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Directors Report of Nandan Denim Ltd.

Mar 31, 2016

Dear members,

The Directors have pleasure in presenting the Twenty Second Annual Report together with the Audited Financial Statements of the Company for the period from 1st April, 2015 to 31st March, 2016. The working and operational parameters of all the plants of the Company were quite satisfactory during the year.

FINANCIAL PERFORMANCE

Highlights of Financial Results for the year are as under: (Amounting C)

Particulars

For the year ended

31.03.2016

31.03.2015

Revenue from operations

11567254246

10965333603

EBITDA

1911440057

1654429970

Less: Finance Costs

411714806

377085653

Less: Depreciation

659985984

595503285

Profit before exceptional items and tax

881283985

712263781

Exceptional Items

Nil

Nil

Profit Before Tax

881283985

712263781

Less: Tax expense

248061835

197926223

Profit After Tax

633222150

514337558

AMOUNT AVAILABLE FOR APPROPRIATION

1707966845

1293425130

Dividend: Interim

72878490

27329434

Proposed Final

Nil

45549056

Tax on Dividend

14836348

13917353

Transfer to General Reserve

13000000

13000000

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards. It complies with the provisions of Companies Act, 2013 and guidelines issued by SEBI. Management evaluates all recently issued or revised accounting standards on an ongoing basis. Apart from this, the Company discloses Audited and Unaudited Financial Results on quarterly and annual basis as per Listing Agreement entered into with the stock exchanges and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

It is evident from the above graphs that your Company has progressed during the current period ended 31st March, 2016. It has achieved aggregate sales of C1156.72 crores as compared to sales of C1096.53 crores in last fiscal And Profit Before Tax of C88.12 crores as compared to Profit Before Tax of C71.22 crores last year.

Barring unforeseen circumstances, the Directors of your Company expect continued growth in turnover and profitability in future also.

A detailed analysis of the financial operations is given in the Management Discussion and Analysis Report which forms part of this Annual Report in terms of the provisions of Regulation 34 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. The analysis on the Industry Scenario throws light on the important risks and concerns faced by your Company. The strategy of your Company to de-risk against these factors is also outlined in the Management Discussion and Analysis Report.

SUBSIDIARY AND ASSOCIATE COMPANIES

Nandan Denim Limited did not have any subsidiary or associate company for the year ended 31st March, 2016.

DIVIDEND

The dividend payout for the year under review is in accordance with the Company''s policy to build long term shareholder value and considering the long term growth objectives of the Company.

The Board, at its meeting held on 12th February, 2016, declared an Interim Dividend of Re. 0.80/- (i.e. 8%) per equity share of face value of C10/- each. A second Interim Dividend of Re. 0.80/- (i.e. 8%) per equity share of face value of C10/- each was further declared at the Board Meeting held on 11th March, 2016. The total dividend for the year works out to C 1.60/- (i.e. 16%) per equity share on a face value of C10/- per share. Last year, the dividend was paid at the same rate. The Company has paid dividend distribution tax plus applicable surcharge, education cess and / or any other cess applicable on the dividend distribution tax at the time of declaration and payment of dividend.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

Nandan Denim Limited has a broad-based Board of Directors, constituted in compliance with the Companies Act, 2013 and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and in accordance with good corporate governance practices. The Board functions either as a full Board or through various committees constituted to oversee specific areas.

The Board of Directors at their meeting held on 29th April, 2015 approved the appointment of Dr. Yasho Verdhan Verma as Additional Director of the Company in the capacity of Independent Director. He was further regularised as Director in the Annual General Meeting of the Company held on 29th September, 2015.

On the recommendation of the Nomination and Remuneration Committee, at the Board Meeting held on 11th March, 2016, Mr. Pradeep Kumar Shrivastava and Mr. Ganesh Khawas were appointed as Additional Directors in the capacity of Whole - Time Directors. As

Additional Directors, they hold office up to the date of forthcoming Annual General Meeting and are eligible for appointment as Directors. Later, Mr. Ganesh Khawas stepped down from his position as Whole - Time Director effective from the close of business hours on 4th July, 2016 which was approved via circular resolution by the Board of Directors. The Board places on record its appreciation for his contribution towards the Company.

Independent Directors

The Board of the Company as on 31st March, 2016 consisted of 9 Directors, out of which five were Independent Directors, two were Promoter Directors and two were Whole - Time Directors.

All Independent Directors have given declarations that they meet the criteria of independence as laid down under Section 149 of the Companies Act, 2013 and Regulation 16 of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 which have been relied on by the Company and were placed at the Board Meeting held on 28th May, 2016.

Retirement by rotation

Mr. Brijmohan Chiripal, Managing Director, is liable to retire by rotation at the ensuing AGM pursuant to the provisions of section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and the Articles of Association of your Company and being eligible has offered himself for re-appointment. Appropriate resolutions for their re-appointment are being placed for your approval at the ensuing AGM.

Appointment/Re-appointment of Directors

In compliance with requirements of the Companies Act, Listing Agreement and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, brief resume and expertise of persons proposed to be appointed / re-appointed as Directors is mentioned below. Details of other directorships, memberships in committees of other Companies and shareholding in the Company have been mentioned in the Annexure to the Notice.

Mr. Brijmohan Chiripal is the Managing Director of Nandan Denim Limited. Aged 55 years, he has done his Bachelors in Engineering (Chemicals) and has almost three decades of experience in the field of manufacturing, trading and export of various textile products. He takes keen interest in the marketing aspects of the Company.

Mr. Pradeep Kumar Shrivastava is the Whole Time Director of the Company. He has done his Post Graduation in Personnel Management apart from M.A. and Diploma in Social Work. He also holds degree in law. He has worked with Companies like Gujarat Ambuja Exports Limited and Modern Terry Towel Limited, amongst others. He possesses around 30 years of experience in the field of Human Resource.

In terms of Securities and Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations, 2015, the number of Committees (Audit Committee and Stakeholders Relationship Committee) of public limited companies in which a Director is a member/chairman were within the limits provided under listing regulations, for all the Directors of the Company. The number of directorships of each independent Director is also within the limits prescribed under listing regulations.

Key Managerial Personnel

During the period under review, Mr. Sanjay Agrawal vacated office as Chief Financial Officer from the Company with effect from 31st March, 2016. The Board places on record appreciation for his valuable contribution during his association with the Company. Thereafter, Mr. Ashok Bothra was appointed as the Chief Financial Officer of Nandan Denim Limited at the Board Meeting held on 28th May, 2016 and designated as Key Managerial Personnel.

Apart from the above, Mr. Brijmohan Chiripal is the Managing Director of the Company and Ms. Purvee Roy is the Company Secretary of the Company, thereby satisfying the requirements of the provisions of sections 2(51) and 203 of the Companies Act,

2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 pertaining to Key Managerial Personnel. In addition, Mr. Deepak Chiripal serves as Chief Executive Officer of the Company.

Annual Evaluation of Board''s Performance

As required under the provisions of Section 134(3)(p) of the Companies Act, 2013; Listing Agreement and SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, the Board has carried out an annual evaluation of its own performance, of its Committees and individual directors. The manner in which such performance evaluation was carried out is as under:

The performance evaluation framework is in place to seek their response on the evaluation of the entire board and individual directors. The Nomination and Remuneration Committee carries out evaluation of Director''s performance.

The performance of the Board and Individual Directors was evaluated by the Board seeking input from all Directors. The performance of committees was evaluated by the Board seeking input from the committee members. The Nomination and Remuneration Committee reviews the performance of the Individual Directors. A separate meeting of the Independent Directors was also held to review the performance of no independent Directors; performance of the Board as a whole and performance of the Chairman of the Company, taking into account the views of executive as well as non-executive Directors.

The criteria of evaluation of Board includes mechanism for evaluating its performance as well as that of its Committees and individual Directors, including the Chairman of the Board based on the criteria laid down by Nomination and Remuneration Committee which includes attendance, contribution at the meetings and otherwise, independent judgment, safeguarding of minority shareholders interest, adherence to Code of Conduct and business ethics, monitoring of regulatory compliance, risk management and review of internal control system, etc.

Declaration of Independence

Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of Companies Act, 2013 read with the schedules and rules issued there under as well as Regulation 16(1)(b) of the Listing Regulations [including any statutory modification(s) or re-enactment(s) for the time being in force] so as to qualify themselves to be appointed as Independent Directors.

BOARD MEETINGS

The Board meets at regular intervals to discuss and decide on the Company''s policies and strategies apart from other Board matters. The calendar depicting the tentative dates of Board and Committee Meetings is circulated in advance to facilitate the Directors to arrange their schedule and to ensure participation in the meetings.

During the financial year 2015-16, six board meetings were held on 29th April, 2015; 29th May, 2015; 5th August, 2015; 3rd November, 2015; 12th February, 2016 and 11th March, 2016 respectively. The gap between two Board Meetings did not exceed 120 days.

Details of composition of Board and its committees and of the meetings held, attendance of the Directors and other relevant details are provided in the Corporate Governance Report.

The intervening gap between the meetings was within the period prescribed under the Companies Act, 2013; Listing Agreement and SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015.

POLICY ON DIRECTOR''S APPOINTMENT AND REMUNERATION

The Board had originally constituted its Remuneration Committee much before the coming into force of the Companies Act, 2013 as part of good corporate governance practice. The current policy is to ensure that the Board and Top Management is appropriately constituted to meet its fiduciary obligations to stakeholders, to identify persons who are qualified to become Directors or who may be appointed in senior management as / or Key Managerial Personnel of the Company and that the level and composition of remuneration is reasonable and sufficient to attract, retain and motivate Directors and meets appropriate benchmarks.

The remuneration paid to the Directors is in accordance with the Nomination and Remuneration Policy formulated in accordance with section 178 of the Companies Act, 2013 and regulation 19 of the Listing Regulations [including any statutory modification(s) or re-enactment(s) for the time being in force]. The Managing Director and CEO do not receive remuneration from any other Company.

The Nomination & Remuneration Committee, at its sole discretion, consider the integrity, qualification, expertise and experience of the person for appointment as a Director and then recommend the Board of his/her appointment. The policy has been attached as ''Annexure - D'' to the Boards Report.

BOARD COMMITTEES

Your Company has four Committees of the Board, namely:

Audit Committee

Stakeholders'' Relationship Committee Nomination and Remuneration Committee Corporate Social Responsibility Committee

Apart from the above, a Preferential Allotment Committee was also formed to take care of matters related to preferential issue of convertible warrants and conversion thereof.

Details of all the Committees along with their composition, terms of reference and meetings held during the year are provided in detail in the ''Corporate Governance Report'' which forms part of the Annual Report.

EVALUATION OF THE BOARD OF DIRECTORS

The Company has devised a policy for performance evaluation of its individual directors, the Board and the Committees constituted by it, which includes criteria for performance evaluation.

In line with the requirements of the Companies Act, 2013; Listing Agreement and SEBI (Listing Obligations and Disclosure Requirements), Regulations, 2015, the Board has carried out an annual evaluation of its own performance, working of the Committees, and the Directors individually. The Board performance was evaluated based on inputs received from all the Directors after considering criteria such as Board composition and structure, effectiveness of processes and information provided to the Board, etc.

The Nomination and Remuneration Committee has also reviewed the performance of the individual directors based on their knowledge, level of preparation and effective participation in meetings, understanding of their roles as Directors, etc.

CORPORATE GOVERNANCE

Corporate Governance is not just a destination, but a journey to constantly improve sustainable value creation. It is an upward-moving target that we collectively strive towards achieving.

Corporate Governance encompasses a set of systems and practices to ensure that the Company''s affairs are being managed in a manner which ensures accountability, transparency and fairness in all transactions in the widest sense. The objective is to meet stakeholders'' aspirations and societal expectations. Good governance practices stem from the dynamic culture and positive mindset of the organization. We are committed to meet the aspirations of all our stakeholders. This is demonstrated in shareholder returns, good credit ratings, governance processes and an entrepreneurial performance focused work environment. Additionally, our customers have benefited from high quality products delivered at extremely competitive prices.

Over the years, we have strengthened governance practices. These practices define the way business is conducted and value is generated. Stakeholders'' interests are taken into account, before making any business decision. Nandan Denim Limited has the distinction of consistently rewarding its shareholders.

It has thus become crucial to foster and sustain a culture that integrates all components of good governance by carefully balancing the complex inter-relationship among the Board of Directors, Audit Committee, Finance, Compliance and Assurance teams, Auditors and the senior management. Our employee satisfaction is reflected in the stability of our senior management, low attrition across various levels and substantially higher productivity.

In accordance with regulations of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 and listing agreement entered into with BSE Limited (BSE) and the National Stock Exchange of India Limited (NSE), the report containing the details of Corporate Governance systems and processes at Nandan Denim Limited forms part of this Annual Report.

Further, a certificate obtained from the statutory auditors, M/s J.T. Shah & Co., Chartered Accountants, regarding compliance of conditions of Corporate Governance as stipulated in SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 has been annexed as part of the Corporate Governance Report.

LISTING AGREEMENT

The Securities and Exchange Board of India (SEBI), on 2nd September, 2015, issued SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015 with the aim to consolidate and streamline the provisions of the Listing Agreement for different segments of capital markets to ensure better enforceability. The said regulations were effective from 1st December, 2015. Accordingly, all listed entities were required to enter into the Listing Agreement within six months from the date of notification of the regulations. The Company entered into Listing Agreement with BSE Limited and the National Stock Exchange of India Limited during February 2016.

SHARE CAPITAL

The paid up Equity Share Capital of the Company as on 31st March, 2016 was C45.54 crores. There has been no change in the Equity Share Capital of the Company during the year.

CONVERTIBLE WARRANTS

Nandan Denim Limited had taken shareholder''s approval at the Annual General Meeting of the Company conducted on 29th September, 2015 for issue of 25,00,000 convertible warrants to a non - promoter entity at a conversion price of C200/- (Rupees Two Hundred only) each. Pursuant to in - principle approval received from stock exchanges, the convertible warrants were allotted on 9th November, 2015. The entire amount of C50.00 crores (Rupees Fifty crores only) was received in tranches. Thereafter, the warrants were converted into equity shares in the month of May, 2016. Listing approval and trading approval has been received from both the exchanges.

MANAGEMENT DISCUSSION AND ANALYSIS

The Management Discussion and Analysis Report forms an integral part of this report and gives details of the overall industry structure, economic developments, performance and state of affairs of your Company''s business, internal controls and their adequacy, risk management systems and other material developments during the financial year 2015-16.

VIGIL MECHANISM

In accordance with Section 177 of the Companies Act, 2013; Listing Agreement and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the Company has formulated a Whistle Blower Policy to address the genuine concerns, if any, of the employees wherein employees can raise any suspected or actual violations of the Code of Conduct. Specifically, employees can raise concerns regarding any discrimination, harassment, victimization, any other unfair practice being adopted against them or any instances of fraud by or against the Company.

The details of the same have been stated in the Report on Corporate Governance and the policy can also be accessed on the Company''s website at http://www.nandandenim.com/Pdf/ WhistleBlowerPolicy.pdf.

CODE OF CONDUCT FOR THE PREVENTION OF INSIDER TRADING

The Board of Directors has adopted the Insider Trading Policy in accordance with the requirements of the SEBI (Prohibition of Insider

Trading) Regulation, 2015 for fair disclosure of unpublished price sensitive information and prevention of insider trading.

The Insider Trading Policy of the Company lays down guidelines and procedures to be followed, and disclosures to be made while dealing with shares of the Company, as well as the consequences of violation. The policy has been formulated to regulate, monitor and ensure reporting of deals by employees and to maintain the highest ethical standards of dealing in Company securities.

DIRECTORS RESPONSIBILITY STATEMENT

Your Directors state that:

i. in the preparation of the annual financial statements for the year ended 31st March, 2016, the applicable accounting standards have been followed along with proper explanation relating to material departures;

ii. such accounting policies have been selected and applied consistently and made such 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 as at the end of the financial year 31st March, 2016 and of the profit and loss of the Company for that period;

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

iv. the annual financial statements have been prepared on a going concern basis;

v. internal financial controls have been laid down and followed by the Company and that such internal financial controls are adequate and are operating effectively; and

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

PUBLIC DEPOSITS

During the year under review, the Company has neither accepted nor renewed any deposits from public within the meaning of Section 73 and 74 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 [including any statutory modification(s) or re-enactment(s) for the time being in force].

ENERGY CONSERVATION, TECHNOLOGY ABSORPTION AND FOREIGN EXCHANGE EARNINGS AND OUTGO

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under section 134(3)(M) of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, has been annexed as ''Annexure

- A'' to this Report.

ENVIRONMENT AND POLLUTION CONTROL

Nandan Denim Limited strives to maintain good standards of environmental care and ensures that increasing level of operations do not adversely impact standards of health and environment. To combat pollution and strengthen the area ecology, considerable emphasis is placed on trees. All manufacturing facilities possess the required environmental clearance from the respective Pollution Control Boards and do comply with the relevant statutory provisions.

The Company is well aware of its responsibility towards a better and cleaner environment. Our efforts in environment management go well beyond mere compliance with statutory requirements.

HUMAN RESOURCES / INDUSTRIAL RELATIONS FRONT

Human Resources:

Your Company attaches significant importance to continuous up gradation of Human Resources for achieving the highest levels of efficiency, customer satisfaction and growth. As part of the overall HR Strategy, training programs have been organized for employees at all levels through both internal and external faculties during the year under review. As on 31st March, 2016, the employee strength was approximately 2900.

Industrial Relations:

The industrial relations during the year under review continued to be cordial. The Directors place on record their sincere appreciation for the services rendered by employees at all levels.

PARTICULARS OF EMPLOYEES

The information required pursuant to section 197(12) of the Companies Act, 2013read with Rule 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,

2014 in respect of employees of the Company, will be provided upon request. In terms of section 136(1) of the Companies Act, 2013, the Report and Accounts are being sent to the shareholders and others entitled thereto, excluding the information on employees'' particulars which is available for inspection by the shareholders at the corporate office of the Company during business hours on working days of the Company upto the date of the ensuing Annual General Meeting. If any shareholder is interested in obtaining a copy thereof, such shareholder may write to the Company Secretary in this regard.

None of the employees listed in the said Annexure is a relative of any Director of the Company. None of the employees hold (by himself or along with his / her spouse and dependent children) more than two percent of the equity shares of the Company.

The ratio of remuneration of each director to the median of employees'' remuneration as per Section 197(12) of the Companies Act, 2013, read with Rule 5(1) of the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 forms part of the Board''s report.

AUDITORS

Statutory Auditor

M/s. J.T. Shah & Co., the Statutory Auditors of the Company, were appointed for a period of five years at the Annual General Meeting of the Company held on 15th September, 2014. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the Auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s. J.T. Shah & Co., Chartered Accountants, as Statutory Auditors of the Company is placed for ratification by the shareholders. In this regard, the Company has received a written consent and certificate stating that they satisfy the criteria provided under section 141 of the Companies Act, 2013 read with the Companies (Audit and Auditors), Rules, 2014 and that the appointment, if made, shall be in accordance with the applicable provisions of the Companies Act, 2013 and rules issued there under. As required under the Listing Agreement and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, M/s. J.T. Shah & Co., Chartered Accountants, have also confirmed that they hold a valid certificate issued by the Peer Review Board of Institute of Chartered Accountants of India (ICAI) as required under the Listing Regulations.

The Statutory Auditors of the Company have not reported any fraud as specified under the second proviso of Section 143(12) of the Companies Act, 2013 [including any statutory modification(s) or reenactments) for the time being in force].

The Auditors'' Report for the financial year ended 31st March, 2016 does not contain any qualification, reservation or adverse remark.

Cost Auditor

The Board of Directors of the Company, on the recommendations made by the Audit Committee at its meeting held on 10th August, 2016 has approved the appointment of M/s. A.G. Tulsian & Co., Cost Accountants [Firm Registration No. 100629] as the Cost Auditor of your Company for the financial year 2016-17 to conduct the audit of the cost records of your Company. The remuneration proposed to be paid to the Cost Auditor, subject to the ratification by the members at the ensuing AGM would be not exceeding C50,000/- (Rupees Fifty Thousand Only) plus taxes and out of pocket expenses, if any.

Your Company has received consent from M/s. A.G. Tulsian & Co., Cost Accountants, to act as Cost Auditor for conducting audit of cost records for the financial year 2016-17 along with a certificate confirming their independence and arm''s length relationship.

Secretarial Audit

In terms of Section 204 of the Companies Act, 2013 read with the Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014, the Board of Directors of your Company at its meeting held on 10th August, 2016 has appointed Ms. Geeta Serwani of M/s. Geeta Serwani & Associates, Practicing Company Secretary [Membership No.: 24479 and Certificate of Practice No.: 8842] as the Secretarial Auditor to conduct an audit of the secretarial records for the financial year 2016-17.

The Company has received consent from Ms. Geeta Serwani to act as the auditor for conducting audit of the secretarial records for the financial year ending 31st March, 2017.

The Secretarial Audit Report for the financial year ended 31st March, 2016 is annexed herewith as Annexure - C to this report. The Secretarial Audit Report does not contain any qualifications, reservations or adverse remarks.

DISCLOSURE UNDER SCHEDULE V(F) OF THE SEBI (LISTING OBLIGATIONS AND DISCLOSURE REQUIREMENTS) REGULATIONS, 2015

The Company does not have any Unclaimed Shares issued in physical form pursuant to Public Issue / Rights Issue.

RELATED PARTY TRANSACTIONS

During the financial year 2015-16, your Company has entered into transactions with related parties as defined under section 2(76) of the Companies Act, 2013 read with Companies (Specification of Definitions Details) Rules, 2014, all of which are in the ordinary course of business and on arm''s length basis and in accordance with the provisions of the Companies Act, 2013, read with the Rules issued there under; Listing Agreement and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015. Further, there were no transactions with related parties which qualify as material transactions under the Listing Regulations.

All transactions with related parties were reviewed and approved by the Audit Committee. Prior omnibus approval was granted by the Audit Committee for related party transactions which are of repetitive nature, entered in the ordinary course of business and are on arm''s length basis in accordance with the provisions of Companies Act, 2013 read with the Rules issued there under; Listing Agreement and SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015.

The details of the related party transactions as per Accounting

Standard 18 are set out in Note 39 to the Financial Statements forming part of this report.

The policy on Related Party Transactions is available on the website of the Company at http://www.nandandenim.com/Pdf/ RelatedPartyTransactionPolicy.pdf

Form AOC - 2 pursuant to Section 134(3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out as Annexure - F to the Directors Report.

LOANS AND INVESTMENTS BY THE COMPANY

Details of loans, guarantees and investments under the provisions of Section 186 of the Companies Act, 2013 read with the Companies (Meetings of Board and its Powers) Rules, 2014, as on 31st March, 2016, are set out in Notes to the Financial Statements forming part of this report.

DETAILS OF INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS

Your Company has put in place adequate internal financial controls with reference to the financial statements.

Nandan Denim Limited has adopted accounting policies which are in line with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules, 2006 that continue to apply under Section 133 and other applicable provisions, if any, of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and relevant provisions of the Companies Act, 1956 to the extent applicable. These are in accordance with generally accepted accounting principles in India. Changes in policies, if any, are approved by the Audit Committee in consultation with the Statutory Auditors.

The Company operates in SAP, an ERP system and has many of its accounting records stored in an electronic form and backed up periodically. The ERP system is configured to ensure that all transactions are integrated seamlessly with the underlying books of account. The Company has automated processes to ensure accurate and timely updating of various master data in the underlying ERP system.

The management periodically reviews the financial performance of your Company against the approved plans across various parameters and takes necessary action, wherever necessary.

Your Company has a code of conduct applicable to all its employees along with a Whistle Blower Policy which requires employees to update information accurately. Any non - compliance noticed is to be reported and auctioned upon in line with the Whistle Blower Policy.

The Company gets its standalone accounts audited every quarter by its Statutory Auditors.

RISK MANAGEMENT

The Company has a well-defined risk management framework in place. Further, it has established procedures to periodically place before the Board, the risk assessment and management measures. As such, there are no risks which in the opinion of the Board threaten the existence of the Company. However, the details of the risks faced by the Company which may pose challenges and the mitigation thereof are discussed in detail in the Management Discussion and Analysis Report that forms part of the Annual Report.

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

In order to prevent sexual harassment of women at workplace, a new legislation - The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 has been notified on 9th December, 2013. Under the said Act, every Company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at workplace of any woman employee.

Nandan Denim Limited has adopted a policy for prevention of Sexual Harassment of Women at Workplace and has constituted the Internal Complaints Committee (ICC) with an NGO as one of its Members. Our policy assures discretion and guarantees no retaliation to complainants. We follow a gender-neutral approach in handling complaints of sexual harassment and we are compliant with the law of the land wherever we operate. Further, adequate awareness programmes were also conducted for the employees of the Company.

During the financial year 2015-16, no cases in the nature of sexual harassment were reported at any workplace of Nandan Denim Limited.

CORPORATE SOCIAL RESPONSIBILITY

The Company has constituted Corporate Social Responsibility Committee in compliance with the provisions of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules 2014. The Corporate Social Responsibility Committee has formulated a Corporate Social Responsibility Policy (CSR policy) indicating the activities to be undertaken by the Company. The CSR policy may be accessed on the Company''s website at the link: http:// www.nandandenim.com/Pdf/CorporateSocialResponsibilityPolicy. pdf.

The CSR Committee of the Board consists of Dr. Yasho Verdhan Verma (Independent Director) as Chairman. Mr. Giraj Mohan Sharma (Independent Director) and Mr. Vedprakash Chiripal (Promoter Director) are its members.

Over the years, the Company has aligned its business processes and goals to make a more deep-rooted impact on the society''s sustainable development. A detailed update on the CSR initiatives of the Company is provided in the Corporate Social Responsibility and Sustainability Report, which forms part of the Annual Report.

As a responsible corporate citizen, the Company has been implementing societal activities since many years. As per the strict interpretation of the new CSR rules, some of these initiatives may not be eligible under the 2% CSR spend. As these activities are integral to the business, the Company has decided to continue with them.

During the year, the Company was in the process of evaluating the focus areas / locations of intervention for CSR activities to cater to the pressing needs of society and deliver optimal impact. As a socially responsible Company, your Company is committed to increase its CSR impact and spend over the coming years, with its aim of playing a larger role in India''s sustainable development by embedding wider economic, social and environmental objectives.

For the year ended 31st March, 2016, the calculated amount towards its CSR activities as required under the Act lies unspent. The reason for not spending the required amount towards CSR activities was mainly due to extraneous factors and due to better negotiation by the Company with the service providers / external agencies which resulted into savings and ultimately could not be spent as budgeted. The Company has been however extremely committed towards exercising its social responsibilities and is dedicated to spend, to achieve better results. The Company is confident about its work in the social space and is sensitive to the requirements of the Companies Act, 2013. In view of the same, your Company is confident of a turnaround as far as the CSR numbers are concerned in the next financial year.

The Annual Report on Corporate Social Responsibility u/s 135 of the Companies Act, 2013 providing necessary disclosures is annexed as Annexure - B to this Report.

EXTRACT OF ANNUAL RETURN

The details forming part of the extract of the Annual Return as on 31st March, 2016 in Form MGT - 9 in accordance with Section 92(3) of the Companies Act, 2013 read with Companies (Management and Administration) Rules, 2014, are set out herewith as Annexure

- E to this report.

CEO & CFO CERTIFICATION

In terms of SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, the certification by the Chief Executive Officer and Chief Financial Officer on the financial statements and internal controls relating to financial reporting has been obtained.

A copy of the certificate on the financial statements for the financial year ended 31st March, 2016 is annexed as Annexure to the Corporate Governance Report.

SIGNIFICANT / MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY''S OPERATIONS IN FUTURE

There are no significant / material orders passed by the regulators or courts or tribunals impacting the going concern status of your Company and its operations in future.

CHANGE IN THE NATURE OF BUSINESS, IF ANY

There was no change in the nature of business of the Company during the financial year ended 31st March, 2016.

CREDIT RATING

During the year under review, ICRA assigned credit rating of A- for Long Term with stable outlook and A2 for Short Term for Nandan Denim Limited.

The assigned ratings take into account NDL''s strong market position in the domestic denim industry, established distribution network and the extensive industry experience of its promoters. The rating further derives comfort from partially integrated operations of the Company and the plans for backward integration within the denim value chain which should help the Company respond to industry pressures and improve its profitability over the long term. The ratings also take into account the improving financial risk profile of NDL characterized by consistent growth in scale and profitability resulting in improvement in capital structure and debt protection metrics. ICRA further notes that company is in the midst of a large capex plan towards backward integration which will benefit from various government incentive schemes and on stabilization of the operations, should result in strengthening of the operational risk profile of Nandan Denim Ltd.

GREEN INITIATIVES

In order to save environment by cutting down the consumption of paper, the Ministry of Corporate Affairs (MCA) has introduced "Green Initiative in Corporate Governance" by allowing paperless compliance by companies under the provisions of the Companies Act, 2013. MCA had further announced that the Directors of the Company may participate in a meeting of Board or Committee of Directors, under the provisions of the Companies Act, through electronic mode. Participation of Directors in the Board or its Committee meetings through video conferencing is an approved way of attending the meetings and such participation is considered for the purposes of quorum, authority, etc. The Companies are also mandated to conduct the postal ballot through electronic means also. The facility of electronic voting was offered to the shareholders for the postal ballot process undertaken by the Company for approval of issue of shares on preferential basis in February, 2015, the issue was later on withdrawn. In future, if any requirement of passing resolutions through postal ballot, Nandan Denim Limited will conduct the ballot process in the e-voting mechanism.

NDL started sending documents like notices convening General Meetings, Financial Statements, etc. including Annual Reports in electronic form, to the email addresses made available to us by the depositories from time to time. We appreciate the initiative taken by MCA as it helps in prompt receipt of correspondence and also avoids delay or losses caused through post. Therefore, we are publishing only the statutory disclosures in the print edition of the Annual Report. Annual Report containing additional data is available on our website namely www.nandandenim.com.

Further, as a member, you will be entitled to be furnished with a copy of the above mentioned documents as required, upon receipt of a requisition any time. We would appreciate your support on our desire to participate in the green initiative.

GENERAL

The Company has not issued equity shares with differential voting rights as to dividend, voting or otherwise; and

The Company does not have any ESOP scheme for its Directors / employees.

APPRECIATIONS

Your Directors would like to express their sincere appreciation for the co-operation and assistance received from shareholders, bankers, financial institutions, regulatory bodies and other business constituents during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all executives, officers and staff, resulting in the successful performance of the Company during the year.

For and on behalf of the Board of Directors

Vedprakash Chiripal Brijmohan Chiripal

Place: Ahmedabad Chairman Managing Director

Date: 10th August, 2016 DIN: 00290454 DIN: 00290426


Mar 31, 2015

The Directors have pleasure in presenting the Twenty First Annual Report together with the Audited Financial Statements of the Company for the period from April 1, 2014 to March 31, 2015.

THE COMPANIES ACT, 2013

The Ministry of Corporate Affairs (MCA) had partly notified the Companies Act, 2013 in September 2013 and March 2014 with major- ity of the sections as well as rules being notified in March 2014. With respect to provisions of the Companies Act, 2013, appropriate references have been made in this report to the extent these provisions have become applicable effective from April 1, 2014.

Your Company has been regular in keeping pace with the fast changes introduced by the Companies Act, 2013 and initiated necessary actions accordingly. Some of the important initiatives taken by your Company are as under:

- Re/constitution of the Committees of the Board;

- Designation of Key Managerial Personnel's (KMP);

- Establishment of Vigil Mechanism;

- Recommendation for the appointment of the Independent Directors, not liable to retire by rotation, who satisfy the criteria enumerated in Companies Act, 2013; and

- Providing E-Voting facility to members

FINANCIAL PERFORMANCE

Highlights of Financial Results for the year are as under:

(Rs,in cr.)

Particulars For the year ended

31.03.2015 31.03.2014

Revenue from operations 1096.53 893.75

EBITDA 165.44 132.68

Less: Finance Costs 3771 32.03

Less: Depreciation 59.55 49.73

Profit before exceptional items and tax 71.23 54.91

Exceptional Items 0 0

Profit Before Tax 71.23 54.91

Less: Tax expense 19.79 15.60

Profit After Tax 51.43 3931

AMOUNT AVAILABLE FOR APPROPRIATION 180.78 136.74

Dividend: Interim 274 273

Proposed Final 4.55 273

Tax on Dividend 0.46 0.46

Tax on Proposed Final Dividend 093 0.46

Transfer to General Reserve 130 1.00

The financial statements of the Company have been prepared in accordance with the Generally Accepted Accounting Principles in India (Indian GAAP) to comply with the Accounting Standards notified under Section 211(3C) of the Companies Act, 1956 (which continue to be applicable in respect of Section 133 of the Companies Act, 2013 in terms of Rule 7 of the Companies (Accounts) Rules, 2014 and the relevant provisions of the Companies Act, 1956 / Companies Act, 2013, as applicable and guidelines issued by the Securities and Exchange Board of India ("SEBI"). Management evaluates all recently issued or revised accounting standards on an ongoing basis. Apart from this, the Company discloses Audited and Unaudited Financial Results on quarterly and annual basis as per Listing Agreement entered into with the stock exchanges.

PERFORMANCE OVERVIEW

It is evident from the above graphs that your Company has progressed during the period ended March 31, 2015. It has achieved aggregate sales of Rs. 1096.53 crores and Profit Before Tax of Rs. 71.23 crores.

Barring unforeseen circumstances, the Directors of your Company expect continued growth in turnover and profitability in future also.

A detailed analysis of the financial operations is given in the Management Discussion and Analysis Report which forms part of this Annual Report.

SUBSIDIARY COMPANY

Nandan Denim Limited does not have any subsidiary company.

DIVIDEND

The Company continues to evaluate and manage its dividend policy to build long term shareholder value. Your Directors are pleased to recommend for your approval a dividend of Rs. 1.00/- (i.e. 10%) per equity share of Rs. 10/- each fully paid-up for the period ended March 31, 2015. The dividend, subject to the approval of shareholders at the Annual General Meeting to be held on September 29, 2015, will be paid to the eligible members within the stipulated time.

The Board, at its meeting held on February 3, 2015, declared an Interim Dividend of Re. 0.60/- (i.e. 6%) per equity share of face value of Rs. 10/- each. The total dividend for the year works out to Rs. 1.60/- (i.e. 16%) per equity share on a face value of Rs. 10/- per share as against the total dividend of Rs. 1.20/- (i.e. 12%) per equity share on face value of Rs. 10/- per share in the previous year.

The Register of Members and Share Transfer Books will remain closed from September 23, 2015 till September 29, (both days inclusive) 2015 for the purpose of payment of the final dividend for the financial year ended March 31, 2015 and the Annual General Meeting. The Annual General Meeting is scheduled to be held on September 29, 2015.

DIRECTORS AND KEY MANAGERIAL PERSONNEL

During the period under review, Mr. Gautam Gandhi stepped down as Independent Director from the Board with effect from August 8, 2014. The Board places on record his appreciation and gratitude for his guidance and valuable contribution during their association with the Company.

On the recommendation of the Nomination and Remuneration Committee, at the Board Meeting held on November 11, 2014, Ms. Pratima Ram and Mr. Giraj Mohan Sharma were appointed as Additional Directors with immediate effect. Further, Mr. Yasho Verdhan Verma was appointed as Additional Director at the Board Meeting held on April 29, 2015. All three were appointed in the capacity of Independent Directors. As Additional Directors, they hold office up to the date of forthcoming Annual General Meeting and are eligible for appointment as Directors.

Further, in terms of section 149 read with section 152 of the Companies Act, 2013, an Independent Director is now not required to retire by rotation, and may be appointed on the Board of the Company for maximum two terms of up to five years each. Accordingly, it is proposed to appoint the existing Independent and Non-Executive Directors namely Ms. Pratima Ram, Mr. Giraj Mohan Sharma and Mr. Yasho Verdhan Verma, for an initial term of five years, effective from September 29, 2015. All these Independent Directors have confirmed their independence in terms of the requirements of Companies Act, 2013. The Company has received separate notice(s) together with the requisite amount, as per the provisions of section 160 of the Companies Act, 2013, for the appointment of aforementioned Directors on the Board of the Company.

Mr. Vedprakash Chiripal, Non-Executive Director, is liable to retire by rotation at the ensuing AGM pursuant to the provisions of section 152 of the Companies Act, 2013 read with the Companies (Appointment and Qualification of Directors) Rules, 2014 and the Articles of Association of your Company and being eligible have offered themselves for re-appointment. Appropriate resolutions for their re-appointment are being placed for your approval at the ensuing AGM.

In compliance with requirements of Clause 47 VIII (E) of the Listing Agreement, brief resume, expertise and details of other directorships, memberships in committees of other Companies and shareholding in the Company of persons proposed to be appointed / re-appointed as Directors are as under:

*Dr. Yasho Verdhan Verma was appointed on the Board of the Company w.e.f. April 29, 2015.

Apart from the above, Mr. Brijmohan Chiripal is the Managing Director of the Company. Mr. Sanjay Agrawal has been appointed as the Chief Financial Officer w.e.f. February 3, 2015 and Ms. Purvee Roy is the Company Secretary of the Company, thereby satisfying the requirements of the provisions of sections 2(51) and 203 of the Companies Act, 2013 read with Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014 pertaining to Key Managerial Personnel.

Annual Evaluation of Board's Performance

In terms of the provisions of the Companies Act, 2013 read with Rules issued there under and Clause 49 of the Listing Agreement, the Board of Directors on recommendation of the Nomination and Remuneration Committee, have evaluated the effectiveness of the Board / Director(s) for the financial year 2014-15.

Declaration of Independence

Your Company has received declarations from all the Independent Directors confirming that they meet the criteria of independence as prescribed under the provisions of Companies Act, 2013 read with the schedules and rules issued there under as well as Clause 49 of the Listing Agreement so as to qualify themselves to be appointed as Independent Directors.

BOARD MEETINGS

The Board meets at regular intervals to discuss and decide on the Company's policies and strategies apart from other Board matters. The calendar depicting the tentative dates of Board and Committee Meetings is circulated in advance to facilitate the Directors to arrange their schedule and to ensure participation in the meetings.

During the financial year 2014-15, four board meetings were held on May 30,2014; August 8,2014; November 11,2014 and February 3, 2015 respectively. The gap between two Board Meetings did not exceed 120 days.

BOARD COMMITTEES

Your Company has five Committees of the Board, namely:

- Audit Committee

- Stakeholders 'Relationship Committee

- Nomination and Remuneration Committee

- Corporate Social Responsibility Committee

- Risk Management Committee

Details of all the Committees along with their composition, terms of reference and meetings held during the year are provided in detail in the 'Corporate Governance Report 'which forms part of the Annual Report.

EVALUATION OF THE BOARD OF DIRECTORS

Pursuant to the provisions of the Companies Act, 2013 and Clause 49 of the Listing Agreement, Independent Directors at their meeting, without the participation of the Non-independent Directors and Management, considered/evaluated the Boards' performance, performance of the Chairman and other Non-independent Directors.

The Board subsequently evaluated its own performance, the working of its Committees (Audit, Nomination and Remuneration and Stakeholders Relationship and Risk Management Committee) and Independent Directors (without participation of the relevant Director).The criteria for performance evaluation have been detailed in the 'Corporate Governance Report 'which is attached as part of this Report. The Directors expressed satisfaction over the evaluation process.

CORPORATE GOVERNANCE

Corporate Governance is the application of best management practices, compliance of law in true letter and spirit and adherence to ethical standards for effective management and distribution of wealth and discharge of social responsibility for sustainable development of all stakeholders. Corporate governance is the system by which business organizations are directed and controlled. The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the organization, such as, the board, managers, shareholders and spells out the rules and procedures for making decisions on corporate affairs. By doing this, it also provides the structure through which the company objectives are set, and the means of attaining those objectives and monitoring performance. The concept of corporate governance hinges on total transparency, integrity and account- ability of the management and the board of directors.

The Company is committed to maintaining good standards of Corporate Governance and adhering to the Corporate Governance requirements as set out by Securities and Exchange Board of India (SEBI). Several features such as the Whistle Blower Policy, Policy on Related Party Transactions amongst others have been incorporated by the Company. The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report. The Certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance as stipulated under Clause 49 is also published in this Annual Report.

DISCLOSURE REQUIREMENTS

As per Clause 49 of the Listing Agreements entered into with the stock exchanges, corporate governance report with auditors' certificate thereon and management discussion and analysis are attached, which form part of this report.

Details of the familiarization programme of the independent directors are available on the website of the Company [URL: http://www.nandandenim.com/downloads/Familirization%20Policy.pdf]

Details of policy formulated by the company with regard to related party transactions is available on the website of the Company [URL: http://www.nandandenim.com/downloads/Related%20Party%20Transaction% 20Policy.pdf]]

The Code of practices and procedures for fair disclosure of unpublished price sensitive information and code of conduct for prevention of insider trading have also been uploaded on the Company's website [URL: http://www.nandandenim.com/downloads/ Code%20of%20Practices%20and%20Procedures%20for%20Fair%20Disclosure% 20of%20UPSI%20.pdf,http://wwwnandandenim.com/downloads/Code%20of%20 Conduct%20for%20Prevention%20of%20lnsider%20Trading%20.pdf]

The Company has a Whistle Blower Policy for the employees to report genuine concerns / grievances to provide vigil mechanism for employees and directors of the Company. The provisions of this policy are in line with the provisions of section 177(9) of the Act and revised clause 49 of the listing agreement entered into with the stock exchanges. The Policy is uploaded on the Company's website [URL: http://www.nandandenim.com/downloads/Whistle%20Blower%20Policy.pdfl.The Policy provides a framework and process whereby concerns can be raised by its employees against any kind of discrimination, harassment, victimization or any other unfair practice being adopted by them.

SHARE CAPITAL

The paid up Equity Share Capital of the Company as on March 31, 2015 was Rs. 45.54 crores. There has been no change in the Equity Share Capital of the Company during the year. Further, the Company has not issued equity shares with differential rights as to dividend, voting or otherwise and does not have any ESOP scheme for its employees or Directors.

The Company had taken shareholders approval via postal ballot for issue of 80,00,000 convertible warrants to specified group of investors (both promoter & non-promoter) but was later on withdrawn by the Company and not acted upon.

DIRECTORS RESPONSIBILITY STATEMENT

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

(a) In the preparation of the annual accounts, the applicable accounting standards have been followed;

(b) They 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 that period;

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

(d) They have prepared the annual accounts on a going concern basis;

(e) They have laid down internal financial controls to be followed by the Company and such internal financial controls are ad- equate and operating effectively;

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

DEPOSITS

The Company has neither accepted nor renewed any deposits from public within the meaning of Section 73 of the Companies Act, 2013 read with Companies (Acceptance of Deposits) Rules, 2014 during the year.

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

The information on conservation of energy, technology absorption and foreign exchange earnings and outgo as stipulated under section 134 of the Companies Act, 2013 read with the Companies (Accounts) Rules, 2014, is set out as 'Annexure – A to this Report.

PARTICULARS OF EMPLOYEES

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

AUDITORS Statutory Auditor

M/s. J.T. Shah & Co., the Statutory Auditors of the Company, were appointed for a period of five years at the Annual General Meeting of the Company held on September 15,2014. In terms of the first proviso to Section 139 of the Companies Act, 2013, the appointment of the Auditors shall be placed for ratification at every Annual General Meeting. Accordingly, the appointment of M/s. J.T. Shah & Co., Chartered Accountants, as Statutory Auditors of the Company is placed for ratification by the shareholders. In this regard, the Company has received a written consent and certificate stating that they satisfy the criteria provided under section 141 of the Companies Act, 2013 read with the Companies (Audit and Auditors), Rules, 2014 and that the appointment, if made, shall be in accordance with the applicable provisions of the Companies Act,2013and rules issued there under. As required under Clause 49 of the Listing Agreement, M/s.J.T.Shah & Co., Chartered Accountants, have also confirmed that they hold a valid certificate issued by the Peer Review Board of ICAI.

Cost Auditor

The Board of Directors had appointed M/s. A.G. Tulsian & Co., Cost Accountants as the Cost Auditor of your Company for the financial year 2014-15 to conduct the audit of the cost records of your Company. As per section 148 and other applicable provisions, if any, of the Companies Act, 2013 read with Companies (Audit and Auditors) Rules, 2014, the Board of Directors of your Company has appointed M/s. A.G.Tulsian & Co., Cost Accountants as the Cost Auditor for the financial year 2015-16 on the recommendations made by the Audit Committee. The remuneration proposed to be paid to the Cost Auditor, subject to the ratification by the members at the ensuing AGM would be not exceeding Rs. 50,000/- (Rupees Fifty Thousand Only) excluding taxes and out of pocket expenses, if any.

Your Company has received consent from M/s. A.G.Tulsian &Co., Cost Accountants, to act as Cost Auditor of your Company for the financial year 2015-16 along with a certificate confirming their independence.

Secretarial Audit

Ms. Geeta Serwani of M/s. Geeta Serwani & Associates, Practicing Company Secretary was appointed to conduct the Secretarial Audit of the Company for the financial year 2014-15, as required under section 204 of the Companies Act, 2013 read with the Companies (Ap- pointment and Remuneration of Mangerial Personnel) Rules, 2014.

The auditors' report and secretarial auditors' report does not contain any qualifications, reservations or adverse remarks. Report of the secretarial auditor has been attached as an annexure which forms part of this report.

RELATED PARTY TRANSACTIONS

The Company has entered into transactions with related parties as defined under section 2(76) of the Companies Act, 2013 read with Companies (Specification of Definitions Details) Rules, 2014. The transactions were carried out in the ordinary course of business and on arms' length basis and in accordance with the provisions of the Companies Act, 2013, rules issued there under and Clause 49 of the Listing Agreement.

The details of related party transactions as required under AS-18 are set out in Note 38 of the financial statements forming part of this Annual Report. Form AOC-2 pursuant to section 134 (3)(h) of the Companies Act, 2013 read with Rule 8(2) of the Companies (Accounts) Rules, 2014 is set out as 'Annexure - E'to this Report.

Post October 1,2014, prior omnibus approval of the Audit Committee and the Board has been obtained on an annual basis for transactions with related parties which are of a foreseeable and repetitive nature. A statement giving details of all the related party transactions were placed before the Audit Committee for its review on quarterly basis. The Company has developed a Related Party Transaction Policy for identification and monitoring of such transactions. The Policy, as approved by the Board, is uploaded on the Company's website. None of the Directors have any pecuniary relationships or transactions with the Company.

LOANS AND INVESTMENTS BY THE COMPANY

Details of loans and investments by the Company to other bodies corporate or persons are given in notes to the financial statements.

DETAILS OF INTERNAL FINANCIAL CONTROLS RELATED TO FINANCIAL STATEMENTS

Nandan Denim Limited has adopted accounting policies which are in line with the Accounting Standards prescribed in the Companies (Accounting Standards) Rules, 2006 that continue to apply under section 133 and other applicable provisions, if any, of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014 and relevant provisions of the Companies Act, 1956, to the extent applicable. These are in accordance with generally accepted accounting principles in India. Changes in policies, if any, are approved by the Audit Committee in consultation with the Auditors. The senior level management periodically review s the financial performance of your Company across various parameters and takes necessary actions, wherever necessary.

RISK MANAGEMENT

The Company has a well-defined risk management framework in place. Further, it has established procedures to periodically place be- fore the Board, the risk assessment and management measures. As such, there are no risks which in the opinion of the Board threatens the existence of the Company. However, the details of the risks faced by the Company which may pose challenges and the mitigation thereof are discussed in detail in the Management Discussion and Analysis Report that forms part of the Annual Report.

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

Nandan Denim Limited has always believed in providing a safe and harassment free environment for every individual working in the Company. The Company has in place a well drafted policy specifically in accordance with The Sexual Harassment of Women at Workplace (Prevention, Prohibition and Redressal) Act, 2013 which has been made applicable both at the corporate office and the plant location. Under the said Act, every Company is required to set up an Internal Complaints Committee to look into complaints relating to sexual harassment at work place of any women employee as there is zero tolerance on such issues. The Company has adopted a policy, in com- pliance thereof and has also constituted a Committee for its effective implementation, copy of which is also available on the website of the Company.

During the financial year 2014-15, no cases in the nature of sexual harassment were reported at any workplace of Nandan Denim Limited.

EXTRACT OF ANNUAL RETURN

As provided under section 92(3) of the Act, the extract of annual return is given in 'Annexure - C in the prescribed Form MGT-9, which forms part of this report.

CEO & CFO CERTIFICATION

Certification from Mr. Deepak Chiripal, CEO and Mr. Sanjay Agrawal, CFO, pursuant to provisions of Clause 49(V) of the Listing Agreement, for the year under review was placed before the Board of Directors of the Company at its meeting held on May 29,2015.

A copy of the certificate on the financial statements for the financial year ended March 31, 2015 is annexed along with this Report.

SIGNIFICANT / MATERIAL ORDERS PASSED BY THE REGULATORS OR COURTS OR TRIBUNALS IMPACTING THE GOING CONCERN STATUS AND COMPANY'S OPERATIONS IN FUTURE

There are no significant / material orders passed by the regulators or courts or tribunals impacting the going concern status of your Company and its operations in future.

CHANGE IN THE NATURE OF BUSINESS, IF ANY

There was no change in the nature of business of the Company during the financial year ended March 31, 2015.

CREDIT RATING:

During FY15, Brickworks has assigned a rating of BWR A-/A2 to the bank facilities of Nandan Denim Limited. The rating reflect the promoters' strong industry experience, established track record of the Company, fully integrated operations, strong economies of scale with largest installed capacity for denim in India, established customers with strong domestic distribution network, moderate financial profile marked by moderate net worth with adequate debt protection metrics.

RELEASE OF PLEDGED SHARES

During the year under review, total 89,50,000 pledged shares of Nandan Denim Limited were released. The percentage of pledged shares to the total shareholding held by the Promoter Group was reduced from 73.80 % to 37.97%. Further, the percentage of pledged shares to the total equity shareholding of the Company came down to 23.14% from 42.79%.

GREEN INITIATIVES

In order to save environment by cutting down the consumption of paper, the Ministry of Corporate Affairs (MCA) has introduced "Green Initiative in Corporate Governance" by allowing paperless compliance by companies under the provisions of the Companies Act. MCA had further announced that the Directors of the Company may participate in a meeting of Board or Committee of Directors, under the provisions of the Companies Act, through electronic mode. Participation of Directors in the Board or its Committee meetings through video conferencing is an approved way of attending the meetings and such participation is considered for the purposes of quorum, authority, etc. The Companies are also mandated to conduct the postal ballot through electronic means only. The facility of electronic voting was offered to the shareholders for the postal ballot process undertaken by the Company for approval of issue of shares on preferential basis, the issue was later on withdrawn. In future, if any requirement of passing resolutions through postal ballot, Nandan Denim Limited will conduct the ballot process in the e-voting mechanism.

NDL started sending documents like notices convening General Meetings, Financial Statements, etc. including Annual Reports in electronic form, to the email addresses made available to us by the depositories from time to time. We appreciate the initiative taken by MCA as it helps in prompt receipt of correspondence and also avoids delay or losses caused through post. Therefore, we are publishing only the statutory disclosures in the print edition of the Annual Report. Annual Report containing additional data is available on our website namely www.nandandenim.com.

Further, as a member, you will be entitled to be furnished with a copy of the above mentioned documents as required, free of cost, upon receipt of a requisition from you any time. We would appreciate your support on our desire to participate in the green initiative.

ACKNOWLEDGEMENT

Your Directors place on record their appreciation for co-operation and support received from various Departments of the Government of India, State Governments, banks, financial institutions, Registrar of Companies, suppliers, other regulatory authorities, shareholders, etc. the management would like to express their appreciation for the contribution and dedication of its employees at all levels and collaboration of the workers of the Company as we believe that employees form the pillars on which the success of the organization depends.

For and on behalf of the Board of Directors

Vedprakash Chiripal Brijmohan Chiripal

Ahmedabad Chairman Managing Director

May 29,2015 DIN: 00290424 DIN: 00290426


Mar 31, 2014

Dear Members,

The Directors have pleasure in presenting the 20th Annual Report on the business and operations of the Company together with the Audited Accounts for the financial year ended March 31, 2014.

FINANCIAL HIGHLIGHTS:

The financial performance of the company is summarized below: (Rs. in crore)

FINANCIAL RESULTS 2013-14 2012-13

Turnover 893.75 703.12

Profit Before Depreciation 104.64 76.68

Less: Depreciation 49.73 40.92

Profit After Depreciation 54.91 35.76

Less: Provision for Taxation 11.55 7.46

Less: Provision for Deferred Tax 4.05 (2.75)

Profit After Taxation 39.31 31.05

Less: Prior Period Items —- —-

Less: Short / (Excess) provision of Income Tax —- —-

Profit for the year 39.31 31.05

Appropriations / Adjustments —- —-

Balance of profit /(loss) brought forward —- —-

Interim Dividend 2.73 NIL

Proposed Final Dividend (12% i.e.Rs. 1.20/- per share)* 2.73 5.47

Corporate Dividend Tax (including cess and surcharge) 0.93 0.93

General Reserves 5.33 4.33

Profit carried to Balance Sheet 39.31 31.05

* Refer Note on Dividend mentioned below.

PERFORMANCE:

For the financial year ended March 31, 2014, the Company has recorded a good revenue and margin performance. During the year under review 2013-14, your Company has achieved a turnover of Rs. 893.75 crore as against Rs. 703.12 crore for the previous financial year registering a rise of 27%. The Profit Before Tax (after interest and depreciation charges) during the year under review was Rs. 54.91 crore as compared to previous years figure of Rs. 35.76 crore. The Net Profit during the year 2013-14 was Rs. 39.31 crore as compared to previous year figure of Rs. 31.05 crore which shows the increase of 27%. Your Directors would like to inform that the Company is implementing the expansion projects by increasing its production capacity continuously in order to grab the increase in demand for the denim fabrics in the domestic and international market and thereby increasing its volume and activities in its field. Further the Company has targeted to achieve high volume in the terms of quantity and value and also adding the capacity to improve its performance and thereby its share in the market. Your Company expects to achieve very excellent performance during the current year.

CREDIT RATING:

CRISIL has assigned a Long Term Rating of CRISIL BBB /Stable and Short Term Rating of CRISIL A2 to Nandan Denim Limited during the year. Good credit ratings by leading agencies reflect the Company''s financial discipline and prudence.

DIVIDEND:

Based on the Company''s performance, the Directors are pleased to recommend for approval of the members, a Final Dividend of Rs. 1.20/- per share for the financial year 2013-14 which is inclusive of the Interim Dividend of Re. 0.60/- per share declared by the Board of Directors of the Company at their meeting held on February 4, 2014. The Final Dividend on equity shares, if approved by the members, would involve a cash outflow of Rs. 3,19,74,072/- including dividend tax.

The dividend will be paid to the members whose name appears in the Register of Members as on Record Date in respect of the shares held in dematerialized form. It will be paid to the members whose names are furnished by National Securities Depositories Limited and Central Depository Services (India) Limited as beneficial owners as on that date. The dividend payout for the year under review has been formulated in accordance with shareholders'' aspirations and the Company''s policy to pay sustainable dividend linked to long term growth objectives of the Company.

CHANGE IN NAME:

During the year, the Company''s name has been changed from Nandan Exim Limited to ''Nandan Denim Limited'' and necessary approvals were taken from the authorities concerned.

DEPOSITORY SYSTEM:

As the members are aware, the Company''s shares are compulsorily tradable in electronic form. As on March 31, 2014, 99.97 % of the Company''s total Paid-Up Capital representing 4,55,33,454 shares are in dematerialized form. In view of the numerous advantages offered by the Depository System, members holding shares in physical mode are advised to avail of the facility of dematerialization on either of the Depositories.

PUBLIC DEPOSIT:

Your Company has not accepted any public deposit and as such, no amount on account of principal or interest on public deposits was outstanding as on the date of the Balance Sheet.

SAFETY OF ASSETS:

Your Directors state that the business has lots of unforeseen risks attached to its real assets as plant & machinery, stocks and other assets of the Company and in case any unforeseen event happens, entire business might get stuck and therefore your Directors have taken effective steps to cover these risks adequately by having insurance cover as per the norms to safeguard the business and the interest of the stakeholders of the Company. Besides these, the Company has installed adequate safety equipments and taken appropriate measures related to maintenance of all plant & machineries, buildings, etc.

CORPORATE GOVERNANCE REPORT, MANAGEMENT DISCUSSION & ANALYSIS REPORT AND CORPORATE SOCIAL RESPONSIBILITY:

As per clause 49 of the Listing Agreements entered into with the Stock Exchanges, Corporate Governance Report with Auditors'' Certificate thereon and Management Discussion & Analysis are attached and form part of this report.

SEBI, vide its circular has mandated Companies listed on the BSE & NSE to include Corporate Social Responsibility as part of the Annual Report describing the initiatives taken by the Companies from environmental, social and governance perspective. Besides this, the Company has an innate desire and zeal to contribute towards the welfare and social upliftment of the community. Accordingly, the Corporate Responsibility Report is attached and forms part of the Annual Report.

BOARD OF DIRECTORS:

In accordance with the Articles of Association of the Company and the provisions of the Companies Act, Mr. Brijmohan Chiripal, Director who retires by rotation from the Board of Directors of the Company at the ensuing Annual General Meeting during the year under review, and offers himself for reappointment. Mr. Brijmohan Chiripal, Managing Director is liable to retire by rotation. Your Directors recommend his reappointment. Pursuant to provisions of sections 149, 150, 152 & other applicable provisions of the Companies Act, 2013 and rules made thereunder, your Directors are seeking appointment of Mr. Tara Sankar Bhattachrya and Mr. Ambalal Patel as Independent Directors of the Company for five consecutive years for a term upto September 14, 2019. Details of the proposal are mentioned in the explanatory statement u/s 102 of the Companies Act, 2013 of the Notice of the ensuing Annual General Meeting.

Mr. Gautam Gandhi resigned as a Director of the Company with effect from August 8, 2014. The Directors place on record their appreciation of the valuable advice and guidance given by him while he was a Director of the Company.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to section 217(2AA) of the Companies Act, 1956 and based on the information received from the Management and after due enquiry, your Directors state that:

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

b) They have selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2014 and of the profit of the Company for the year ended on that date;

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

d) The annual accounts of the Company have been prepared on a going concern basis.

AUDITORS AND AUDITORS'' REPORT:

M/s. J.T. Shah & Co., Chartered Accountants, the Statutory Auditors of the Company, hold office till the conclusion of the forthcoming AGM and are eligible for re-appointment. Pursuant to the provisions of section 139 of the Companies Act, 2013 and the rules framed thereunder, it is proposed to appoint M/s. J.T. Shah & Co., Chartered Accountants as statutory auditors of the Company from the conclusion of the forthcoming AGM till the conclusion of the twenty fifth AGM to be held in the year 2019, subject to ratification of their appointment at every AGM.

INFORMATION REGARDING CONSERVATION OF ENERGY, ETC. AND EMPLOYEES:

Information required under Section 217(1)(e) of the Companies Act, 1956 read with Rule 2 of the Companies (Disclosure of Particulars in the Report of the Board of Directors) Rules, 1988 and under Section 217(2A) of the Companies Act, 1956 read with Companies (Particulars of Employees) Rules, 1975, as amended from time to time, forms part of this report. However, as per the provisions of Section 219(1)(b)(iv), the report and accounts are being sent to all shareholders of the Company excluding the information relating to conservation of energy, technology absorption and foreign exchange earning and outgo and statement of particular of employees. Any shareholder interested in obtaining such particulars may inspect the same at the Registered Office of the Company or write to the Company Secretary for a copy.

ACKNOWLEDGEMENT:

Your Directors would like to express their appreciation for the assistance and co-operation received from the financial institutions, banks, government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committee services by the executives, staff and workers of the Company.

For and on behalf of the Board

Place: Ahmedabad VEDPRAKASH D. CHIRIPAL Date:August 8, 2014 Chairman


Mar 31, 2013

Dear Members,

The Directors have pleasure in presenting the 19th Annual Report on the business and operations of the Company together with the Audited Accounts for the financial year ended March 31, 2013.

FINANCIAL HIGHLIGHTS:

The financial performance of the company is summarized below:

(Rs. in crores)

FINANCIAL RESULTS

2012-13 2011-12

Turnover 703.12 573.84

Profit Before Depreciation 76.68 55.29

Less: Depreciation 40.92 33.26

Profit After Depreciation 35.76 22.03

Less: Provision for Taxation 7.46 6.01

Less: Provision for Deferred Tax (2.75) 1.5

Profit After Taxation 31.05 18.79

Less: Prior Period Items

Less: Short / (Excess) provision of Income Tax

Profit for the year 31.05 18.79

Appropriations / Adjustments

Balance of profit / (loss) brought forward

Interim Dividend NIL NIL

Proposed Final Dividend (12% i.e.Rs. 1.20/- per share) 5.47 4.55

Corporate Dividend Tax (including cess and surcharge) 0.93 0.74

General Reserves 0.78 0.47

Profit carried to Balance Sheet 31.05 18.79

PERFORMANCE:

During the year under review, your Company has achieved a record turnover of Rs. 703.12 crores as against Rs. 573.84 crores for the previous financial year registering a rise of 22.52 percentage.

The profit before tax (after interest and depreciation charges) during the year under review was Rs. 35.76 crore as compared to previous years figure of Rs. 22.03 crore. The Net Profit during the year 2012-13 was Rs. 31.05 crore as compared to previous year figure of Rs. 18.79 crore which shows the increase of 65.23 percentage. Your Directors would like to inform that the Company is implementing the expansion projects by increasing its production capacity continuously in order to grab the increase in demand for the denim fabrics in the domestic and international market and thereby increasing its volume and activities in its field. Further the Company has targeted to achieve high volume in the terms of quantity and value and also adding the capacity to improve its performance and thereby its share in the market. Your Company expects to achieve very excellent performance during the current year.

CREDIT RATING:

The current ratings of the Company are ''Fitch BBB–(ind)'' for long term loans, ''Fitch BBB–(ind)'' / ''Fitch A3 (ind)'' for Fund Based Limits and FitchA3(ind) for Non – Fund Based Limits. This is as per Fitch Ratings India Private Limited.

DIVIDEND:

Your Directors have recommended a dividend of Rs. 1.20 per Equity Share i.e. 12% (last year Rs. 1.00 per Equity Share) for the financial year ended March 31, 2013. The dividend will be paid to the members whose name appears in the Register of Members as on Record Date in respect of the shares held in dematerialised form. It will be paid to the members whose names are furnished by National Securities Depositories Limited and Central Depository Services (India) Limited as beneficial owners as on that date.

The dividend payout for the year under review has been formulated in accordance with shareholders'' aspirations and the Company''s policy to pay sustainable dividend linked to long term growth objectives of the Company.

DEPOSITORY SYSTEM:

As the members are aware, the Company''s shares are compulsorily tradable in electronic form. As on March 31, 2013, 99.97 % of the Company''s total paid-up Capital representing 4,55,33,454 shares are in dematerialized form. In view of the numerous advantages offered by the Depository System, members holding shares in physical mode are advised to avail of the facility of dematerialization on either of the Depositories.

PUBLIC DEPOSIT:

Your Company has not accepted any deposit during the year under review u/s. 58A of the Companies Act, 1956.

SAFETY OF ASSETS:

Your Directors state that the business is exposed to lots of unforeseen risks attached to its real assets as plant & machinery, stocks and other assets of the Company and in case any unforeseen event happens, entire business might get stuck and therefore your Directors have taken effective steps to cover these risks adequately by having insurance cover as per the norms to safeguard the business and the interest of the stakeholder of the Company

CORPORATE GOVERNANCE:

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The Company has also implemented several best corporate governance practices as prevalent globally. The Report on Corporate Governance as stipulated under Clause 49 of the Listing Agreement forms part of the Annual Report. The requisite Certificate from the Auditors of the Company confirming compliance with the conditions of Corporate Governance as stipulated under the aforesaid Clause 49 is attached to this Report.

CORPORATE SOCIAL RESPONSIBILITY:

SEBI, vide its circular has mandated companies listed on the BSE & NSE to include Corporate Social Responsibility as part of the Annual Report describing the initiatives taken by the companies from Environmental, Social and Governance perspective. Besides this, the Company has an innate desire and zeal to contribute towards the welfare and social upliftment of the community. Accordingly, the Corporate Responsibility Report is attached and forms part of the Annual Report.

MANAGEMENT DISCUSSION AND ANALYSIS:

Management Discussion and Analysis Report as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges is presented in a separate section forming part of the Annual Report.

BOARD OF DIRECTORS:

In accordance with the Articles of Association of the Company and the provisions of the Companies Act, 1956, Shri.Vedprakash D. Chiripal, Director retires by rotation from the Board of Directors of the Company at the ensuing Annual General Meeting during the year under review, and offers himself for reappointment. Your Directors recommend his reappointment. Also, Shri. T.S. Bhattacharya who was appointed as an Additional Director at the Board Meeting of the Company will be regularized as a Director at the ensuing Annual General Meeting.

A brief resume of the Director retiring by rotation and the Director to be regularised at the ensuing Annual General Meeting, nature of expertise in specific functional areas and names of companies in which they holds directorships, chairmanships of Committees of the Board as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India forms part of the Annual Report.

PARTICULARS OF EMPLOYEES:

Since there are no employees employed by the Company which are covered under section 217 (2A) of the Companies Act, 1956, the particulars of employees as required by section 217 (2A) of the Companies Act, 1956 and Companies (Particulars of Employees) Rules, 1975 as amended is not appended.

TRANSFER OF AMOUNTS TO INVESTOR EDUCATION AND PROTECTION FUND:

Pursuant to the provisions of Section 205A(5) and 205C of the Companies Act, 1956, relevant amounts which remain unpaid or unclaimed for a period of 7 years have been transferred by the Company to the Investor Education and Protection Fund.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956 and based on the information received from the Management and after due enquiry, your Directors state that:

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

b) They have selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at March 31, 2013 and of the profit of the Company for the year ended on that date;

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

d) The annual accounts of the Company have been prepared on a going concern basis.

AUDITORS AND AUDITORS'' REPORT:

M/s. J.T. Shah & Co., Chartered Accountants, the Statutory Auditors of the Company, retire at the ensuing Annual General Meeting and have confirmed their eligibility and willingness to accept office, if re-appointed.

The observations and comments given by Auditors in this report read together with notes to accounts are self explanatory and hence do not call for any further comments under Section 217 of the Companies Act, 1956.

COST AUDITORS:

The Company has appointed M/s. A.G. Tulsian& Co., Cost Auditors, Ahmedabad for conducting cost audit of textile and other products for the financial year 2013-14.

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

The particulars as required under 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 are given in Annexure to this report.

ACKNOWLEDGEMENT:

Your Directors would like to express their appreciation for the assistance and co-operation received from the financial institutions, banks, government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the services by the executives, staff and workers of the Company.

For and on behalf of the Board

Place: Ahmedabad VEDPRAKASH D. CHIRIPAL

Date : May 30, 2013 Chairman


Mar 31, 2012

The Directors have pleasure in presenting the 18th Annual Report on the business and operations of the Company together with the Audited Accounts for the financial year ended March 31, 2012.

FINANCIAL HIGHLIGHTS:

The financial performance of the company is summarized below:

(Rs. in Lacs)

FINANCIAL RESULTS 2011-12 2010-11

Sales 57383.87 50739.63

Profit Before Depreciation and Tax 5956.23 5129.87

Less: Depreciation 3325.89 2536.05

Profit Before Taxation 2630.34 2593.82

Less: Provision for Taxation 601.00 574.33

Less: Provision for Deferred Tax 150.00 284.95

Profit for the year 1879.33 1734.54

Appropriations / Adjustments

Proposed Final Dividend (455.49) -

Corporate Dividend Tax (including cess and surcharge) (73.89) -

General Reserves (47.00) -

Profit carried to Balance Sheet 1302.95 1734.54

PERFORMANCE:

During the year under review 2011-12, your Company has achieved a record turnover of Rs. 573.84 crores as against Rs. 507.40 crores for the previous financial year registering a rise of 13.09 percentage.

The profit before tax (after interest and depreciation charges) during the year under review was Rs. 26.30 crore as compared to previous years figure of Rs. 25.36 crore. The Net Profit during the year 2011-12 was Rs. 18.79 crore as compared to previous year figure of Rs. 17.35 crore which shows the increase of 8.35 percentage. Your Directors would like to inform that the Company is implementing the expansion projects by increasing its production capacity continuously in order to grab the increase in demand for the denim fabrics in the domestic and international market and thereby increasing its volume and activities in its field. Further the Company has targeted to achieve high volume in terms of quantity and value and also adding the capacity to improve its performance and thereby its share in the market. The Company is also in dialogue with the international brand players for the supply of its products. With the cutting down of production by China, there is very bright future in the denim fabrics for all denim manufacturers and with the high qualitative products and cost effectiveness, your Company expects to achieve excellent performance during the current year.

CREDIT RATING:

The Company has received credit rating of 'Fitch BBB-(ind)' for long term loans, 'Fitch BBB-(ind)' / 'Fitch A3 (ind)' for Fund Based Limits and Fitch A3(ind) for Non - Fund Based Limits in June 2012. This is as per Fitch Ratings India Private Limited.

DIVIDEND:

During the year under review, the Company has achieved a Net Profit after Tax of Rs. 18.79 crores even after continuous implementation of expansion projects, which is financed through Term Loans and Internal Cash Approvals. With a profit to be ploughed back in the project and with the record revenue by way of sales during the year under review and also as a part of kind support and trust put in by the shareholders in the Company, your Directors have recommended a dividend of 10% (Re. 1/- per share) on equity shares during the year ended on March 31, 2012. The dividend will be paid to the members whose name appears in the Register of Members as on the record date in respect of the shares held in dematerialsed form. It will be paid to the members whose names are furnished by National Securities Depositories Limited and Central Depository Services (India) Limited as beneficial owners as on that date.

CONSOLIDATION OF SHARES:

Your Directors would like to state that your Company has consolidated the face value of Equity Shares from Re. 1/- per share to Rs. 10/- per share during the year under review. The consolidation in the share capital has been effectively done for the purpose of giving a better picture of Earning Per Share (EPS) to the equity shareholders and to enable them to take effective decision in the development of the Company. Your Company, after complying the necessary formalities with the concerned stock exchanges and depositories, has recommenced the trading of equity shares at a face value of Rs. 10/- per share. Therefore, your Directors would like to inform the shareholders and the investors at large that the face value of the equity shares of the Company is Rs. 10/- per share.

DEPOSITORY SYSTEM:

As the members are aware, the Company's shares are compulsorily tradable in electronic form. As on March 31, 2012, 99.96 % of the Company's total paid-up Capital representing 455,323,74 Shares were in dematerialized form. In view of the numerous advantages offered by the Depository System, members holding shares in physical mode are advised to avail of the facility of dematerialization on either of the Depositories.

PUBLIC DEPOSIT:

Your Company has not accepted any deposit during the year under review u/s. 58A of the Companies Act, 1956.

SAFETY OF ASSETS:

Your Directors state that the business has lots of unforeseen risks attached to its real assets such as plant & machinery, stocks and other assets of the Company and in case any unforeseen event happens, entire business might get stuck and therefore your Directors have taken effective steps to cover these risks adequately by having insurance cover as per the norms to safeguard the business and the interest of the stakeholders of the Company.

CORPORATE GOVERNANCE:

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The Company has also implemented several best corporate governance practices prevailing in the market. A separate report on Corporate Governance along with the Auditors' Certificate on compliance with Corporate Governance as stipulated in Clause 49 as set out in this Annual Report and forms part of this report. Further, a certificate from C.E.O. regarding declaration on Code of Conduct also forms part of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY:

The Company has an innate desire and zeal to contribute towards the welfare and social upliftment of the community. During the year 2011-12, Chiripal Group continued its Corporate Social Responsibility (CSR) initiatives in various fields. Activities in this area are set out in detail in the annexed CSR Report.

MANAGEMENT DISCUSSION AND ANALYSIS:

Management Discussion and Analysis Report as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges is presented in a separate section forming part of the Annual Report.

BOARD OF DIRECTORS:

In accordance with the Articles of Association of the Company and the provisions of the Companies Act, 1956, Shri. Ambalal C. Patel, Director retires by rotation from the Board of Directors of the Company at the ensuing Annual General Meeting during the year under review, and offers himself for reappointment. Your Directors recommend his reappointment.

A brief resume of the Director retiring by rotation at the ensuing Annual General Meeting, nature of expertise in specific functional areas and names of companies in which he holds directorships, chairmanships of Committees of the Board as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India forms part of the Annual Report.

PARTICULARS OF EMPLOYEES:

In terms of the provisions of Section 217(2A) of the Act, read with the Companies (Particulars of Employees) Rules, 1975 as amended, the names and other particulars of employees are set out in the Annexure to the Directors Report. However, having regard to the provisions of Section 219(1)(b)(iv) of the Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

DIRECTORS' RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956 and based on the information received from the Management and after due enquiry, your Directors state that:

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

b) They have selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2012 and of the profit of the Company for the year ended on that date;

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

d) The annual accounts of the Company have been prepared on a going concern basis.

AUDITORS AND AUDITORS' REPORT:

M/s. J.T. Shah & Co., Chartered Accountants, the Statutory Auditors of the Company, hold office upto the conclusion of the ensuing Annual General Meeting and are eligible for appointment.

The Company has received letters from M/s. J.T. Shah & Co., Chartered Accountants, to the effect that their appointment, if made would be in conformity with the limits prescribed in Section 224(1B) of the Companies Act, 1956 and they are not disqualified for such appointment within the meaning of section 226 of the said Act. The Board recommends the re-appointment of M/s. J.T. Shah & Co., Chartered Accountants, as the Auditors of the Company for the current financial year 2012-13.

The observations and comments given by Auditors in this report read together with notes to accounts are self explanatory and hence do not call for any further comments under Section 217 of the Companies Act,

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

The particulars as required under 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 are given in Annexure to this report.

ACKNOWLEDGEMENT:

Your Directors would like to express their appreciation for the assistance and co-operation received from the financial institutions, banks, government authorities, customers, vendors and members during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the services by the executives, staff and workers of the Company.

For and on behalf of the Board

Place : Ahmedabad VEDPRAKASH D. CHIRIPAL

Date : 13/08/2012 Chairman


Mar 31, 2011

Dear Shareholders,

The Directors have pleasure in presenting their 17th Annual Report and Audited Accounts for the financial year ended 31st March, 2011.

FINANCIAL HIGHLIGHTS:

The financial performance of the company is summarized below:

(Rs. in crores)

FINANCIAL RESULTS 2010-11 2009-10

Sales 507.40 375.83

Profit Before Depreciation 51.39 40.92

Less: Depreciation 25.36 22.60

Profit After Depreciation 26.03 18.32

Less: Provision for Taxation 5.70 6.26

Less: Provision for Deferred Tax 2.85 0.44

Profit After Taxation 17.46 11.62

Less: Prior Period Items 0.02 —

Less: Short / (Excess) provision of Income Tax 0.11 0.04

Profit for the year 17.35 11.58

Appropriations / Adjustments — —

Balance of profit / (loss) brought forward 43.17 31.59

Interim Dividend — —

Proposed Final Dividend — —

Corporate Dividend Tax (including cess and surcharge) — —

General Reserves — —

Profit carried to Balance Sheet 60.52 43.17

PERFORMANCE:

The turnover for the financial year under review 2010-2011 were Rs. 507.40 crore as against Rs. 375.83 for the previous financial year registering an increase of 35%. The profit before tax (after interest and depreciation charges) during the year 2010-2011 was Rs. 26.03 crore as compared to previous years figure of Rs. 18.32 crore. The Net Profit during the year 2010-11 was Rs. 17.35 crore as compared to previous year figure of Rs. 11.58 crore thus acheiving rise of 49%. Your Directors expect to improve the performance during the current year.

DIVIDEND:

During the year under review, the Board of Directors have not recommended any dividend in view of ploughing back the profits into ongoing projects considering the expansion plans of the Company and to conserve the resources.

DEPOSITORY SYSTEM:

As the members are aware, the Company's shares are compulsorily tradable in electronic form. As on March 31, 2011, 99.96 % of the Company's total paid-up Capital representing 455,324,150 shares are in dematerialized form. In view of the numerous advantages offered by the Depository System, the members holding shares in physical mode are advised to avail of the facility of dematerialization on either of the Depositories.

PUBLIC DEPOSIT:

Your Company has not accepted any deposit during the year under review u/s. 58A of the Companies Act, 1956.

COVERAGE OF ASSETS:

The adequate Insurance Cover for the existing Plant & Machineries, Building, Stock, etc. considering the various risk factors attached to the assets have been taken and insured the assets to take care of the unforeseen circumstances to safeguard the interest of the Company.

CORPORATE GOVERNANCE:

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI and Stock Exchanges. The Company has also implemented several best corporate governance practices as prevalent.The Report on Corporate Governance as stipulated under clause 49 of the Listing Agreement forms part of the Annual Report.

The requisite certificate from Auditors of the Company, confirming compliance with conditions of corporate governance as stipulated under the aforesaid Clause 49 is annexed to this report. Further, a certificate from C.E.O. and declaration on Code of Conduct also forms part of this Annual Report.

CORPORATE SOCIAL RESPONSIBILITY:

During the year 2010-11, Chiripal Group continued its Corporate Social Responsibility (CSR) initiatives in various fields. Activities in this area are set out in detail in the annexed CSR Report.

MANAGEMENT DISCUSSION AND ANALYSIS:

Management Discussion and Analysis Report for the year under review as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India is presented in a separate section forming part of the Annual Report.

DIRECTORS:

In terms of the provisions of the Companies Act, 1956, Shri Gautam C. Gandhi, Director of the Company who retires by rotation as per provisions of the Articles of Association during the year under review, offers himself for reappointment at the ensuing Annual General Meeting. Your Directors recommend his reappointment as Director of the Company.

A brief resume of the Director retiring by rotation at the ensuing Annual General Meeting, nature of expertise in specific functional areas and names of companies in which he holds directorships, chairmanships of Committees of the Board as stipulated under Clause 49 of the Listing Agreement with the Stock Exchanges in India forms part of the Annual Report.

PARTICULARS OF EMPLOYEES:

In terms of the provisions of Section 217(2A) of the Act, read with the Companies (Particulars of Employees) Rules, 1975 as amended the names and other particulars of employees are set out in the Annexure to the Directors Report. However, having regard to the provisions of Section 219(1)(b)(iv) of the Act, the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

GROUP:

Pursuant to intimation received from the Promoters and names of the Promoters and entities comprising group as defined under the Monopolies and Restrictive Trade Practices (MRTP) Act, 1969 are disclosed in the Annual Report for the purpose of the SEBI (Substantial Acquisition of Shares and Takeovers), Regulations, 1997.

DIRECTORS RESPONSIBILITY STATEMENT:

Pursuant to Section 217(2AA) of the Companies Act, 1956 and based on the information received from the Management and after due enquiry, your Directors state that:

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

b) They have selected such accounting policies and applied them consistently and made judgements and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2011 and of the profit of the Company for the year ended on that date;

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

d) The annual accounts of the Company have been prepared on a going concern basis.

AUDITORS AND AUDITORS' REPORT:

M/s. J.T. Shah & Co., Chartered Accountants, the Statutory Auditors of the Company, hold office upto the conclusion of the ensuing Annual General Meeting and are eligible for appointment.

The Company has received letter from M/s. J.T. Shah & Co., Chartered Accountants, to the effect that their appointment, if made would be in conformity with the limits prescribed in Section 224(1B) of the Companies Act, 1956 and they are not disqualified for such appointment within the meaning of section 226 of the said Act. The Board recommends the re-appointment of M/s. J.T. Shah & Co., Chartered Accountants, as the Auditors of the Company for the current financial year 2011-12.

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

The particulars as required under 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 are given in Annexure to this report.

ACKNOWLEDGEMENT:

Your Directors would like to express their appreciation for assistance and co-operation received from the Financial Institutions, Banks, Government Authorities, Customers, Vendors and Members / Shareholders, Regulatory Bodies and other business constituents during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the commitment displayed by all the executives, staff and workers resulting in successful performance of the Company during the year.

For and on behalf of the Board

Place : Ahmedabad VEDPRAKASH D. CHIRIPAL

Date :August 5, 2011 Chairman


Mar 31, 2010

The Directors have pleasure in presenting their 16th Annual Report and Audited Accounts for the year ended 31st March 2010 to the shareholders and stakeholders of the Company.

FINANCIAL HIGHLIGHTS:

(Rs. in Crore)

FINANCIAL RESULTS 2009-10 2008-09

Sales 375.83 317.91

Profit: Before Depreciation 40.92 21.04

Less: Depreciation 22.60 22.08

Profit After Depreciation 18.32 (1.04)

Less: Provision For Taxation 6.26 0.21

Less: Provision For Deferred Tax 0.44 (0.22)

Profit: After Taxation 11.58 (1.03)

Less: Prior Period Items - 0.37

Less: Short/(Excess) provision of Income Tax 0.04 -

Profit for the year 11.58 (1.40)

Appropriations / Adjustments

Balance of profit / (loss) brought forward 31.59 33.00

Interim Dividend - -

Proposed Final Dividend - -

Corporate Dividend Tax (including cess and surcharge) - -

General Reserves - -

Profit carried to Balance Sheet 43.17 31.59

PERFORMANCE:

The Turnover for the financial year under review 2009-2010 were Rs.375.85 Crore as against Rs.317.91 Crore for the previous financial year registering an increase of 18.22%. The profit before tax (after interest and depreciation charges) during the year 2009-2010 was Rs.18.32 Crore as compared to previous years figure of (Rs.1.42 Crore). The Net Profit during the year 2009-10 was Rs.11.58 Crore as compared to previous year figure of (Rs.1.40 Crore) Your Directors expect to improve the performance during the current year.

DIVIDEND:

Your Company is implementing its expansion project and backward integration project (Spinning Unit) to reap the benefits of increased demand. To continue its growth process, the Company is ploughing back its profit into ongoing projects and therefore your Directors have not recommended any dividend for the financial year ended 31.3.2010.

COMPLETION OF EXPANSION PROJECT:

Your Directors are pleased to inform you that during the year under review, the Company has fully completed expansion project as per Letter of Offer filed with SEBI and the Company is now having 4 Denim Lines of 40 Lakh mtr p.a, 40 TPD Spinning Plant along with 15 mw power project. Further, the proceeds of the Rights Issue of Rs.4554.90 Lacs, have been fully utilized as per expansion project. The impact of the increase in the capacity and expansion project will be available over a period of time and will improve the performance of the Company.

DEPOSITORY SYSTEM:

As the Members are aware, the Company’s shares are compulsorily tradable in electronic form. As on March 31, 2010, 99.96% of the Company’s total paid-up Capital representing 455316275 shares are in dematerialized form. In view of the numerous

advantages offered by the Depository System, Members holding shares in physical more are advised to avail of the facility of dematerialization on either of the Depositories.

PUBLIC DEPOSIT:

Your Company has not accepted any deposit during the year under review, u/s 58A of the Companies Act, 1956.

COVERAGE OF ASSETS:

The Adequate Insurance Cover for the existing Plant & Machinery, Building, Stock, etc. considering the various risk factors attached to the asset have been taken and insured the assets to take care of the unforeseen circumstances to safeguard the interest of the company.

CORPORATE GOVERNANCE:

The Company is committed to maintain the highest standards of Corporate Governance and adhere to the Corporate Governance requirements set out by SEBI. The Company has also implemented several best corporate governance practices as prevalent.

The Report on Corporate Governance as stipulated under clause 49 of the Listing Agreement forms part of the Annual Report.

The requisite Certificate from Auditors of the Company, confirming compliance with conditions of corporate governance as stipulated under the aforesaid clause 49 is annexed to this report. Further, a certificate of CEO and declaration on code of conduct also forms part of this Annual Report.

The management discussion and analysis report and compliance report on corporate governance as required by clause 49 of the listing agreement also forms part of this Annual Report

CORPORATE SOCIAL RESPONSIBILITY:

During the year 2009-10, Chiripal Group continued its Corporate Social Responsibility (CSR) initiatives in various fields. Activities in this area are set out in detail in the annexed CSR Report.

SECRETARIAL AUDIT REPORT:

As a measure of good corporate governance practice, the Board of Directors of the Company appointed M/s. Keyur Shah & Associates, Practicing Company Secretary to conduct Secretarial Audit of the Company for the financial year ended March 31, 2010.

The Secretarial Audit Report confirms that the Company has complied with all the applicable provisions of the Companies Act, 1956, Depositories Act, 1996, Listing Agreements with the Stock Exchanges, Securities Contracts (Regulation) Act, 1956 and all the Regulations and Guidelines of SEBI as applicable to the Company, including the Securities and Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations, 1997 and the Securities and Exchange Board of India (Prohibition of Insider Trading) Regulations, 1992.

DIRECTORS:

Shri Vedprakash D Chiripal, Director who retires by rotation during the year under review, offers himself for reappointment. Your Directors recommend his reappointment.

PARTICULARS OF EMPLOYEES:

In terms of the provisions of Section 217(2A) of the Act, read with the Companies (Particulars of Employees) Rules, 1975 as amended the names and other particulars of employees are set out in the Annexure to the Directors Report. However, having regard to the provisions of section 219(1)(b)(iv) of the Act , the Annual Report excluding the aforesaid information is being sent to all the members of the Company and others entitled thereto. Any member interested in obtaining such particulars may write to the Company Secretary at the Registered Office of the Company.

GROUP:

Pursuant to intimation received from the Promoters, and names of the Promoters and entities comprising group as defined under the monopolies and restrictive trade practices (MRTP) Act 1969 are disclosed in the Annual Report for the purpose of the SEBI (Substantial Acquisition of Shares and takeovers), Regulations, 1997.

DIRECTORS RESPONSIBILITY:

Pursuant to Section 217(2AA) of the Companies Act 1956 and based on the information received from the Management and after due enquiry, your Directors state that;

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

b) They have selected such accounting policies and applied them consistently and made judgments and estimates that were reasonable and prudent so as to give a true and fair view of the state of affairs of the Company as at 31st March, 2010 and of the profit of the Company for the year ended on that date;

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

d) The annual accounts of the Company have been prepared on a going concern basis.

AUDITORS:-

M/s. J.T. Shah & Co, Chartered Accountants, the Statutory Auditors of the Company, holds office up to the conclusion of the ensuing Annual General Meeting and have given their consent for re-appointment. The Company has received a written confirmation from Auditors to the effect that their appointment, if made would be in conformity with the limits prescribed in Section 224 (1B) of the Companies Act, 1956 and they are not disqualified for re-appointment within the meaning of section 226 of the said act. The Board recommends the re-appointment of M/s. J.T. Shah & Co, Chartered Accountants, as the Auditors of the Company for the current financial year 2010-11.

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

The particulars as required under 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 are given in Annexure to this report.

ACKNOWLEDGMENT:-

Your Directors would like to express their appreciation for assistance and co-operation received from the Financial Institutions, Banks, Government Authorities, Customers, Vendors and Members / Shareholders during the year under review. Your Directors also wish to place on record their deep sense of appreciation for the committed services by the executives, staff and workers of the Company.

For and on behalf of the board

Place :- Ahmedabad VEDPRAKASH D CHIRIPAL

Date:- 27/07/2010 Chairman

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