At Mafatlal Industries Ltd., a part of Arvind Mafatlal Group, fulfilling CSR has been a way of life. The Group has been mplementing a range of CSR activities over the last 50 years in areas like poverty allevation, health care, education for young children and women''s upliftment in rural India etc. CSR is considered as a humble tribute to what society has given us. We are striving continuously with the sole objective of creating an environment of well- being in all spheres of life.

Pursuant to the provision of Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company has constituted a CSR Committee. Shri H.A. Mafatlal is the Chairman of the Committee and Shri V. P. Mafatlal and Shri V. R. Gupte are other Members of the Committee. The Board of Directors have based on the recommendations of the Committee, formulated a CSR Policy.

7. Energy, Absorption and Foreign Exchange Earnings and out go:

Additional information on conservation of energy, technology absorption, foreign exchange earnings and outgo as required to be disclosed in terms of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed hereto and forms part of this Report.

8. Particulars of Employees:

nformation as per Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 forms a part of this report and will be sent on demand to the shareholders. Any shareholder interested in obtaining a copy of the said statement may write to the Company Secretary.

9. Industrial Relations:

The relations between the employees and the Management have remained cordial

10. Directorate:

Pursuant to the provisions of the Companies Act, 2013, Shri H A. Mafatlal, retires by rotation at the ensuing Annual Genera Meeting and being eligible, offer himself for reappointment.

Shri P. J. Desai has resigned from the Directorship of the Company w.e.f. 30th May, 2014. Your Directors place on record its appreciation for the services rendered by Shri P. J Desai during his association with the Company.

Shri P. R. Amin, Shri N. K. Parikh, Shri V. R. Gupte and Shri P.N. Kapadia, Independent Directors, whose period of Office was liable to determination by retirement of Directors by rotation under the erstwhile applicable provisions of the Companies Act, 1956 are being appointed as Independent Director for a term of five consecutive years. Notices under Section 160 of the Companies Act, 2013 have been received from Members signifying their intention to propose their candidature as directors of the Company.

In order to comply with the provisions of Section 152(6) of the Companies Act, 2013 requiring not less than two thirds of the total number of Directors (excluding Independent Directors) of the Company to be rotational directors, the Company has re- classified Shri Rajiv Dayal, Managing Director of the Company as a Director liable to retire by rotation

11. Subsidiary Companies:

Repal Apparel Pvt. Ltd., Myrtle Textiles Pvt. Ltd., and Mayflower Textiles Pvt. Ltd. ceased to be subsidiaries of the Company with effect from 25th March, 2014. In view of the above, only Mafatlal Services Ltd. continue to be a subsidiary of the Company.

As per the general exemption granted under Section 212(8) of the Companies Act, 1956, by the Government of India, Ministry of Corporate Affairs, New Delhi vide its General Circular No.2/2011, dated 8th February, 2011, Balance Sheet and Statement of Profit & Loss, Directors'' Report and the Auditor''s Report of the said Subsidiary company has not been attached with the Balance Sheet of the Company.

However, other details required to be disclosed as per the said General Circular No.2/2011, dated 8th February, 2011, have been given in the Annual Report.

The Annual Accounts and related information of the subsidiary company are open for inspection by any member at the Registered Office of the Company on any working day between 2.00 p.m. and 4.00 p.m. and the Company will make available these documents upon request by any member of the Company who may be interested in obtaining the same.

12. Insurance:

The properties and insurable interests of your Company like buildings, plant and machinery, stocks etc. are adequately nsured.

13. Directors'' Responsibility Statement:

As required under the provisions of Section 217 (2AA), of the Companies Act, 1956, your Directors report as under:

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

(ii) that 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 and of the profit of the Company for the year under review;

(iii) that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;

(iv) that the directors have prepared the annual accounts on a ''going concern'' basis.

14. Auditors:

At the Annual General Meeting, Members are requested to appoint M/s. Deloitte Haskins & Sells, Chartered Accountants, Vadodara, as Auditors from the conclusion of this meeting till the conclusion of the 103rd Annual General Meeting

and to fix their remuneration. The specific notes forming part of the Accounts referred to in the Auditor''s Report are self- explanatory and give complete information

15. Cost Audit:

As per the requirement of the Central Government and pursuant to the provisions of Section 233B of the Companies Act, 1956, the audit of the cost accounts relating to the product "Textiles" is required to be carried out every year. The Company has appointed Cost Auditors viz. Shri I. V. Jagtiani, Mumbai and Shri B. C. Desai, Ahmedabad, to audit the cost accounts for the Financial Year 2013-14 ended 31st March, 2014. Approva from the Central Government has been received for the above referred appointments. The Cost Audit Report in respect of the financial period 2013-14 will be filed on or before due date i.e. 27th September, 2014.

16. Corporate Governance & Management Discussion & Analysis Report:

As required under the Listing Agreement with Stock Exchanges, Reports on "Corporate Governance" as well as "Management Discussion and Analysis Report" are attached and form part of the Directors'' Report. Further, during the year under review, the Company has complied with all the mandatory requirements of the Corporate Governance. A certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under the Listing Agreement is annexed to the Report on Corporate Governance.

17. Appreciation:

The Directors wish to place on record their appreciation of the devoted services of the workers, staff and the officers who have largely contributed to the efficient management of your Company. The Directors place on record their appreciation for the continued support of the shareholders of the Company.

For and on behalf of the Board,

Mumbai, H. A. MAFATLAL Dated: 30th May, 2014 Chairman

Mar 31, 2013

To The Members of Mafatlal Industries Limited

The Directors are pleased to present the 99th Annual Report together with Audited Statement of Accounts for the year ended 31st March, 2013.

1. Financial Results:

The Financial Results of the Company are as under: (Amount Rs. in lacs)

Current Year1 2012-13 (12 months) Previous Period2 2011-12 (9 Months) 1st April, 2012 to 31st March, 2013 1st July, 2011 to 31st March, 2012

Revenue from Operations 79749.07 14374.88

Other Income 4289.06 3694.91

EBIDTA 8999.05 (1096.70)

Less: Depreciation 1444.05 203.42

Finance Costs 3199.92 245.11

Profit before Exceptional Items 4355.08 (1545.23)

Exceptional Items (Net) 697.74 (5040.76)

Profit before Taxes 5052.82 (6585.99)

Tax (Expense) / Benefits (1336.89) 1400.00

Profit after Taxes 3715.93 (5185.99)

Add: Surplus brought forward from previous year 3768.28 11954.27

Add: Pursuant to Scheme of Amalgamation (1908.71)

Amount available for appropriation 5575.50 6768.28

Appropriation

Transfer to Capital Redemption Reserve 3000.00

Transfer to General Reserve 375.00

Proposed Final Dividend 695.64

Corporate Dividend Tax 118.22

1188.86 3000.00

Surplus carried to Balance Sheet 4386.64 3768.28

1 The figures for the financial year 2012-13 include the figures of erstwhile Mafatlal Denim Limited and erstwhile Mishapar Investments Limited which have been amalgamated with the Company with effect from 1st April, 2012.

2 The Board of Directors had changed the financial year 2011-12 to end on 31st March, 2012 instead of 30th June, 2012. Hence, the previous financial year was for a period of nine months.

In view of the above, the financial results for the financial year 2012-13 are not comparable with those for the financial year 2011-12.

2. Dividend:

Though the Arvind Mafatlal Group has been in the textile business since 1905, Mafatlal Industries Limited was incorporated on 20th January, 1913. To mark this ''Centenary Year'', in addition to the normal dividend of Rs.3/- per share (@ 30%), a Special Centenary Dividend of Rs.2/- per share (@ 20%) aggregating to Rs.5/- per Equity Share (@ 50%) on 1,39,12,886 Equity Shares of face value of Rs.10 each has been recommended by the Board.

3. Year in Retrospect:

The year under review was a historic year for the Company in many ways. The Company completed 100 years of its existence and also took a major decision in amalgamating Mafatlal Denim Limited and Mishapar Investments Limited with itself as per the Scheme of Amalgamation sanctioned by Hon''ble High Courts of Gujarat and Mumbai with effect from the appointed date of 01.04.2012.

The benefits of the amalgamation are reflected in the increase in Revenue to Rs.840.38 crores, PBIDT to Rs.89.99 crores and PAT to Rs.37.16 crores for FY 12-13.

The general business environment continued to be challenging due to the uncertain global economic scenario and the deceleration of India''s GDP growth. Your Company has fine- tuned its business strategy by focusing on capital investments, cost reduction initiatives through VRS, improvement in product mix and creating a visibility for further strengthening Mafatlals brand.

4. Amalgamation of Mishapar Investments Limited and Mafatlal Denim Limited with the Company:

The Scheme of Arrangement and Amalgamation of Mishapar Investments Limited (Wholly-Owned Subsidiary Company) and

Mafatlal Denim Limited (Promoter Group Company) with the Company has been sanctioned by the Hon''ble High Court of Gujarat and Hon''ble High Court of Judicature at Bombay vide Orders dated 8th April, 2013 and 26th April, 2013 respectively, with effect from 1st April, 2012 (Appointed Date). The Company has filed a copy of the above referred Orders with the Registrar of Companies, Gujarat and the Registrar of Companies, Maharashtra and the said Scheme has become effective w.e.f. 28th May, 2013.

The Company has issued and allotted 40,99,415 Equity Shares of face value of Rs.10/- each fully paid-up to the shareholders of Mafatlal Denim Limited on 30th May, 2013 in ratio of 1:10 as per the Scheme. The Company has submitted applications for listing of 40,99,415 Equity Shares of face value of Rs.10/- each to BSE Limited (BSE) and Ahmedabad Stock Exchange Limited (ASE).

5. Project Promotion Division:

NOCIL Limited (NOCIL):

The year experienced one of the most challenging business environments which the rubber chemicals industry has ever faced. Most major customers of NOCIL undertook significant production cuts to align their production with the decline in the demand from the automobile sector. This in turn, resulted in lower demand for Rubber Chemicals.

Despite this, NOCIL''s turnover for the year under review, touched Rs.527 crore as compared to Rs.511 crore in the previous year, representing an increase of about 3%. The net profit was Rs.42.49 crores as compared to Rs.33.99 crores in the previous year.

As reported last year, one of the major initiatives undertaken by NOCIL''s management, was to set-up a new manufacturing facility at Dahej in Gujarat, with a much improved process technology, to produce a key intermediate for an important product in the range of rubber chemicals. The said facility commenced commercial production from early March 2013.

6. Energy, Absorption and Foreign Exchange Earnings and out go:

Additional information on conservation of energy, technology absorption, foreign exchange earnings and outgo as required to be disclosed in terms of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed hereto and forms part of this Report.

7. Particulars of Employees:

Information as per Section 217 (2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975 forms a part of this report and will be sent on demand to the shareholders. Any shareholder interested in obtaining a copy of the said statement may write to the Company Secretary.

8. Industrial Relations:

The relations between the employees and the management have remained cordial.

9. Directorate:

Shri P. J. Desai, Director of the Company will retire by rotation at the ensuing 99th Annual General Meeting of the Company and being eligible, offers himself for re-appointment. Shri V. K. Balasubramanian retires by rotation but has shown his unwillingness for re-appointment on retirement. The Board places on record its sincere appreciation of the valuable services and co-operation extended by Shri V. K. Balasubramanian during his tenure as Director of the Company.

The Board of Directors of the Company has appointed Shri P. N. Kapadia and Shri V. R. Gupte as Additional Directors on the Board of Directors of the Company with effect from 30th May, 2013. Pursuant to the provisions of Section 260 of the Companies Act, 1956, Shri P. N. Kapadia and Shri V. R. Gupte shall hold office up to the date of the ensuing 99th Annual General Meeting of the Company. The Company has received notices under Section 257 of the Companies Act, 1956, alongwith the deposit of Rs.500/- each from the Members of the Company signifying their intention to propose at the ensuing 99th Annual General Meeting, Shri P. N. Kapadia and Shri V. R. Gupte as candidates for the office of the Directors of the Company, liable to retire by rotation. Considering the varied experience and expertise of the said Directors, your Board of Directors recommends their appointment as Directors of the Company at the ensuing Annual General Meeting.

The Board of Directors of the Company at their Meeting held on 28th May, 2013, has appointed Shri V. P. Mafatlal and Shri Rajiv Dayal as the Executive Vice-Chairman and Managing Director & Chief Executive Officer of the Company respectively with effect from 28th May, 2013 on terms and conditions and remuneration as stated under Item Nos. 9 & 10 of the Explanatory Statement of the Notice convening the 99th Annual General Meeting of the Company subject to the approval of the Shareholders of the Company. Your Board of Directors recommend their appointment as Executive Vice-Chairman and Managing Director & Chief Executive Officer of the Company respectively at the ensuing 99th Annual General Meeting of the Company. Shri Hrishikesh A. Mafatlal has stepped down from the position of Managing Director of the Company w.e.f. 28th May, 2013 and continues as the Chairman of the Company.

10. Subsidiary Companies:

During the year, Mafatlal Global Apparel Limited and Silvia Apparel Limited have ceased to be subsidiaries of the Company. Further, the Hon''ble High Court of Gujarat pursuant to an Order dated 27th February, 2013 directed Sunanda Industries Limited to be wound up under Sections 433 and 434 of the Companies Act, 1956. During the year, Mishapar Investments Limited, wholly-owned subsidiary has been amalgamated with the Company with effect from 1st April, 2012. In view of the above, the following companies continue to be subsidiaries of the Company:

1. Mafatlal Services Limited

2. Myrtle Textiles Pvt. Limited

3. Mayflower Textiles Pvt. Limited

4. Repal Apparel Pvt. Limited

As per the general exemption granted under Section 212(8) of the Companies Act, 1956 by the Government of India, Ministry of Corporate Affairs, New Delhi vide its General Circular No.2/2011, dated 8th February, 2011, Balance Sheet and Statement of Profit & Loss, Directors'' Report and the Auditors'' Report of the said Subsidiary companies have not been attached with the Balance Sheet of the Company.

However, other details required to be disclosed as per the said General Circular No.2/2011, dated 8th February, 2011, have been given in the Annual Report.

The Annual Accounts and related information of the subsidiary companies are open for inspection by any member at the Registered Office of the Company on any working day between 2.00 p.m. and 4.00 p.m. and the Company will make available these documents upon request by any member of the Company who may be interested in obtaining the same.

11. Insurance:

The properties and insurable interests of your Company like buildings, plant and machinery, stocks among others are adequately insured.

12. Directors'' Responsibility Statement:

As required under the provisions of Section 217 (2AA) of the Companies Act, 1956, your Directors report as under:

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

(ii) that 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 period and of the profit of the Company for the period under review,

(iii) that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities,

(iv) that the directors have prepared the annual accounts on a ''going concern'' basis.

13. Auditors:

At the Annual General Meeting, Members are requested to appoint M/s. Deloitte Haskins & Sells, Chartered Accountants,

Vadodara, as Auditors for the current year and to fix their remuneration. The specific notes forming part of the Accounts referred to in the Auditors'' Report are self-explanatory and give complete information.

14. Cost Audit:

As per the requirement of the Central Government and pursuant to the provisions of Section 233B of the Companies Act, 1956, the audit of the cost accounts relating to the product ''Textiles'' is required to be carried out every year. The Company has appointed Cost Auditors viz. Shri I. V. Jagtiani, Mumbai and Shri B. C. Desai, Ahmedabad, to audit the cost accounts for the Financial Year 2012-13 ended 31st March, 2013. The erstwhile Mafatlal Denim Limited had also appointed Shri I. V. Jagtiani, Mumbai to audit the cost accounts for the Financial Year 2012-13 ended 31st March, 2013. Approval from the Central Government has been received for all the above referred appointments. The Cost Audit Report in respect of the financial year 2012-13 will be filed on or before due date i.e. 27th September, 2013.

15. Corporate Governance & Management Discussion & Analysis Report:

As required under the Listing Agreement with Stock Exchanges, Reports on ''Corporate Governance'' as well as ''Management Discussion and Analysis Report'' are attached and forms part of the Directors'' Report. Further, during the period under review, the Company has complied with all the mandatory requirements of the Corporate Governance. A certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under the Listing Agreement is annexed to the Report on Corporate Governance.

16. Appreciation:

The Directors wish to place on record their appreciation of the devoted services of the workers, staff and the officers who have largely contributed to the improved results of your Company. The Directors place on record their appreciation for the continued support of the shareholders of the Company.

For and on behalf of the Board,

Mumbai, H. A. MAFATLAL

Dated: 30th May, 2013 Chairman

Jun 30, 2011

The Members,

MAFATLAL INDUSTRIES LIMITED

The Directors present the 97th Annual Report together with Audited Statement of Accounts for the period ended 30th June, 2011.

1. FINANCIAL RESULTS:

The Financial Results of the Company are as under:

(Amount Rs.in Lacs)

Current period Previous Period 2010-11 2009-10 @ (13months) (14 months) 1st June.2010 to 1st April, 2009 to 30th June, 2011 31st May, 2010

Turnover (Including export benefits/ 65,034.61 13,238.20 incentives)

Other Income (includes sale of 21,135.56 17,575.49 properties)

Increase/(Decrease) in Stock of 1,030.48 (117.26) finished Goods & Process Stock

Gross Profit 51,673.59 7,065.18

[Before Interest, Depreciation & Tax]

Less: Depreciation 252.48 332.51

Interest (Net) 647.59 458.23

Provision for Current tax

(Including Wealth tax) 12,450.40 1,100.25

Profit after Taxes 38,323.12 5,174.19

(Short)/Excess Provision of Tax of Earlier Years) (267.12) 2.11

38,056.00 5,176.30

Add: Deficit brought forward from

Previous Period/Year (26,101.73) (31,278.03)

11,954.27 (26,101.73)

@ The Board of Directors has changed the Financial Year 2010-11 to end on 30th June, 2011 instead of 31st May, 2011.

2. DIVIDEND:

The Profit, during the period under report, is due to income arising out of the sale of Development Rights on the 50% land of Mazgaon Unit in terms of Modified Rehabilitation Scheme-2009(MS-09) approved by the Hon'ble Board for Industrial & Financial Reconstruction (BIFR). The operations of the Company during the year have resulted in a loss, though substantially reduced.

Pursuant to MS-09 the Company cannot declare any dividends to its equity shareholders without the prior approval of the BIFR during the rehabilitation period which extends up to 31st March, 2016. Also, as per the terms of issue of Fully Redeemable Non Cumulative Preference Shares the company cannot declare any dividend on equity shares till dividend is declared and paid to the preference shareholders who are entitled to a dividend @ 1% for every financial year commencing on or after 1st January, 2014, unless redeemed earlier.

The Company however, is confident of repaying its residual liabilities under the schemes including redemption of Preference Shares much sooner than the period envisaged under MS-09.

In view of this, Directors regret their inability to recommend dividend.

3. MODIFIED REHABILITATION SCHEME (MS-09):

As you are aware, the Hon'ble BIFR has sanctioned the Rehabilitation Scheme of the Company under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985("SICA") vide its Order dated 30th October, 2002. Thereafter, as already reported last year, the Modified Rehabilitation Scheme (MS-09) of the Company was sanctioned by BIFR, vide Order dated 24th/25th June, 2009.

Consequent upon the net worth of the Company turning positive based on Balance Sheet of 31st May, 2010 and upon application of the Company, BIFR de-registered the Company from the purview of SICA/BIFR vide its Order dated 12th August, 2010. Under the said Order dated 12th August, 2010, BIFR interalia directed that the unimplemented provisions of MS-09, if any, should be implemented by the concerned agencies and their implementation shall be monitored by the Company. Subsequently, in an Appellate Proceedings, the Appellate Authority for Industrial and Financial Reconstruction vide its Order dated 16th May, 2011, interalia modified the above directions to the effect that the implementation of MS-09 shall be monitored by the BIFR instead of the Company.

During the period under review the winding-up petition filed by LKP Merchant Financing Ltd.("LKP")(which was reported to the members of the Company in earlier Directors' Report) was withdrawn by LKP as their dues were settled.

4. SALE OF MAZGAON UNIT LAND OF THE COMPANY IN MUMBAI:

The Members are aware that the BIFR-sanctioned Rehabilitation Scheme and the Modified Scheme of the Company provided for sale of surplus assets including Mazgaon land in Mumbai.

As intimated to the members in the Explanatory Statement annexed to the notice of postal ballot dated 9th May, 2011, the Company had received Offer dated 3rd May 2011 from Piramal Developers Pvt. Ltd. and Gliders Buildcon LLP, entities of Ajay Piramal Group for development or sale / assignment of leasehold land of the Company admeasuring about 30,910 Sq. Mtrs. (including road set back area of 3622 Sq. Mtrs.) situated at Rambhau Bhogale Marg, Mazgaon, Mumbai-400 010, for a consideration of Rs.605.80 Crores. The said proposal was approved by the members by passing a resolution by postal ballot by overwhelming majority of 99.82% of the valid votes cast in the said postal ballot.

Accordingly, on 17th June, 2011, the Company executed Agreement with Gliders Buildcon LLP, for the development and other relevant agreements in respect of a part of the Company's leasehold land at Mazgaon in Mumbai admeasuring about 30,910 Sq. Mtrs.

As mentioned in the explanatory statement to the notice of the said postal ballot, the remaining 50% land of the Company at Mazgaon (Mumbai), is required to be surrendered to the Municipal Corporation of Greater Mumbai ("MCGM") for which the Company will be eligible to get Transferable Development Rights("TDRs"). The Company will be able to sell such TDRs in the market.

The Developer shall construct at its cost a Spinning Unit and give it to the Company for recommencing the spinning activity with a capacity of 10000 spindles which is required to be run by the Company in terms of the notification dated 10th February, 2004 issued by the Government of Maharashtra for dereserving 50% of the land and also in terms of the BIFR sanctioned schemes.

Ahmedabad Unit :

As reported to the members in the Directors' Report for financial year ended 30th September, 2003 the Company had agreed to sell its closed Ahmedabad Unit to Annapurna Polymers Pvt. Ltd. (APPL) for a consideration of Rs.6,77,70,000/- out of which the Company had already received a sum of Rs.5,10,00,000/- as advance. The said sale was pursuant to the Scheme of Rehabilitation approved by BIFR, and it was also approved by the Asset Sale Committee appointed pursuant to the said BIFR Scheme. The formal transfer of the assets of the said unit to APPL was completed during the period against which the Company has received the balance consideration of Rs.1,67,70,000/-.

5. YEAR IN RETROSPECT :

During the period under review, due to continuous product development activities and better plant maintenance efforts, the production during the 13 months period was substantially improved to 192.88 lacs mtrs. compared to 180.74 lacs mtrs. during the previous period of 14 months. This could have been improved further but for the shortage of working capital and delay in implementation of capital expenditure due to lack of funds which adversely affected the utilization of plant capacities.

Cost reduction and product improvement projects were undertaken on continuous basis in order to reduce losses and improve Profitability. With this, the Company has been successful in improving the process house capacity utilization as well as deliver better quality products.

Further, there was a substantial rise in raw material rates as also increase in employees cost due to high infl ation and consequential increase in dearness allowance. The increase in cost of production due to these factors was off-set to a large extent by an increase in selling prices of the products, increase in volume of production and better product-mix.

Total sales during the 13 months period was 218.16 lacs mtrs. compared to 197.89 lacs mtrs during the previous period (14 months). The textile turnover during the current period of 13 months was Rs.165.32 crores as compared to Rs.132.38 crores during the previous period.

The period under review was a landmark for the Company since it was de- registered from the purview of SICA/BIFR after almost a decade of hibernation under BIFR. Further the Company also achieved a major milestone of completing the sale of its Mazgaon Unit land. The proceeds realized therefrom will be sufficient to address the residual outstanding liabilities in terms of MS-09. It will also provide the requisite seed capital to the Company to raise its Fixed Capital and Working Capital requirements from the Banks for its growth and expansion.

6. PROJECT PROMOTION DIVISION:

NOCIL Limited (NOCIL):

During the year 2010-11, NOCIL had relatively stable business conditions in the first half of the year. However, right from the beginning of second half, prices of most of its inputs started hardening on the back of the surge in the crude oil price as well as the prices of various derivatives thereof. Also the Company continues to face very aggressive competition from the dumped imports of Rubber Chemicals into India and margins remained under pressure due to the continued dumping of the products. The Company has initiated a Mid Term Anti-Dumping Petition on imports sourced from Korea. Despite increase in input cost by a combination of timely booking of orders at the best possible prices, better management of various operational parameters and organization of utilities management, the margins during the year remained more or less similar to the previous year.

The turnover of NOCIL for the year 2010-11 was Rs.480 crores as compared to Rs.460 crores, representing an increase of 4.50% over the previous year. The production of Rubber Chemicals and their intermediates was 38,264 MT for the year under review as against 36,697 MT representing an increase of 4 % as compared to the previous year. NOCIL has made Profit before Tax of Rs.48.01 Crore for the year as compared to Rs.50.13 Crores for previous year. During the year 2010-11, NOCIL achieved exports of Rs.181 crores, which were marginally lower than Rs.186 crores in the previous year.

The Rubber Chemicals market continues to remain competitive and dumping by international suppliers into India continues to be a matter of concern.

7. ENERGY, ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUT GO:

Additional information on conservation of energy, technology absorption, foreign exchange earnings and outgo as required to be disclosed in terms of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed hereto and forms part of this Report.

8. PARTICULARS OF EMPLOYEES:

No employee of the Company was in receipt of remuneration of Rs.65 lacs for 13 months period ended 30th June, 2011 or Rs.5 lacs per month for the part of the period. Hence, Statement required to be given as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, is not given.

9. INDUSTRIAL RELATIONS:

The relations between the employees and the Management have remained cordial.

10. DIRECTORATE:

Shri P. R. Amin and Shri V. K. Balasubramanian, Directors of the Company will retire by rotation at the ensuing 97th Annual General Meeting of the Company and being eligible, offer themselves for re-appointment.

11. SUBSIDIARY COMPANIES:

During the period under review Mishapar Investments Ltd., Sudas Manufacturing & Trading Limited, Sunanda Industrial Machinery Ltd., Mafatlal Services Ltd., continued to be the subsidiaries of your Company.

As per the general exemption granted under Section 212(8) of the Companies Act, 1956, by the Government of India, Ministry of Corporate Affairs, New Delhi. vide its General Circular No.2/2011, dated 8th February, 2011, Balance Sheet and Profit & Loss Account, Directors' Report and the Auditor's Report of the Subsidiary companies have not been attached with the Balance Sheet of the Company.

However, other details required to be given as per the said General Circular No.2/2011, dated 8th February, 2011, have been disclosed in the Annual Report.

The Annual Accounts and related information of the subsidiary companies are open for inspection by any member at the Registered office of the Company on any working day between 2.00 p.m. and 4.00 p.m. and the Company will make available these documents upon request by any member of the Company who may be interested in obtaining the same.

12. INSURANCE:

The properties and insurable interests of your Company like buildings, plant and machinery, stocks etc. are properly insured.

13. DIRECTORS' RESPONSIBILITY STATEMENT:

As required under the provisions of Section 217 (2AA), of the Companies Act, 1956, your Directors report as under:

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

(ii) that 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 period and of the Profit of the Company for the period under review,

(iii) that the directors have taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities,

(iv) that the directors have prepared the annual accounts on a going concern basis.

14. AUDITORS:

At the Annual General Meeting, Members are requested to appoint M/s. Deloitte Haskins & Sells, Chartered Accountants, Vadodara, as Auditors for the current year and to fix their remuneration. The specific notes forming part of the Accounts referred to in the Auditor's Report are self-explanatory and give complete information.

Cost Audit:

As per the requirement of the Central Government and pursuant to the provisions of Section 233B of the Companies Act, 1956, the audit of the cost accounts relating to the product "Textiles" is required to be carried out every year. The Company has appointed Cost Auditors viz. Shri I. V. Jagtiani, Mumbai and Shri B. C. Desai, Ahmedabad, to audit the cost accounts for the Financial Year 2010-11 i.e. from 1.06.2010 to 31.05.2011, pursuant to approvals of the Central Government vide their letters dated 15th July, 2010 and 13th July, 2010, respectively. The Company has applied to the Central Government for approval to the appointment of the said Cost Auditors for the extended Financial Year 2010-11 ended on 30th June, 2011.The Cost Audit Report in respect of the financial period 2010-11 will be filed on or before the due date i.e.27th December, 2011.

15. CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION & ANALYSIS REPORT:

As required under the Listing Agreement with Stock Exchanges, Reports on "Corporate Governance" as well as "Management Discussion and Analysis Report" are attached and form part of the Directors' Report. Further, during the period under review, the Company has complied with all the mandatory requirements of the Corporate Governance. A certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under the Listing Agreement is annexed to the Report on Corporate Governance.

16. APPRECIATION:

The Directors wish to place on record their appreciation of the devoted services of the workers, staff and the officers who have largely contributed to the efficient management of your Company in the difficult times. The Directors place on record their appreciation for the continued support of the shareholders of the Company.

For and on behalf of the Board,

H. A. MAFATLAL

Chairman Mumbai,

Dated: 8th August, 2011

May 31, 2010

The Directors present the 96th Annual Report together with Audited Statement of Accounts for the 14 months period ended 31st May, 2010.

1. FINANCIAL RESULTS:

The Financial Results of the Company are as under: (Rs.in Lacs)

Current period Previous Year

2009-10 2008-09

(14 months) (12 months)

Turnover (Including export benefits/ 13238.21 12707.10

incentives)

Other Income 17575.49 42059.00

(Decrease)/increase in Stock of (117.26) 17.20

finished Goods & Process Stock

Gross Profit 7065.18 34951.28

[Before Interest, Depreciation & Tax]

Less: Depreciation 332.51 , 402.02

Interest (Net) 458.23 782.54

Provision for Current tax

(Including Wealth tax) 1100.25 0.40

Provision for Fringe Benefit

Tax - 15.60

Profit after Taxes 5174.19 33750.72

Excess Provision of Tax of

Earlier Years 2.11 -

5176.30 33750.72

Add: Deficit brought forward from

Previous Year/Period (31278.03) (65028.75)

(26101.73) (31278.03)

*The Board of Directors has extended the Financial Year 2009-10 to end on 31s1 May, 2010.

2. DIVIDEND:

Your Directors regret their inability to recommend dividend.

3. MODIFIED REHABILITATION SCHEME (MS-09):

As you are aware, the Honble Board for Industrial & Financial Reconstruction (BIFR) has sanctioned the Rehabilitation Scheme of the Company, under the provisions of the Sick Industrial Companies (Special Provisions) Act, 1985 vide its Order dated 30th October, 2002. The said Scheme was implemented substantially by the Company.

As already reported last year the Modified Rehabilitation Scheme (MS-09) of the Company was sanctioned by the Honble Board for Industrial & Financial Reconstruction (BIFR), New Delhi, vide Order dated 24th/25th June, 2009. During the period under review the Company has taken steps to implement the said Scheme.

As mandated by the BIFR in MS-09, the promoters of the Company have, in order to strengthen the equity base of the Company, converted the 300,00,000 - Optionally Convertible Fully Redeemable Non-cumulative Preference Shares of Rs.10/- each aggregating Rs.3000 Lacs and the Company has allotted on 12th November, 2009, 48,13,860 Equity Shares of Rs.10/- each at the conversion price of Rs.62.32 per equity share (i.e. Premium of Rs.52.32 per share) computed as per formula provided in the said modified rehabilitation scheme. The formula for the conversion price is higher of either (i) the average of weekly high and low of closing price of shares of the Company as quoted on the Bombay Stock Exchange during the six months preceding the date of conversion of OCCP or (ii) the average of weekly high and low of the closing price of shares of the Company as quoted on Bombay Stock Exchange during the 2 weeks preceding the date of conversion i.e.12-11-2009.

In terms of Clause 78(1) Chapter VII of Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2009, the said shares have been listed on BSE and ASE with a lock-in period of 3 years for 19,62,722 shares and balance 28,51,088 shares for one year.

The Honble High Court of Bombay has dismissed the Public Interest Litigation (PIL) filed by an NGO in the Honble High Court of Bombay, challenging the decision of the Government of Maharashtra for de-reserving 50% of the Mazgaon Unit Land of the Company in Mumbai. Thus, the 50% of the said land is available to the Company either for sale or to develop the same.

Further as per the direction and the guidelines of the MS-09, the Company constituted Asset Sale Committee-I comprising of a representative of the Company, Monitoring Agency, Government of Maharashtra and a Nominee Director appointed by the BIFR, for the disposal of identified assets at Mumbai, Maharashtra and similarly Asset Sale Committee-ll comprising of a representative of the Company, Monitoring Agency, Government of Gujarat and a Nominee Director appointed by the BIFR, for the disposal of the identified assets in Gujarat was constituted. Substantial work on disposal of the Assets has been completed in accordance with the directions and guidelines issued in the said MS-09. Accordingly the said Asset Sale Committees have disposed of some of the identified assets of the Company and realized more than Rs.80 crores.

During the year the Net Worth of the Company turned positive as at 31s1 May, 2010 and the Company ceased to be Sick Industrial Undertaking within the meanning of Section 3(i) (o) of the SICA, 1985. On an application by the Company seeking its de-registration from BIFR under SICA, the BIFR, vide its Order dated 12th August, 2010, discharged the Company from the perview of SICA/BIFR with certain directions as under:

i) IDBI Bank is relieved from the responsibility of Monitoring Agency.

ii) The un-implemented provisions of Modified Scheme (MS-09) if any, should be implemented by the concerned agencies and their implementation would be monitored by the Company M/s. Mafatlal Industries Limited.

iii) The Special Director1, appointed by the BIFR on the Companys Board of Directors (BoD), if any, would stand discharged with immediate effect.

iv) The Company would complete the necessary formalities with the Registrar of Companies (ROC) as may be required.

The Company has filed the said order with the Registrar of Companies on 04.09.2010.

4. YEAR IN RETROSPECT:

, Operations of the Company during the period under review were affected by shortage of working capital resulting in underutilization of the plant capacities. While working with existing old machines best possible efforts have been made to produce the high quality products with reasonable success. Delay in implementation of Capex has affected Companys plans to achieve higher value addition in product-mix. Cost-reduction and product- improvement projects have been undertaken on continuous basis in order to reduce losses and improve product-mix. With these efforts the Comapny has been successful in improving the Companys process-house capacity utilisation as well as deliver better quality products.

This policy of continuous product-mix improvement / process improvement has helped Company to achieve higher volumes of sale of processed fabrics in export as well as domestic markets. The Company has substantially reduced production of Grey fabrics for sale due to its very low contribution margins at 8.49 lac mtrs during the period under review as compared to 53.86 lacs Yntrs during the previous year

Profitability during the period under review was adversely affected by substantial increase in prices of raw materials and higher wage bill due to increased D.A. There was marginal relief in profitability due to favourable foreign exchange rate realization against exports.

The total sales during the period (14 months) was 184.53 lacs mtrs. as compared to 190.33 lacs mtrs during previous period of 12 months. The textile turnover during the current period Apr 09 to May 10 was Rs. 132.38 crores as against Rs. 127.08 crores during the previous period of 12 months.

5. PROJECT PROMOTION DIVISION:

NOCIL Limited (NOCIL):

The year 2009 -10 started with an unprecedented negative outlook due to the global financial meltdown. Fortunately, the situation in India had started turning positive as compared to the Western world. As a result, the domestic Tyre industry got back to normal production levels and consequently demand for rubber chemicals showed a healthy trend in the domestic market. NOCIL experienced positive volume growth during the year under review and this growth as mentioned above, was driven mainly by Domestic Sales.

The turnover of NOCIL for the year under review was Rs.460 crores as compared to Rs.499 crores representing a decrease of 7.87% over the previous year. The production of rubber chemicals and their intermediates was 36697 MT for the year under review as against 33573 MT representing an increase of 9.30% as compared to the previous year.

During the year under review, NOCIL achieved exports of Rs.181 crores as against Rs.231 crores in the previous year.

During the year NOCIL has managed to pay off all its secured loans in the first quarter of the year and also pay unsecured loan during May, 2010. As such NOCIL has become a debt free company.

6. ENERGY, ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUT GO:

Additional information on conservation of energy, technology absorption. foreign exchange earnings and a:. required to be disclosed in terms of Section 217(1)(e) of the Companies Act, 1956 read with the Companies (Disclosure of Particulars in the Report of Board of Directors) Rules, 1988 is annexed hereto and forms part of this Report.

7. PARTICULARS OF EMPLOYEES:

Information as per Section 217(2A) of the Companies Act, 1956, read with the Companies (Particulars of Employees) Rules, 1975, forms a part of this Report, and will be sent on demand to the shareholders. Any shareholders interested in obtaining a copy of the said statement may write to the Company Secretary.

8. INDUSTRIAL RELATIONS:

The relations between the employees and the Management have remained cordial. ,

9. DIRECTORATE:

Shri Arvlnd N. Mafatlal retires by rotation but has shown his unwillingness for re-appointment on retirement. In recognition of the contribution made by him in the growth of the Company as well as the Group, it is decided by the Board to confer the honour of "Chairman Emeritus" on Shri Arvind N. Mafatlal w.e.f. the date of conclusion of 96 th Annual General Meeting. Shri Hrishikesh A Mafatlal is appointed as the Chairman of the Company from the date of the conclusion of the ensuing 96 th Annual General Meeting. The Board places on record its sincere appreciation for the valuable services rendered by Shri Arvind N. Mafatlal during his tenure with the Company.

Shri P. J. Desai, Director of the Company will retire by rotation at the ensuing 96th Annual General Meeting of the Company and being eligible, offer himself for re-appointment.

BIFR has withdrawn the nomination of Shri Mohan Lall as Special Director from the Board of Directors of the Company with effect from 30th March,2010. The Board places on record its sincere appreciation of the guidance and co operation extended by Shri Mohan Lall during his tenure as Director of the Company.

10. SUBSIDIARY COMPANIES.

During the year under review Mishapar Investments Ltd., Sudas Manufacturing & Trading Limited, Sunanda Industrial Machinery Ltd., Mafatlal Services Ltd., continued to be the subsidiaries of your Company.

As per the exemption granted to the Company by the Central Government vide its Order No. 47/3/2010-CL-lll dated 28th June,2010, the Company has not attached copy of the Balance Sheet and Profit and Loss Account, Directors Report and Auditors Report of the Subsidiary Companies for the financial year ended 31" March, 2010 and other documents required to be attached under Section 212(1) of the Companies Act/1956 to the Balance Sheet of the Company for the period ended 31st May, 2010.

However, the other details as required by the Central Government, while granting the said exemption, are disclosed in the Report.

The Annual Accounts and related information of the subsidiary companies are open for inspection by any member/investor at the Registered Office of the Company on any working days between 2.00 p.m. to 4.00 p.m. and the Company will make available these documents/details upon request by any

member of the Company who may be Interested in obtaining the same. The annual accounts and related information of the subsidiary companies are also available on the Companys website.

11. INSURANCE:

The properties and insurable interests of your Company like buildings, plant and machinery, stocks etc. are properly insured.

12. DIRECTORS RESPONSIBILITY STATEMENT:

As required under the provisions of Section 217 (2AA), your Directors report as under:

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

(ii) that 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 period and of the Profit of the Company for the period under review, 1

(iii) that the directors have taken proper and sufficient care for the maintenance of adequate accounting records In accordance with the provisions of this Act for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities,

(iv) that the directors have prepared the accounts on a going concern basis

13. AUDITORS:

At the Annual General Meeting, Members are requested q appoint M/s. Deloitte Haskins & Sells, Chartered Accountants, Vadodara, as Auditors for the current year and fix their remuneration. The specific notes forming part of the Accounts referred to in the Auditors Report are self- explanatory and gives complete information.

Cost Audit

As per the requirement of the Central Government and pursuant to the provisions of Section 233B of the Companies Act, 1956, the audit of the cost accounts relating to the product Textiles" is being carried out every year. The Company has appointed Cost Auditors viz. Shri I. V. Jagtianl, Mumbai and Shri B. C. Desai, Ahmedabad, to audit the cost accounts for the year 2009-10 i.e. from 1.04.2009 to 31.05.2010. Necessary applications have been made for amendment in Financial Year 2009-10 to end on SI" May, 2010 instead of 31st March, 2010 in approvals of the Central Government vide their letters bearing dated 8.06.2009 and 09.11.2009. Approvals for modifications are awaited.

14. CORPORATE GOVERNANCE & MANAGEMENT DISCUSSION & ANALYSIS:

As required under the Listing Agreement with Stock Exchanges, Reports on "Corporate Governance as well as "Management Discussion and Analysis are attached and forms part of the Directors Report. Further, during the year under review, the Company has complied with all the mandatory requirements of the Corporate Governance. A certificate from the Auditors of the Company regarding compliance of conditions of Corporate Governance as stipulated under the Listing Agreement is annexed to the Report on Corporate Governance.

15. APPRECIATION:

The Directors wish to place on record their appreciation of the devoted services of the workers, staff and the officers who have largely contributed to the efficient management of your Company in the difficult times. The Directors place on record their appreciation for the continued support of the shareholders of the Company.

For and on behalf of the Board,

H A MAFATLAL

Vice- Chairman

Mumbai,

Dated: 24th September, 2010

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